JUDGMENT
K.S. Rathore, J.
1. Since these three writ petitions have been filed against the decision taken by the respondents for inviting fresh tender for installation and establishment of 16 Slice Spiral CT Scan and MRI machine and rendering various diagnostic services to the patients, therefore, these writ petitions are being decided by this common order. The fact of the case of M/s. Neeraj & Associates (SBCWP No. 4246/2004) are being taken as a leading case.
2. An advertisement was issued on 12.3.2004 by the respondents in daily newspaper Danik Bhaskar for inviting the tenders to install CT Scan and MRI machine in SMS Hospital, Jaipur.
3. All the petitioners submitted their technical and financial bids. The technical bids were opened on 21.4.2004 by the committee constituted for this purpose by the Rajasthan Medicare Relief Society. After opening of the technical bids, financial bids were opened on 18.5.2004. To this effect, a press note was issued by the respondents on 22.6.2004 in daily newspaper Rajasthan Patrika that M/s. Neeraj & Associates is found eligible to instal CT Sean Machine and M/s. Okay Diagnostic Research Centre to instal MRI machine, but M/s. Hospital & Hospital did not qualify in the tender despite this fact that the offer made by the M/s. Hospital & Hospital was lowest in comparison to the qualified tenderers.
4. The contract of installation of CT Scan and MRI machines were decided to be given to the private parties with the objects (i) to effectively provide services to the ailing public to get diagnostic tests done and present their reports before the treating Doctor, (ii) to mitigate the expenditure, which was considered to be always on the higher side for the purposes of getting the diagnosis done with the help of CT Scan machine, (iii) to ensure that the tests which are not possible for being carried out with the help of CT Scan Machine installed in SMS Hospital and to provide the latest machines. This decision was also taken keeping in view to cut down the waiting period which patients are facing with the Hospital CT Scan machine and to avoid higher costs to be undergone by patients who are compelled to seek diagnosis done at the private diagnostic centres having the facility of CT Scan when they are urgently required to have the said diagnosis done and cannot wait for their turn. It was also thought proper to provide free diagnosis scanning to 20% poor persons.
5. The relief society-respondent No. 2 was registered vide certificate of Registration dated 28.10.1996 under the Rajasthan Societies Registration Act, 19S8. The first Managing Committee as constituted under Article 4 of the Constitution of the society was as under:
(i) Shri O.P. Bihar, J.A.S., Principal Secretary, Medical and Health Services, Government of Rajasthan, Jaipur-Chairman;
(ii) Smt. Alka Kala I.A.S., Divisional Commissioner, Jaipur-Vice Chairman;
(iii) Shri S.N. Thanvi, I.A.S., District Collector, Jaipur–Member;
(iv) Dr. P.L. Nawalkha, Professor, Medical College, Jaipur-Members
(v) Dr. G.S. Gahlot, Director, Medical and Health Services, Rajasthan–Member;
(vi) Dr. H.H. Hathi, Superintendent, S.M.S. Hospital, Jaipur-Member Secretary;
(vii) Dr. S.C. Mathur, Head, Department of Medicine, S.M.S. Hospital, Jaipur-Member;
(viii) Dr. S.R. Dharkar, Head, Department of Neuro Surgery, S.M.S. Hospital, Jaipur-Member;
(ix) Dr. J.C. Sharma, Head, Department of Orthopaedics, S.M.S. Hospital, Jaipur-Member.”
6. An amendment was made to the Constitution by a resolution passed by the Managing Committee of the Relief Society on 6.5.1997 whereby the Constitution stood amended in respect of the properties of the Relief Societies as follows :
“Society ki samast sampati Rajya Sarkar ki hogi”
7. The said society has been founded for the purpose to provide facilities on cost basis (various routine and special diagnostic tests) to the patients and to provide clinical facilities on cost basis thus, the society is not having any profit-making aim.
