Hon. Virendra Kumar Dixit, J (Delivered by Hon'ble Devi Prasad Singh, J)
1. Present writ petition under Art. 226 of the Constitution of India has been preferred against the acceptance of tender of respondent No.5 for supply of two High Energy Linear Accelerators with Image Guided Radiotherapy and Sterotactic Radiotherapy to Dr. Ram Manohar Lohia Institute of Medical Sciences, Lucknow (in short, institute). Brief facts, giving rise to the controversy, are discussed hereinafter.
2. By an advertisement dated 11.12.2009, the respondent No.2 invited tenders in sealed envelope for supply of two High Energy Linear Accelerators with Image Guided Radiotherapy and Sterotactic Radiotherapy. The last date for issuance of tender document from the office was 9.1.2010 and the last date for receipt of tender in the office of the respondent was 11.1.2010 by 5.00p.m. The bids were to be opened in the presence of authorised representative of bidders at 11.00a.m., on 12.1.2010. The relevant portion of the advertisement with regard to item for supply is reproduced as under :
"DR. RAM MANOHAR LOHIA INSTITUTE OF MEDICAL SCIENCES, VIBHOOTI KHAND, GOMTI NAGAR, LUCKNOW - 226 010.
Ref. No.RMLIMS/09-10/Purchase/884 Date :-11.12.2009 Tender Notice Sealed offers are invited from reputed manufacturer/Direct Importers/ Authorized Distributors/Authorized Agents for the supply of following equipments as per conditions stipulated in the tender documents :
Sl.No.
Equipments Earnest money 1 Two High Energy Linear Accelerators with Image Guided Radiotherapy and Sterotactic Radiotherapy Rs.24,00,000.00 2 3 Tesla clinical MRI/MRS Scanner System Rs.12,00,000.00 3 Dual Head SPECT Gamma Camera with multislice Diagnostic CT Rs.8,00,000/-
Extracorporeal Shock Wave Lithotripsy (ESWL) unit Rs.2,00,000.00 5 Intra Aortic Balloon Pump System Rs.15,000/-
3. The tender document contains general terms and conditions with regard to instruments in question which reveals that sealed tenders were invited in a two bid system, i.e. technical offer and price bid (financial bid) with two identical copies of each. It further provides that two copies of technical bids shall be submitted in one envelope while two copies of price bids shall be submitted in second envelope and both should be separately sealed. The third envelope containing draft of earnest money should be furnished in sealed cover. All three envelopes should be kept in a large envelope which is to be sealed and posted (Condition No.3). According to condition No.28 of the tender document, the equipment supplied shall carry a warranty of 60 months from the date of satisfactory installation and commissioning of the equipment. In the event of any trouble or defect, the same should be removed immediately at the own expenses of the seller as promptly as possible as may be necessary to permit the materials function in accordance with the specification and to fulfill the warranty. The institute has been given option to remove the defective material at seller's expenses. If the materials do not meet the specification, it should be obligatory on the part of the seller to attend within seven days to correct deficiency (Condition No.28, 29 and 30).
4. With regard to equipments, condition No.41 of the tender document provides that the equipment shall be of latest model and version with latest state of art technology. The technical specification of the High Energy Linear Accelerators with Image Guided Radiotherapy and Sterotactic Radiotherapy has also been given along with tender condition to bidders. The technical specification contains various items for compliance by bidders. Some of the important facet of equipments as is evident from the technical specification are as under :
Technical Specifications for two High Energy Linear Accelerators with Image Guided Radiotherapy and Sterotactic Radiotherapy Sealed tenders are invited from Manufacturers/Principals for the supply of two latest clinical medical Linear Accelerators "Type Approved by A.E.R.B.," Mumbai, with identical model and basic specifications for producing 6MV and 15MV Photons (beam matching) with Multiple Electron Energies for 3D conformal and intensity modulated radiotherapy. All the items quoted should be covered with a warranty period of five years inclusive of consumables (like SF gas, UPS batteries etc) needed to run the equipment and a commitment to provide spares for 10 years. The system should have the following additional capability and equipment for commissioning /clinical use of the system :
(A) Two high energy linear accelerators (LA) a. First LA in room A should have an Image Guided Radiotherapy attachment (IGRT) b. Second LA in room B should have stereotactic radiotherapy/radiosurgery attachment and accessories (B) Treatment planning system, network system and dosimetry accessories (A) Two High Energy Linear Accelerators : (Each accelerator should fulfill all the following requirements as under for items 1-15) Medical linear accelerators should be able to perform various specialized treatment techniques such as : Intensity Modulated Radiation Therapy (IMRT) with adaptability for up gradation for Image Guided Radiotherapy. The complete RF chain including the Klystron/Magnetron, electron gun, target, bending magnet and standing wave guide/travelling wave guide should be covered with non pro rata warranty of 10 years."
