M/S. Bharat Biotech International Ltd. v. State of Kerala and Kerala Medical Service Corporation Ltd.

## **IN THE HIGH COURT OF KERALA AT ERNAKULAM** **PRESENT:** ## **THE HONOURABLE MR.JUSTICE T.R.RAMACHANDRAN NAIR** ## **TUESDAY, THE 20TH DAY OF NOVEMBER 2012/29TH KARTHIKA 1934** ## **WP(C).No. 21192 of 2012 (Y)** **---------------------------** ## **PETITIONER :** **--------------------** **M/S. BHARAT BIOTECH INTERNATIONAL LTD. REPRESENTED BY R. KISHORE KUMAR BUSINESS CO-ORDINATOR, GENOME VALLEY, TURKAPALLY SHAMEERPET, HYDERABAD-500078, ANDHRA PRADESH.** **BY ADVS.SRI.M.K.DAMODARAN (SR.) SRI.P.K.VIJAYAMOHANAN SRI.ALAN PAPALI SRI.GILBERT GEORGE CORREYA SRI.NISHIL.P.S. SMT.O.V.BINDU SRI.J.VIMAL** **RESPONDENT(S): --------------------------** **1. STATE OF KERALA, REPRESENTED BY THE SECRETARY TO GOVERNMENT HEALTH AND FAMILY WELFARE DEPARTMENT GOVERNMENT SECRETARIAT, THIRUVANANTHAPURAM-695001.** **2. THE KERALA MEDICAL SERVICE CORPORATION LTD., REPRESENTED BY ITS MANAGING DIRECTOR NRHM BUILDINGS, GENERAL HOSPITAL JUNCTION THIRUVANANTHAPURAM-695035.** **R2 BY ADV. SRI.M.AJAY, SC, KERALA MEDICAL SERVICE CORPORATION** **THIS WRIT PETITION (CIVIL) HAVING BEEN FINALLY HEARD ON 02-11-2012, THE COURT ON 20-11-2012 DELIVERED THE FOLLOWING:** **Mn** **...2/-** ## **WP(C).No. 21192 of 2012 (Y)** ## **APPENDIX** ## **PETITIONERS' EXTS :** **EXT P1: TRUE COPY OF THE TENDER NOTIFICATION NO.KMSCL/DRGED (II)/ RC/2012/001 DATED 1.1.2012. EXT P2: TRUE OCPY OF THE REPRESENTATION DATED 17.1.2012 FILED BEFORE THE 2ND RESPONDENT. EXT P3: TRUE COPY OF THE AMENDMENT NO.2 DATED 28.1.2012 ISSUED BY THE 2ND RESPONDENT. EXT P4: TRUE COPY OF THE PROVISIONAL SUPPLIER RATE LIST DATED 26.3.2012 PUBLISHED BY THE 2ND RESPONDENT IN THEIR OFFICIAL WEBSITE. EXT P5: TRUE COPY OF THE COMMUNICATION NO.KMSCL/DRG/FS/001TENDER/2012 DATED 30.3.2012 OF THE 2ND RESPONDENT. EXT P6: TRUE COPY OF THE BID RANKING STATUS PUBLISHED ON 10.4.2012. EXT P7: TRUE COPY OF THE COMMUNICATION NO.KMSCL/DRG/FS/001-TENDER ISSUED BY THE 2ND RESPONDENT TO THE PETITIONER COMPANY DATED 10.4.2012 INVITING FOR HEARING BY PRINCIPAL SECRETARY. EXT P8: TRUE COPY OF THE LETTER SEEKING FOR CLARIFICATION DATED 25.4.2012 ISSUED BY THE 2ND RESPONDENT. EXT P9: TRUE COPY OF THE EXPLANATION DATED 5.5.2012 OF THE PETITIONER. EXT P10: TRUE COPY OF THE NOTICE DATED 27.8.2012 FOR CANCELLATION OF TENDER. EXT P11: TRUE COPY OF THE RE-TENDER NOTIFICATION DATED 27.8.2012 AND THE SCHEDULE OF THE TENDER.** ## **RESPONDENTS' EXTS :** **EXT R2(a): COPY OF THE COMPLAINT DATED 28TH JANUARY, 2012.** **EXT R2(b): COPY OF THE NOTICE ISSUED BY THE KMSCL TO M/S. CADILA HEALTHCARE LTD DATED 8.3.2012 & 16.3.2012. EXT R2(c): COPY OF THE OBJECTIONS RECEIVED FROM M/S. CHIRON BEHRING LTD DATED 22.3.2012. EXT R2(d): COPY OF THE OBJECTIONS RECEIVED FROM M/S. INDIAN IMMUNOLOGICAL LTD DATED 26.3.2012.** **EXT R2(e): COPY OF THE OBJECTIONS RECEIVED FROM THE PETITIONER HEREIN DATED 24.3.2012.** **(Contd...)** **WP(C).No. 21192 of 2012 (Y)** **EXT R2(f): COPY OF THE MINUTES OF THE MEETING HELD IN THE CHAMBERS OF THE PRINCIPAL SECRETARY, HEALTH DATED 16.4.2012.** **EXT R2(g): COPY OF THE MINUTES OF THE COMMITTEE HEADED BY THE TENDER INVITING AUTHORITY DATED 6.6.12.** ## **//TRUE COPY//** **P.S. TO JUDGE** **Mn** ## **T.R.RAMACHANDRAN NAIR, J.** **- - - - - - - - - - - - - - - - - - - - - - - - - -** ## **W.P.(C).No. 21192 of 2012** **- - - - - - - - - - - - - - - - - - - - - - - - - - DATED THIS THE 20[th] OF NOVEMBER, 2012** ## **JUDGMENT** Mainly, the petitioner challenges the cancellation of the tender as well as the retender notification issued as per Ext.P11. It is contended that the petitioner's financial bid was the lowest one pursuant to Ext.P1 notification and the attempt to have a retender is clearly malafide and is to deny the grant of contract to the petitioner. 2. The petitioner company is engaged in the manufacture and supply of medicinal items under the Drugs and Cosmetics Act. The tender herein is one concerning the supply of Rabies Vaccine. It is stated that the petitioner is one of the largest manufacturing companies having turn over of more than Rs. 100 crores for the last financial year and they have been supplying their products to more than 70 countries worldwide. They have world-class manufacturing facilities and have won various national awards, the details of which are given in para 4 of the writ petition. 3. The tender notification Ext.P1 is for the supply of various medicines and provides for two bid systems, viz. technical bid and price bid. The second respondent, viz. the Kerala Medical Services Corporation W.P.(C).No.21192/2012 -2- Ltd. (for short the Corporation) invited the tender. The substance of the contentions of the petitioner is the following: The last date for submission of tender was 6.2.2012. Rabies Vaccine is included as serial No.9 in in Section IV of the tender notification. The tender notification provides for various procedures in the matter. When a pre tender meeting was held, the petitioner had raised an objection and made a representation as per Ext.P2 with regard to the discrepancy of the item in the tender notification concerning the standard, quality and the route of administration. The petitioner requested to change the said description of the vaccine. In Ext.P1 the route of administration was notified as Intra Muscular/Intra Dermal (“IM/ID” for short). It is pointed out that an amendment was brought out as per Ext.P3 thereafter, wherein the unit quantity has been shown as “1 ml Vial” without referring to any route of administration as “IM/ID. The petitioner submitted a tender for the supply of Rabies Vaccine 1 ml Vial ID Administration at the rate of Rs.133.43 per Vial. The petitioner was successful both in the technical bid and the price bid. Ext.P4 is the provisional list of selected suppliers published on 26.3.2012 by the second respondent in their official website. The rate quoted by M/s. Chiron Behring, Mumbai was Rs.183.75 per Vial and M/s. Indian Immunologicals W.P.(C).No.21192/2012 -3- Ltd., Hyderabad was Rs.134.21 per Vial. 4. It is submitted that thereafter violating the procedures provided in the tender notification, the decision on selection of the supplier for Rabies Vaccine was referred to the Board of Directors by Ext.P5. Ext.P6 is the true copy of the Bid Ranking Status wherein with regard to Rabies Vaccine, referring to the complaints by all the bidders, the matter is left to the decision of the Board of Directors of the Corporation. Thereafter a notice was issued to the petitioner as per Ext.P7 to attend a hearing on the complaints which were submitted by the petitioner and the other tenderers, on 16.4.2012 in the Chamber of the Principal Secretary (Health), Government Secretariat, Thiruvananthapuram by the sub committee of the Board of Directors. The petitioner's representative also attended the meeting. The discussion was on the route of administration, viz. “IM/ID”. The petitioner's representative submitted that in the light of Ext.P3 amendment such a question does not arise. Later, Ext.P8 letter was issued to the petitioner to submit documentary proof (a letter or certificate) issued by the Drugs Controller General of India (for short DCGI) to the effect that the Rabies Vaccine offered by the petitioner can be used for both IM and ID route of administration valid as on the date of the tender. The petitioner W.P.(C).No.21192/2012 -4- submitted a reply as per Ext.P9 stating various aspects including that the clarification as per Ext.P8 is not required. It was pointed out that the same product cannot be administered for both purposes, Intra Muscular and Intra Dermal. It is the case of the petitioner that no vaccine is capable of both applications and therefore the clarification sought was unnecessary and it was done deliberately to disturb the tendering procedure and as a ground to cancel the tender. 5. After Ext.P10 cancellation order was published, Ext.P11 retender notification has been issued. In Ext.P11 the route of administration is shown as “ID” and the unit is “1 ml Vial” with a strength of “2.5 IU”. 6. The vehement contention raised is that the entire process is vitiated by arbitrariness. It is pointed out that the respondents are bound to guarantee a level playing field. The petitioner mainly contends that by Ext.P3 amendment, the Corporation had dispensed with the specification of Rabies Vaccine based on the route of administration as “IM” and “ID”. This was done after the clarification in the pre tender discussion as provided under para 6.17 of the tender conditions. Now the reason stated in Ext.P10 is that the route of administration has not been mentioned in Ext.P3 which is unjustified. It is also stated that the alleged complaints of the tenderers have W.P.