Writ Petition No.11312 of 2010 filed under Article 226 of the Constitution of India praying to issue a writ of mandamus directing respondents 1 and 2 to consider the petitioner's offer in accordance with tender conditions published in the tender notification No.UIP-11011/210/2010-11/BCG/TE/VPC dated 14.10.2009 issued by the second respondent and place trial orders for the supply of BCG vaccine to the said respondents in terms of the tender submitted by the petitioner on 24.11.2009.
Writ Petition No.17522 of 2010 filed under
Article 226 of the Constitution of India praying to issue a writ of certiorarified mandamus calling for the records relating to the letter dated 29.7.2010 of the second respondent relating to the procurement of BCG vaccine against tender No.UIP-11011/210/2010-11/BCG/TE/VPC dated 14.10.2009, quash the same and consequently direct respondents 1 and 2 to place trial orders for the supply of BCG vaccine to the said respondents in terms of the tender submitted by the petitioner on 24.11.2009 pursuant to the tender notification No.UIP-11011/210/2010-11/BCG/TE/VPC dated 14.10.2009 issued by the first respondent.
For petitioner : Mr.V.T.Gopalan, Senior Counsel for Mr.V.Nandakumar For RR 1 and 2 : Mr.M.Raveendran, Additional Solicitor General for Mr.J.Ravindran, Assistant Solicitor General For R3 : Mr.Ashokpathy for M/s.Pass Associates COMMON ORDER Heard Mr.V.T.Gopalan, learned Senior Counsel appearing for the petitioner and Mr.M.Raveendran, learned Additional Solicitor General appearing for respondents 1 and 2 and Mr.Ashokpathy for M/s.Pass Associates appearing for the third respondent.
2. By consent, the writ petitions themselves are taken up for disposal. These two writ petitions involve common issues between the common parties. Therefore, both the writ petitions are disposed of by common order.
3. Writ Petition No.11312 of 2010 is filed for a writ of mandamus directing respondents 1 and 2 to consider the petitioner's offer in accordance with tender conditions published in the tender notification No.UIP-11011/210/2010-11/BCG/TE/VPC dated 14.10.2009 issued by the second respondent and place trial orders for the supply of BCG vaccine to the said respondents in terms of the tender submitted by the petitioner on 24.11.2009.
4. Writ Petition No.17522 of 2010 is filed for a writ of certiorarified mandamus calling for the records relating to the letter dated 29.7.2010 of the second respondent relating to the procurement of BCG vaccine against tender No.UIP-11011/210/2010-11/BCG/TE/VPC dated 14.10.2009, quash the same and consequently direct respondents 1 and 2 to place trial orders for the supply of BCG vaccine to the said respondents in terms of the tender submitted by the petitioner on 24.11.2009 pursuant to the tender notification No.UIP-11011/210/2010-11/BCG/TE/VPC dated 14.10.2009 issued by the first respondent.
5. The facts leading to the cases are set out hereunder:-
(i) The petitioner is a Private Limited Company having its registered office at Old No.5, New No.13/A3, Circular Road, United India Colony, Kodambakkam, Chennai 600 024 and is a manufacturer of BCG Vaccine from its manufacturing facility at No.49, Pappankuppam Village, Near SIPCOT, Gummidipoondi Taluk, Tiruvallur District with a production capacity of 1080 lakh doses per annum from 22nd December 2008 onwards. The Company has valid licences and certificates from all the authorities both Central and State Government for manufacturing the vaccine.
(ii) It is the further case of the petitioner that the second respondent issued a tender notice on 14.10.2009 for supply of various items including supply of 670.01 lakh doses of BCG Vaccine for the year 2010-11. According to the tender notice, the pre-bid meeting was fixed on 3.11.2009, the closing date for receipt of tenders was 26.11.2009 at 3.00 pm and the date and time of opening of tenders was 26.11.2009 at 4.00 pm. As per clause (a) of the qualification criteria of the tender, only domestic primary manufacturers are eligible to participate in the tender. This was done with a view to encourage local manufacturers and reduce the monopoly resulting in cost saving. Clause (b) states that the bidders should have two years manufacturing and marketing experience with a note that the manufacturers who do not possess two years experience in specific vaccine will not be given full order without testing their ability through placement of trial order.
(iii) According to the petitioner, they have fulfilled all the necessary terms and conditions stipulated in the tender document except the condition stipulated under clause (b). As per the aforesaid clause, the bidder should have two years manufacturing and marketing experience of substantial quantities of any vaccines in India. However, this clause is qualified by proviso to the clause stating as under:-
"The manufacturers who do not have two years of manufacturing and marketing experience in specific vaccine (BCG) may not be given full orders without testing their ability through placement of trial order. The quantity of trial order shall be decided by the purchaser."