...........13. Portal Imaging :
The electronic portal imaging system shall be based on amorphous silicon flat panel detector technology. The size of the flat panel detector should be at least 30 cm x 30 cm or more with a minimum of 1024 x 768 pixel resolution.
Should be fully integrated Portal Imaging system along with linear accelerator, Should have real time imaging.
Should have integrated arm fixed along with unit, and able to take images at any gantry angles, (Robotic arm and should be remote controlled).
Should have automatic image acquisition.
Software licenses for portal imaging analysis to be stated and provided.
........(a) Image guided radiotherapy (IGRT):
The vendor should provide KV based IGRT verification system that should be FDA approved and should be in clinical use in renowned centres worldwide. The imaging system must be deployable and retractable through an automatically controlled, motorized retractable arms. For image guidance, either the digitally reconstructed radiograph from the planning system or a 2D image (kv or MV imaging) and 3D cone beam CT image set will be kept as the reference image and the appropriate image set acquired on the subsequent treatment days will be compared against this reference standard. All such data shall be automatically stored in the database. The software shall have advanced features for automatic image registration of the 3D image sets. It shall also have very efficient display tools for this purpose. Additionally, it should be possible to superimpose the DICOM-RT structure sets from TPS on the cone beam CT image data. It should be possible to adaptive radiotherapy. When a flat panel is provided for MV/MV imaging (2D or 3D), such a panel will be of amorphous silicon technology with a minimum size of 30cm x 30 cm. Import of CBCT for dose calculation and evaluation should be possible."
5. The general condition along with warranty provided with regard to equipment is as under :
General Conditions :
1. The supplier shall quote for the most recent model of their machine.
2. Number of installations in India and worldwide should be provided for the quoted model only. Such installations should have been supplied directly by the quoting firm itself.
3. Declare separately the FOB and CIP prices.
4. List of factory-trained engineers (Linear accelerator) in India should be provided.
5. Time taken to ship the spare parts during warranty period and also after warranty period should be specified.
Parts to be delivered at the doorsteps of the Institute without any additional charges.
6. Up time guarantee of 95% or more should be provided during warranty and CMC period.
7. Warranty : The supplier shall give a comprehensive warranty for five years after installation on the entire linac system including local items (and battery replacements).
8. The supplier should provide comprehensive maintenance contract inclusive of customs and all taxes for the next five years (i.e. years 6 to 10 inclusive). T. All the items including consumables for functioning the equipment need to be included in the CMC and no exclusion criteria will be accepted. The batteries of the UPS will be included in the above CMC quote. During the CMC period spare parts to be delivered at the doorstep of the institute without any additional charges.
9.Electrical panel distribution and turnkey jobs (vide infra) such as furniture for control console and inside the Linear Accelerator room for housing all equipment related accessories will be included in the quote in Indian Rupees along with the staggered payment terms.
10. The lower bidder (L 1) will be identified by adding up prices quoted as follows :
....................13. The Linear accelerator and necessary accessories like MLC, TPS etc shall be FDA approved and necessary certificates shall be provided.
14. The machine shall be AERB type approved.
15. Linear accelerator service facility should be available at least in North India such as at New Delhi, etc.,
16. Time taken for the delivery of the equipment and installation and commissioning should be mentioned.
17. Uptime Warranty : 95% uptime warranty should be provided. In case the equipment is down beyond the 95% uptime, penalty of Rs.5000/- per working day will be levied/subtracted from the CMC payment as under for each item 1-3 for a maximum period of one month. Beyond one month, in addition to the penalty clause as above, the CMC charges will also not be paid for the proportional period the equipment was down. The warranty would be divided into 3 items, and if any component of an item is non functional - the warranty of the entire item would be extended for the said period. If the planning systems /network is down, the warranty of the all the three items 1 -3 will be extended for the said period.
6. After opening of tenders in the presence of the representative of the bidder on 12.1.12010, the petitioner came to know that the undue advantage has been given to the respondent No.5. Hence, feeling aggrieved, he submitted a representation dated 10.3.2010 (Annxure-4), in response to which, the Technical Committee sought clarification from the respondent No.3 vide its letter dated 15.3.2010 (Annexure-5). On account of alleged deviation from tender condition, the petitioner also submitted a representation dated 23.3.2010 (Annexure No.6) to defer finalisation of bid. It has been pleaded and stated by the petitioner's counsel that in pursuance to the order dated 23.4.2010, passed by this Court, the Technical Committee prepared a report which is contrary to tender condition given in the advertisement. It is stated that the condition of fully automatic machine is not fulfilled by the respondent No.5. Even then the Technical Committee opined that even without conforming to the tender pre condition, there shall be no significant difference in the quality of images. It is stated that the danger of exposing the technicians and doctors to unwarranted exposure to radiation while adjusting the manual arm has been ignored by the Technical Committee with intention to give undue favour to the respondent No.5. It has been submitted by the petitioner's counsel that against the warrantee of ten years required under tender precondition, the opposite party No.5 has given warranty of one year. A different bid has been given of different machine than what has been invited by the advertisement. The automatically controlled, motorized retractable arms is the basic and most important requirement of the tender precondition which has been replaced by manual operative arm and has been bypassed by the Technical Committee on the ground that it shall not affect the quality of images.