(C).No.21192/2012 -5- no real relevance in the matter, as already the issue was settled. Ext.P8 was issued only as a prelude to the cancellation. No vaccine is capable of application in both ways. It is thus explained that it is after the price bid was opened a change was attempted only to deny the acceptance of the tender of the petitioner. When all the parties understood that the quantity required and the unit specified can only be by way of “ID” method, merely because of the absence of the word “ID” in Ext.P3, the tender cannot be cancelled. 7. Further, it is pointed out that as far as the tender procedure is concerned, it is entirely a matter for a decision of the Tender Inviting Authority as well as the Bid Evaluation Committee therein and the Board of Directors have no role. Therefore, it is submitted that the cancellation is at the dictation of an authority who is not empowered in the matter. No other authority can interfere with the tendering process. The Bid Evaluation Committee had practically taken the decision in respect of the complaints before opening of the price bid which led to Ext.P3. Therefore, a reference of the matter to the Board of Directors itself is with the malafide motive to deny the benefit to the petitioner. 8. The second respondent has filed a detailed counter affidavit. The W.P.(C).No.21192/2012 -6- allegation of arbitrariness and malafides have been denied. It is stated that the Corporation is an agency of the Government which is procuring drugs and other supplies required for the Government hospitals of the State through open tender processes. As far as anti Rabies Vaccines are concerned, they are developed using different media and methods as approved by the Drugs Controller General of India (DCGI). It was originally being injected through IM route and now it is administered mostly by ID route. Rabies Vaccines find widespread use in Government hospitals. In para 3 of the counter affidavit, the chronology of events have been detailed. It is averred that suggestions/objections raised by tenderers in the pre bid meeting on 19.1.2012 as well as Ext.P2 submitted by the petitioner were thoroughly examined and inputs were sought from the consultant of the Corporation who is a retired State Drugs Controller. It is based on his opinion the tender notification was amended by which anti rabies vaccine made from Duck Embryo was included. When the technical bid was opened on 8.2.2012 there were four bidders. Then, a complaint was received that rabies vaccine with cell culture through Duck Embryo is not suitable for ID route of administration. Ext.R2(a) is the copy of the complaint. In the light of the complaint the Corporation decided to W.P.(C).No.21192/2012 -7- require all bidders to submit necessary proof that their vaccine can be administered through both IM/ID route. For vaccines administered through the IM route the dosage prescribed is only 1ML/0.5ml vaccine per injection and for ID route the dosage prescribed is only 0.1 ML per injection. Now the system is being shifted towards ID route of administration and the requirement for anti rabies vaccine to be administered through the IM route is comparatively minuscule. It is further contended that only after the technical bid was opened and complaints were raised by each other that it was brought to the notice of the Corporation that the DCGI requires separate licences to be taken by manufacturers for anti rabies vaccines administered through the IM route and to be administered through the ID route. Therefore, every one of the tenderers were required to certify and to submit documents as noted above. Ext.R2(b) notice was issued to M/s. Cadila Healthcare Ltd., one of the tenderers. They could not produce the documents required and therefore their bid was not considered. The three bids remaining were considered and the price bid was also opened. 9. After the price bids were opened there were further objections by the bidders which are produced as Exts.R2(c) to R2(e). These required in depth examination and the tenders for anti rabies vaccine was deferred and W.P.(C).No.21192/2012 -8- a notice was issued as per Ext.P5. To this process the petitioner did not make any objection at any point of time. Upto the issuance of Ext.P11, the petitioner did not raise any objection. Therefore, the petitioner should be considered to have been acquiesced with the proceedings issued by the Managing Director, who is the tender inviting authority. 10. The petitioner as well as two other bidders were called for a personal hearing on 16.4.2012 as per Ext.P7 by the Sub Committee in the Chambers of the Principal Secretary to the Government, Health Department, the Chairman of the Corporation. The sub committee was authorised to hear them. The sub committee meeting was held on 16.4.2012 which was chaired by the Principal Secretary to Government, Health Department, the Managing Director of KMSCL, the State Drugs Controller and the Head of the Department, College of Pharmaceutical Sciences. All of them are members of the Board of Directors of the Corporation. The petitioner's representative was also there. The petitioner as well as M/s. Indian Immunological Ltd. did not have any specific objections. M/s. Chiron Behring complained that the rival manufacturers do not have product approval for 1ML anti rabies vaccine for both IM and ID route of administration issued by the DCGI. Therefore, it was decided to require W.P.(C).No.21192/2012 -9- all the bidders who had not produced documents, to show authorisation, as the Corporation requires both IM and ID route usage. All the bidders agreed to do so, within two weeks time. Ext.R2(f) is the copy of the minutes. To Ext.P8 notice, the petitioner gave Ext.P9 reply stating the stand that requiring licence for both IM and ID route of administration is not called for. The reply will show that the use of their vaccine of 1ML for IM route is under active consideration by DCGI and that the recommendations of the committee were placed before the Board of Directors in its 20[th] meeting held on 13.8.2012. The recommendation of the committee was approved by the Board of Directors and accordingly Ext.P10 cancellation notice was issued and a fresh tender notice was thereafter issued. 11. It is also averred in para 6 of the counter affidavit that a committee chaired by the Managing Director of the Corporation evaluated all the tender documents supplied by the bidders. It was of the view that if the specification in the amended notification Ext.P3 was insisted, there will be only one eligible bidder, viz. Chiron Behring who have produced approval for both IM and ID routes. Therefore, the sub committee observed that the appropriate course of action is 1 ML rabies vaccine for ID route of W.P.(C).No.21192/2012 -10- administration which will enable all manufacturers to submit qualified tenders. The committee was of the view that there was certain ambiguities in the specification of product described in the tender which resulted in the confusion. It was also found that there is sufficient stock of rabies vaccine 0.5ML suitable for the IM route of administration and accordingly a revised notification was issued. Ext.R2(g) is the copy of the minutes of the committee. It is pointed out that the retendering process is for the best interest of the participants and if the petitioner's bid is the lowest, they will also qualify for supplies and on the contrary, if purchases are pursued based on the original specifications and prices quoted, only the L3 bidder will qualify and there will be a huge difference in the cost. Various other factors are also pointed out in the counter affidavit. It is mainly pointed out that the fact that vaccine cannot be used through another route of administration in the light of the different licencing process by the DCGI, was brought to the notice of the Corporation later and it is in that context a fresh tender was invited. 12. It is explained in para 9 that the Board of Directors is exclusively comprised of various Government functionaries and there was no other member in the Board who have got any other interest. The Chairman is the W.P.(C).No.21192/2012 -11- Principal Secretary to the Government, Health and Family Welfare Department. The other Directors are State Mission Director, NRHM, Director of Health Services, Director of Medical Education, Drugs Controller, Additional Secretary, Finance Department and Head of the Department and College of Pharmaceutical Sciences. It is therefore pointed out that there are no malafides in the matter. The Board of Directors of the Company is a supreme body which is competent to take a decision when such questions are raised. Therefore, there is no merit in the contention of the petitioner that an external agency has taken over the decision making process with regard to the tendering. It is pointed out that there had been deliberations with the Board of Directors which is perfectly justified as the interest of the Corporation and that of the general public are involved. 