8. The technical and financial bids of the petitioners were accepted on 21.4.2004 and 18.5.2004 respectively. Vide letter dated 17.6.2004, the petitioner’s firm tender and financial bids were approved. In this letter, the petitioner firm was informed to furnish a Bank guarantee of Rs. 12 lacs failing which the earnest money will be forfeited. It has also been mentioned in the letter that the petitioner firm have to instal the CT Scan/MRI machine within a period of three months from the date of execution of the agreement and the agreement was supposed to toe executed by the petitioner firm within a period of 10 days on a non-judicial stamp of worth Rs. 100/-.
9. It is contended on behalf of the petitioners M/s. Neeraj & Associates and M/s. Okay Diagnostic Research Centre that they have placed the order for purchase of machines on 17.6.2004 immediately after receipt of the approval letter.
10. The respondents issued a letter on 21.6.2004 whereby the petitioners were informed not to proceed further in this matter (agreement bond and security money, etc.). By another letter dated 21.6.2004, the petitioners were informed to remain present in the Executive Committee meeting which was held on 30.6.2004 for the purpose of finalisation of the tenders and they were also informed to raise any queries/objections/suggestions, if any, regarding finalisation of the tenders.
11. Learned Counsel for the petitioners Mr. G.K. Garg and Mr. A.K. Bhargava given much emphasis on the press note Issued on 20.6.2004 wherein it was expressed by the respondents that the entire process with respect to invitation of the tenders for the installation of the machine in the Hospital was absolutely transparent but some tenders have questioned the procedure adopted by the respondent No. 2 for the purposes of inviting the tenders for installation of the CT scan and MRI machine so a meeting may be called of all the tenderers so that doubt and complaints as are being alleged against the Relief Society in the matter of inviting tenders may be heard and proper decision can be taken by the Committee with an open mind the meeting was called for the aforesaid purposes on 30.6.2004.
12. It is given out that the petitioners and none of the tenderers were present in the meeting on 30.6.2004 to point out as to how the rate quoted by the petitioners ought not to have been taken as the lowest. However all the time the tenderers were apprised for re-tender for the machine.
13. In these writ petitions the decision of the Executive for re-tender has been challenged.
14. Since M/s. Neeraj & Associates has not challenged the re-tender order dated 30.6.2004, therefore amendment was sought in the writ petition and the same was allowed.
15. Mr. G.K. Garg, learned Counsel appearing on behalf of M/s. Neeraj & Associates submits that Weighted Average Rate Formula for giving grading to Various tests or judging the average rate of Various bids was explained in the pre-bid conferences Assuming that Weighted Average Rate Formula was not explained and the parties were not known it, they would not have submitted their tenders. None else has come to say that what is mentioned in Annexure R/10 regarding non-explanation of Weighted Average Rate Formula had not been explained. The participants were well understood of Weighted Average Rate Formula and applied for tenders. In such circumstances, cancellation of approval vide letter dated 30.6.2004 is contrary to the law and the respondents cannot reject the contract without assigning any reason.
16. In support of his submissions, he placed reliance on the judgment reported in 1974(2) SCC 169 wherein Hon’ble Supreme Court has held that there should be reasons and circumstances which when taken into consideration objectively justifies the order in order to knock down the plea of arbitrary action on behalf of the authority concerned.
17. In response to the reasons stated in the cancellation order that list of all tests which are to be carried out by the installed machine not given, learned Counsel submits that all the bidders knew about the tests to be conducted by the CT Scan and MRI machine as they have given the different rates for different tests and to show the comparison of the rates quoted by the parties for each different test, the petitioner placed the chart before this Court.
18. Mr. A.K. Bhargava who is representing the case of M/s. Okay Diagnostic Research Centre agree with the submissions made on behalf of M/s. Neeraj & Associates.
19. In addition, Mr. Bhargava submitted that technical bid of the petitioner for installation of MRI machine was opened on 21.4.2004 and the petitioners bid was declared, successful in the technical round. The financial bids were announced openly and tender was approved for installation and establishment of 1.5 Tesla MRI machine in the Hospital on the terms and conditions as mentioned in the letter dated 17.6.2004. It was also informed to submit the agreement bond on a non-judicial stamp and security money of Rs. 12 lacs in the form of Bank guaranteer in favour of the Member Secretary.