7. It is further stated by the petitioner's counsel that while calculating the total price, deliberately wrong arithmetical calculation has been done by the opposite parties 2 and 3. The tender has to be submitted in two bid system - the technical bid and financial bid. The bid offered by the opposite party No.5 is alleged to be conditional in derrogation of the condition No.14 of the tender precondition. It is also alleged that the respondent No.5 has also not offered the total price of the machine inclusive of custom duty obtroi clearance charges and all other charges. It is further submitted that the officer of 8% discount by the respondent No.5 of the technical bid is objectionable against the tender condition.
8. Mrs. Santosh Agarwal, Joint Director of the respondent No.5 has initially filed counter affidavit on 7.4.2010. In response to the averments contained in para 14 of the writ petition with regard to automatically controlled, motorized retractable arms in para 13 of the counter affidavit, it has been stated that the equipment offered by the respondent No.5 is having automatic movement of imaging canal as per tender specification. In response thereto, in para 12 of the rejoinder affidavit, the argument contained in the writ petition has been reiterated. It has been stated that the FDA approval dated 12.4.2005 was for XVI R 3.5 ('IGRT' 3.5) but in the technical bid the respondent No.5 has not mentioned as to which kind/series of XVI they are going to provide. It has been further stated that the respondents are going to provide XVI R 3.5 version which is not the latest but it is of old technology and averment has been supported by annexing a copy of notice circulated by the respondent No.5 attached as Annexure RA-1 to the rejoinder affidavit. It is categorically stated in para 12 of the rejoinder affidavit that the system offered by the respondent No.5 does not have IGRT which is deployable and retractable through an automatically controlled Motorized retractable arm. It is further stated that the respondent No.5 has quoted the specification of portal imaging device at the place of IGRT.
9.It has been vehemently stated by the petitioner's counsel that according to Clause 13 of the tender precondition, the portal imaging should have integrated arm fixed along with unit and able to take images at any gantry angles (robotic arm and should be remote control) and the portal imaging system shall be based on Amorphous Silicon Flat Panel Detector Technology. It is asserted that the portal imaging is a separate device from that of IGRT and the respondents have pleaded false facts collusively stating that the system the respondent No.5 sought to supply is IGRT system. It has also been stated by the petitioner's counsel that the equipments supplied by the respondents lacks approval from Food and Drug Authority (FDA). During the course of proceeding, a Technical Committee was constituted in pursuance to order passed by this Court to evaluate the technical bid. The technical committee stated that the equipment supplied by the respondent No.5 has got approval of United States Food and Drug Administration (FDA) and the model offered by the respondent No.5 is used in other centres of the country with regard to imaging system (IGRT).
10. The Technical Committee appointed by the High Court consists of Head of Department Shaleen Kumar, Professor & Head, Department of Radiotherapy, S.G.P.G.I. as its Chairman along with other experts. The Committee has submitted its report on 21.5.2010. The report of the Committee to the extent it relates to claim of the parties is reproduced as under :
"A point wise clarification as directed in the interim order of the Hon'ble High Court (Annexure 5, 2 pages follows.
Observation/query Clarification 1 Radiotherapy machine sought to be supplied by respondent no, 5, M/s Elekta Medical System (India) Pvt. Ltd. does not conform to the specifications given in the tender notice. Specifically:
The committee disagrees. Please confer document dated 22 March 2010 at Annexure 6, 51 pages "Technical Bid Comparison of High Energy Linear Accelerator With IGRT and SRT, RML'
(a) does not conform to the requirement of FDA approval Has approval of United States Food and Drug Administration (FDA0 (Annexure 7, 14 pages)
(b) not used at renowned centres The model offered. Synergy is in use in several centers (Govt) and private, in India, (Annexure 8, 1 page) including All India Institute of Medical Sciences and also abroad.
(c) imaging system is not deployable and retractable through an automatically controlled motorized retractable arm as required in clause 16-A The imaging system in consideration consists of two arms: (1) X-ray source and (2) detector. While the X-ray sources is deployed and parked manually, the detector is deployed and parked via a motorized mechanism. This arrangement in no way conflicts with its intended function or reduces patient throughput. A corroborative view is annexed from a premier, tertiary care academic institute from India (Annexure 9, page, comments by Head, Medical Physics Unit of All India Institute of Medical Sciences, New Delhi) 2 Radiotherapy machine being offered by respondent No.5 does not confirm to the aforesaid requirement of portal imaging, which is a 2D dimension machine but it lacks the requirement as given in IGRT, which is a 3-D dimension machine.