13. Heard learned Senior Counsel for the petitioner Shri M.K. Damodaran and Shri M. Ajay, learned Standing Counsel appearing for the second respondent Corporation. 14. It is submitted by the learned Senior Counsel appearing for the petitioner that Exts.P10 and P11 have been issued with a malafide purpose to exclude the petitioner who is the lowest tenderer now. It is also submitted that the tender has to be finalised by the Bid Evaluation W.P.(C).No.21192/2012 -12- Committee in terms of clause 6.16.14 of the tender conditions. The Board of Directors of the Corporation or any technical committee have no role to play in the matter. 15. It is submitted that the alleged ploy now adopted by issuing the retender notification and by specifying the route of administration as “Intra Dermal” was not at all required in the light of Ext.P3 amendment to the first notification Ext.P1. It is submitted that in Ext.P1 in Section IV the route of administration is shown as “IM/ID” and the unit is shown as “1ml” Vial apart from the strength of dosage. The petitioner had raised an objection in the pre tender meeting which was held on 19.1.2012 with regard to the description of the item. The suggestion of the petitioner is evident from Ext.P2. It was pointed out that 1ml quantity cannot be used for Intra Muscular route whereas it can be used only for Intra Dermal route of administration. Ext.P3 was issued after the said suggestion of the petitioner was accepted and both the routes of administration have been deleted therein. What is added therein is the words “Duck Embryo”. Everybody understood that the route of administration is “ID” only and further tendering process was undertaken accordingly. While inviting this Court's attention to para 3 of the counter affidavit, it is pointed out that as W.P.(C).No.21192/2012 -13- on 23.3.2012 with the exclusion of M/s. Cadila Healthcare, there were only three tenderers left. Thereafter on 26.3.2012 the price bid was opened. Para 6.16.7 and 6.16.8 of Ext.P1 notification have thus been complied with. Thereafter, the provisional drug-wise rate list of all the accepted products of the eligible bidders and list of rejected bidders will be published in the notice board in terms of para 6.16.9 as well as 6.16.10. Going by the said publication which is evident from Ext.P4 herein, the petitioner is the L1 tenderer. Therefore, the respondents had to proceed with the next stage under para 6.16.11 and the remaining steps will have to be completed accordingly. It is submitted that there is no justification for issuing Ext.P5 on the plea that there were complaints in the matter. An attempt to refer to the decision of the Board of Directors is therefore illegal and malafide. The petitioner's price bid reflected in Ext.P4 will show that the quoted rate is Rs.133.43 whereas the rate quoted by the L2 tenderer is 134.21 and that of L3 is 183.75. It is submitted that the deferring of the decision to accept L1 tender and referring the matter to the Board of Directors is clearly to deny grant of tender to the petitioner. The complaints had to be decided at the time of examination of the technical bid and thereafter what remains is only opening of the price bid. No further enquiry is required after the Bid W.P.(C).No.21192/2012 -14- Evaluation Committee accepted the technical bid. Therefore, it is pointed out that the entire attempt is a clandestine one to scuttle the tendering process. Ext.P5 is therefore actuated by malafides and Ext.P11 retender notice was not at all required in the light of the amended notification Ext.P3 itself. Learned Senior Counsel further explained that as far as the route of administration is concerned, a vaccine for which the route of administration is IM, cannot be used for the other route, viz. ID. Therefore, it was not necessary in Ext.P11 now to notify it as ID especially, 1 ml indicates ID route itself. It is also submitted that the notice issued to the petitioner Ext.P8 asking to explain the details regarding the licences, if any, for IM/ID routes is with a preconceived attempt to deny the award of contract to the petitioner. Nobody had any such complaint before and the petitioner has suitably replied it in Ext.P9. It is submitted that a licence for use of a vaccine for IM route by the petitioner is not at all required since the contract notified covered only ID route. It is therefore submitted that the well settled principles laid down by this Court and the Apex Court with regard to providing a level playing field has been clearly violated. Learned Senior Counsel relied upon the following decisions of the Apex Court and this Court: **W.B. State Electricity Board v. Patel Enginering Co. Ltd.** W.P.(C).No.21192/2012 -15- **And others** {(2001) 2 SCC 451}, **Union of India and another v. International Trading Co. and another** {(2003) 5 SCC 437}, **Reliance Energy Ltd. And another v. Maharashtra State Road Development Corpn. Ltd. and others** {(2007) 8 SCC 1}, **State of Kerala v. Zoom Developers Private Limited and others** {(2009) 4 SCC 363} and **M/s. Zoom Developers Private Limited v. State of Kerala and others** (2008 (4) KHC 934). 16. Shri M. Ajay, learned Standing Counsel for the Corporation submitted that the procedure has been followed in a transparent manner. It is submitted that the medicine can be used for the different routes of administration. In the first notification, Ext.P1, the specification was “Im/Id” indicating both the routes. When Ext.P3 was issued after an application was received from one company to include Duck Embryo, the same was done. But the required specification was unfortunately left out in Ext.P3. Initially there were four bidders and by referring to the chronological events, learned Standing Counsel explained that one of the bidders, viz. M/s. Cadila Healthcare was directed to inform whether their product can be administered by IM/ID route. It is submitted that in tune with the transparent procedure, the key documents submitted by the bidders W.P.(C).No.21192/2012 -16- were published on 15.3.2012 and thereafter on 23.3.2012 the notice of eligible bidders was published after excluding M/s. Cadila Healthcare as their product could not be used by ID route. It is submitted that after the price bids were opened also, complaints were received from the tenderers including the petitioner, raising objections with regard to the tenders of other participating tenderers. The objections have been produced as Exts.R2(c) to R2(e). Since a detailed examination of the objections was required, the matter was deferred and referred to the Board of Directors as per Ext.P5 wherein it was mentioned that further proceedings will be subject to the decision of the Board of Directors. There was no objection on the part of the petitioner to the said process at any time before the filing of the writ petition. Learned counsel therefore submitted that the respondents have not acted hastily in the matter. It is also submitted by reference to the proceedings Ext.R2(g) that if the tender is proceeded with as per Exts.P1 and P3, then there will be only one tenderer left out and for enabling competent tenders to be submitted, a retender notification was published. My attention was invited to the various clauses in Ext.P1 relating to the entire procedure. It is submitted that the Bid Evaluation Committee was involved in the initial stages and as far as the Corporation is concerned, W.P.(C).No.21192/2012 -17- being a Company and a legal entity, there is no harm in taking a decision by the Board of Directors themselves who is the final authority, because various aspects are there and the interest of the public is also involved in the matter. It is therefore submitted that there is no invalidity in the proceedings at all. At every stages the parties were called for meetings and their objections were discussed and decisions were taken. It is submitted that the decision had to be taken on a purely technical matter and therefore discussions under various forums were required. It is submitted that as far as the Board of Directors of the Corporation is concerned, only Government officers alone constitute the forum and therefore it is not a case where any private interest is involved to help any of the tenderers. 17. It is further submitted that the answer given by the petitioner to Ext.P8 notice by way of Ext.P9 will show that the petitioner is not having the required permit for administration of the vaccine through IM route. While publishing Ext.P3 it was never intended that the tender is confined to ID route alone, and both the routes were inadvertently omitted in Ext.P3 notification. Apart from the same, it can be seen that the petitioner had participated in all the deliberations throughout without any objections also. Therefore, it is submitted that to avoid any delay in the matter and to have W.P.(C).No.21192/2012 -18- the participation of the qualified tenderers, the notification was issued. 