20. The respondent No. 2 just after four days issued a letter whereby the approval which was granted in favour of the petitioner was kept in abeyance till further orders.
21. Mr. Bhargava further submits that 18 parties had submitted their tenders for CT Scan machines and 14 parties for MRI machine. The bids received from the various parties were referred to the Technical Committee on 7.5.2004 gave its report after evaluation. After receipt of the report of the Technical Committee, financial bids were opened on 18.5.2004 in the presence of the bidders. After approval, the matter was referred to the Technical Committee on 3.6.2004 to various tests or judging the average rate of various bids based on Weighted Rate Average Formula for finalisation of the bids. Learned Counsel Mr. Bhargava submits that Weighted Rate Average Formula was neither mentioned in the terms and conditions of the tender nor it was made known in the pre-bid conference despite the objection raised by some bidders in pre-bid conference. The technical committee on 7.6.2004 submitted its report and gave grading to various tests. It was found that M/s. Okay Diagnostic Research Centre Pvt. Ltd. had given the lowest bid for MRI machine and M/s. Neeraj Associates had given the lowest bid for CT Scan machine.
22. Learned Counsel further requested that this matter be investigated through CBI as the respondents manipulated the tender documents. In support of his submissions, he placed reliance on the judgment reported in WLC 1998(1) 21 and AIR 1996 SC 25 wherein the Hon’ble Supreme Court has laid down the conditions for valid tenders:
(i) It must be unconditional;
(ii) Must be made at the proper place;
(iii) Must conform to the terms of obligations;
(iv) Must be made at the proper time;
(v) Must be made in a proper form;
(vi) The person by whom the tender is made must be able to and willing to perform his obligations;
(vii) There must be reasonable opportunity for inspection;
(viii) Tender must be made to the proper person; and
(ix) It must be of full amount.
23. Mr. S.S. Hora who is representing the case of M/s. Hospital & Hospital submits that the rate quoted by his client is much lower in comparison to the M/s. Okay Diagnostic Research Centre, but the respondents did not care to examine the rate quoted by the petitioner. In para 7 of the writ petition, a chart of the rates has been shown which demonstrates that the rate quoted by the M/s. Hospital & Hospital are less than rates quoted by the successful tenderers, therefore, the tender of the petitioner should be declared successful as the petitioner fulfils all the requirement stipulated in the tender document. The cancellation of tender is merely grant of one more opportunity to M/s. Okay Diagnostic Research Centre Pvt. Ltd. to put its tender and ignore the rightful claim of the petitioner. The re-tender has been call to save from judicial scrutiny the tender granted to respondent No. 3 M/s. Okay Diagnostic Research Centre.
24. Per contra, learned Advocate General Mr. B.P. Agarwal submits that vide order dated 8.3.2004, the Government of Rajasthan laid down a policy for installation of. sophisticated diagnostic equipments through private participation in Government Hospitals with a view to equip the Government Hospitals with latest diagnostic/treatment machines/ equipment in the hospitals and certain criteria has been laid down.
25. The Medicare Relief Society decided the number and type of diagnostic/treatment machines required for efficient functioning of the Hospital. The machines/equipments were divided in two categories (a) Investigative/diagnostic machines, the licensee would be provided space in the hospital building to instal the machine, The machine/equipment would be operated and maintained by the licensee, It was also decided vide order dated 8.3.2004 that in future no new diagnostic machines and equipment and investigative machines would be purchased from Government or from RMRS funds. Only in cases where private investment might not be feasible, cases for prior permission of the Government be moved for such purchases with the understanding that existing machines in the hospitals would continue to be operated by the hospitals as in the past till they become obsolete or beyond economical repair/replacement.
26. In pursuance of the aforesaid policy, the Rajasthan Medicare Relief Society invited tenders for installation or MRI machine of 1.5 Tesla or higher and Spiral CT Scan machine 16 Slice or higher with the mention that a pre-bid conference will be held on 2.4.2004.
27. As mentioned in the tender notice, pre-bid conference was held on 2.4.2004 and all the petitioners attended the pre-bid conference and minutes of the meeting were drawn and the same is also annexed with the reply to the amended writ petition as Annexure-R/11.