The Committee disagrees. The machine offered by espondent no.5 is Synergy with XVI, which is capable of 3-D volumetric image guided radiotherapy (IGRT). Relevant pages of technical bid enclosed (Annexure 10, 5 pages, and Annexure 9, 1 page, comments by Head, Medical Physics of All India Institute of Medical Sciences) 3 The Technical Committee that has approved the technical bid of both the parties, has not given any finding on the objection of the petitioner but only after narrating the version of the petitioner as well as respondent no.5, has said that the machines conform to the standards prescribed The committee had considered the representation to all the points. Vide infra.
Reference is made to letter No. VMSIPL/DEL/MAR 10/0527 Dated 10 March 2010. The relevant points are
1. As per their technical bid the price offered for the above items are "Total CIP Price at New Delhi airport US $ 57335 (Fifty seven thousand three hundred thirty five only)"
As per your tender specifications it should be quoted through two bid system where any information on price in technical bid deserves disqualification of bidder. Hence we request you to take the appropriate action on the same.
The technical Committee sought clear directions from the copetent authority of the Dr RML Institute vide letter No. PGI/RT/RML/181/10 dated 15 March 2010 in respect of the alleged violation of process/procedure brought to notice of Director Dr RML Institute (and copied to the technical committee) by the petitioner. The competent authority of Dr RML Institute vide letter dated 17 March 2010 directed the technical committee to proceed in the process of evaluation. (Annexure 11, 9 pages).
2. Warranty-Tender Specifications (I) The complete RF chain including the Klystron/Magnetron, electron gun, target, bending magnet and standing wave guide/travelling wave guide should be covered with non pro rata warranty of 10 years;-2 years warranty for Magnetron was mentioned
(ii) 10 years warranty for RF chain including wave guide, Electron gun, bending magnet and others are no where mentioned in the quote
(iii) The Equipment supplied shall carry a warranty of 60 months from the date of satisfactory Installation and commissioning of the equipment.- One year warranty for the machine is also mentioned.
(iv) offered price does not include customs duty, clearance for components during warranty, post warranty upto five years and and 10 years warranty for RF Chain has to be borne by RMLIMS Clarification from respondent no.5 sought during technical committee meeting which was communicated in writing.
2. FDA No FDA is enclosed for IGRT (XVI), TPS, MLC, and Focal Sim and Focal Pro Enclosed, Annexure 7 3. Phantom for 4D/Respiratory Gating Not quoted-...? Clarification from respondent no.5 sought during technical committee meeting which was communicated in writing. 4. IGRT Tender Specifications- The vendor should provide KV based IGRT verification system that should be FDA approved and should be in clinical use in renowned centers, worldwide. - Not Available The imaging system must be deployable and retractable through an automatically controlled, motorized retractable arm. - Not possible Has approval of United States Food and Drug Administration (FDA)(Annexure 7) The model offered. Synergy is in use in several centers (Govt) and private, in India, (Annexure 8) including All India Institute of Medical Sciences and also abroad.
The imaging system in consideration consists of two arms : (1) X-ray source and (2) detector. While the X-ray source is deployed and parked manually, the detector is deployed and parked via a motorized mechanism. This arrangement in no way conflicts with its intended function or reduces patient throughput. A corroborative view is annexed from a premier, tertiary care academic institute from India (Annexure 9)
5. Networking Tender Specifications Comprehensive oncology information & record & verify system; Record and verify treatment parameters of patients undergoing treatment on the Linac should be one comprehensive database with Record and Review Patient Diagnoses; plan a course of treatment, write RT prescriptions, track dose to specific sites; define site breakpoints.
Electa has quote Mosaiq desk top with Impac server : where as to match the tender specifications they should quote MOSAIQ Multi Access or MOSAIQ 2.0. Otherwise they can't meet the tender specifications Clarification from respondent no.5 sought during technical committee meeting which was communicated in writing.
6. Synergistiq Tender Specifications - Interface with Treatment Planning System DICOM 3 and DICOM RT interface should be included. Import of CBCT data for treatment planning and visualization of dose distribution should be possible. Synergistiq has not been quoted.
Included in the technical bid of respondent no.5, Annexure 12, 4 pages.
The Committee reconsidered the offer of both the parties, gave them an opportunity to participate and the conclusions in respect of technical suitability of the offers of radiotherapy equipment by the petitioner and respondent no.5 remain unchanged i.e. M/s Elekta Ltd and M/s Varian Medical Systems are technically eligible.
Thanking you,"
11. A perusal of the report indicates that the Committee has recorded its finding with regard to instruments in question and observed that imaging system has two parts - X-Ray source and detector, out of which the detector is fully automatic whereas X-Ray source is deployed and parked manually. A perusal of the terms of advertisement as well as technical specification of the instrument(supra) shows that the imaging system must be deployable and retractable through an automatically controlled motorized retractable arms. The software should have advanced features for automatic imaging registration of 3D image sets. The imaging system should be fully integrated along with linear accelerator. Thus, according to specification and terms and conditions provided by the advertisement as well as supplied with the tender form, the whole imaging system must be automatically controlled. The letter and spirit of the technical specification is the X Ray Source as well as detector both should be automatic whereas in the present case, admittedly, X Ray source is manually operated whereas detector is automatic.
