Point of Law : Order to fulfill the requirements of principles of natural justice, a show cause notice should meet the twin requirements viz. [i] the material/grounds to be stated which according to the Department necessitates an action; and [ii] particular penalty/action which is proposed to be taken.

JUDGMENT :

By invoking the extra-ordinary jurisdiction under Article 226 of the Constitution of India, the writ petition has been instituted challenging a Show Cause Notice dated 21.07.2017 and an order dated 20.09.2017, both issued under the hand of the Mission Director, National Health Mission [NHM], Assam. By the Show Cause Notice dated 21.07.2017, the petitioner was asked to show cause as to why there was delay from the end of the petitioner to supply the essential drugs pursuant to two Purchase Orders, dated 21.01.2017 and 23.03.2017 respectively, and as to why the petitioner should not be blacklisted for non-performance in supplying essential drugs in the State causing delay in the programme, ‘Free Drug Service’ Scheme of the Government of India. By the Order dated 20.09.2017, the petitioner has been disqualified to participate in any tender processes initiated by the NHM, Assam for a period of 5 [five] years from the date of the said Order stated to be passed in terms of Clause 17 of the Bid Document.

2. The office of the Mission Director, NHM, Assam initiated a National Competitive Bidding [NCB] process by publishing a Tender Notice for supply of drugs vide Tender No. NHM/PROC/RC-DRUGS/2268/2014-15/13559 dated 11.11.2014 [‘the Tender Notice’, for short]. By the Tender Notice dated 11.11.2014, sealed tenders in Two-Bid system [Technical Bid & Price Bid] were invited from manufacturers or their authorized distributors/dealers for finalization of rate contracts for supply of drugs to Government Health Institutions located in different districts of Assam. As per the Tender Notice, delivery of ordered items would be effected at District Drug Stores, located in 27 different districts of Assam. As per the Bid Document of the Tender Notice, a Pre-Bid Meeting was scheduled on 25.11.2014 and the last date of submission of tender was till 02-00 p.m., 08.12.2014. By a Corrigendum no. 1 dated 08.12.2014, the last date and time of submission of tenders were extended till 02-00 p.m., 16.12.2014. By the said Corrigendum, certain modifications/ amendments were carried out in the original Bid Document issued pursuant to the Tender Notice dated 11.11.2014.

2.1. Responding to the Tender Notice dated 11.11.2014 and the Corrigendum dated 08.12.2014, the petitioner, a company registered and incorporated under the Companies Act, 1956, submitted its tender. In due course, the petitioner was communicated by the respondent NHM that the petitioner had emerged as a successful bidder.

3. It is the case of the petitioner that after the petitioner declared as the successful bidder, the respondent NHM started issuing purchase orders in favour of the petitioner and in terms of Clause 13 of the Bid Document, the petitioner was required to sign an agreement as per Annexure-XVI for each such order. Thereafter, the petitioner required to execute the purchase orders placed by the respondent NHM at various districts of the State of Assam within the stipulated time period. As per Clause 13 of the Bid Document, the successful bidder had to execute an agreement as per Annexure-XVI by following the formalities prescribed therein.

3.1. On 21.01.2017, a Purchase Order of even date was issued in favour of the petitioner, whereby, the petitioner was asked to supply the drugs as per the items and prices with details mentioned therein, in accordance with the terms and conditions stated therein. By Annexure-I, the respondent NHM stated the items, quantities and rates of the drugs to be supplied by the petitioner and by Annexure-II, the respondent NHM mentioned the destinations for delivery of the drugs. The total amount of the drugs to be supplied was Rs. 81,18,592.30 [exclusive of all taxes].

3.2. On 23.03.2017, another Purchase Order of even date was issued in favour of the petitioner, whereby, the petitioner was asked to supply the drugs as per the detail items in accordance with the terms and conditions stated therein. By Annexure-I, the respondent NHM stated the items,