JUDGMENT
Amitava Roy, J.
1. This proceeding witnesses a strident challenge to the award of the contract to the respondent No. 5, M/s Aeigis Health Care, Chatribari Road, Guwahati, by the Assam Rifles for supply of 15000 litres of CARDOIV CARDONOL to 1/2/3 Maintenance Group Assam Rifles for the year 2006-07. Apart from alleging gross illegalities, the process has been impeached to have been afflicted by malafide and abuse of executive power detrimental to public health and revenue.
Entertaining the challenge, this Court while issuing notice on 22.1.2007 in the interim restrained payment for the supplies to the respondent No. 5. The said respondent, for vacation/cancellation/alteration of the said order has filed the application registered as Misc. case 361/2007.
I have heard Mr. A.M. Mazumdar, Sr. Advocate assisted by Mr. S.S. Dey and Mr. M. Nath, Advocates for the petitioners, Mr. M. Ahmed, learned Central Government Counsel, for the official respondents and Mr. D. Das and Mr. I. Lahiri, Advocates for the respondent No. 5.
2. The abbreviated facts indispensably essential for better comprehending the rival assertions deserve to be minuted. Introducing itself to be a private limited company incorporated under the Companies Act, 1956, the petitioner has averred that it is registered as well under Section 9(4) of the Insecticides Act, 1968 (hereafter referred to as the Act) as a manufacturer of different insecticides including different types of solvents (Xylene, Cyclohexanone, Apromax etc.) and emulsifiers (SNT A, SNT B etc). The licence had been issued by the Ministry of Agriculture, Government of India vide F. No.2274-F/CIR, F. No. 649/F/89/CIR, F. No. 5651-F, 5528-F, 2276-F/CIR, 277F/94. The petitioner has thus claimed that in view of the said registration, it is licenced to manufacture insecticide vide licence No. 32/ 937/PP-1LC/M-1 issued by the Insecticide Licence Cell, Government of West Bengal.
It has been stated that “Bionol” is a cashew nut shell extract and oil based non-toxic insecticide composition and is also known by its generic name Cardol/Crdonol. The petitioner has claimed itself to be the sole manufacturer of Bionol by virtue of the licence issued to it and that the said product is marketed by it exclusively.
According to the petitioner, it is also registered as a Small Scale Industrial Unit under the Directorate of Cottage and Small Scale Industries, Government of West Bengal and the National Small Industries Corporation Ltd. and has in the meantime supplied the above produce to various reputed organizations in the country. Its product (Bionol) has also been approved to be exported to Germany by the Indo-German Chamber of Commerce.
3. The Director General, Assam Rifles, Shillong, issued a Notice Inviting Tender (here after referred to as the NIT) dated 7.6.2006 in the issue dated 16.6.2006 of the daily “The Telegraph” Guwahati Daily Edition inviting sealed tenders for supply of different hygiene and chemical items to Assam Rifles for the year 2006-07 from authorized distributors/dealers who were authentically engaged in the sale thereof. Against schedule No. 05 of the said notice, bids were invited for the supply of a product named “Bionol”. In addition to indicating the documents to be essentially submitted with the tenders it was further prescribed that the tenderers would have to deposit Rs. 1,80,000/- in the form of deposit at call receipt/fixed deposit receipt from a scheduled nationalized Bank. The last date of submission of the tenders in the two bid system i.e. Technical and Cost bid was fixed on 11.7.2006 with the stipulation that the technical bids would be opened on the same date. The tenderers were also required to deposit tliree samples each of the product duly packed.
By a corrigendum published on 20.6.2006, an amendment to the original NIT was introduced whereby the commodity in schedule No. 5 was specified as Cardol/Cardonol (100% herbal preparation with active ingredient based on cashew extract, compound consisting of active ingredient, emulsifier and solvent in water soluble composition, Non-toxic to human and mammals) instead of Bionol as in the original NIT The petitioner obtained the bid document from the web site of Assam rifles in terms of the original NIT and submitted its Technical as well as Cost Bid within the stipulated time and date. The respondent No. 5 was also one of the contenders. The Technical Bids were opened on 11.7.2006 and on the scrutiny thereof the offers of the petitioner and the respondent No. 5 were declared to be technically responsive. The petitioner has maintained that subsequent thereto, it came to learn that the respondent No. 5 had deposited three sealed samples of “Bionol” along with its bid documents though it was neither the manufacturer of the said product nor had it been appointed by the petitioner as its authorized distributor or dealer or had permitted it to deal with it in any other capacity. The petitioner has averred that the respondent No. 5 neither holds any licence to manufacture Bionol or any of its generic composition containing Cardol/Cardonol nor had it been appointed as its distributor/dealer either by the petitioner or any other Company and therefore it (respondent No. 5) lacked the pre-requisite qualification to participate in the process. It alleged that the respondent No. 5 had fraudulently submitted its product Bionol as its (respondent No. 5) sample. Further the respondent No. 5 also did not submit any evidence to authenticate that it is engaged in the sale or manufacture of Bionol or the generic formulation Cardol/Cardonol. According to the petitioner, therefore, the Technical Bid of the respondent No. 5 being apparently not in terms of the essential tender conditions ought to have been rejected outright.
4. However, as the authorities of the Assam Rifles most inexplicably appeared to be aligned to award the contract to the respondent No. 5, the petitioner instituted Title Suit No. 38(T)/2006 in the Court of the learned Assistant to the Deputy Commissioner, Shillong, praying for a declaration that the acceptance of Technical Bid of the said respondent (defendant No. 6 therein) is illegal and arbitrary. Along with the suit, an application for temporary injunction was also filed vide Misc. Case No. 104(T)/2006. The learned Trial Court after hearing the learned Counsels for the parties was pleased to grant interim injunction restraining the authorities of the Assam Rifles from opening the Cost Bid or settle the contract. The matter having been taken up in appeal by the respondent No. 5, the learned lower Appellate Court by judgment and order dated 22.11.2006 passed in FAO No. 26(T)/2006 and 28(T)/2006 set aside the order dated 22/9/2006. Subsequent thereto, the respondent No. 5 was settled with the contract and the related work order for the supplies was issued. As a matter of fact, the Assam Rifles through its pleadings before the learned Trial Court had disclosed that the Cost Bid of the tenderers including that of the respondent No. 5 had been opened on 14.08.2006.