12. While making a statement before this Court on 29.4.2011, it was admitted by Shri Shaleen Kumar, Professor & Head, Department of Radiotherapy and Chairman of the Technical Committee that fully automatic imaging system is available in the market. However, automation of X Ray source does not make any difference and the instrument proposed to be supplied by both the parties is of identical feature. Keeping in view the report of the Technical Committee and the statement made before the Court, there appears to be no dispute that the imaging system has mainly two parts. i.e. X Ray source and detector and in market, fully automatic imaging system is available even if automation of X Ray source does not make any difference as submitted by the Chairman of the Technical Committee.
Whether the respondents have got right to purchase in pursuance to tender notice, a machine which does not conform to the advertisement ? We are not considering other arguments advanced by the petitioner's counsel since the case may be decided on this ground alone. The supply of machine of different specification contrary to the demand under terms and conditions of tender requires consideration. Whether automatic X Ray source create additional benefit or not is a subject matter to be considered by expert of the field. Though Shri Shaleen Kumar submits that it shall not make any difference even if X Ray source is not automatic but keeping in view the fact that fully automatic imaging system is available in the market whether the respondents have got right to relax the tender conditions with regard to specification of machine ? Ordinarily, specification of equipment or machine, given in the tender form cannot be relaxed except by publication of a corrigendum. In the present case, no corrigendum was published. Since it is not disputed that the fully automatic imaging system is available in the market, hence in case the petitioner vis-à-vis the private respondent does not fulfil the required condition, then the tenders submitted by both of them will not fulfil the required condition. Needless to say that in case the respondents want an instrument having imaging system of which X Ray source may be operated manually and with automatic detector and in case such condition would have been given in the advertisement, other manufacturers of the field would have applied in pursuance to advertisement containing such conditions. Since the number of manufacturers producing fully automatic imaging system seems to be less or few, hence the number of applicants would be lesser in number. In case the petitioner and private respondent do not fulfil the conditions, then step which should have been taken by the respondents is to readvertise the tender relaxing the specification of the equipment in question with regard to imaging system so that the manufacturers in this country or outside could have applied but the same has not been done.
13. Now, we have to consider some of the cases relied upon by the learned counsel for the parties.
14. In (1979)3 SCC 489 Ramana Darayar Shetty versus International airport Authority of India and others, Hon'ble Supreme court held that the standard of eligibility laid down in the notice for tender cannot be departed from arbitrarily. Such departure from standard will amount to denial of equality of opportunity to those who felt bound by the standard of eligibility and therefore, did not submit their tenders. Any relaxation of standard of eligibility at the time of considering the tenders or applications will amount to denial of opportunity to those who considering themselves ineligible did not apply. Such parties otherwise competent will have standing to impugne the decision awarding benefit to any party not eligible by the standards or norms laid down initially. To reproduce relevant portion :
"10.Now, there can be no doubt that what paragraph (1) of the notice prescribed was a condition of eligibility which was required to be satisfied by every person submitting a tender. The condition of eligibility was that the person submitting a tender must be conducting or running a registered 2nd class hotel or restaurant and he must have at least 5 years' experience as such and if he did not satisfy this condition of eligibility his tender would not be eligible for consideration. This was the standard or norm of eligibility laid down by the 1st respondent and since the 4th respondents did not satisfy this standard or norm, it was not competent to the 1st respondent to entertain the tender of the 4th respondents. It is a well settled rule of administrative law that an executive authority must be rigorously held to the standards by which it professes its actions to be judged and it must scrupulously observe those standards on pain of invalidation of an act in violation of them. This rule was enunciated by Mr. Justice Frankfurter in Viteralli v. Seton : where the learned Judge said:
An executive agency must be rigorously held to the standards by which it professes its action to be judged. Accordingly, if dismissal from employment is based on a defined procedure, even though generous beyond the requirements that bind such agency, that procedure must be scrupulously observed. This judicially evolved rule of administrative law is now firmly established and, if I may add, rightly so. He that takes the procedural sword shall perish with the sword.
.................................................
