The court ruled that the State's non-payment for supplied equipment was arbitrary, violating Article 14, and held that the existence of an arbitration clause does not preclude judicial review under Article 226.

JUDGMENT :

Rajesh Mazumdar, J.

Heard Mr. B.K. Das, learned counsel for the petitioner and also heard Mr. M.Smith, learned counsel appearing for the respondents.

2. This writ petition has been instituted under Article 226 of the Constitution of India by the petitioner with the following prayer;

“Under the above facts and circumstances it is therefore prayed that your Lordships would be pleased to admit this petition, call for the records, issue a rule calling upon the respondents to show cause as to why a writ in nature of Mandamus shall not be issued to direct the respondents to pay an amount of Rs. 32,25,000/- (Rupees Thirty two lacs and twenty five thousand) only to the petitioner within a specified time and on perusal of record and reply to show cause if any and after hearing the parties would be pleased to make the rule absolute by directing the respondents to pay the aforesaid amount to the petitioner within a specified time. And or pass any other order/orders as your Lordships may deem fit and proper in the interest of justice.”

3. The story unfurled in the writ petition is that the petitioner, a proprietorship firm, is dealing with manufacture and supply of medical and dental instruments. The petitioner firm fulfilled the requirements for a medical and general equipment manufacturing & trading unit.

4. The respondent No.3, namely the Medical Superintendent, Employees State Insurance Corporation Model Hospital, Guwahati had floated a bid document in the “Government e Marketplace” (in short, the GeM) inviting the tender for supply of “C ARM FLUROSCOPE X RAY Machine” from intending suppliers/vendors.

5. The proprietorship firm participated in the tender process and had offered to supply the BPL C RAY C ARM Fluoroscope with motorised machine, the price of which was fixed by the Original Equipment Manufacturer (OEM) as uploaded in GEM was Rs. 32,40,000/-. On finding the bid successful and to its satisfaction, the respondent No.3 awarded the bid in favour of the petitioner herein vide Contract No. GEMC-511687762071052 generated on 13.05.2021.

As per the terms and conditions of the contract, the petitioner had delivered the BPL CRAY C ARM FLUROSCOPE with motorised mechanical motion on 16.07.2021 at ESIC Model Hospital, Beltola. The machine was installed on 20.07.2021 by the authorized service engineer deputed by respondent No.4, i.e. the original equipment manufacturer, who has been arrayed as the respondent No. 4 in this writ petition. The installation report, acknowledging the installation was generated on 20.07.2021.

6. Upon successful delivery of the equipment, the petitioner uploaded the invoice in the GeM with a unit price of Rs. 32,25,000/-. The Consignee Receipt and Acceptance Certificate (in short, the CRAC) was uploaded by the respondent No.3 in GeM on 21.08.2021, showing the acceptance of the item supplied by the firm of the petitioner.

7. When the petitioner did not receive his due payment, he submitted a representation on 07.09.2021 before the respondent No.3 for release of the payment. A reminder was submitted on 23.09.2021. The respondent No.3, by a communication addressed to the respondent no. 4, i.e. the original equipment manufacturer, had raised certain issues like the “Country of origin of monitor was made in China, high cost, improper functioning etc.” A copy of the same was marked to the present petitioner firm. In reply, the petitioner sent a mail on 14.10.2021 informing the respondent No.3 that the equipment had been installed by the engineer of the respondent No.4 and all service related issues post installation in the machine was to be addressed by the respon