28. Mr. Abhay Bhandari, learned Counsel for Rajasthan Medicare Relief Society does not dispute that the Weighted Average Rate Formula was not placed before the bidders in this conference.
29. In the meeting held on 30.6.2004, all the parties attended were present and their attendance was marked in the sheet by the respondents. In the meeting, it was given out by all the bidders that they were not aware of Weighted Average Rate Formula for evaluation of their bids and nor they were provided with the list of various tests which are required to be conducted on these machines. It was also submitted by the bidders that the rate fixed by the Technical Committee was not made known to him before submitting the bid. Considering the submissions and objections raised by the bidders, the Executive Committee thought proper to cancel the letter dated 17.6.2004 and decided to issue fresh tender notice on the following reasons:
(a) The weights allotted to the various tests need review because the frequency of some tests was more than other, particularly the tests for the head.
(b) While applying the Weighted Average Rate Formula, the tests with higher frequency particularly tests for head got lower weighted as compared to the tests with less frequency.
(c) The committee felt that there was some inadvertent error at the time of awarding the weightage to different tests, which need rectification.
(d) It was decided to have a list of most common test to be carried on these machines which should be prepared in advance and allotted weighted based on the opinion of a Technical Committee should be known to the bidders. This should be a part of the tender documents.
30. As the most of the bidders in the meeting raised the following issues:
(i) The weighted average rate formula was not discussed in the pre-bid conference. The weights allotted to each test by the technical committee are irrational and arbitrary.
(ii) M/s. Meeraj & Associates, Jhalawar, have quoted only 18 investigations, which were routine investigations, The rates for special investigation which were part of the technical specifications, were not mentioned,
(iii) In the conditions of the tender, the experience of running the machine was called and it has not been taken into consideration while evaluating the tender,
(iv) If weighted average rate formula is rightly applied by assigning the proper weights to each test, the other parties would become the lowest and that will largely benefit the patients in terms of lower rates particularly for the tests of head which constituted nearly 80-90% of total tests.
(v) One calculation sheet of relevant tests was also presented to the committee by one of the bidder.
31. Unanimously, all the bidders requested for the following:
(a) The number of tests along weight to be assigned for evaluation should be specified in advance-so as to provide the wide platform to the bidders.
(b) The condition of the tender regarding experience for installation of 40 machine, etc. should be examined from the point of view of giving any weightage to them at the time of evaluation of the tender.
(c) The tender should be cancelled and afresh tender be invited.
32. Learned Counsel for the respondents submits that the petitioners were well aware of the reasons for cancellation of the tender as they were present in the meeting held on 30.6.2004 and all were agreed for re-tender.
33. Learned Counsel for the respondents further submits that there was no acceptance, nor any agreement was executed between the parties and also they have not deposited the security money of Rs. 12 lacs, therefore, the contract was not concluded between the parties.
34. The respondents have further raised the objection regarding maintainability of the writ petition as these petitions are with regard to contract. Since no formal agreement was entered with the petitioners, they cannot ask for specific performance of the contract and the petitioners have alternative efficacious remedy by way of filing of civil suit.
35. In support of his submissions with regard to concluded contract, learned Counsel for the respondents placed reliance on the judgments reported in AIR 1947 Madras 366. On the question of maintainability of writ petition, he placed reliance on the judgments reported in (2000) 6 SCC 293 and AIR 1996 SC 3515.
36. Learned Counsel for the respondents submits that where public interest is involved, this Court should not interfere and placed reliance on the judgments reported in (1999) 1 SCC 492, (2000) 2 SCC 617 and AIR 1972 SC 1816.
37. On the point of promissory estoppel he submits that the petitioner M/s. Okay Diagnostic Research Centre has not acted to its disadvantage on receiving the approval letter. M/s Neeraj & Associates has acted in hot haste in placing an order for machines. It was not a statutory contract and doctrine of promissory estoppel cannot be enforced in cases of private contract by issuing writ of mandamus.
