"l32s2l HIGH COURT FOR THE STATE OF TELANGANA AT HYDERABAD (SPecial Original Jurisdiction) THURSDAY, THE TWENTY FIRST DAY OF DECEMBER TWO THOUSAND AND TWENTY THREE PRESENT THE HONOURABLE MRS JUSTICE SUREPALLI NANDA WRIT PETITIO N NO: 44213 0F 2022 Between: 1. M/s. Asha Medical Hall, Rep. by its Proprietot^Harish K' Raney' Office at' # ' i'i:o-+os, ttumpally, Hvderabad, Telangana - 500 001 2. Harish K. Raney, S/o. Hassanand Raney' Aoed About' 58 Years' Occ. pharmaci.t, nlolfi. f.fo. r r-O-+OS, Namfally, iyderabad, Telangana - 500 001. ...PETITIONERS AND 1. The Union of lndia, Rep. by its Secretary, lrrlinislry o{ Health and Family ' it;lf;;\", C;ntiai ebreinm6nt Health Scheme (cGHS)' New Delhi' lndia' 2. The Director General, Central Government Health Scheme (CGHS)' at Nirman Bhavan, New Delhi, lndia' 3. The Additional Director, Central Government Health Scheme (CGHS) \" dil;'y;'5;rtmv, ahir* ' 1-8'445. Airport Colonv' Patigadda' Begumpet' Hyderdbad, Telangana - 500 016' ...RESPONDENTS Petition under Article 226 of the constitution of lndia praying that in the circumstances stated in the affidavit filed therewith, the High courl may be pleasedtoissueanappropriateWrit,Order,orDirectionmoreparticularlyonein the nature of wRlT oF CERTIORARI to quash the office order, dated 29-11'2019' bearing No. CGHS/Hyd/ADMN/LC/201 gt14O-142, issued by the 3'd Respondent, theAdditionalDirector,CGHs,Begumpet.Hyderabad,Telangana-500016' unjustifiably disqualifying the petitioners in the e-Bid submitted for empanelment of ALCs under CGHS, Hyderabad, for the year 2019-2022' as illegal' arbitrary, unconstitutional and contrary to principles of natural .iustice and violative of article 14 of Constitution of lndia, consequently direct the 3'd respondent. (a). To return the EMD paid by the petitioners by way of payment order No.',s 000630, 000631 , and 000632 of Rs. 3,5U,0001, Rs. 1,76,0001, and Rs. 3,06,000/- respectively total amounting to Rs. 8,41,000/- (Rupees Eight Lakhs Forty One Thousand Only) on 17tO7t2}1g, the payment orders were paid in favor of the 3'd Respondent, on O3tO1l2O2O, (b). To pay interest or 24 percent per annum on the total EMD of Rs. 8,41,000/- (Rupees Eight Lakhs Forty One Thousand Only) to the petitioners from the date of payment till the date of realization, (c). And direct the 3'd respondent to pay to the petitioners a total sum of Rs. 10,00,000/- towards damages and compensation. lA NO: 1 OF 2022 Petition under Section 151 CPC praying that in the circumstances stated in the affidavit filed in support of the petition, the High Court may be pleased to DIRECT the Respondents to consider the representations, dated 1810512022, 14t1)t2022 and 29111t2O22, submilted by the petitioners to the 3'd Respondent, pending disposal of the main Writ Petition. Counsel for the Petitioners: SRI JAKKAMSETTI RAVINDRA Counsel for the Respondents: GADI PRAVEEN KUMAR (Dy. SOLICITOR GENERAL OF INDIA) The Court made the following: ORDER 3 E J P CE U P LIN N N 2L o 2 Heard Mr. Jakkamsetti Ravindra, learned counsel appearang on behalf of the petitioners and Mr.Gadi Praveen Kumar, learned Deputy Solicitor General of rndia appearing on behalfofthe Respondents. oRD E 2 as under : Petitioners approached the Court seeking prayer to issue a Writ of Certiorari to quash the office order, l{fi Ll*?;J,,i li ti., ffi i,\"*, _ ffflyflit l3[ #t\"t;l':\"' r?