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IN THE HIGH COURT OF DELHI AT NEW DELHI

Decided on: 13.03.2015

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W.P.(C) 5470/2014, C.M. NO.10865/2014

M/S. THEON PHARMACEUTICALS LTD.…………Petitioner

Through: Sh. Himanshu Gupta, Advocate.

Versus

DG, ESIC AND ORS.

……………..Respondents

Through: Ms. Rekha Palli, Ms. Ankita Patnaik and Ms.

Garima Sachdeva, Advocates, for Respondent Nos. 1 and

2. Sh. Aseem Chaturvedi and Sh. Abhijeet Swaroop,

Advocates, for Respondent No.4.

CORAM:

HON'BLE MR. JUSTICE S. RAVINDRA BHAT

HON'BLE MR. JUSTICE R.K. GAUBA

MR. JUSTICE S. RAVINDRA BHAT (OPEN COURT)

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1.

The present Writ Petition challenges the award of Employees State

Insurance Corporation ("ESIC") Rate Contract No. 138 for Product Code

No. 534 by the first two Respondents to the fourth Respondent, despite the

Petitioner allegedly being the lowest bidder. A direction to quash and set

aside the said decision and a direction to the Respondents to accept the

Petitioner‟s lowest bid, and cancel the fourth Respondent‟s bid in respect of

supply of Drug Product Code No. 534 of ESIC is sought.

2.

The Petitioner is a public limited company incorporated under the

Companies Act, 1956. It was first granted permission for manufacturing and

marketing fixed dose composition of the drug in question by the Drugs

2015:DHC:2479-DB

Controller General of India (“DCGI”), the third Respondent herein, on

15.3.2010. Pursuant to certain objections raised by the fourth Respondent,

this permission was amended on 30.7.2010.

3.

The Director General, ESIC issued a Tender Notice on 12.9.2012 for

Rate Contract No.138 for supply of Drugs & Dressings, which include

product code No. 534 (Pre & Probiotic Capsules) against ESIC Rate

Contract no. 138. The Tender Document specifically provided that price bid

of only those tenderers would be opened who fulfil all the eligibility criteria

(provided in Clause 3 of the Terms & Conditions of the Rate Contract).

Paragraph IV of the Terms and Conditions provided that the bids (Technical

Bid in Cover „A‟ and Price Bid in Cover „B‟) were to be submitted by

01.11.2012. The Petitioner & fourth Respondent participated in the bid for

the drug in question. The Petitioner‟s price bid for supply of the subject drug

was `44.87 for 10 capsules, whereas the fourth Respondent‟s price bid for

the same was ` 56.05 (for 10 capsules).The final rate contract was issued on

22.11.2013, wherein the Petitioner‟s bid for the subject drug was rejected in

favour of fourth Respondent.

4.

Consequently, the Petitioner filed RTI Applications on 07.12.2013

and 17.01.2014 with the ESIC seeking certain information with regard to the

allotment of tender for the subject drug. Based on the information received

upon filing of the RTI Applications, the Petitioner states that in the meeting

in respect of Rate Contract No.138 held on 5/6.2.2013, the Committee had

specifically recommended that the drug in question quoted by the Petitioner

may be considered provisionally eligible subject to reply from DCGI.

Thereafter, by Minutes of Meeting for finalization of Rate Contract No.138

held on 24.7.2013, the Committee after taking into consideration the

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concerned facts and opinion of the representative of the DCGI

recommended that both the Petitioner and fourth Respondent may be

considered as eligible. However, after clearance of participation of the

Petitioner for the drug in question, the tender was granted to the fourth

Respondent.

5.

The Petitioner submits that the acceptance of the bid of a higher

tenderer, i.e. fourth Respondent, and the rejection of its bid is prejudicial to

the financial interests of the ESIC as well as the end consumer. According to

the Petitioner, it would entail additional cost for the exchequer, which is

against the public policy. This selection is evidently arbitrary, malafide,

high-handed and colourable exercise of power and tainted with ulterior

motives.

6.

The first, second and fourt