34.It is, therefore, obvious that both having regard to the constitutional mandate of Article 14 as also the judicially evolved rule of administrative law, the 1st respondent was not entitled to act arbitrarily in accepting the tender of the 4th respondents, but was bound to conform to the standard or norm laid down in paragraph 1 of the notice inviting tenders which required that only a person running a registered IInd Class hotel or restaurant and having at least 5 years' experience as such should be eligible to tender. It was not the contention of the appellant that this standard or norm prescribed by the 1st respondent was discriminatory having no just or reasonable relation to the object of inviting tenders namely, to award the contract to a sufficiently experienced person who would be able to run efficiently a IInd class restaurant at the airport. Admittedly the standard or norm was reasonable and non-discriminatory and once such a standard or norm for running a IInd Class restaurant should be awarded was laid down, the 1st respondent was not entitled to depart from it and to award the contract to the 4th respondents who did not satisfy the condition of eligibility prescribed by the standard or norm. If there was no acceptable tender from a person who satisfied the condition of eligibility, the 1st respondent could have rejected the tenders and invited fresh tenders on the basis of a less stringent standard or norm, but it could not depart from the standard or norm prescribed by it and arbitrarily accept the tender of the 4th respondents. When the 1st respondent entertained the tender of the 4th respondents even though they did not have 5 years' experience of running a IInd Class restaurant or hotel, denied equality of opportunity to others similarly situate in the matter of tendering for the contract. There might have been many other persons, in fact the appellant himself claimed to be one such person, who did not have 5 years' experience of running a IInd Class restaurant, but who were otherwise competent to run such a restaurant and they might also have competed with the 4th respondents for obtaining the contract, but they were precluded from doing so by the condition of eligibility requiring five years' experience. The action of the 1st respondent in accepting the tender of the 4th respondents, even though they did not satisfy the prescribed condition of eligibility, was clearly discriminatory, since it excluded other person similarly situate from tendering for the contract and it was plainly arbitrary and without reason The acceptance of the tender of the 4th respondents was, in the circumstances invalid as being violative of the equality clause of the Constitution as also of the rule of administrative law inhibiting arbitrary action."
15. In the case reported in (1986)2 SCC 594 Chaitanya Kumar and others versus State of Karnataka and others, Hon'ble Supreme Court held that the government may enter into contract with any person but while doing so, the State or its instrumentality cannot act arbitrarily. In case the authority of the State chooses to invite tenders then it must abide by the conditions laid down in the tender notices. In case tender form submitted by any party is not in conformity with the conditions of tender notice, the same should not have been accepted.
Controversy before Hon'ble Supreme Court was for supply of pasteurized milk instead of fresh buffalo or cow milk as specified in the tender notice. Hon'ble Supreme Court held that in such situation, the opportunity should have been given to change the tender. Hon'ble Supreme court further held that since the tender submitted was not in conformity with the tender notice, hence, it should not have been accepted by the authorities.
16. In (1986)3 SCC 247 Harminder Singh Arora versus Union of India and others, Hon'ble Supreme court held that once the government decided to award contract on the basis of bid by tender, it must abide by terms of tender.
17. In (1995(1) SCC 478 New Horizons Limited and another versus Union of India and others, Hon'ble Supreme Court ruled that in the matter of entering into a contract, State does not stand on the same footing as private person who is free to enter into a contract to any person he like. The State in exercise of its various provisions is governed by the mandate of Art. 14 of the Constitution of India which excludes arbitrariness in State action and requires the State to act fairly and reasonably. The government cannot act arbitrarily at its sweet will like a private individual and deal with any person it pleases but its action must be in conformity with the standard or norms which are not arbitrary, irrational and irrelevant. Of course, certain measures of "free play in the joints" is necessary for an administrative body functioning but that too without violating the fundamental right guaranteed under Article 14 of the Constitution of India.
18. In 1993 Vol1 SCC 492 Raunak International Limited versus IVR Construction Limited, Hon'ble Supreme Court observed that a criteria can be relaxed only in case relaxation is permissible under the terms of tender.
However, in the present case, neither in the advertisement nor the tender condition provides that instead of fully automatic imaging system, a partial automatic imaging system (supra) may be purchased by relaxing the published conditions.
19. In (2001)2 SCC 451 West Bengal State Electricity Board versus Patel Engg. Company Limited and others, Hon'ble Supreme Court declined to permit to correct the negligent mistake in bid document on the basis of equity. Hon'ble Supreme Court further held that rules and conditions have to be complied with even in respect of lowest bid. The principle of awarding contract to lowest tenderer as applied when all the things are equal. In case the conditions are not satisfied, then there is no obligation to award contract to lowest bidder.