5. The respondents No. 1 to 4 in their counter while endorsing the process to be valid and beyond reproach contended that the respondent No. 5 is the authorized distributor of Amit Biotech a registered manufacturer of Bio Psticides and Organic Manure. No comment, however, was offered to the averments that the respondent No. 5 had deposited three sealed samples of bionol along with its Bid documents. According to the answering respondents, the generic name of Bionol is Cardol/Cardonol and that the corrigendum was consciously issued so as to make the process largely participatory and to ensure the quality of the commodity sought to be purchased. They expressed ignorance of the claim that the petitioner was the sole manufacturer and distributor of Bionol. They affirmed that the tender of respondent No. 5 was accompanied by all requisite documents as per the tender conditions and that the contract was awarded to it following a careful scrutiny of the tender documents and the recommendations of the Tender Purchase Committee. They maintained that the generic composition cardol/cardonol is manufactured and distributed by many companies through out the Country and that the petitioner had no monopoly thereon. They stated that on the completion of the process it transpired that the respondent No. 5 was the lowest bider (L1) having quoted its offer at Rs. 548/- per litre, which was lower by Rs. 76/- than that of the petitioner (L2) at Rs. 624/- per litre. They branded the suit to be an endeavour of the petitioner to flout the tender process without valid reasons and disclosed that after the order of injunction was interfered with by the learned lower Appellate Court on 22.11.2006, the respondent No. 2 vide letter No. 1.11011/103(E) 2006-Q/682 dated 28.11.2006 issued the work order in favour of the respondent No. 5 asking it to supply 15000 liters of Cardol/Cardonol to the identified destinations within 10.1.2007. According to them, the respondent No. 5 duly supplied the required quantity of Cardol/ Cardonol to the stations specified. They questioned the maintainability of the writ petition as being barred by the principles of res-judicata and estoppel as well as laches and undue delay. They claimed that the samples of the product submitted by the petitioner and the respondent No. 5 had been sent for technical evaluation and both having been cleared by the concerned laboratory, the latter having been found to be most suitable considering amongst others the difference in rates was awarded the contract. The commodity involved having already been dispatched to the destinations, the answering respondents asserted that the petition deserved dismissal in limine.
6. In its application for recalling the interim order, the respondent No. 5 more or less reiterated the stand of the official respondents. It avowed that it was a licencee to sell, stock and distribute drugs under the Drugs and Cosmetic Rules, 1945, and is licenced for such purposes vide licence No. KHP/121576, which is valid from 5/6/2003 to 31.12.2007. It claimed to be the sole institutional sales agent for M/s Amit Biotech, an established manufacturers of bio pesticides and organic manure, which also includes the product Cardol/Cardonol. It asserted that it was engaged in a plethora ofbusiness activities involving supply of goods of various nature to several governmental and nongovernmental organizations over the years including hygienic chemicals. In particular, it asserted to be supplying Cardol/Cardonol as well to different institutions. While flaying the instant petition to be an incredulous ilitigation laden with false and malafide motive to harass it, the answering respondent stated that the petitioner has sought to mislead the Court by claiming it to be the sole manufacturer of the abovementioned generic formulation without producing any patent right to establish the same. It reiterated that Cardol/Cardonol is being manufactured and distributed by many other companies through out the territory of India and that by no means the petitioner have any undisputed monopoly over the same. The respondent also questioned the bonafide of the petitioner contending that it had participated in the tender process without any demur and had sprang into action only after realizing that the result thereof would not be favourable to it.
While reiterating the facts pertaining to the institution of the suit, the initial order of injunction and the vacation thereof in appeal, the respondent reiterated that in terms of the work order issued on 28.11.2006, it had already supplied the required quantities of Cardol/Cardonol to different destinations as mentioned in the NIT. Documents supportive of the above fact have also been appended to the counter. The maintainability of the writ petition has also been questioned on the count of res-judicata, estoppel, delay and suppression of material facts. According to it, the tender process was conducted strictly in terms of the stipulations prescribed and the contract was awarded to it after the sample deposited along with the tender was duly examined and certified by a Central Government approved laboratory and due scrutiny of its tender documents and acceptance of its rates.
7. The petitioner in its affidavit to the said application while generally reiterating the facts pleaded in the writ petition has avowed that the commodity to be supplied is admittedly an insecticide, the manufacture, sale and storage of which is mandatorily regulated by the provisions of the Act and the Rules framed thereunder. It reiterated that M/s Amit Biotech was not authorized to manufacture Cardol/Cardonol. Moreover, the certificate issued by the said firm projecting the respondent No. 5 as its sole “Selling institutional sales agent” was inconsequential inasmuch as such a certificate can be granted only by a licenced manufacturer of insecticide only under form-VI and Form-Vm under the Insecticide Act and the Rules. The petitioner further stated that the item Cardol/Cardonol being an insecticide and not a drug/cosmetic under the Drugs and Cosmetics Act, 1940 (hereafter referred to as the Drugs Act) and Drugs and Cosmetics Rules, 1945, (hereafter referred to as the Drugs Rules) the licence of the respondent No. 5 under the Drugs Rules is irrelevant. The petitioner also asserted that the deli very challans annexed to the application disclose supplies of the product “Terokil” which is neither a brand name nor the generic formulation of Cardol/Cardonol and was not the commodity sought for. It has been further asserted that the brochure of “Terokil” divulge that it contain Rotenone, which is a termicide and a broad spectrum cellulose protectant for controlling termites and other soil insects in agricultural crops including tea plantation. Besides contending that Rotenone is toxic to human and other mammals, it has also been stated that there has been no sale/supply of Cardol/Cardonol by M/s Amit Biotech in favour of the respondent No. 5. The deal therefore has been condemned as repugnant to the NIT and collusive to defraud public exchequer.