(iv) While that being so, the petitioner has obtained manufacturing licence for new drug formulation during December 2008 and the same is being marketed by them since then. Within one year from the date of commencement of manufacturing activity, the petitioner has sold more than 12 lakh doses of BCG Vaccine through private domestic market alone. Therefore, they have approached respondents 1 and 2 through various representations as soon as they got manufacturing licence in December 2008 to give trial orders. However, they have been informed orally during the meeting that it is not possible to give order without participating in the tender and advised the petitioner to participate in the next tender and assured to consider the grant of trial order at that time. The condition of two years experience as stipulated in clause (b) read with the note would clearly imply that this condition is not a bar for awarding the tender. It only enables the purchaser to place trial order before giving the full order to assess the capability of the supplier.
(v) Pursuant to the said tender notification dated 14.10.2009, the petitioner submitted its bid quoting the rate of Rs.28.60 per vial. Besides the petitioner, only the third respondent which took part in the bid has quoted the very same rate as that of the petitioner. However, respondents 1 and 2 have ignored to consider the petitioner's offer and appeared to have granted the contract to the third respondent which has also quoted the very same rate of Rs.28.60 per vial. Respondents 1 and 2 have imposed a condition restricting the eligibility criteria only to the local manufacturers with the intention to avoid monopoly by a single player. In fact, the petitioner is the only other manufacturer manufacturing the said vaccine in the country. Though the terms and conditions of the tender notice enable respondents 1 and 2 to consider the award of contract to the manufacturer who does not possess the required experience on trial basis, without considering the offer of the petitioner, respondents 1 and 2 appear to have awarded the contract for the supply of the said vaccine to the third respondent alone. The said action of the first and second respondents is arbitrary and violative of the fundamental right of the petitioner as guaranteed under
Article 19(1)(g) of the Constitution of India. Therefore, the petitioner has filed Writ Petition No.11312 of 2010 praying for a writ of mandamus directing respondents 1 and 2 to consider the petitioner's offer in accordance with tender conditions published in the tender notification No.UIP-11011/210/2010-11/BCG/TE/VPC dated 14.10.2009 issued by the second respondent and place trial orders for the supply of BCG vaccine to the said respondents in terms of the tender submitted by the petitioner on 24.11.2009 in which this court by order dated 27.5.2010 was pleased to observe that it is open to respondents 1 and 2 to place trial orders with the petitioner.
(vi) There was no response to the petitioner's notice dated 22.7.2010 calling upon the respondents to either place trial orders or communicate the reasons for not placing the trial orders. In the said circumstances, the petitioner is left with no other alternative except to invoke the jurisdiction of this court for a mandamus directing the respondents to consider the representation of the petitioner and pending the writ petition, the respondents have issued the impugned order dated 29.7.2010 stating that the petitioner's bid was not found eligible for placement of order as it did not comply to clause (b) of qualification criteria for eligibility of firms of the tender enquiry. The above order has been challenged in W.P.No.17522 of 2010.
6. Respondents 1 and 2 have filed their counter stating that the writ petition is not maintainable as the petitioner has no legal right to insist for placing of trial orders for supply of BCG vaccine in terms of the tender submitted by the petitioner on 24.11.2009 since the petitioner is not eligible as per the tender conditions stipulated in the tender document which specifies that the bidder should have two years manufacturing and marketing experience of substantial quantities for any vaccine in India. This has been admitted by the petitioner in para 4 of the affidavit also and as such the petitioner who is not eligible cannot stall the tender process and further as there is no legal right existing on the petitioner, it cannot claim as a legal right for instance of placing of trial order. As per the tender enquiry clause 18, the contract shall be governed by the Arbitration Clause 24 of DGS&D-68 (Revised) amended upto date. The nominee of the Secretary (FW) shall be the Arbitrator. The court of law located in Delhi shall alone have the jurisdiction to decide the case in the event of any disputes and if the tenderer does not agree to the arbitration clause, the petitioner ought to have filed the petition in a Court in Delhi or resorted to arbitration if there is any dispute. On the ground of jurisdiction alone and on the availability of effective alternative remedy, this writ petition is liable to be dismissed.