18. Learned Standing Counsel appearing for the second respondent, by referring to the averments in the counter affidavit also, submitted that if the plea of the petitioner is accepted as stated in Ext.P9, there could have been allegation of bias as IM route has not been excluded. 19. Before considering the respective contentions, the various aspects will have to be considered in terms of the details reflected in the documents as well as the pleadings. In Ext.P1 tender notification in Section IV under item 9, the specification given is “Rabies Vaccine”. The method of administration is given as Im/Id ( Intra muscular/Intra dermal). The unit given is 1 ml Vial. Ext.P3 was issued when along with other items “Duck Embryo” was also included. In Ext.P3, the route of administration, viz. Im/Id has been omitted and the unit alone is given as “1 ml Vial”. 20. A reading of Ext.P2 will show that the petitioner had requested for modification of the tender specification. Therein, the change sought for is as follows: W.P.(C).No.21192/2012 -19- - “.............In view of this the description need to be changed as follows for more clarity: 1) 0.5ml/IM/ID 2.5 1.U with 0.5ml diluent and syringe. (Both for IM/ID use) 2) 1ml ID 2.5 1.D with 1ml diluent and multiple syringes (For ID use) (Normally 10 syringes) We therefore request you to kindly make the amendment and oblige.” Going by the same, the petitioner requested for change for showing IM/ID use as well as for ID use with the unit 0.5 ml and 1 ml respectively. In fact, the petitioner has pleaded in the writ petition that it is as per his objection Ext.P2 as well as raising of similar issues by other bidders, Ext.P3 was issued by way of an amendment. 21. Ext.P4 is the proceedings dated 26.3.2012 after the opening of the price bid which is captioned as “Provisional Supplier-wise Rates Quoted Details for the Tender for Supply of Drugs Requiring Cold Storage for the year 2012-2013”. Apart from the tender in question is concerned, there are tenders for supply of other drugs also. When we come to Rabies Vaccine, the first bidder shown is Chiron Behring, Mumbai. Therein, in the third column the item is described with the route of administration as W.P.(C).No.21192/2012 -20- IM/ID and the approved rate is Rs.183.75. In the column wherein the petitioner's details are furnished also, the route of administration is shown as IM/ID along with the description of the vaccine and the approved rate is Rs.133.43. Under the name of the third bidder, viz. Indian Immunologicals Ltd., Hyderabad, along with the description of the vaccine, the route of administration is given as IM/ID. 22. Ext.P5 is the provisional notice by which the finalisation of the bid was deferred and referred to the Board of Directors. In para 1 it is stated that “the price bids of all the categories of tenderers referred above were opened and evaluated on 23.6.2012 and the price quoted by the offerers was published on the same day for verification vide notice 9th cited” which is Ext.P4 herein. It is stated further that “the discrepancies noted were rectified and complaints/representations received in response to the notices were examined and the decision taken is published herewith as Tables I and II respectively.” Among the Drugs, Serial No.1 is Rabies Vaccine. With regard to the nature of complaint/representation, it is stated that “for the product Rabies Vaccine Human 1ml (Drug code D21021) complaints have been received from all the bidders pointing out the defects of others.” The decision, noted in the right hand side column is that the W.P.(C).No.21192/2012 -21- finalisation is deferred and referred to the decision of the Board of Directors. There are decisions with respect to different items in Ext.P5 itself. 23. Ext.P6 is the next document which is published on 10.4.2012. The same is the Bid Ranking Status after negotiation with the tenderers and as far as Rabbis vaccine is concerned, it is given as a foot note that “since all the bidders have raised complaints against one another, further processing and finalisation of the product Rabies Vaccine Human (Drug Code-D21021) will be subject to the decision of the Board of Directors”. Again, the tenderers were called for a hearing on 16.4.2012 at 4 p.m. as per Ext.P7 notice, to appear before the Sub Committee. Ext.P8 is the notice dated 25.4.2012 whereby the petitioner was directed, based on the decision of the Sub Committee meeting, to produce documentary proof (a letter or certificate) issued by the DCGI that the Rabbis Vaccine offered by the petitioner can be used for both IM and ID route of administration valid as on the date of the tender. It was stated that any failure will result in rejection of the tender also. The reply furnished by the petitioner as per Ext.P9 will show that as far as IM use is concerned, the matter is under active consideration by DCGI and hope to get it at the earliest. The W.P.(C).No.21192/2012 -22- petitioner has also taken the stand in Ext.P9 that in the light of the amendment, removing of IM/ID, there cannot be any objection for the tender submitted by the petitioner being accepted. In Ext.P11 retender notification now it is specified that the tender is invited for ID route of administration. 24. The main contention raised by the learned Senior Counsel for the petitioner, Shri M.K. Damodaran is that Ext.P3 amendment clinches the issue with regard to the route of administration, that it can only be the ID route and therefore the whole process undertaken is illegal and arbitrary. It is also contended that the decision making process is so tainted, to dub it arbitrary. Therefore, the approach required is to find out whether the reason now stated is an erroneous one and the petitioner is entitled to succeed on the basis of Ext.P3 amended notification, in that it should be considered only as suggested by the petitioner. 25. First I will, therefore, consider whether the amendment is brought only in terms of the suggestion made by the petitioner as contended already. 26. While analysing the issue, the chronology of events as stated in para 3 of the counter affidavit also requires consideration. After the invitation of tender on 10.1.2012, a pre tender meeting was held on W.P.(C).No.21192/2012 -23- 19.1.2012. Therein, M/s. Cadila Healthcare, another bidder requested for inclusion of Duck Embryo derived vaccine also. It is explained in para 4 of the counter affidavit that the suggestion/objections raised by the tenderers in the pre bid meeting on 19.1.2012 as well as the suggestion/objection received as per Ext.P2 submitted by the petitioner were thoroughly examined and inputs were sought from the consultant of the Corporation who is a retired State Drugs Controller. It is pointed out that the amendment was brought in as per his advise and the specified rabies vaccine made from duck embryo was included in the notification, while the specification of IM/ID was dispensed with. 27. Therefore, there is no unanimity on the main argument raised by the petitioner that it was based on the request of the petitioner alone the amendment was brought out with a purpose to provide the ID route of administration only. 28. We will come to the next stage, i.e. after the technical bids were opened on 8.2.2012. At that stage four bidders were there, viz. Cadila Healthcare Ltd., Chiron Behring, Indian Immunological Ltd. and the petitioner. As per the averments in para 4 of the counter affidavit, the respondents received a complaint as per Ext.R2(a) submitted by Chiron W.P.(C).No.21192/2012 -24- Behring wherein they objected to the vaccine made from duck embryo. The contention therein is that the said vaccine is not suitable for ID route of administration. It is averred in para 4 of the counter affidavit that the Corporation therefore decided to require all the bidders to submit necessary proof that their vaccine can be administered through both IM and ID route. The unit for dosage by IM route is 1 ml/0.5 ml of vaccine per injection and by ID route the dosage prescribed is only 0.1 ml per injection. Ext.R2(b) is the notice issued to M/s. Cadila Healthcare Ltd. directing production of documents to show that approval of their product for both IM and ID route is there. They did not produce documents and thus was excluded. Therefore, only three eligible bidders were there. 29. The next stage is the opening of price bid on 26.3.2012. The petitioner has produced as Ext.P4, the Provisional Supplier-wise Rates Quoted Details after the opening of the price bid. One thing to be noticed from Ext.P4 that against each of the tenderers, under drug code 'D21021' the the drug name is shown as the following: “Rabies Vaccine Human (Cell Culture) (Chick Embryo), Vero Human Deploid Cells) IM/ID with Diluent 2MLSyringe with needle (24G) and a file for opening the diluent.” Both IM/ID route have been specified therein. There is nothing to show that the W.P.