38. Heard rival submissions of the respective parties and perused the material available on record as well as judgments and relevant provisions of law referred by the respective parties.
39. It is admitted by the respective parties that the Government of Rajasthan laid down a policy for installation of sophisticated diagnostic equipment through participants in the Government Hospitals. For that purpose, the Government has authorised the Rajasthan Medicare Relief Society for achieving the object of providing facilities to the patients including medicines and tests and also supposed to provide the facility of staying the attendant of the patients and to construct the Sulabh Complex and instal Rain Basera. The Relief Society is headed by the senior officials of the Government like Principal Secretary, Medical & Health Services, Divisional Commissioner, Jaipur, District Collector, Jaipur and Director, Professor, Medical College, etc. The property of the said society will be the property of the State.
40. It is also not disputed by the parties that after opening of technical and financial bid, the offer made on behalf of the M/s. Neeraj & Associates and M/s. Okay Diagnostic Centre was found lowest and the letter was sent for approval before the Executive Committee informing the petitioners M/s. Neeraj & Associates and M/s. Okay Diagnostic Research Centre to this effect that their bid is found lowest and they are required to execute the agreement on non-judicial stamp of Rs. 100/- and to deposit Rs. 12 lacs as security amount within a period of ten days.
41. The controversy only arise when the matter was referred to the Technical Committee to give grading to various bids. The Technical Committee applied Weighted Average Rate Formula and given grading and it was found that M/s. Okay Diagnostic Research Centre and M/s. Neeraj & Associates bid were found to be lowest for installation of MRI and CT Scan machines respectively.
42. After issuance of the letter dated 17.6.2004 for executing the agreement and to furnish the Bank guaranteer, immediately on 20.6.2004, a press note was issued by the Member Secretary of the Relief Society and vide letter dated 21.6.2004, the respondents issued letter to the petitioners informing them that the approval letter dated 17.6.2004 is placed in abeyance and the petitioners were also directed not to act upon in accordance with the approval letter. The controversy crop up from this stage.
43. In the tender notice, it has been mentioned that for giving the grading, Weighted Rate Average Formula will apply and after opening of the technical and financial bid, this formula was applied. During grading, it was observed that the entire tests which are required to be conducted by the aforesaid machines are not mentioned in the tender document and in view of the complaints received by the respondents, it was thought proper to reconsider the matter, therefore, all the tenderers were notified to attend the meeting on 30,6.2004. This fact reveals from the attendance sheet and this fact is also not denied by the petitioners,
44. I have also perused the minutes drawn on 30.6.2004. Upon careful perusal of the minutes, it reveals that Weighted Rate Average Formula was discussed, in the meeting. After due deliberation exchanged between the tenderers and members of the committee and in the presence of the tenderers including the petitioners, it was unanimously decided for re-tender and the proceedings were drawn in the presence of participants by the committee.
45. Knowing this fact that in the meeting held on 30.6.2004, the petitioners were party to the resolution, the decision was taken by the committee in their presence, the petitioners have filed these writ petitions.
46. To resolve the present controversy, the questions which are required to be determinated by this Court whether the approval letter dated 17.6.2004 issued to the M/s. Neeraj & Associated and M/s. Okay Diagnostic Research Centre can be termed as concluded contract or not and whether the respondents are having the jurisdiction to decide for re-tender in public interest.
47. As evident by the letter dated 17.6.2004 that it was only an intimation and pursuant to this intimation, the petitioners were required to execute the agreement and furnish the Bank guarantee of Rs. 12 lacs within a period of 10 days. Since before expiry of 10 days, vide letter dated 21.6.2004, the petitioners were informed not to act upon on the basis of letter dated 17.6.2004 meaning thereby, the petitioners neither executed any agreement nor has given the Bank guarantee of Rs. 12 lacs. In such circumstances, this offer cannot be termed as concluded contract. For the purposes of contract, after acceptance of the offer, the parties have to enter into an agreement. Here in the instant case, no agreement was executed, therefore, the contract cannot be said to be concluded between the parties.