[3i3' cc r-r s, aJs ;.; o-et,' riv6 grc 666, iil; \"*+.;,3# fintglii \"fu ,*, il{ ffii n si 1 e1 e r.' \" i ;; il?.I :,:ffi:T:t,Ji:[T,, : T, .?:l.j t :? constitution of lniia respondent: ' consequently direct the 3'd (a)To return the EMD o^uld-^by the petitioners by way of ii':,iiiii?r,*ll\"',9si? j*i1t'i:x's:d.'ffi ;j respectively total amounting to Rs.8,41,000/- (Rupees ,'i-3\" riili:[\"'?#: rhoLla nd o^,, i'\"\"\" i'r. o 7 . 20 Ls, 3.dRe;pJn;;;i, o\"ni\"j]0,]i!\"0, ou,o in ravor or the (b)To pay interesr 6 2z ;i' ffi2i;b;E)l *, *1,o#\"3\"'.1ili'.1?#\" :B[l il? 4 Thousand Only) to the petitioners from thedate of payment tlll the date of realization' (c) And direct the 3'd respondelt- ^tq^P9v l\"\"tition\"tt a total sum of Rs' 10'00'000/- damages and comPensation ' to the towards ti h n rt P iti n r 3 o the avt a) The Petitioner No' 1 is a Proprietorship concern represented by its Proprietori Petitioner No'2 and engaged in the sale and distribution of medicines in Hyderabad and in otherStatesoflndia'TheRespondentNo.3hadinvitedE- Tender Online Bids vide Notice No' FNo'CGHS/Hyd/Admn' IALC/2llg-22/1-13, dated o1'07'zOLg for empanelment for supply of day to day Allopathic Medicine to Wellness Centres located in Hyderabad, which fall under the jurisdiction of the 3,d Respondent herein. In response to the said Tender Notification the Petitioner Bid for 3 Wellness Centres under Central Government Health Scheme' Hyderabad for the WellnessCentreNo.2Humayunnagar,WellnessCentreNo.ll Kakatiyanagar, and Wellness Centre No'10 AG's Colony' The E-bids are invited on behalf of the Health Secretary by the Office of the 3'd Respondent as the Respondent No'1 is the 5 final authority for the approval of the tenders. The E-bid is of two stages one Technical and Commercial Bid, the Petitioner was successful in the E-bid and Commercial Bid and was offered as ALC and submitted EMD for Rs.8,41,000/-. It is further the case of the Petitioner that the Petitioner furnished all the relevant documents and on the perusal of the same only the Selection Committee had qualified the Petitioner for opening of commercial bid. The Petitioner had also addressed a letter dt. 03.09.2019 to the 3'd Respondent welcoming the Inspection Committee to conduct the inspection. While so, to the shock of the Petitioner the Petitioner received communication dt. 12.12.2019 intimatino o the Petiti on er t that with reference to Petition rb d su bm ission 1689800 it is informed that the Peti ioner bid has not been selected for t Award of Contract bv nstituted committee. The the d Ulv co Petitioner also recetv mmu cation dt. 29.7t.2019 ed co n informino the Pe it oner t the Petitroner had been t hat disqualified for the E-hrid su Lrmitted for Emoanelme nt of ALCs under CGS . Hvderabad. for the ear 20 19-2022 the clauses/ paras of the e-tender document on the recommenda tions of the tender committee. Thes aid imouoned order dated 5 .77.2 19 issu he tfu r sta as b rd r s n h u nder: \"PARA 15 WITH SU BHEADING COR RUPT OR FRAD LENT RAC UD ENT P CTIC MEANS MIS R E PRESEN oNOFFA IN ORDER TO INFLUENC ETH E TENDERPRo ESS OR EXECUTION OF A CONTRACT THE DETRI MENT OF CGHS (PAGE N .15 TERM AN OF TH CONT CT SECTION - PARA 6 WITH SUB HEADING-CORRUPT I D 7, VII GH WILL REJECT A PROPo R AL FO AWA DOFCONTRACT ( PAGE NO.39) OF rHE TENDE R DOC UME T.