(C).No.21192/2012 -25- petitioner had objected to the incorporation of the drug name as above with both routes of administration at that point of time. 30. The second respondent has stated that after the price bid was opened, all the three bidders raised objections which have been produced as Exts.R2(c) to R2(e). Ext.R2(c) is the objection received from M/s. Chiron Behring Ltd. which is dated 22.3.2012 and is seen received on 28.3.2012, going by the endorsement. The objection raised is against the petitioner and the operative portion shows that their contention is that the data submitted by the petitioner should not qualify for manufacturing and marketing criteria and therefore they should be disqualified. In Ext.R2(d) submitted by M/s. Indian Immunologicals Ltd. the objection raised is that the petitioner does not qualify for requirement of the Corporation, as the requirement is Rabies Vaccine 1ml for both IM and ID usage. The petitioner's objection is Ext.R2(e) which is with respect to M/s. Human Biologicals Institute, a division of M/s. Indian Immunologicals Ltd. and it was regarding the technical acceptability of the tender quoted by them. 31. In fact, the receipt of objections are clearly referred to in Ext.P5 notice and a decision is taken that the finalisation is deferred and the matter is referred to the Board of Directors. Para 1 of Ext.P5 notice shows W.P.(C).No.21192/2012 -26- that the complaints/representations received were examined. It is also worthwhile to be noticed that Reference No. 9 in Ext.P5 is a notice dated 26.3.2012, which is the date of opening of the tender and it is stated in para 1 that “the price quoted by the offerers were published on the same day for verification”, by that notice. 32. Thus, all the parties obtained opportunity to raise objections/complaints against each other and their products. This aspect is to be noticed in the light of the contention raised by the petitioner in ground 'C' of the writ petition that “the reason assigned for cancellation of the tender that the tenderers have raised complaints against one another is only an imaginary ground.” Since the respondents have produced Exts.R2(c) to R2(e) which are the objections received, it cannot be said that an imaginary ground has been found out, as a prelude to cancellation. 33. Then we come to the next stage, i.e. consideration of the matter by the Sub Committee in the meeting held on 16.4.2012. The procedure adopted is by issuance of notice to all the three bidders to appear before the Sub Committee with documents and Ext.P7 is the copy of the notice issued to the petitioner. The notice clearly directed the petitioner to attend the meeting or send a representative duly authorised, along with all supporting W.P.(C).No.21192/2012 -27- documents and present its complaint before the Sub Committee. Similar notices have been issued to others also as evident from para 5 of the counter affidavit. The Sub Committee was chaired by the Principal Secretary to the Government, Health and Family Welfare Department, the Managing Director of the Corporation, State Drugs Controller and the Head of the Department, College of Pharmaceutical Sciences, all of whom are members of the Board of Directors of the Corporation. It is averred in para 5 of the counter affidavit that the representatives of all the three eligible bidders including the petitioner attended the hearing. It is clear from the said para that the petitioner and M/s. Indian Immunologicals Ltd. did not have any specific objection. A specific objection was raised by M/s. Chiron Behring that the rival manufacturers do not have product approval for 1 ml for both IM/ID route of administration issued by the DCGI. It is averred that a decision was taken to require all eligible bidders who had not produced evidence to show authorisation given by DCGI for both IM/ID route, to submit such documents. Significantly, it is averred that “all the bidders agreed to do within two weeks time.” A copy of the minutes has been produced as Ext.R2(f). 34. A reference to Ext.R2(f) will show that deliberations of the W.P.(C).No.21192/2012 -28- Committee have been recorded therein. In the last paragraph of Ext.R2(f) it is recorded that “After hearing the views of the Board members, it was decided that the vaccine should have authorisation issued by DCG(I) for both IM and ID route of administration. Those who have not produced such documents should produce authorisation issued by DCG(I) that the Rabies Vaccine Human Iml with diluent is approved for both IM and ID route of administration as on the date of the tender. **All the firms have agreed to furnish the same within 2 weeks,”** (Emphasis supplied) 35. The petitioner is also therefore a party to the said decision. Ext.R2(f) is not under challenge in this writ petition. Therefore, the same also will go to show that the requirement was for both IM and ID route of administration for which supporting documents were sought from all the tenderers, which were agreed to be furnished within two weeks. 36. Ext.P8 is the notice issued to the petitioner thereafter. Reference No.2 therein is the decision taken in the Sub Committee meeting held on16.4.2012 ( minutes of which is Ext.R2(f). The notice opens with the following sentence: “As decided in the meeting referred 2nd above, you are directed to submit documentary proof (a letter or certificate) issued by the W.P.(C).No.21192/2012 -29- DCG(I) (in original) that the Rabies Vaccine Human-Iml (Drug code D21021) offered by you vide ref. 1[st] cited can be used for both Intra Muscular (IM) and Intra Dermal (ID) route of administration valid as on the date of the tender.” It is further stated that if there is any failure to produce the same, the offer will be rejected. Therefore, the said notice is clearly issued in the light of Ext.R2(f) decision. True that the petitioner later on contended by Ext.P9 that the tender specification is not IM/ID, but Ext.P9 also makes it clear that the petitioner has not obtained the certificate for use of the vaccine for IM route. It is stated that the specific use of the vaccine for Iml IM use is under active consideration by DCGI and they hope to get the same at the earliest. From the files made available to the Court, it is seen that identical notices have been issued to the other two bidders also. 37. From the resume of the above facts, it can be seen that even at the initial stage when the vaccine with specification “duck embryo” was included by Ext.P3 , one of the tenderers, viz. M/s. Cadila Healthcare Ltd. was asked to produce the documents to show both routes of administration. When the specific question was raised after the price bid was opened also, by Ext.R2(f), a decision was taken to demand the said documents from all W.P.(C).No.21192/2012 -30- the tenderers. It is clear from the counter affidavit that all the tenderers were issued similar notices like Exts.P7 and P8. Therefore, it is not a case where the petitioner alone was asked to produce the documents issued by DCGI. As far as the second respondent is concerned, they had a uniform stand with regard to this aspect, viz. the required route of administration as both IM and ID before and after the price bid was opened which is clear from the pleadings in the counter affidavit and the documents discussed above. The respondents have explained in the counter affidavit in para 6 that on 6.6.2012 the Committee chaired by the Managing Director, examined the documents submitted by different bidders. The committee included the Drugs Controller, the Additional Director of Health Services, the Head of the Department, College of Pharmaceutical Science, the Additional Professor, Department of Community Medicine, Medical College, Thiruvananthapuram and Store Officer of the Government Medical Store, Directorate of Health Services, Thiruvananthapuram. It is stated that they had specifically considered the entire aspects relating to the notice inviting tenders, the specifications prescribed, the offers received and the objections raised by the different bidders and they found that if the specification in Ext.P3 was insisted upon, there will be only one eligible W.P.(C).No.21192/2012 -31- tenderer who has produced approval for both IM and ID route of administration. It is further averred that against them there is a specific complaint by the petitioner quoting the literature that 1 ml cannot be used for ID route. Therefore, the Sub Committee was of the view that the appropriate course of action is to have Iml Rabies Vaccine for ID route of administration so that the manufacturers will submit qualified tenders. They were of the view that there were certain ambiguities in the specification of the product described in the tender which has led to the confusion. They have approved a revised specification also and Ext.R2(g) is the copy of the minutes of the Tender Committee. It is submitted that in the light of the above, the petitioner can also submit tender, as the ID route is specified in the fresh tender notification. It is pointed out that if the specification in Ext.P3 is adopted, only the L3 bidder will qualify, which will lead to procurement of the drug at a huge difference of cost as the quoted rate of M/s. Chiron Behring is very high. 38. A reference to Ext.R2(g) will show that various aspects have been considered by the Committee in detail. It is explained in para 2 that the route of administration was not mentioned and it was specified to conform with Indian Pharmacopoeia and accordingly the amended W.P.