7. In the counter of the respondents, it is also stated that the tender condition is in accordance with law and further the process of awarding tender is within the well established legal procedures. A person, who is ineligible but participated in the tender as a matter of right cannot claim for trial order and stall procurement of vaccine which is essentially required for children of the country to protect them from acute tuberculosis diseases. The present petition relates to consider the petitioner's offer in accordance with the tender conditions published in the tender notification No.UIP-11011/210/2010-11/BCG/TE/VPC dated 14.10.2009 issued by the second respondent and placing of trial orders for the supply of BCG Vaccine to the said respondents in terms of the tender submitted by the petitioner on 24.11.2009. It is their case that the second respondent procures various vaccines for its Routine Immunization Programme and BCG vaccine is one of them. These vaccines are procured through Limited Tender Enquiry from the manufacturers registered with Drug Controller General of India (now known as CDSCO) provided it meets the following qualification criteria which was also stipulated in the said tender notice dated 14.10.2009:-
"a) Only domestic primary manufacturers are eligible to participate in the tender. (Primary manufacturer is a manufacturer that performs all the manufacturing and processing operations needed to produce goods in their appropriate dosages form, including processing, blending, formulating, filling, packing, labeling and quality testing).
b) The bidder should have 2 years manufacturing and marketing experience of substantial quantities for any vaccine in India duly supported by the documentary evidence and attested by their Chartered Accountant.
c) The production capacity of the bidders should be at least 10% of the required quantity of the item.
d) The bidder must possess manufacturing license and Good Manufacturing Practices (GMP) certificate complying to the revised Schedule M of Drugs and Cosmetics Act, 1940, for the manufacturing facility which should be valid on the date of tender opening and shall remain valid till the date of completion of supply.
f) Bidder should not have been convicted. A certificate from the State Drug Authorities should support this."
8. It is the stand of respondents 1 and 2 that if a bidder meets all the above conditions but, if they do not have two years of manufacturing and marketing experience in the specific vaccine then they will not be awarded full order though they meet all the above conditions and will be considered only for trial order, the quantity of which shall be decided by the purchaser as per the note given under qualification criteria which inter alia states that "Note: The manufacturer who do not have two years of manufacturing and marketing experience in the specific vaccine (BCG) may not be given full orders without testing their ability through placement of trial order. The quantity of trial order shall be decided by the purchaser."
9. Therefore, the condition mentioned in the note is for placement of order on the bidder who is meeting eligibility criteria but not on the bidder who is not having experience of marketing and manufacturing of a specific vaccine (in this case BCG vaccine). Hence, this clause in the note is not applicable to the petitioner. The condition regarding placement of trial order is applicable to the bidders who are meeting all the conditions of qualification criteria of the tender enquiry. The petitioner has started manufacturing only from 22.12.2008 and since they are manufacturing only BCG vaccine, they are not meeting the eligibility condition of two years manufacturing and marketing experience of substantial quantities of any vaccine in India. As such they are not eligible for trial order. The condition for trial order is applicable to only those bidders who have qualified the eligibility conditions from (a) to (f) as mentioned in qualification criteria for eligibility of firms of the tender enquiry but not having the two years manufacturing and marketing experience of specific vaccine (BCG). As vaccines are given to the children, Government cannot take risk to place supply order on those who have not at least two years manufacturing and marketing experience of any vaccine. The condition of trial order has been incorporated in the tender enquiry in order to avail the offers of a manufacturer who is new in specific vaccine but has sufficient manufacturing and marketing experience (two years) for other vaccines and not for those bidders who do not have sufficient experience of manufacturing and marketing of any vaccine. In the tender process, the eligibility conditions cannot be waived, even if it is found that only one bidder is qualified. There is no provision for such negotiation or discussion before placement of order who is not qualifying the tender conditions. The quantity of 274 lakh doses of BCG Vaccine is required to meet the requirement of Routine Immunization Programme for the year 2010-2011.
10. The second respondent, at no point of time, acted arbitrarily in finalization of procurement of BCG vaccine and it was well within its rights not to award the contract on the petitioner for supply of BCG Vaccine as they did not meet the eligibility conditions of the tender. Further, the procurement process of BCG vaccine has been stalled due to the injunction order issued by the High Court on 27.5.2010. Under the circumstances, the respondents were not be able to meet the immunization programme's requirement as such this programme will be very adversely affected. BCG vaccines is administered to newly born children for protecting them from acute tuberculosis and this can be administered only upto the age of one year. If this vaccine is not administered within this period, the child will remain unprotected for his/her lifetime. The requirement of the vaccine for the year 2010-11 is 325 lakh doses, out of which only 51 lakh doses have been procured during this year. To meet the programme requirement balance quantity has to be procured at the earliest. A bidder who is, prima facie, not eligible cannot and should not be allowed to stall the procurement process of this vaccine which is to be used for Universal Immunization Programme, thereby endangering lives of millions of children of this country. Therefore, they prayed for dismissal of the writ petition.
