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IN THE HIGH COURT OF DELHI
Vipin Sanghi, Jasmeet Singh, JJ.
Ursapharm India Private Limited - Appellant
Versus
Employees State Insurance Corporation - Respondent
W.P.(C) 8214 of 2021 & CM Appl. 25478 of 2021
Decided On : 27-08-2021
| Table of Content |
|---|
| 1. petitioner's bid rejection context (Para 1 , 2 , 3 , 4 , 5 , 6 , 7 , 8) |
| 2. legitimate expectation based on past precedents (Para 10 , 11 , 12 , 13 , 15 , 17) |
| 3. authority's discretion in tender requirements (Para 20 , 21 , 22 , 28 , 29) |
| 4. court defers to authority’s interpretation of tender conditions (Para 30 , 31) |
| 5. writ petition dismissal without merit (Para 32) |
JUDGMENT
Vipin Sanghi, J. (Oral)--The petitioner has preferred the present petition to assail the letter/order dated 03.08.2021 passed by the respondent authority informing the petitioner of the rejection of its Bid in response to E-Tender Enquiry No. U-25/12/142C-146C/2019-Med.V for DG ESIC rate Contract No. 142C for supply of Drugs for use of ESI institutions all over the country.
2. The petitioner also seeks a direction to set aside the decision of the respondents contained in their communication dated 06.07.2021, as being non-jurisdictional, predetermined, and arbitrary. Petitioner seeks a further direction to the respondents to issue the Letter of Award to the petitioner in terms of the aforesaid E-Tender Enquiry for supply of drugs for use in ESI Institutions in the country.
3. The case of the petitioner is that the petitioner is an Indian Company, and is a subsidiary of the German Company, namely, Ursapharm Germany. Petitioner states that Ursapharm Germany is engaged in the manufacture of, inter alia, the drug Povidone: eye lubricant which is `preservative free' and `phosphate free'. Petitioner also states that it is the alter ego of Ursapharm Germany, and acts as the local supplier and marketer of the drugs manufactured by UrsaPharm Germany.
4. Petitioner narrates that in the year 2018, the respondent issued a Tender Enquiry calling for submission of bids at fixed rates for several Drugs for supply to ESI Institutions across the country.
5. The petitioner submitted its bid for the Drug Povidone: eye lubricant and the same was accepted by the respondent. The contract in relation to the said Tender Enquiry was for the period 2018-2020. The contract was further extended till 31.08.2021.
6. The petitioner issued another identical Tender Enquiry, calling for submission of bids for fixing the rates of several Drugs, including `Povidone', again for supply to ESI Institutions across the country for a period of 2 years' The petitioner again participated in the tender process, and had a legitimate expectation of success in the present Tender process as well.
7. On 06.07.2021, the petitioner received an E-mail communication from the respondent, informing the petitioner that its bid had been rejected. The petitioner states that no reasons were communicated except that "Annexure TS in the audited report of the principal firm (imported) does not adhere to the terms and conditions in pre-bid Corrigendum".
8. The petitioner then sent a representation on 13.07.2021, seeking review of the respondent's decision to reject the petitioner's technical bid. On 03.08.2021, the respondent rejected the petitioner's representation. Consequently, the petitioner has preferred the present petition.
9. The relevant clause of the tender, which forms the basis for rejection of the petitioner's bid may now be taken note of. Clause 7 of the RFP lays down the turnover criteria. The relevant part of the same reads as follows:
"7. TURNOVER CRITERIA
I. Turnover for schedule drugs
a) Participating Pharmaceutical firm should have annual turnover of each of the last three preceding financial years (2016-17, 2017-18, 2018-19) equal or more than the sum total of the amount of individual turnover of the quoted list of the drugs. Individual Turnover for each drug has been indicated in drug Schedule.
Example:
If Drug A has X turnover, Drug B has Y turnover and Drug C has Z turnover.
| S No. | Name of the Drugs | Annual Turnover of the bidder for the last three preceding years (2016-17, 2017-18 & 2018-19) equal or more |
| 1. | A, B & C | X+Y+Z |
| 2. | A & B | X+Y |
| 3. | B & C | Y+Z |
| 4. | C | Z |
x x x x x x x x x
d. Grou
The turnover criteria in bidding must be met independently by the bidder without considering the parent's financial performance, ensuring procedural integrity in the tendering process.
The turnover criteria in tendering processes are essential to assess the financial and supply capacity of the bidder. The bidder must meet the turnover criteria based on its own financial performance....
Tender evaluation must prioritize fairness, and the interpretation of criteria should avoid hyper-technical disqualifications that undermine competitive bidding processes.
Interpretation of tender documents in favor of the bidder in case of ambiguity and the importance of adhering to the standards and norms laid down in the tender documents.
A Joint Venture bidder may combine the average annual turnover of its members to meet tender qualification criteria, and ambiguous tender terms cannot result in disqualification.
The court upheld that tender eligibility criteria should not be excessively onerous and affirmed that judicial interference is limited to cases where terms are arbitrary or discriminatory.
The court emphasized the importance of complying with tender qualification criteria and upheld the authority of the evaluation committee in assessing bid documents.
Public tendering processes must adhere strictly to stipulated criteria, ensuring bidders are evaluated fairly without arbitrary disqualifications.
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