(C).No.21192/2012 -32- notification was issued. After narrating all the other details, reference has been made to Ext.R2(f) decision of the Sub Committee and it is mentioned that if the condition to produce authorisation from DCGI for both routes of administration are insisted, then as per the available documents M/s. Chiron Behring is the only qualified bidder. In para 5 mention is made about the objection raised by the petitioner against M/s. Chiron Behring and it is stated that it will require further verification and will be time consuming. Accordingly, a decision was taken to call for a fresh tender. 39. It is therefore evident that Ext.P10 cancellation is based on the decision of the Sub Committee which was accepted by the Board of Directors. Both will have to be read together. 40. The petitioner's contention therefore that the description of the product in Ext.P3 can only lead to one specification, i.e. ID route cannot hold good. True that both IM and ID routes are not specified in Ext.P3. But can it be conclusively said that the same is only one providing for ID route? Learned Senior Counsel for the petitioner submitted that the unit prescribed in Ext.P3 can only lead to one conclusion that it is for ID use alone. In fact, even in Ext.P2 submitted by the petitioner also, the petitioner has not sought for a description as ID route alone. Therein, both the routes were W.P.(C).No.21192/2012 -33- specified by the petitioner. Item one description therein is for both IM and ID route and item 2 is for ID route. As already noticed, in Ext.P4 which is an uncontroverted document which was published after the price bid was opened, the description given is for both IM and ID route. The respondents have explained in the counter affidavit that the omission of IM and ID specification was not because of any pre tender negotiation and the change was introduced as per the advice of the Consultant. The amendment in Ext.P3 was only to introduce the words 'Duck Embryo'. The company which quoted for the vaccine derived from 'duck embryo', was asked to produce the documents to show that it can be administered both by IM and ID route. The said notice which has already been referred to earlier, is prior to the arising of the present controversy by the petitioner and that was based on a decision taken after a complaint was received by Ext.R2(a). Therefore, even after the price bid was opened, the very same method was adopted in the light of the complaint Ext.R2(c) to R2(e). All the three tenders therefore were considered for the specification IM and ID route. Otherwise, the petitioner also would not have agreed, as evident from Ext.R2(f), to furnish the documents with regard to authorisation by DCGI, to show approval for both IM and ID route as on the date of the tender. W.P.(C).No.21192/2012 -34- Therefore, it is not a case where the route of administration was shown only as ID route as pleaded by the petitioner. At any rate, the same cannot be safely concluded. 41. The further question is whether the argument of the learned Senior Counsel for the petitioner that the decision is tainted by arbitrariness and malafides is correct. In fact, the procedure adopted by the respondents have been explained in the counter affidavit. At every stages, the documents submitted by all the parties were put to the notice of the respective parties for raising their objections. This is clear from the starting of the tender procedures itself. The question is whether the decision making process is tainted or not. Yet another objection raised by the petitioner is reference of the matter to the Board of Directors for a decision. In fact, the procedure to be adopted is well announced, going by the conditions in Ext.P1 from para 6.16 under the heading “Evaluation of Tender”. Under para 6.16.6, the list of eligible bidders and their accepted products/rejected bidders as per the findings of the decisions of the Bid Evaluation Committee/Inspection team will be published in the notice board and website of the Tender Inviting Authority, inviting complaints/suggestions from the bidders/public. These will have to be scrutinised as per para W.P.(C).No.21192/2012 -35- 6.16.7 by the Bid Evaluation Committee. Again, their findings along with the provisional list of qualified bidders for price bid opening along with the date of opening will have to be published in the notice board and website. Para 6.16.8 provides for scrutiny of the price bids by the Bid Evaluation Committee. After the completion of the said procedure, the next stage is under 6.16.9 which requires publication of the provisional drug-wise rate list of all the accepted products of the eligible bidders and the list of rejected bidders in the notice board and website and complaints and suggestions from the bidders/public will have to be invited. Under para 6.16.10 the complaints/suggestions received will have to be scrutinised by the Bid Evaluation Committee. 42. The next question is whether the absence of any role by the Board of Directors in Ext.P1 is crucial to invalidate the proceedings Ext.P10. In Ext.P1, the specific processes to be adopted are by the Bid Evaluation Committee and Tender Inviting Authority. A provision for appeal to the Government is also there. 43. Herein, the explanation for reference of the matter to the Sub Committee and the Board of Directors is that the matter required technical evaluation and to study the materials produced by the bidders and the Board W.P.(C).No.21192/2012 -36- of Directors is the final authority as far as the Corporation is concerned. All the members of the Board of Directors are officials alone and their details have been furnished in para 9 of the counter affidavit. The second respondent is a company registered under the Companies Act and there cannot be any dispute that the Board of Directors is the final decision making authority. It is also explained that the Managing Director's decision will have to be placed before the Board of Directors for ratification and any agreement executed by the Managing Director has to be legally enforceable as against the Corporation. Learned Senior Counsel for the petitioner submitted that the Bid Evaluation Committee and the Tender Inviting Committee cannot act as dictated by the Board of Directors. But herein, it cannot be said that they were acting at the dictation of the Board of Directors. The Sub Committee of the Board of Directors as per Ext.R2(f) heard all the three bidders including the petitioner and thereafter only a decision was taken therein that the bidders should be asked to produce authorisation to show that they have approval from DCGI for both IM and ID route of administration. It cannot be said that the decision is so arbitrary. The said aspect is a crucial one, which is clear even from the earliest point. Even before the price bid was opened, a notice was issued to W.P.(C).No.21192/2012 -37- one of the bidders to show that their product is suitable for both routes of administration. After the Sub Committee examined the matter, again all the documents were scrutinised in a meeting of the Committee headed by the Tender Inviting Authority as evident from Ext.R2(g). It is not a case where a final decision reflected in Ext.P10 has been taken in isolation. The bid documents of all the bidders were examined thoroughly by the Committee which was placed before the Board of Directors and they approved the matter. It cannot be said that the decisions are tainted by arbitrariness and amounts to dictation by a superior authority. As far as the second respondent is concerned, acceptance of tender will be a so crucial decision, as it involves huge public money and public interest is the criteria which has to be considered in such cases. Therefore, it cannot be said that the decisions are tainted by arbitrariness or unreasonableness. 44. The petitioner points out that interference of the Board of Directors is deliberately with the malafide motive to help the existing suppliers to continue their supply. They are not a party respondent in the writ petition. All the three bidders have participated in the deliberations at two stages. Therefore, it is not a case where a decision has been taken without inviting objections from any of the parties including the petitioner W.P.