Accordingly, even if the bid of respondent No.5 is lower, it shall not create a ground to award contract in case other material conditions are not satisfied. It is essential to maintain the sanctity and process of the tender of the bid and also award a contract. It shall be appropriate to reproduce relevant portion from the judgment of West Bengal Electricity Board(supra) ; to quote :
"The submission that remains to be considered is that as the price bid of Respondents 1 to 4 is lesser by 40 crores and 80 crores than that of Respondents 11 to 10 respectively, public interest demands that the bid of Respondents 1 to 4 should be considered. The Project undertaken by the appellant is undoubtedly for the benefit of the public. The mode of execution of the work of the Project should also ensure that the public interest is best served. Tenders are invited on the basis of competitive bidding for execution of the work of the Project as it serves dual purposes. On the one hand it offers a fair opportunity to all those who are interested in competing for the contract relating to execution of the work and, on the other hand, it affords the appellant a choice to select the best of the competitors on a competitive price without prejudice to the quality of the work. Above all, it eliminates favouritism and discrimination in awarding public works to contractors. The contract is, therefore, awarded normally to the lowest tenderer which is in public interest. The principle of awarding contract to the lowest tenderer applies when all things are equal. It is equally in public interest to adhere to the rules and conditions subject to which bids are invited. Merely because a bid is the lowest the requirements of compliance with the rules and conditions cannot be ignored. It is obvious that the bid of Respondents 1 to 4 is the lowest of bids offered. As the bid documents of Respondents 1 to 4 stand without correction there will be inherent inconsistency between the particulars given in the annexure and the total bid amount, it (sic they) cannot be directed to be considered along with the other bids on the sole ground of being the lowest."
20. In 2007 Vol. 10 SCC 333 Puravankara Projects Limited versus Hotel Venus International and others, Hon'ble Supreme Court held that duty to act fairly which is sought to be imported into a contract to modify and/ or alter its terms and/or to create an obligation upon the State government which is not there in the contract is not covered by any doctrine of fairness or reasonableness. Duty to act fairly and reasonably is a doctrine developed in Administrative Law field to ensure rule of law and to prevent failure of justice when the action is administrative in nature. Just as the principle of natural justice ensure fair decision where function is quasi judicial, the doctrine of fairness is evolved to ensure fair action when the function is administrative. But the said principle cannot be invoked to amend, alter or vary the expressed terms of the contract between the parties.
21. In 2009 Vol. 11 SCC 9 Sorath Builders versus Shreejikrupa Buildcon Limited and another, Hon'ble Supreme Court reiterated the age old settled law that the terms and conditions of the tender are required to be adhered to strictly.
22. Much emphasis has been made by Mr. S.M.K. Chaudhari, learned Senior Counsel on the case reported in 1991 Vol.3 SCC 273 Poddar Steel Corporation versus Ganesh Engineering Works and others with submission that the tender conditions could have been relaxed to purchase an equipment with automatic detector and manual X Ray source since the equipment proposed to be supplied by the respondent No.5 is being used in S.G.P.G.I. and K.G.M.C as well as at All India Institute of Medical Sciences.
In the case of Poddar Steel Corporation(supra), bankers cheque marked and certified by the Union Bank of India was signed along with tender by the highest bidder whose bid was accepted, Hon'ble Supreme Court held that the certified cheque of the Union Bank of India drawn on its own branch must be treated as sufficient for the purpose of achieving the object of the condition and the tender Committee took an abundant caution for further verification from the bank. Accordingly, Hon'ble Supreme Court held that the authority inviting the tenders may deviate to some extent in such situation with regard to minor irregularity. However, present case seems to be based on different facts and circumstances where the question relates to fully automatic machine or imaging system or semi automatic. The advertisement was for 'fully automatic imaging system' but the machine proposed to be supplied by the respondent No.5 is semi automatic where X Ray source is manual and detector is motorized one does not seem to fulfil the condition with regard to specification provided in the tender condition or advertisement.
23. In (1999)1 SCC 492 Raunaq International Limited versus I.V.R. Construction Limited and others, Hon'ble Supreme Court held that the public interest litigation should be bona fide for public good and not merely cloak for attaining private ends. The award of contract is a commercial transaction and in arriving at a commercial decision, the paramount importance are commercial considerations fulfilling certain conditions in terms of tender. To reproduce para 9 :
"9. The award of a contract, whether it is by a private party or by a public body or the State, is essentially a commercial transaction. In arriving at a commercial decision considerations which are of paramount importance are commercial considerations. These would be :(1) The price at which the other side is willing to do the work; (2) Whether the goods or services offered are of the requisite specifications; (3) Whether the person tendering has the ability to deliver the goods or services as per specifications. When large works contracts involving engagement of substantial manpower or requiring specific skills are to be offered, the financial ability of the tenderer to fulfil the requirements of the job is also important; (4) the ability of the tenderer to deliver goods or services or to do the work of the requisite standard and quality; (5) past experience of the tenderer, and whether he has successfully completed similar work earlier; (6) time which will be taken to deliver the goods or services; and often (7) the ability of the tenderer to take follow up action, rectify defects or to give post contract services. Even when the State or a public body enters into a commercial transaction, considerations which would prevail in its decision to award the contract to a given party would be the same. However, because the State or a public body or an agency of the State enters into such a contract, there could be, in a given case, an element of public law or public interest involved even in such a commercial transaction."
