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IN THE HIGH COURT OF DELHI AT NEW DELHI
Satish Chandra Sharma, Subramonium Prasad, JJ.
Allengers Medical Systems Ltd. – Appellant
Versus
Union of India & Anr. – Respondents
W.P.(C) 14261 of 2022 & C.M. No. 43548 of 2022
Decided On : 21-03-2023
Tender Disqualification - Procurement of C-Arm Fluoroscope X-Ray Machines - General Financial Rules, 2017 - Rule 173(iv) - The court held that the scope of judicial review in contractual matters, especially those pertaining to tenders, is extremely limited. Courts may only interfere in an administrative decision if it is arbitrary, irrational, unreasonable, mala fide, or biased. The court refused to exercise its jurisdiction in intervening in the tender process, as the petitioner's claims were found to be baseless and the rejection reasons were published categorically, allowing the petitioner to challenge them before the court.
Fact of the Case:
The petitioner, a manufacturer and exporter of medical diagnostic equipment, challenged the decision of the Directorate General Armed Forces Medical Services (DGAFMS) to disqualify them and declare another bidder as the L1 bidder for the procurement of C-Arm Fluoroscope X-Ray Machines. The petitioner alleged that the disqualification was arbitrary and without reasoning.
Finding of the Court:
The court found that the petitioner's claims were baseless and the rejection reasons were published categorically, allowing the petitioner to challenge them before the court. The court refused to exercise its jurisdiction in intervening in the tender process.
Issues: The issues involved the disqualification of the petitioner and the declaration of another bidder as the L1 bidder, based on the technical evaluation of the quoted models and compliance with the tender specifications.
Ratio Decidendi: The court held that the scope of judicial review in contractual matters, especially those pertaining to tenders, is extremely limited. Courts may only interfere in an administrative decision if it is arbitrary, irrational, unreasonable, mala fide, or biased. The court refused to exercise its jurisdiction in intervening in the tender process, as the petitioner's claims were found to be baseless and the rejection reasons were published categorically, allowing the petitioner to challenge them before the court.
Final Decision: The petition was dismissed, and a cost of Rs. 50,000/- was imposed on the petitioner for abusing the process of law.
JUDGMENT
Satish Chandra Sharma, C.J.
1. The instant petition has been filed under Article 226/227 of the Constitution of India seeking issuance of a writ of certiorari for quashing/setting aside of the decision dated 24.08.2022 issued by the Directorate General Armed Forces Medical Services (DGAFMS), i.e. Respondent No.1, whereby Trivitron Healthcare Private Limited, i.e. Respondent No.2, was declared as the L1 bidder in terms of e-Tender dated 13.05.2021.
2. The facts, in brief, leading to the instant petition are as under:
a) It is stated that the Petitioner herein is a manufacturer and exporter of various medical diagnostic equipment such as X-Ray systems, Digital Radiography systems, Digital Mammography, etc. It is stated that a Notice Inviting Tender was issued by the Respondent No.1 on 13.05.2021 under the aegis of the Ministry of Defence for the procurement of 32 pieces of C-Arm Fluoroscope X-Ray Machines. Bidders with a minimum average annual turnover of Rs. 400 lakhs and an OEM average turnover (last three years) of Rs. 850 lakhs were eligible to apply. With regard to the product/service specification, a pre-bid query was raised by the Petitioner herein on 15.05.2021. The response to the same was issued by Respondent No.1 on 06.08.2021, however, it is stated that the Respondent No.1 failed to respond to a clarification pertaining to the camera quality.
b) Vide Corrigendum dated 11.06.2021, the last date of participating in the tender was extended till 19.06.2021. Subsequently, vide modification notification dated 05.08.2021, the tender was further extended to 10.08.2021. Accordingly, it is stated that the Petitioner herein submitted the bid on 09.08.2021.
c) It is stated that vide letter dated 25.08.2021, Respondent No.1 intimated to seven bidders, including the Petitioner herein, that the Sr. Consultant (Surgery) had directed for the demonstration of the requisite equipment which was to be held before the Board of Directors (BOD) comprising of four members. The letter notes that the report of the BOD was to be submitted by 06.09.2021 to the Sr. Consultant (Surgery).
d) It is stated that in pursuance of aforementioned letter dated 25.08.2021, the Petitioner delivered a demonstration of their equipment at the RR Hospital, Delhi Cantt, on 29.09.2021. It is further stated that vide letter dated 07.10.2021, the Petitioner intimated certain technical points stating, "we are original equipment manufacturer (OEM) of quoted unit having own in-house R&D (Research and Development) due to which we are able to give startup time 40 seconds. We matched asked startup time by working on software of machine."
e) It is stated that on 30.03.2022, the Technical Bids of all bidders were opened by Respondent No.1 and only two bidders out of seven bidders had qualified, including Respondent No.2 herein. The Petitioner herein had also failed to qualify. It is stated that the technical evaluation of the Petitioner notes that i.) the picture quality of the camera is unacceptable as the camera acquisition is 14 bit only while the minimum allowed value is 16 bit, and ii.) the startup time is more than 50 seconds when the maximum allowed time is 40 seconds. Vide letter dated 31.03.2022, the Petitioner herein requested for a re-evaluation of the bids, however, no response was given to the same by Respondent No.1.
f) It is stated that on 24.08.2022, Financial Bids pertaining to the matter herein were opened and Respondent No.2 herein was declared as L1 and one Siemens Healthcare Private Limited was declared as L2. Further, it is only on 24.08.2022 that Respondent No.1 issued a reply to the letter of the Petitioner dated 30.03.2022 stating "Competent Authority has reiterated that the product quoted did not match BBQR as intimated during TEC".
g) Aggrieved by the above, the Petitioner has approached this Court by way of the instant writ petition seeking quashing/setting aside of the decision dated 24.08.2022 of Respondent No.1 whereby Respondent No.2 was d
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