8. Mr. Mazumdar has urged that the respondent No. 5 being neither a licensed manufacturer of Bionol or Cardol/Cardonol or an authorized distributor/dealer thereof, it was plainly ineligible to participate in the process in terms of the tender prescriptions and, therefore, the impugned settlement of the contract in its favour is manifestly illegal, arbitrary and lacks bonafide. Not only the said respondent failed to furnish the essential documents as required under the tender stipulations, the sample deposited by it was that of Bionol a product exclusively manufactured by the petitioner and in that view of the matter, its candidature ought to have been rejected at the threshold. The learned Sr. counsel emphasized that the respondent No. 5 was neither appointed not-authorized by any licensed dealer or manufacturer of the commodity concerned within the meaning of the Act and the Insecticides Rules, 1971 (hereafter referred to as the Rules), and, therefore, its tender being obviously ineffectual ought to have been left out of consideration for all practical purposes. Referring to the uncontroverted pleaded assertion that the respondent No. 5 had offered Bionol as the sample of the commodity which, according to Mr. Mazumdar, is clearly borne out by the test report annexed to the writ petition, it has been argued that the award of contract in its (respondent No. 5) favour in the teeth thereof was patently malafide and induced by a collateral purpose. The respondent No. 5 having quoted Bionol without the consent and/ or approval of the petitioner such an offer was nonest in law, he urged. The learned Sr. Counsel maintained that as M/s Amit Biotech as well was not the licensed manufacturer, dealer or distributor of the generic formulation Cardol/Crdonol, the purported certificate appointing the respondent No. 5 as its selling agent therefor is of no consequence.
Mr. Dey, supplementing the above, referred to the provisions of the Act and the Rules to buttress the point that neither the respondent No. 5 nor M/s Amit Biotech thereunder could be deemed to be the manufacturer or distributor or dealer of Bionol or Cardol/Cardonol and, therefore, the tender of the said respondent was nonest in law. Mr. Dey insisted that the respondent No. 5 ‘s offer lacked candour inasmuch as though it quoted for Cardol/Cardonol but to reinforce its offer deposited petitioner’s manufactured Bionol as the sample. The learned Counsel was critical about the decision of the official respondents in selecting the said respondent for the supply only on the basis of the rate quoted without verifying the product to be supplied. Referring to the challans of supply annexed to the application of the respondent No. 5, Mr. Dey contended that the same disclosed supply of a different product “Terokil” and not Cardol/Cardonol. This, the learned Counsel urged, was not only in departure from the commodity solicited in the NIT but also posed potential health hazard, Terokil being toxic to human beings. Mr. Dey pleaded that the whole process was a farce only to favour the respondent No. 5 undermining public health and government exchequer thereby rendering the same per se unconstitutional, null and void. Not only this tainted venture ought to be adjudged invalid, an appropriate writ ought to be issued in public interest to realize the payments made for the claimed supply by the respondent No. 5 but also stringent action is mandated against the respondents, he urged. Mr. Dey to reinforce his arguments placed reliance on the decision of the Apex Court in Subhash Project and Marketing Limited v. W B Power Development Corporation and Ors. and of this Court in Edu. Com. Solution Ltd. and Ors. v. State of Assam and Ors. 2006 (2) GLT 775.
9. The learned Central Government Counsel while controverting the contentions bearing on the validity of the process emphatically urged that the respondent No. 5 was selected being the most suitable tenderer in strict conformity with the tender covenants. According to him, the samples furnished by the petitioner and the respondent No. 5 were different as manifest from the test reports. The offer of the respondent No. 5 having been adjudged to be technically responsive and its rate lowest, the contract was awarded to it. Mr. Ahmed submitted that in the meantime, the supplies as ordered have been effected and that therefore the respondent No. 5 is in law entitled to the payment therefor.
10. Mr. Das initiated his arguments questioning the maintainability of the writ petition. He maintained that the issues in TS 38(T)/2006 and in the instant petition being common, the instant proceeding in view of the judgment and order dated 22.11.2006 passed in FAO 26(T)/2006 and FAO 28(T)/2006 is clearly an abuse of the process of Court and ought to be rejected in limine. The writ petitioner having chosen to leave the aforementioned judgment and order of the lower appellate court unchallenged, it is estopped in law from mounting a fresh assailment on the settlement of the award to the respondent No. 5 on the same grounds. Moreover as the suit is still pending, the present petition suffers from the vice of suppression of material facts. It is unduly delayed as well, the respondent No. 5 in the meantime having completed the supplies as ordered, he urged. Turning to the other contentions, Mr. Das argued that for being eligible to participate in the process, the tenderer was not necessarily required to be a manufacturer of the product and that an authorized distributor or dealer could permissibly join the same. As the respondent No. 5 was the authorized dealer/distributor of M/s Amit Biotech, manufacturer of Cardol/Cardonol, its tender was valid and, therefore, rightly accepted by the Assam Rifles. He contended that Bionol not being an insecticide and Cardol/Cardonol being only a biochemical pesticide, the provisions of the Act and the Rules were not attracted and, therefore, all reference thereof are misconceived and fallacious. As only a trade licence granted to the respondent No. 5 by the Gauhati Municipal Corporation (hereafter referred to the Corporation) was essential to deal with the said commodity, it was qualified in terms of the tender conditions to participate in the process. According to him, the test reports annexed to the writ petition and relatable to the samples of the parties demonstrate that the products were different and, therefore, the contention that the respondent No. 5 had contrived the petitioner’s manufactured product to be its, is apparently frivolous and betrays bias. Besides as the said proposition involves disputed questions of facts this Court in the exercise of its writ jurisdiction would not embark upon an enquiry into the same.
11. Mr. Dey in reply argued that the frame and character of the suit and the issues involved therein being distinctly different from those in the instant petition, the challenge to the maintainability of the present proceedings is evidently untenable. The suit having been filed at the stage of opening of the Price Bid, impeaching the validity of the corrigendum, the verdict of the learned lower Appellate-Court cannot have any decisive bearing on the grounds of the present impugnment. Mr. Dey, to substantiate his argument that ‘Terokill” was different from Cardol/Cardonol and further toxic to human beings in view of “Rotenone” as one of its ingredients, has led this Court through the brochure of the said product.