48. It is not the case of the petitioners that in anticipation of acceptance of the Offer, they have invested the huge amount for purchase of the aforesaid machines. In my considered opinion, the equity does not lies in favour of the petitioners.
49. In view of the fact that the petitioners were present in the meeting held on 30.6,2004 and signed the minutes of the proceedings and decision was taken in their presence, they are estopped to challenge the action of the respondents for which they were agreed and were parties to it.
50. I have also carefully perused the judgment referred by the petitioner reported in 2004(2) SCC 712 wherein Hon’ble Supreme Court has observed that “even a monthly lease may last for more than a year and for any longer period. In our view, the Trial Court and the High Court have rightly held that in absence of any lease deed or a registered lease deed, the nature of lease would only be that of a monthly lease.” The facts and circumstances of the instant case altogether different and the ratio decided by the Hon’ble Supreme Court is not applicable.
51. Similarly the ratio decided in case of Trivenibai v. Lilabai, AIR 1959 SC 620, Harichand Mancharam v. Govind Laxman, AIR 1923 PC 47, are also not applicable to the instant case.
52. I have also perused the judgment referred by learned Counsel for the petitioner on the point of concluded and binding contract in case of Gujarat State Financial Corporation v. Lotus Hotels Pvt. Ltd., 1983(3) SCC 379, wherein Hon’ble Supreme Court has observed that “if appellant entered into a solemn contract in discharge and performance of its statutory duties and the respondent acted upon it the statutory corporation cannot be allowed to act arbitrarily.” Here in the instant case, simply an intimation letter was issued to the petitioners that their offer is found lowest and they are further required to fulfil the requirement and to execute the agreement. It is not a case where the respondents have acted arbitrarily and decision of re-tender was taken in the presence of the parties, therefore, the ratio decided by the aforesaid judgment is also not applicable.
53. I have also perused the judgments referred by the learned Counsel for the respondents.
54. In case of Kerala State Electricity Board and Another (supra), the Hon’ble Supreme Court has held that the dispute relating to terms of contract with statutory body, the writ petition Court is not a proper forum for resolution of such disputes, The same view has been taken by the Hon’ble Supreme Court in case of State of U.P. and Ors. v. Bridge & Roof Co. (India) Ltd.
55. I have also carefully scanned the judgment rendered by Hon’ble Supreme Court in case of Raunaq International Ltd. v. I.V.R. Construction Ltd. and Ors., wherein Hon’ble Supreme Court has held that “even when the State or a public body enters into a commercial transaction, considerations which would prevail in its decision to award the contract to a given party would be the same. However, because the State or a public body or an agency of the State enters into such a contract, there could be, in a given case an element of public law or public interest involved even in such a commercial transaction. The element of public interest are (1) Public money would be expended for the purposes of the contract. (2) The goods or services which are being commissioned could be for a public purpose, such as, construction of roads, public buildings, power plants or other public utilities. (3) The public would be directly interested in the timely fulfilment of the contract so that the services become available to the public expeditiously. (4) The public would also be interested in the quality of the work undertaken or goods supplied by the tenderer. Here in the instant case, as the Weighted Rate Average Formula and list of different tests was not circulated between the parties, the decision for re-tender was taken by the respondent in public interest at large to provide cheaper rate of tests to the patients.
56. The same view has been taken by the Hon’ble Supreme Court in case of AIR India Ltd. v. Cochin International Airport Ltd. and Ors., wherein the Hon’ble Supreme Court has held that “the State, its corporations, instrumentalities and agencies have the public duty to be fair to all concerned. Even when some defect is found in the decision-making process the Court must exercise its discretionary power under Article 226 with great caution and should exercise it only in furtherance of public interest and not merely on the making out of a legal point.”
57. Thus, in view of the aforesaid observations and in view of ratio decided by the Hon’ble Supreme Court in the various judgments referred by the respondents, it is a case where the State rightly decided for a re-tender regarding purchase of CT Scan and MRI machine in public interest. Consequently, the writ petition fails and the same are hereby dismissed with no order as to costs.
58. Since the writ petitions have been dismissed, the interim order dated 7th July, 2004 stands vacated. The stay applications also stand rejected.