The case of Raunaq International(supra) does not extend any help to the respondents. Hon'ble supreme Court itself ruled that out of seven paramount importance or conditions, one is whether the goods and certificates offered are of requisite specification. In the present case, at the face of record, the equipment proposed to be supplied by the respondents is not of requisite specification provided by the terms and conditions and the advertisement of the tender.
24. In AIR 2007 SC 437 M/s. B.S.N. Joshi & Sons Limited versus Nair Coal Service; Limited and others, Hon'ble Supreme Court ruled that the plea not raised in the writ petition cannot be urged during hearing. It is further held that a decision taken to award contract in public interest should ordinarily be not interfered. Where employer exercises power to relax certain conditions when shown to be fair and bona fide, the court should not interfere. However, the facts and circumstances and ratio of the case of B.S.N. Joshi seems to be not applicable in the present context. Every case is to be considered keeping in view the controversy and question of law involved. The judgments of Hon'ble Supreme Court should be considered in reference to context befitting to the facts and circumstances and controversy involved therein.
25. In view of above, since the respondent No.5 does not propose to supply the same fully automatic equipment in terms of the tender condition, on this ground alone, the impugned decision taken by the respondents seems to suffer from substantial illegality and violative of Art. 14 of the Constitution of India.
26. Where the government is dealing with public by creating job or entering into contract or issuing quota or licence or granting other forms of largesse, the State cannot act arbitrarily at its sweet will like a private individual and deal with any person it pleases. The action of the government or its instrumentalities must be in conformity with the standard or norms which is not arbitrary, irrational or irrelevant.
27. The power or discretion of the government must be confined in structured by rational, relevant and non-discriminatory standard and norms. If the government departs from such standard or norms, in any case or cases the action of the government would be liable to be struck down unless the government shows that the departure was not arbitrary but was based on some valid principle which in itself was not irrational, unreasonable and discriminatory.
28. In the present case, though it has been vehemently argued that the X Ray machine proposed to be supplied by the respondent No.5 fulfills all the required standard and it is same which the petitioner wants to supply and the same machine is used in S.G.P.G.I. Lucknow as well as Medical College but the machine which the respondents proposed to supply does not fulfil the specification provided in the tender notice as well as advertisement. The advertisement as well as tender notice specifically provides that the machine must contain fully automatic imaging system. Neither the tender nor the advertisement empowers the authorities to relax the condition with regard to specification of the machine. Accordingly, the respondents 1 to 4 have got no right to relax the specification at the stage of finalization of contract. By permitting to do so will deprive other manufacturers who may intend to supply semi automatic machine for participating in the tender process. Permitting to do so will be violative of settled principle of law and hit by Art. 14 of the Constitution of India(supra).
29. Since on this ground alone, the decision taken by the respondents seems to suffer from substantial illegality, we are not entering into other questions raised by the petitioner's counsel. Award of contract in favour of the respondent No.5 is in violation of the tender conditions particularly with regard to specification of equipment in question, hence bad in law. The argument of the respondents as well as the state and the Head of Department S.G.P.G.I. that there shall be no difference in a fully automatic imaging system and the semi automatic where X Ray source is operated manually and detector is motorized one, i.e. automatic, seems to be of no help. The courts are not concerned with the decision taken by the respondents or the authorities but concerned with decision making process. Power conferred to this Court under Art. 226 of the Constitution is to ensure procedural fairness in action or the decision and not the decision itself vide 1994(6)SCC 651 Tata Cellular versus Union of India, (2009)12 SCC 159 State of Maharashtra and others versus Prakash Prahlad Patil and others.
30. Even if the equipment in question is equally good like fully automatic imaging system, it is not open for this court to enter into this aspect of the matter except to ensure procedural fairness required by law (supra). Permitting the respondents to change the terms and conditions of tender or specification of the equipment at the stage of finalization of tender means depriving the other tenderers or manufacturers to participate in the tender process which does not seem to be permissible under law.
31. Accordingly, the writ petition deserves to be and is hereby allowed. A writ in the nature of certiorari is issued quashing the contract awarded to the respondent No.5 for supply of two pieces of High Energy Linear Accelerators with Image Guided Radiotherapy and Sterotactic Radiotherapy in pursuance to tender notice dated 11, Dec. 1999 with consequential action. Keeping in view the fact that because of pendency of the writ petition in this Court, the equipment, namely High Energy Linear Accelerators with Image Guided Radiotherapy and Sterotactic Radiotherapy could not be purchased and patients may suffer and the prominent hospital of this city may be ill equipped causing public loss and injury, it shall be appropriate that fresh tender be invited for the purchase of equipments specifying the condition afresh to meet out the requirement and purchase the same expeditiously say within a period of three months. The process of re-advertisement/inviting of tender afresh for supply of High Energy Linear Accelerators with Image Guided Radiotherapy and Sterotactic Radiotherapy may be completed within the said period of three months.
Costs easy.
(Virendra Kumar Dixit, J) (Devi Prasad Singh, J) May 11, 2011 kkb/