12. The arguments advanced have been duly considered. As considerable emphasis has been laid by both the parties on the aspect of maintainability of the proceeding in hand, it would be appropriate to deal therewith at the outset before delving into the other issues. The primary facts pertaining to the NIT, the corrigendum and participation of the petitioner and the respondent No. 5 in the resultant process are not in dispute. The petitioner’s version in the suit has been that in response to the NIT, it submitted its tender for bionol as originally specified at Schedule No. 05 therein. It claimed itself to be the sole manufacturer thereof, describing it (bionol) to be an organic insecticide and lamcide easily soluble in water, safe for use to destroy all types of insects such as termites, mosquitoes etc. The technical composition of the said product was disclosed to be of active ingredients of solvent and emulsi fier of varying percentage. It pleaded that it was informed by a fax message dated 7.8.2006 that its Cost Bid along with that of the respondent No. 5 would be opened on 9.8.2006. On this, it required the concerned authority of the Assam Rifles to ascertain from the bidders as to whether the necessary approval from it have been obtained to bid for Bionol it being the sole manufacturer thereof. It, in the circumstances, requested for postponement of the date of opening of the Cost Bid. By a subsequent fax message dated 10.8.2006 from the Colonel, Medical Section, Assam Rifles, Shillong, it was for the first time conveyed to it that a corrigendum was published in the issue dated 20.6.2006 of the daily “The Telegraph” to the following effect.
(1) Further to our tender notice No. I. 11011/ 103/Hyg & Chem/2006-07/Q/410 dated 07 June, 2006.
(2) Amend to read name of item Cardol/Cardonol (100% herbal preparation with active ingredient based on cashew extract, compound consisting of active ingredient, emulsifier and solvent in water soluble composition, non-toxic to human and mammals) instead of Bionol as appear in our bid tender notice at schedule No. 5 for procurement of Hygiene and chemical items to Assam Rifles for the year 2006-07.
The petitioner claimed that it came to learn about the corrigendum for the first time from the fax message dated 10.8.2006 and, therefore, requested the official respondents to further defer the opening of the Cost bids. It asserted that the corrigendum was a betrayal of trust by the official respondents thereby leaking its trade secrets to the contending tenderers, as earlier, on their request, it had disclosed to them the composition of its product Bionol which was more or less the same as of the product referred to in the corrigendum. The petitioner alleged this to be a devise to promote the prospects of the respondent No. 5 for wrongful gain and illegal bargain. Challenging the action of the official respondents in entertaining the Technical Bid of respondent No. 5 as illegal, arbitrary and motivated the suit was thus filed for the following reliefs.
(a) For a declaration that the corrigendum to the NIT dated 7.6.2006 as published in the newspaper on 20.6.2006 is void, illegal and arbitrary.
(b) For a declaration that the acceptance of the technical bids of the defendant No. 6 by the defendant No. 3 is illegal and arbitrary.
(c) For a declaration that the plaintiff being the only qualified tenderer in respect of Schedule No. 5 to the NIT dated 7.6.2006 is entitled to be settled with the supply of the product in question.
(d) For a permanent injunction restraining the defendants 2, 3 and 4 from divulging the trade secrets of the plaintiff company.
(e) Cost of the suit.
(f) Any other relief/reliefs, which the plaintiff is entitled to according to law and the principles of justice, equity and good conscience.
In the petition for temporary injunction registered as MC 104 (T)/06 while reiterating the above an order in the interim was sought for to restrain the official respondents from opening the Cost Bids and furthering the tender process.
13. The learned Assistant to the Deputy Commissioner, Shillong, by order dated 22.9.2006 granted the interim relief as prayed for. Both the official respondents and the respondent No. 5 preferred appeals being FAO 26(T)/2006 and FAO 28(T)/2006 and the learned lower Appellate Court by its order dated 22.11.2006 interfered with the order of the learned Trial Court. The learned Court below dismissed the petitioner’s plea of want of knowledge of the corrigendum before 10.8.2006, it having been published in three newspapers and noticed that it had not raised any objection with regard to the respondent No. 5’s eligibility at any earlier stage of the process. It observed that though the petitioner was aware that the Cost Bid would be opened on 14.8.2006, it instituted the suit only thereafter on 21.8.2006. It recorded the assertion of the respondents that the corrigendum was to ensure maximum public participation and obviate monopoly of one Company in the process. It held that the injunction, if sustained, would be detrimental to public interest as the commodity sought to be purchased, was for the use of the troops. Observing that the corrigendum in effect was an act of resettlement of the terms of the tender, which was not open to judicial scrutiny, the order of injunction was thus vacated. Admittedly the said decision remained unchallenged in any higher foaim.
The contents of the plaint and the reliefs prayed for demonstrate that the challenge recorded therein pertained to a stage when the process had not culminated in the award of the contract in favour of respondent No. 5. The assailment was essentially of the conigendum. Noticeably the issue of eligibility of the respondent No. 5 to view for the contract was not finally adjudicated upon on merits. The validity of the corrigendum was principally under scrutiny. The learned Counsel for the petitioner before this Court has candidly conceded that the impugnment of the conigendum is no longer beingpursued. The petitioner in the instant proceeding has sought for annulment of the selection of the respondent No. 5 and the work order issued in its favour and reconsideration of its bid. The parties though common, the cause of action for the instant proceeding is traceable to the settlement of the contract in favour of the respondent No. 5 and issuance of work order to it. Obviously the facts constituting the cause of action therefor, are relatable to a stage subsequent to the one obtaining in the suit. The writ petition seeking adjudication therefore, in my considered opinion, having regard to the questions raised, cannot be construed to be exactly in the same framework as of the suit. I am, therefore, not inclined to non-suit the petitioner on the ground of res-judicata. The decision of the learned Lower Appellate Court, considering the stage of the process involved in the suit, cannot be construed to be a determination on the issues raised herein. The omission to challenge the said order as well does not pose a bar of estoppel in the attending facts and circumstances. This contention, therefore, fails.