(C).No.21192/2012 -38- and behind their back. The petitioner had also utilised the opportunity at different stages by raising its objections against the other tenderers. Therefore, the question of violation of the principles of natural justice does not arise here. It has come out from the pleadings of the respondents that after the price bid was opened three objections were received which are produced as Exts.R2(c) to R2(e). Subsequent proceedings were taken after these objections were received and at different stages the Committee considered the matter and a hearing was also offered to the three bidders on 16.4.2012. All the three bidders were issued simultaneous notices like Exts.P7 and P8 and only one bidder remained in the field who had authorisation for both routes of administration, viz. M/s.Chiron Behring. But their quoted price being Rs.183. 75, it was thought that fresh tender can be invited. It cannot be said to be an arbitrary decision as otherwise it would have caused huge expenditure for the respondents. 45. The petitioner's tender could not be accepted since they had not obtained approval from DCGI for IM route and the matter was pending even going by Ext.P9 reply. In fact, the second respondent has explained in para 10 of the counter affidavit that Ext.P3 amendment does not actually specify IM or ID, but it does not specify IM route alone or ID route alone and W.P.(C).No.21192/2012 -39- therefore the situation will be only for both. In the light of the discussion made above, it can be seen that the stand of the respondents in this regard is acceptable. It cannot solely depend upon the unit mentioned in Ext.P3, as contended by the learned Senior Counsel for the petitioner. 46. The next aspect to be considered is whether the principles stated in various decisions relied upon by the learned Senior Counsel for the petitioner, have been followed in the decision making process. ## 47. In **International Trading Company's case** {(2003) 5 SCC 437), in paragraphs 14 & 16 it has been laid down as follows: “14. It is, trite law that Art. 14 of the Constitution applies also to matters of governmental policy and if the policy or any action of the Government, even in contractual matters, fails to satisfy the test of reasonableness, it would be unconstitutional. 16. Where a particular mode is prescribed for doing an act and there is no impediment in adopting the procedure, the deviation to act in different manner which does not disclose any discernible principle which is reasonable itself shall be labelled as arbitrary. Every State action must be informed by reason and it follows that an act uninformed by reason is per se arbitrary.” The said principle will imply that every one of the action by the State should satisfy the test of reasonableness and cannot be arbitrary. W.P.(C).No.21192/2012 -40- 48. In **Patel Engineering Co. Ltd.'s case** {(2001) 2 SCC 451}, in para 31 it has been held as follows: “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.” Apart from the same, in para 24 it has been held as follows: “The very purpose of issuing rules/instructions is to ensure their enforcement lest the rule of law should be a casualty.” 49. In **Reliance Energy Ltd.'s case** {(2007) 8 SCC 1} in para 36 the Apex Court has laid down the doctrine of 'level playing field'. It was held that Articles 14 and 21 of the Constitution of India cover various aspects of life and level playing field is an important concept while construing Article 19(1)(g) of the Constitution. The said paragraph is extracted below for easy reference: “36. We find merit in this civil appeal. Standards applied by courts in judicial review must be justified by constitutional principles which govern the proper exercise of public power in a democracy. Article 14 of the Constitution embodies the principle of “non -discrimination”. However, it is not a free-standing W.P.(C).No.21192/2012 -41- provision. It has to be read in conjunction with rights conferred by other articles like Article 21 of the Constitution. The said Article 21 refers to “right to life”. It includes “opportunity”. In our view, as held in the latest judgment of the Constitution Bench of nine Judges in _Coelho v. State of T.N._ (2007) 2 SCC 1), Articles 21/14 are the heart of the chapter on fundamental rights. They cover various aspects of life. “Level playing field” is an important concept while construing Article 19(1)(g) of the Constitution. It is this doctrine which is invoked by REL/HDEC in the present case. When Article 19(1)(g) confers fundamental right to carry on business to a company, it is entitled to invoke the said doctrine of “level playing field”. We may clarify that this doctrine is, however, subject to public interest. In the world of globalisation, competition is an important factor to be kept in kind. The doctrine of “level playing field” is an important doctrine which is embodied in Article 19(1)(g) of the Constitution. This is because the said doctrine provides space within which equally placed competitors are allowed to bid so as to subserve the larger public interest. “Globalisation”, in essence, is liberalisation of trade. Today India has dismantled licence raj. The economic reforms introduced after 1992 have brought in the concept of “globalisation”. Decisions or acts which result in unequal and discriminatory treatment, would violate the doctrine of “level playing field” embodied in Article 19(1)(g). Time has come, therefore, to say that Article 14 which refers to the W.P.(C).No.21192/2012 -42- principle of “equality” should not be read as a stand alone item but it should be read in conjunction with Article 21 which embodies several aspects of life. There is one more aspect which needs to be mentioned in the matter of implementation of the aforestated doctrine of “level playing field”. According to Lord Goldsmith, commitment to the “rule of law” is the heart of parliamentary democracy. One of the important element of the “rule of law” is legal certainty. Article 14 applies to government policies and if the policy or act of the Government, even in contractual matters, fails to satisfy the test of “reasonableness', then such an act or decision would be unconstitutional.” Hence, a decision or act which results in unequal or discriminatory treatment will violate the doctrine of 'level playing field'. 50. In **M/s. Zoom Developers Pvt. Ltd.s case** (2008 (4) KHC 934) a Division Bench of this Court examined various aspects. In para 77 the Bench relied upon the principles stated in **R.D. Shetty v. International Airport Authority** (AIR 1976 SC 1628), in the following words: “While judicially reviewing an administrative decision that involves of a tender process or contract of this nature, the Courts are not very much concerned about the merits of the decision, but concerned with the process of decision making. Law in this regard is well settled and need not be reiterated. Development of law in W.P.(C).No.21192/2012 -43- this regard from the celebrated decision of Supreme Court in R.D. _Shetty v. International Airport Authority_ , AIR 1976 SC 1628 is steady and unambiguous. If the decision making is vitiated by any reason, then the Courts will interfere.” In para 92 the principles stated by the Apex Court in **Union of India v. E.G. Nambudiri** {(1991) 3 SCC 38), have been extracted and the same is reproduced below: “Ordinarily, courts and Tribunals, adjudicating rights of parties, are required to act judicially and to record reasons. Where an administrative authority is required to act judicially it is also under an obligation to record reasons. But every administrative authority is not under any legal obligation to record reasons for its decision, although, it is always desirable to record reasons to avoid any suspicion. Where a statute requires an authority though acting administratively to record reasons, it is mandatory for the authority to pass speaking orders and in the absence of reasons the order would be rendered illegal. But in the absence of any statutory or administrative requirement to record reasons, the order of the administrative authority is not rendered illegal for absence of reasons. If any challenge is made to the validity of an order on the ground of it being arbitrary or mala fide, it is always open to the authority concerned to place reasons before the Court which may have persuaded it to pass the orders. Such reasons must already W.P.(C).No.21192/2012 -44- exist on records as it is not permissible to the authority to support the order by reasons not contained in the records. Reasons are not necessary to be communicated to the Government servant. If the statutory rules require communication of reasons, the same must be communicated but in the absence of any such provision absence of communication of reasons do not affect the validity of the order.” The tests laid down are with reference to the requirement to state reasons by an administrative authority under various situations. 