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2022 Supreme(Guj) 857

IN THE HIGH COURT OF GUJARAT AT AHMEDABAD
Aravind Kumar, A.J. Shastri JJ.
M/s. Overseas Healthcare Pvt. Ltd. – Petitioner
Versus
State of Gujarat – Respondent
Special Civil Application No. 19597 of 2021
Decided On : 07-07-2022

Advocates appeared:
Shalin Mehta, Saurin Mehta, Krishal Patel, K.M.Antani, Mitul Shelat, Disha Nanavati, Advocates

Headnote:

Constitution of India, 1950 – Article 226 – Power of high court to issue certain writs – Prayer for quashing risk purchase orders – Petitioner has sought for reliefs – Writ jurisdiction – Held, Petitioner came to be duly replied by second respondent by traversing contentions raised by petitioner and as such, stand of petitioner that impugned order has been passed without considering reply of petitioner or same being in violation of principles of natural justice does not hold water – In fact, petitioner was not only under contractual obligation but also under obligation to supply Droxycycline tables during pandemic period which was very much required to cater to needs of Covid patients in State of Gujarat, which petitioner had failed to adhere to supply though had agreed – Impugned order passed is in consonance with Clause (5) of the tender document and Condition No.3 of acceptance letter – Dismissed.

JUDGMENT :

Aravind Kumar, J.

1. Petitioner has sought for the following reliefs :

    "A. Your Lordship may be pleased to admit and allow this petition;

B. Your Lordships may be pleased to issue a Writ of Mandamus or a Writ in the nature of Mandamus, or any other appropriate writ, order or direction, quashing and setting aside the impugned Risk Purchase Recovery Orders annexed at Annexure-A (Colly.) of the petition issued by respondent No.2 as the same being arbitrary, illegal and dehors the terms and conditions of the tender, terms and conditions for Acceptance Letter, Agreement dated 28.11.2018 and Rate Contract dated 01.05.2019;"

2. Brief background of the case are :

2.1 Second respondent having monopoly in the State of Gujarat to procure and supply drugs and surgical items to the Government hospitals throughout the State of Gujarat, invited online tender on 17.04.2018 from manufacturers/direct importers for purchase of tablets, capsules, injection, miscellaneous and surgical items. In response to the same, petitioner submitted its tender for Item Code No.1071 i.e. 'Droxycycline Capsules 100mg' by submitting its technical and commercial bid. On account of petitioner not being L1, it was awarded the tender as substitute rate contract-holder ('SRCH' for short) which came to be accepted by Acceptance Letter dated 10.10.2018. Pursuant to the same, an Agreement came to be entered into between petitioner and respondent No.2 on 28.11.2018. Petitioner was required to supply the subject tablets on agreed contract rate as per delivery instructions upto 30.09.2020 for 100% quantity in case the required quantity was not supplied by L1 bidder. The second respondent was also entitled to extend the tenure by a period of six months which was extended upto 31.03.2021.

2.2 As L1 bidder failed to supply the required quantity of tablets, second respondent placed purchase orders on the petitioner who is the substitute rate contractor as per the terms of the Agreement dated 28.11.2018. Several purchase orders were placed commencing from January, 2020 to November, 2020 and petitioner did not adhere to any of the purchase orders and did not supply tablets. However, petitioner did not supply 1713 box of Droxycycline Capsules 100 mg on or before 06.03.2020 as per purchase order dated 07.01.2020. Hence, second respondent issued risk purchase notice dated 26.03.2020 to the petitioner. Even subsequent purchase orders placed during June, 2020, October, 2020 and November, 2020, petitioner did not supply. However, petitioner attempted to take umbrage for non-supply on the ground of large scale spread of Covid-19. There was considerable adverse effect on the pharmaceutical industry and there was disruption of supply chain and as such petitioner claims that it could not comply with the risk purchase requisition orders issued by the second respondent. As such, risk purchase notices were issued to the petitioner by the second respondent which was replied by petitioner by taking umbrage under force majeure clause and also contending their obligations under the agreement had come to an end and petitioner was not obliged to supply the capsules. Hence, contending that for purchasing the product from open market, second respondent has not followed any procedure nor offered to purchase from other unsuccessful bidders and as such the risk purchase recovery orders, Annexure-A (collectively) has been impugned in the present Special Civil Application by the writ applicant.

3. The second respondent on being notified has appeared and filed its reply denying the averments made in the petition except to the extent expressly admitting certain facts. It is contended that writ petition arose out of a contract and same cannot be agitated before this Court in writ jurisdiction. It is contended that writ petition under Article 226 is not maintainable to seek alteration or nullification of contractual obligations. Denying the averments made in the petition, respondent has sought for dismiss

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