Indubitably after the vacation of the order of injunction on 22.11.2006, the official respondents issued the work order in favour of the respondent No. 5 on 28.11.2006 to effect supply of its product. This letter required the said respondent to complete the supplies by 10.1.2007. The official respondents in their affidavit have claimed that supplies were made as hereunder.
_______________________________________________________
Sl. Name of unit Quantity in Date
No. liters
_______________________________________________________
1. No. 1 MGAR 9000 8.1.2007
(Dimapur)
2. No. 2 MGAR 3000 12.1.2007
(Silchar)
3. No. 3 MGAR 1908 29.1.2007
(Jorhal)
_______________________________________________________
The averment that the petitioner having come to learn of the supply order had applied to the concerned authority of the Assam Rifles for a copy thereof but to no avail has remained uncontroverted. On the date of the institution of the instant proceeding i.e. 19.1.2007 though as claimed by the respondents a major chunk of the supply had been made, till 29.1.2007, however, the same admittedly was not completed. The consignment note meant for No. 3 MGAR contains the description of article supplied as Cardol/Cardonol Terokiir.
The text of Terokil produced before this Court does not demonstrate Cardol/Cardonol to be a constituent of it. Further the said product as its brochure suggests is toxic/ harmful to human beings. This product, therefore, is visibly different from the commodity sought to be purchased in terms of the NIT. The issues raised are of considerable moment and demands scrutiny of this Court in the interest of public health and safety. There is neither a gross nor undue delay in bringing the challenge to this Court. The plea to the contrary therefore is not sustained.
The writ petition discloses essential facts pertaining to the institution of the suit and the happenings thereafter ending with the order dated 22.11.2006 of the learned lower Appellate Court. The issuance of the work order in favour of respondent No. 5 thereafter has also been referred to. It has been asserted that the supply in full till the filing of the writ petition has not been made and, therefore, an interim order to suspend further supplies or in the alternative to withhold payment had been sought for. The state of supply asserted in the writ petition is in accord with the pleaded stand of the respondents. On a conjoint reading of the pleadings of the parties, 1 do not feel persuaded to hold that the primary facts having a bearing on the proposed adjudication have been kept away from this Court. The challenge to the maintainability of the writ petition is, therefore, negated.
Another fringe aspect ofthe controversy needs to be attended to before entering the thick of the debate. The challenge to the validity of the corrigendum dated 20.06.2006 leading to the suit was abandoned after the annulment of the order of injunction by the learned lower Appellate Court. The materials on record do not demonstrate any deliberate divulgence of the ingredients ofbionol claimed to be the exclusive product of the petitioner to the respondent No. 5 to further its prospects in the tender process. No further dilation in this regard is, therefore, warranted.
The eligibility of respondent No. 5 has been sought to be questioned amongst others on the ground that the certificate issued by M/s Amit biotech introducing it to be its (Amit Biotech) ‘sole selling institutional sales agent” is not in accord with the tender imperatives making only an authorized distributor or dealer authentically engaged in the sale o f the hygiene and chemical items specified to be eligible to make their offers. The edifice of this argument is built on the provisions of the Act and the Rules on the supposition that Bionol or Cardol/Cardonol is an insecticide as comprehended by these legislations. Insecticide has been defined in Section 3(e) of the Act, as hereunder.
3(e)… Insecticide
(i) any substance specified in the Schedule; or
(ii) such other substances (including fungicides and wedicides) as the Central Government may, after consultation with the Board, by notification in the Official Gazette, include in the schedule from time to time; or
(iii) any preparation containing any one or more of such substances;
In conformity with the said prescription, insecticide has been catalogued in schedule to the Act. Admittedly neither Bionol nor Cardol/Cardonol find place therein. No notification of the Central Government published in the official gazette including these substances in the list of insecticides in the Schedule has been produced before this Court. The attention of this Court has also not been drawn to any composition of Cardol/Crdonol in amalgam with one or more of the listed insecticides. Consequently, therefore, Cardol/Cardonol having regard to the definition of insecticide and the Schedule to the Act cannot be construed per se to be an insecticide attracting the rigour of the provisions of the Act and the rules framed thereunder. The provisions of Section 9 and 13 of the Act dealing with the registration of insecticide, grant of licence to manufacture, sell stock or exhibit for sale or distribute any insecticide and the prohibition incorporated in Section 18 for such activities are of no consequence for the present purpose. By the same analogy, Rule 9 and 10 dealing with the mode of application for the licence to sale, stock or exhibit for sell or distribute insecticide and the grant of licence are of no significance. As a corollary, the assertion based on want of such licence under the Act and the Rules, is of no avail to the petitioner. In the face of the definition of insecticide provided in the Act, the licence issued by the Government of West Bengal, Department of Agriculture (Insecticide Licence Cell), Kolkata, to the petitioner authorizing it to manufacture amongst others Bionol as an insecticide does not further its assailment on the eligibility of the respondent No. 5.
14. The brochure of Bionol annexed to the petition introduce it as an organic tennicide not harmful to human beings and other mammals. The ingredients disclosed are cardol, emulsifier and solvent. Noticeably, however, though the respondent No. 5 claimed Cardol/Cardonol to be a bio-pesticide by itself, no evidence to that effect has been produced before this Court. This is no proof either to demonstrate that M/s Amit Biotech is the manufacturer thereof or any commodity in combination therewith, utility whereof is as a bio-pesticide. The documents annexed to the Misc. application of the respondent No. 5 at annexure VII, VIII and IX also do not endorse this plea. Whereas Annexure VII is a Trade Licence simpliciter issued by the Gauhati Municipal Corporation (hereafter referred to as the Corporation) in favour of respondent No. 5 without disclosing the commodities to be dealt with, Annexure VIII is a licence issued under the Drugs Rules authorizing the respondent No. 5 to sell, stock or exhibit for sale or distribute wholesale drugs specified in Schedule C and Schedule C(l) thereof. Abare perusal of the Drugs enlisted in these two schedules of the Rules does not bear out that thereby the respondent No. 5 was entitled in law to sell, stock or exhibit for sale or distribute Cardol/Cardonol or any other product constituting with it as one of the ingredients as a bio pesticide. Annexure IX is the document by which M/s Amit Biotech had declared itself to be the manufacturer of Bio-pesticide and organic manure while presenting the respondent No.5 as its sole sales agent in the North Eastern Indian Market. A cumulative reading of these three documents, does not establish that M/s Amit Biotech to be the manufacturer of Cardol/Cardonol or the respondent No. 5 an authorized distributor or dealer thereof to meet the edict of the tender conditions noticed hereinabove.