11. The third respondent has filed a counter stating as follows:-
Clause (a) of the qualification criteria in the Tender notice stated that only domestic primary manufacturers are eligible to participate in the tender. Further, clause (b) stated that the bidder should have two years manufacturing and marketing experience of substantial quantities for any vaccine in India duly supported by the documentary evidence and attested by their Chartered Accountant. It is pertinent to note that the basic qualification criteria were that the bidder should have minimum of two years of experience in any vaccine in India which is premordial/mandatory condition even for considering trial order who do not have two years of manufacturing and marketing experience in the specific vaccine (BCG). It is also stated that there was no proviso to this clause as is falsely claimed by the petitioner. The note below the clauses stated that the manufacturers who do not have two years of manufacturing and marketing experience in the specific vaccine BCG may not be given full orders without testing their ability through placement of trial order. Thus, the proviso only applies to those manufacturers who do not have a minimum of two years of experience in the specific BCG vaccine only. The trial orders can be placed only on those who did not have two years of experience in BCG vaccine. However, the criteria that the bidder should have a minimum experience of manufacturing and marketing any vaccine in India is a basic criteria and there is no proviso to the same. Thus all the bidders who applied should have fulfilled the criteria of having an experience of two years in relation to any vaccine. The petitioner by alleging that there is a proviso to the clause (b) of the qualification criteria is making false assertions and merely misleading this court.
12. In the counter of the third respondent, it is further stated that the petitioner themselves admit that they had obtained the manufacturing licence for new drug formulation during December 2008. The tender notice was issued on 14.10.2009. Thus, it is clear from the same that when the Tender notice was issued, the petitioner had an experience of less than a year. As already stated above, the qualification criteria of the Tender notice specifically stated that the bidder should have a minimum experience of two years in manufacturing and marketing of any vaccine in India and there is also no proviso to the same as is falsely claimed by the petitioner. The third respondent was perfectly eligible to bid for the said tender and is an extremely well known, reputed and trusted company for manufacturing of vaccines. Further, the decision as to whom the tender should be awarded was on the discretion of respondents 1 and 2 after taking into consideration all the terms and conditions of the Tender Notice and the qualification criteria. Therefore, they prayed for dismissal of the writ petition.
13. Mr.V.T.Gopalan, learned Senior Counsel appearing for the petitioner has strenuously contended that the Government of India Tender Notification dated 14.10.2009 clause 7 provides that the manufacturers who do not have two years manufacturing and marketing experience in the specific vaccine (BCG) may not be given full orders without testing their ability through placement of trial order. The quantity of trial order shall be decided by the purchaser. Further, clause (b) of the qualification criteria prescribed in the Tender Notice provides that the bidder should have two years manufacturing and marketing experience of substantial quantities for any vaccine in India duly supported by the documentary evidence and attested by their Chartered Accountant. The note below the qualification criteria is clause 6 of the tender and therefore, the petitioner, having entered into the field in December 2008, admittedly, having lesser period and their participation of the tender as per clause 6 of the tender notification has to be taken into consideration while considering the bid for the tender.
14. Mr.M.Raveendran, learned Additional Solicitor General appearing for respondents 1 and 2 submits that the note below the qualification criteria has prescribed that persons who do not have two years of manufacturing and marketing experience in the specific vaccine may not be given full orders without testing their ability through placement of trial order. The quantity of the trial order shall be decided by the purchaser and as on date, there is no placement of trial order. Therefore, it is within the discretion and domain of respondents 1 and 2 to decide whether the petitioner is eligible in accordance with clause 6 of the tender notification and the note below the qualification criteria. However, the learned Additional Solicitor General would specifically contend that the petitioner is ineligible to participate in the tender process and they have no two years of experience and he has admitted that for supply of a quantity of 51 doses, the third respondent has been chosen and therefore, they shall not be disturbed by any of the decision of the respondents.
15. I have heard the learned counsel appearing for all the parties and perused the entire material documents and particularly the tender notification issued by the respondents and also the impugned proceedings.