51. Learned Senior Counsel also referred to the principles stated by the Apex Court in various decisions extracted in paragraphs 95 to 98 of the judgment in **M/s. Zoom Developers Pvt. Ltd.s case (supra).** In para 101, the Division Bench was of the view that “even the administrative order which involve civil consequences must be consistent with the rules of natural justice. Expression “civil consequences” encompasses infraction of not merely property or personal rights but of civil liberties, material deprivations and non-pecuniary damages.” The above principle was explained in the light of the fact that all the decisions should be supported by reasons and after perusal of the records, the Bench was of the view that the order impugned therein was not a reasoned one. The above judgment W.P.(C).No.21192/2012 -45- was confirmed by the Apex Court in **State of Kerala v. Zoom Developers Private Limited and others** {(2009) 4 SCC 563}. 52. Shri M.K.Damodaran, learned Senior Counsel for the petitioner contended that on the factual position pleaded by the petitioner and in the light of the principles stated by this Court and the Apex Court in the decisions referred to earlier, the only one conclusion that is possible is that the petitioner should be awarded the contract, being the L1 tenderer. It is pointed out that a direction should be issued to the respondents to proceed from the stage after the opening of the price bid from the stage of para 6.16.10 in Ext.P1 and finally accept the L1 tender. 53. Going by the principles stated by the Apex Court in **International Trading Company's case** {(2003) 5 SCC 437} that every State action must be informed of reason and that an act uninformed by reason is per se arbitrary, it cannot be said that the cancellation of the tender by Ext.P10 and the fresh notification Ext.P11 is bad in law. The respondents have explained as to why the retender notification was issued, in that only the L3 tenderer has got the authorisation for both IM and ID route of administration and they felt that if a fresh tender is invited all the bidders can participate and a tender which conforms to the specifications of W.P.(C).No.21192/2012 -46- ID route of administration can be accepted based on them. The said reason, which is supported by the document produced, viz. Ext.R2(g), by no stretch of imagination, can be said to be arbitrary or illegal. The decision therefore, to cancel the tenders already invited, even though it is alleged by the petitioner as unsupportable by reason, in the light of Exts.R2(f) and R2(g), it can be seen that the said decision is well supported by reasons and has been arrived at after following various procedures and after evaluating the documents in the light of the objections raised by various parties. The files have been produced for perusal by the learned Standing Counsel for the second respondent. On a perusal of the records also, it can be seen that the procedures have been completed in a proper and transparent manner and the decision is not actuated by malafides as alleged by the petitioner. Going by the judgment of the Division Bench in **M/s. Zoom Developers Pvt. Ltd.'s case** (2008 (4) KHC 934), a decision like the one herein, supported by reasons should be evident from the records also (para 101). The copies of the documents produced by the respondents will show that cogent reasons have been stated in support of the decision. It is not a case where by a single line order the respondents have cancelled the tender notification to characterise the same as one uninformed by any reason. Therefore, even W.P.(C).No.21192/2012 -47- going by the application of the principles stated in para 101 of the above decision, it can be seen that the decision herein is supported by cogent reasons. The doctrine of level playing field is also not violated, as no discriminatory treatment was meted out to the petitioner. 54. At every stage, viz. at the stage prior to the opening of price bid and thereafter also, discussions have been made and the parties have been offered an opportunity to raise the objections and suggestions and the Sub Committee heard the views of all the parties as evident from Ext.R2(f) and as already mentioned. The Board of Directors is the final authority as far as the Corporation is concerned and there is no harm in leaving the matter for a proper decision to be taken to the wisdom of the Board of Directors also, since the purchase of drugs as per the specifications required, is of great importance to them and the drug herein is an important one as far as the members of the public are also concerned. 55. The petitioner can succeed if one conclusion alone is possible on the facts pleaded. The said conclusion, going by the arguments of the petitioner, is that Ext.P3 amendment requires the vaccine to be administered only through ID route. Such a conclusion is not possible on the assessment of facts and on a reference to the documents already discussed above. If W.P.(C).No.21192/2012 -48- such was the case, then it was not necessary to issue notice to one of the bidders, viz. M/s. Cadila Healthcare Ltd., to produce authorisation for both routes of administration in respect of their vaccine with duck embryo. 56. When the respondents have shown a proper reason in support of their final decision, this Court will not be justified in upsetting the same for issuing a direction to the respondents to accept the tender of the petitioner. When the respondents required a vaccine to be administered through both the routes and since the petitioner is not having authorisation in respect of IM route, it cannot be said that the decision taken is tainted by arbitrariness and malafides, only with the oblique motive of avoiding the acceptance of the tender of the petitioner. The thorough verification of the documents of all the bidders which was done by the respondents will only reveal that the respondents have been acting bonafide and in a transparent manner. 57. Even though it is vehemently contended by the learned Senior Counsel for the petitioner that the doctrine under Article 19(1)(g) of the Constitution as regards level playing field will squarely apply to the facts of this case, I cannot agree. The petitioner has been given all opportunities to attend the hearing and to raise objections in respect of the other bidders W.P.(C).No.21192/2012 -49- and all the objections received from the respective bidders were considered also. Therefore, the final decision is also supported by reasons. In the light of the above, the said doctrine will not apply to the facts of this case. 58. In a recent judgment of the Apex Court in **M/s. Michigan Rubber (India) Ltd. v. State of Karnataka & Others** (AIR 2012 SC 2915) with regard to the power of judicial review, the following principles have been laid down in para 19: “(a) The basic requirement of Article 14 is fairness in action by the State; and non-arbitrariness in essence and substance is the heartbeat of fair play. These actions are amenable to the judicial review only to the extent that the State must act validly for a discernible reason and not whimsically for any ulterior purpose. If the State acts within the bounds of reasonableness, it would be legitimate to take into consideration the national priorities; (b) fixation of a value of the tender is entirely within the purview of the executive and courts hardly have any role to play in this process except for striking down such action of the executive as is proved to be arbitrary or unreasonable. If the Government acts in conformity with certain healthy standards and norms such as awarding of contracts by inviting tenders, in those circumstances, the interference by Courts is very limited; W.P.(C).No.21192/2012 -50- (c) In the matter of formulating conditions of a tender document and awarding a contract, greater latitude is required to be conceded to the State authorities unless the action of tendering authority is found to be malicious and a misuse of its statutory powers, interference by Courts is not warranted; (d) Certain preconditions or qualifications for tenders have to be laid down to ensure that the contractor has the capacity and the resources to successfully execute the work; and (e) If the State or its instrumentalities act reasonably, fairly and in public interest in awarding contract here again, interference by Courts is very restrictive since no person can claim fundamental right to carry on business with the Government.” Thus, the well settled principle is that the power of judicial review can be only on the ground of reasonableness and a decision is not amenable to judicial review when it is supported by reasons and is not tainted by arbitrariness. The said principles have been evolved in respect of actions leading to award of contracts. The same will squarely apply herein. For all these reasons, the writ petition fails and the same is dismissed. No costs. ## **(T.R.RAMACHANDRAN NAIR, JUDGE)** ## **kav/**