15. The product solicited by the official respondents to be supplied as the corrigendum discloses was Cardol/Cardonol (100% herbal preparation with active ingredient based on cashew extract, compound consisting of active ingredient, emulsifier and solvent in water soluble composition, Non-toxic to human and mammals). He essential components of the said product are, therefore, identifiable as cardol, emulsifier and solvent in watersoluble composition. The test report issued by the Test Man Laboratory, Kolkata (Annexure 6A to the writ petition) admittedly relates to the sample deposited by the petitioner along with its tender disclosing it to be Bionol (Cardol/ Cardonol) the contents whereof are:
Carbon content (% by mass) 22.85% Solvent content (% by mass) 14.07% Emulsifier content (% by mass) 63.07% The test report pertaining to the sample said to have been deposited by the respondent No. 5 along with his tender also issued by the same Laboratory describes it as well to be Bionol (Cardol/Cardonol) with the following contents: Carbon content (% by mass) 26.50% Solvent content (% by mass) 12.42% Emulsifier content (% by mass) 62.88%
Both these samples were certified to be in conformity with the requirements as per British Pharmacopeia specification. Acursory glance of the findings of the tests vis-a-vis the two samples would reveal that the ingredients thereof are same and different only in percentage. Having regard to the constitution of the product specified in the comgendum, the similitude of the ingredients in both the samples is understandable. The brand of Bionol latched to the respondent No. 5’s sample in the face of varying percentage of the components thereof, therefore, may not ipso facto be decisively probative of the petitioner’s plea that its product had been sought to be passed off by the respondent No. 5 to be its own to wrest the contract. It is not unlikely that the word “Bionol” found mention being the name of the chemical item originally tendered for. This, however, as the official records reveal is not enough to negate the petitioner’s challenge.
The consignment notes annexed to the respondent No. 5’s application evidencing supply in response to the work order disclose that the commodity specified therein was provided by M/s Bohagi Enterprise, Guwahati, to the unit authorities of the Assam Rifles of 1 MGAR and 3 MGAR as the consignor and consignee respectively. Not only the consignment notes are conspicuous by the absence of any reference of M/s Amit Biotech claiming to be the manufacturer of the product, in the one meant for 3 MGAR the commodity supplied has been described as Cardol/Cardonol “Terokill”. No explanation for the involvement ofM/s Bohagi Enterprise is also forthcoming. Unmistakably neither “Terokil” was the hygiene and/or chemical item sought for by the official respondents nor was the work order issued therefor. The literature on Terokil reveals it to be a versatile biotermiticide containing ‘Rotenone’ to the extent of 5%. It is described to be a broad spectrum cellulose protectant for controlling termites and other soil insects like mole crickets and cockchafer in agricultural crops including tea plantation manufactured and marketed by M/s Amit Biotech.
There is no indication whatsoever of the same having Cardol/Cardonol as an ingredient. Though in course of the arguments this product has been disowned on behalf of the respondent No. 5, having regard to the reference thereof, in the consignment note as above, this stand is unconvincing. From the text on ‘Rotenone’ produced before this Court, it is cautioned to be toxic to human and other mammals. Prima-facie, therefore, a part at least of the supplies has been of an item neither tendered nor ordered for apart from it being toxic to human and other mammals.
16. In this background it would be of utmost significance to ascertain the procedure adopted by the official respondents in conducting the process from their end in the selection of the respondent No. 5 for making the supplies. The official records contained in file No. I. 11011/103(E)/Q-2006 disclose mat the Medical Branch of the Assam Rifles on 12/5/2006 placed the requisition for Bionol said to be a Larvicidal preparation used in several Government Offices and establishment as a hygiene chemical. Procurement of 15000 litres thereof was recommended, as the annual requirement for the financial year 2006-07. The. NIT was thereafter published on 7.6.2006 as alluded hereinabove. The details of the chemical composition of Bionol was outlined by the said branch as hereunder.
(a) Generic name Cardol/Cardonol.
(b) 100% herbal preparation with active ingredient based on cashew extract.
(c) Should be ready to use compound consisting of active ingredient, emulsifier and solvent in water-soluble composition.
(d) Non-toxic to human and mammals. The letter dated 13.6.2006 disclosing the above has a reference of the letter No. MC/6004/05-06 dated 10.2.2006 of the petitioner Company. The corrigendum in the above terms followed thereafter on 20.6.2006. Noticeably the corrigendum replaced Bionol to be read as Cardol/Cardonol. The chemical composition of the product desired, however, remained as above. Visibly, therefore, there was no scope to interchange Bionol with Cardol/Cardonol after the corrigendum.
The Board of Officers of the Assam Rifles as constituted thereafter met on 11.7.2006 to open the Technical Bids of the contending tenderers. Out of the four bidders, the tenders of two namely the petitioner and the respondent No. 5 were found to be complete in all respects. Whereas the petitioner was recorded as the manufacturer of Bionol (Cardol/Cardonol), the respondent No. 5 was shown to be the distributor of the same article i.e. Bionol (Cardol/Cardonol). The other two tenderers though were thereafter asked to produce the manufacturer’s licence and the Lab Test report of the product offered, they failed to do so. The test reports of all the samples submitted by the four tenderers referred thereto as Bionol (Cardol/Cardonol) with varying percentage of carbol, solvent and emulsifier contents. The petitioner having been intimated about the proposed date of opening of the Cost bid on 9.8.2006, it by its letter dated 8.8.2006 while underlining that the tender notice was for bionol requested the authoriti es of the Assam Rifles to verify at the technical stage itself as to whether the other bidders had obtained its approval to bid for the said product as only it and its associates were permitted to do so and any offer without its approval was unauthorized. The Assam Rifles responded by letter dated 10.8.2006 intimating the petitioner about the corrigendum. The Cost Bids were thereafter opened on 14.8.2006 by a Board of Officers convened therefor. The facts pertaining to the litigation before the learned Court below subsequent thereto need no reiteration.