16. An analysis of the facts of the case would reveal that the petitioner is a Private Limited Company having its registered office at Old No.5, New No.13/A3, Circular Road, United India Colony, Kodambakkam, Chennai 600 024 and is a manufacturer of BCG Vaccine from its manufacturing facility at No.49, Pappankuppam Village, Near SIPCOT, Gummidipoondi Taluk, Tiruvallur District with a production capacity of 1080 lakh doses per annum from 22nd December 2008 onwards. The Company has obtained valid licences and certificates from all the authorities concerned both Central and State Government for manufacturing the vaccine. It is seen that the tender notification issued by the second respondent on 14.10.2009 for supply of various items including supply of 670.01 lakh doses of BCG Vaccine for the year 2010-11. In the tender notification, there are two conditions stipulated one in clause (a) of the qualification criteria of the tender, that only domestic primary manufacturers are eligible to participate in the tender and another in clause (b) that the bidders should have two years manufacturing and marketing experience with a note that the manufacturers who do not possess two years experience in specific vaccine will not be given full order without testing their ability through placement of trial order. Clause 6 of the tender notification dated 14.10.2009 reads as follows:-
"The manufacturers who do not have two years of manufacturing and marketing experience in specific vaccine (BCG) may not be given full orders without testing their ability through placement of trial order. The quantity of trial order shall be decided by the purchaser."
17. Besides the tender notification dated 14.10.2009, on the very same date, a proceeding was issued containing the qualification criteria, clause (b) of which says that The bidder should have 2 years manufacturing and marketing experience of substantial quantities for any vaccine in India duly supported by the documentary evidence and attested by their Chartered Accountant. The note below the qualification criteria provides that the manufacturers who do not have two years of manufacturing and marketing experience in specific vaccine (BCG) may not be given full orders without testing their ability through placement of trial order. The quantity of trial order shall be decided by the purchaser.
18. To examine the above two conditions prescribed for the claim of the petitioner that the decision arrived at by the respondents in the impugned order dated 29.7.2010 stating that the petitioner's bid was not found eligible for placement of trial orders, as it did not comply with clause (b) of the qualification criteria, it is to be stated that on scrutinization of clause 6 of the tender notification issued by the Government of India dated 14.10.2009, and the note to the eligibility criteria issued by the second respondent dated 14.10.2009, it is seen that the clause which is provided in the tender notification and the note to the eligibility criteria are one and the same and a specific clause which is mandated by the authorities in clause (b) of the eligibility criteria mandates that the bidder should have two years manufacturing and marketing experience of substantial quantities of any vaccine in India duly supported by the documentary evidence and attested by their Chartered Accountant. In the eligibility criteria, the note to the tender conditions provides that the manufacturers who do not have two years of manufacturing and marketing experience in specific vaccine (BCG) may not be given full orders without testing their ability through placement of trial order. The quantity of trial order shall be decided by the purchaser and thereafter, on satisfaction of that, they can proceed with the purchase of the vaccines. If that being so, clause 6 in the tender notification is mandatory. This has to be taken into account while deciding the claim of the petitioner, taking into account their coming into the field during December 2008 and having a production capacity of their claim upto 1080 lakh doses and also having participated in the tender process and their bid amount of Rs.28.60 per vial and similarly the third respondent also participated in the tender process and it is their case that they had experience of two years and they have quoted Rs.28.60 per vial.
19. In view of the specific averment made by the Additional Solicitor General that production of BCG vaccine at the King's Institute has been stopped and therefore, the required production quantity is 325 lakh doses in which the third respondent has been granted 51 lakh doses of quantity and taking into account the fact that if BCG vaccine is not administered to the children upto the age of one year, the child will remain unprotected for his/her lifetime and hence the remaining quantity is to be procured and if the petitioner satisfies with the condition in clause 6 of the tender notification dated 14.10.2009 and also their participation in the tender process quoting the very same rate quoted by the third respondent, the note to the eligibility criteria is to be taken into account. In the impugned proceedings, the respondents have not considered the same, but passed the impugned order stating that the petitioner's bid was not found eligible for placement of order as it did not comply to clause (b) of qualification criteria for eligibility of firms of the tender enquiry and therefore, the decision arrived at by the authorities in the tender making process is not in accordance with law.
20. In the light of the foregoing discussions and on analysing the various factors, I am of the considered opinion that the decision arrived at by the respondents is ex facie arbitrary and with total non-application of mind. Therefore, the impugned proceedings cannot be sustained and the same are set aside. The matter is remanded to the respondents for passing appropriate orders in respect of the claim of the petitioner to place trial orders for the supply of BCG vaccine to the respondents in terms of the tender submitted by the petitioner on 24.11.2009.
The writ petitions are allowed with the above directions. No costs. The connected miscellaneous petitions are closed.
ssk.
To
1. Director General of Health Services, Central Drugs Standard Control Organization, (Biological Division), FDA Bhavan, Kotla Road, New Delhi.
2. Union of India, Ministry of Health & Family Welfare, rep by its Secretary, (Vaccine Procurement Cell), Nirman Bhavan, New Delhi