The Cost Bids being opened on 14.8.2006 as scheduled, it transpired therefrom that the respondent No. 5’s bid at Rs. 560/- per litre was the lowest followed by that of the petitioner at Rs. 624/-. The other two tenders were adjudged to be invalid. The product was described as Bionol (Cardol/Cardonol).
17. The records disclose that the respondent No. 5 was thereafter summoned by the Tender Purchase Committee for reduction of its rates and it obliged by scaling it down to Rs. 548.80 per litre. The said committee recommended the said rate to be accepted. It having met the approval of the concerned authorities, the respondent No. 5 on 24.11.2006 was asked to report with the Security Money of Rs. 8,24,000/- for completion of the other formalities. The written agreement was thereafter executed on 28.11.2006, inter alia requiring the respondent No. 5 to supply in conformity with the specifications laid down in the tender notice dated 7.6.2006. The agreement conferred a discretion in the Assam Rifles to obtain samples from the stock supplied and have the same analyzed. It was agreed that no payment would be made if the samples were found not to be congruent with the specifications. Thereunder the respondent No. 5 was obliged to replace any quantity of stock of Cardol/ Cardonol found to be unsuitable and unfit within the warranty period estimated storage life. The Schedule to the agreement/contract which was to subsist till 31.8.2007 described the commodity to be supplied as Cardol/ Cardonol. It stipulated that the Director General, Assam Rifies, or any of its authorized representative could take out samples of the contracted brand of Cardol/Cardonol at any time for re-sampling and that if the same did not pass the standard specified test, the respondent No. 5 would be required to replace the lot. The work order was issued on the same date whereby the respondent No. 5 was asked to complete the supplies in full before 10.1.2007 positively.
The documents accompanying the tender of the respondent No. 5 as available in the records disclose that it had submitted the trade licence issued by the Corporation (Annexure VII to the writ petition) to sell, stock or exhibit for sale, or distribute by wholesale drugs specified in Schedule C and C (1) of the Drugs Rules as well as those not referred to therein and Schedule X thereof. The certificate of M/s. Amit Biotech endorsing it (respondent No. 5) as its “sole selling institutional sales agent” was also submitted. Along therewith, a certificate issued by M/s Amit Biotech authorizing the respondent No. 5 to sell, stock or exhibit for sale or distribute insecticide namely Pestoneem and Akrisulf D.S. as well as the certificate of permanent registration of M/s Amit Bitotech as a manufacturer of Bio Pesticide and Organic Manure were filed. An analytical report of a sample of “Terokil” in the letter head of M/s. Amit Biotech accompanied the tender of respondent No. 5. It appears from the said report that the test disclosed the following ingredients:
(a) pH of 10% AQ Solution 7.2 (b) Total Bio Mass 6.95% (c) Cardonol AB 24.87% (d) Moisture 2% (dictated as 87%)
Vividly the sample is different from the one referred to in the test report of the respondent No. 5’s sample issued by the Test Man Laboratory (Annexure VIB to the writ petition). The letter dated 22.7.2002 of the Bidhan Chandra Krishi Viswabidyalaya, Faculty of Agriculture, Department of Agronomy, West Bengal, addressed to M/s Amit Biotech is one of appreciation amongst others for “Terokil” (versatile bio-termiticide) an organic manure procured from it (M/s Amit Biotech) and used in several demonstrations. The text of Terokil accompanying the tender of the respondent No. 5 declares it to be 100%) Herbal Preparation from cashew shell extract used in ionic stickers and usuable as a versatile bio-termiticide/insecticide with the caution that it is a contact and stomach poison. The product is stated to contain cardinal at 25% E.C.
The petitioner’s tender on the other hand carried with it amongst others the manufacturers licence of insecticide issued by the Government of West Bengal, Department of Agriculture, Insecticide Licence Cell, Kolkata, amongst others of Bionol. The three samples were of its product nomenclatures bionol. The literature of the said article, as observed hereinabove, describe it to be an organic termiticide not harmful either to the environment or to human beings and mammals. The analysis Report of the Regional Research Laboratory, Jorhat, accompanying the tender certifies the sample to be Cashew Nut Shell extract containing 20.5. of Cardol. Several letters of commendation by various organizations and institutions over the said product also formed a part of its tender. Incidentally the other two tenderers namely M/s Bose International Pvt. Ltd. and M/s Bhattacharjya Export and Import Pvt. Ltd. also offered their products to be Bionol. This is intriguing in the face of the unrebutted plea of the petitioner to be the sole manufactures thereof. The official respondents, as a matter of fact, in their counter did not refute the said claim and plainly asserted that the corrigendum was published replacing the brand name Bionol by the generic name Cardol/Cardonol to make the process desirably participative without being dominated by a single supplier.
The above revelations proclaim that the respondent 5 had introduced itself to be a distributor, to be specific, a selling agent of M/s Amit Biotech of the product offered by it. It did not claim itself to be a manufacturer thereof. Necessarily therefore, the credentials of Ms. Amit Biotech as the manufacturer of Bionol or Cardol/Cardonol or its compound as referred to in the corrigendum was indispensable for its (respondent No. 5 tender to be valid. Its licence to sell, stock or exhibit for sale or distribute by wholesale the drugs referred to therein is by itself of no consequence. The certificate of M/s Amit Biotech issued in favour of respondent No. 5 to sell, stock or exhibit for sale or distribute insecticide does not refer to bionol or the solicited compound of Cardol/Cardonol or even Terokil. On the other hand, M/s Amit Biotech’s product Terokil, as it evident from the literature thereof furnished with the tender of Respondent No. 5, clearly certifies it to be an organic manure with Cardinol content to the extent of 5% and warns it to be a contact and stomach poison. The analytical report pertaining to Terokil, obviously vary from the test report of Respondent No. 5’s sample issued by the Test Man Laboratory and, therefore, proclaims that those were not of the same compound. No attempt has been made to illustrate that Cardol, Cardonol and Cardinol, are synonymous. The sample deposited by the respondent No. 5, considering its ingredients therefore, has to be different from Terokil, claimed to be manufactured by M/s. Amit Biotech and of which Respondent No. 5 was projected as its sole agent/distributor.
Though a distinction between Bionol and Cardol/Cardonol was consciously made by the official respondents as is evident from the corrigendum, they were for reasons best known to them casually indifferent to this aspect while processing the tenders freely interchanging the terms at their convenience. This is also patently opposed to the stand in their counter emphasizing the exigency of the differentiation to make the process more competitive and guarantee the quality of the product to be selected for supplies. This is of paramount significance they having decided to procure this commodity as a hygiene and chemical item as requisitioned by the concerned medical branch of the organization. The letter dated 8.8.2006 of the petitioner reiterating it to be the sole manufacturer of Bionol and requesting the authorities of the Assam Rifles to seek a clarification from the other bidders about the permissibility of offering the said product in the above perspective cannot thus be dismissed as a trifle.
18. The records produced did not divulge the state of supply by the respondent No. 5. The counter of the official respondents, however, evince that it was completed on 29.1.2007. Considering the stipulations contained in Clause 10 and Clause 13 of the Tender Notice, the tender of the respondent No. 5 does not appear to be in consonance therewith. The manner in which the official respondents conducted the process falls short of the constitutional prescripts of transparency, non-arbitrariness and accountability to indispensably inform such an exercise involving grant of State largesse of the present kind. Materials on record display a casual and in-cautious approach of the official respondents oblivious of their role and responsibility more particularly when the task under taken was to purchase hygiene and chemical items for sustaining the health and safety of the personnel of the Assam Rifles. Not only the tender stipulations were departed from on fancy, sufficient care and vigil seems to be lacking in accepting the supplies, which include Terokil. Neither was this product sought for nor offered by the respondent No. 5, if its sample is any indication. The text of Terokil as available on records does not authenticate that it satisfies the composition outlined in the corrigendum. No endeavour whatsoever was made to verify the credentials and the offered commodity of the Respondent No. 5, on the measure of the tender covenants and the decision making process seems to be induced by extraneous and collateral considerations. In all, the venture does not inspire the confidence of this Court when tested on the touch stone of the recognized constitutional precepts of a valid process to grant a Government contract at the cost of public exchequer.
19. The parameters of judicial review under Article 226 of Constitution of India have been authoritatively outlined in decisions out of number. This Court in Educamp Sojutions Ltd. (supra), on a review of some momentous pronouncements thereon recounted that an administrative authority even in the matter of entering into a contract is required to act fairly and its action has to be legitimate and fair without any aversion, malice or affection. Not only it is debarred from acting arbitrarily at its sweet will like a private individual, its action must be in conformity with the standards or norms which are non-arbitrary, rational or relevant. The power of judicial review, it reiterated, was intended to prevent aritrariness or favoritism in larger public interest. It referred to the decision in R. (Mohmood) v. Secretary of State for the Home Dept. (2001) 1 WLR 840 underlining that the intensity of review in a public law case will depend on the subject matter in hand. It noticed the dominion of tender stipulations as recognized by the Apex Court in West Bengal Electricity Board v. Patel Engineering Co. Ltd. , wherein it was proclaimed that the very purpose of issuance of rules/instructions was to ensure their enforcement lest the rule of law be a casualty. It held that unless expressly provided the relaxation or waiver of a rule or condition by the State or its agencies in favour of one bidder would create justifiable doubt in the minds of other bidders and thus impair the rule of tranparency and fairness.
The power of judicial review in essence is to rein in unbridled administrative discretion, act or decision. A Constitutional Court is to act as a sentinel on the qui vive against imperious executive functioning to sustain the rule of law. The attending facts and circumstances in my considered opinion demonstrate a decision making process obtrusively incompatible with the above presidential tenets of a valid administrative action.
In Subhash Projects and Marketing Ltd. (supra), the appellant in the contextual facts was held to have been wrongly settled with the work of water intake and plant water system package under the Bakereshwar Thermal Power Project by the West Bengal Power Department Corporation Limited. The Apex Court while sustaining the said conclusion of the Division Bench of the jurisdictional High Court also upheld a direction thereof, to the appellant to pay a sum of Rs. 1 Crore to the writ petitioner, M/s Larson and Toubro for having been illegally denied the contract. This the Division Bench had ordered to make the appellant disgorge atleast some portion of the profit earned by it out of the illegally awarded contract to be made available to the writ petitioner as compensation, who ought to have been awarded the same.
20. In the face of the determination on the coeval facts as above, the settlement of the contract in favour of the respondent No. 5 is hereby adjudged illegal and unconstitutional. The impugned work order is hereby quashed. As it has been represented before this Court that in the meantime, the supplies have been made but the payment in full has not yet been released, it is ordered that the amount lying in balance therefor would not be disbursed by the official respondents to the respondent No. 5. No direction for consideration of the petitioner’s offer, in the above premise, however, is warranted.
21. Having regard to the anomalies prominently noticeable in the process, it is further directed that the Secretary to the Government of India, Ministry of Home Affairs, New Delhi, would cause a fact finding enquiry to be made in the matter so as to ascertain the reasons for conducting the pursuit in such a slip shod, perfunctory, imprudent and irresponsible manner and identify the persons at fault. Needless to say, depending on the results of the enquiry, the said authority would take appropriate action in law against the erring persons and ensure that such illegalities do not recur in future. The said authority would complete the enquiry Within a period of two months herefrom and submit a copy of the report before this Court indicating the steps taken pursuant thereto.
22. The petition stands allowed in the above terms. Consequently, Mise. Case 361/07 stands rejected. No costs.