\" Aggrieved by the same, petitioner filed the present writ RFRAUD NT L P S petition 4 nt Affi n tn t isasu nde r: a) The petitioner has failed to submit the documents called for and on verification with Income Tax authorities it was found that the physical documents subrnitted and documents uploaded were not matching since the petitioner failed to produce the required documents, hence his e_tender was disqualified as per the tender guidelines. Also, the petitioner 7 failed to submit the documents called for verification and therefore the petitioner's e-bid is disqualified. b) The Income Tax officials verified the IT returns oF the petitioner and on comparison with the documents submitted, it was found that they were not matching, hence the EMD was forfeited. c) The e-bids were floated by the office of 3'dRespondent on behalf of the lstRespondent and the E-bid is of two stages one technical bid and commercial bid, the petitioner was successful in the e-bid and commercial bid and was offered as ALC and submitted EMD for Rs. 8,41,000/-. Alongside, the office of the 3'd respondent directed all the qualified bidders to submit the IT related documents in original for the financial year 2017-18 at 11 am on 01.10.2019, as discrepancies were noted in the Annual Turnover, Profit and Loss Account furnished in Central Govt. E-procurement Portal (CPP Portal) and figures submitted in Income Tax Returns and3CB (Profit and Loss Account) were not rnatching, which amounts to fraudulent practice contravening Clause 15(ii) (b). 8 d) Furthernrore, a detailed letter dated 14.10.2019 was addressed to the lst petitioner stating that the figures of Cpp Portal and Income Tax 3.e1urn5 A/ara not matching and directed to bring originars for verification, which the bidder failed to comply. As the Annual Turnover is a vital parameter for selection process, submission of inflated figures amounts to fraudulent practice and rightly enforced Clause 16 A(b) by forfeiting the EMD arnount. e) Moreover, a detailed letter dated 14.10.2019 was addressed to the petitioner giving an opportunity to present all the documents before the Committee and Income tax officer whrch the petitioner failed to utilize. As already averred that Clause 16 A (b) was invoked for willful suppression of Factual information for wrongfully gaining the tender, hence payment of damages does not arise. t) Thereaftet the petitioner has also submitted inflated Turnover Certificate and Profit and Loss Account Statements in CPP Portal which resulted in veriFication with Income Tax officials and finalty removat of the bidder and forfeiting of the EMD amount invoking Clause 16 A(b) Clause Nos. 15 (ii) b, 9 15 (iii). 15(iv) of the terms & conditions of tender documents' As such petitioner Nos. 1 & 2 has no /ocus standi in the matter. Hence, the Writ Petition is devoid of merits and is liable to be dismissed. PERUSED THE RECORD 5. The order impugned dt.29.11'2019 issued by the 3'd Respondent to the petitioners, reads as under : \"Office Order rqls asna Medical Hall #tl-6'465, Nampallv Market, Hyderabad - 5OO O01 is hereby disqualified for the e-bid submitted for empanelment of ALCs under CGHS, Hyderabad for the year 2019-2022 for violating the ciauses/ paras of the e-tender document on the NO. 9 OFT ETE RDO M T. 6. Condition No.15 and t6 of the Open Tender Notice No.F.No.CGHs/ Hyd/Adm n./ ALC12O,g-22/ L'L3' dated O1.O7.2019 issued by the Centrat Government Health Scheme, Hyderabad, is extracted hereunder: recommendations of the tender committee' P 5 o R A RR PT NT ME M RE I E TH P N D 1 A TE E N I LL F R E P R 10 standards of ethics and conduct Process and afterwards during the contract. *15. CORRUPT OR FRAUDULENT PRACTICES (i) CGHS requires that the Bidders observe the highest during the tender execution of such (ii) In pursuance of this policy, the terms and conditions are set Forth as follows: a) \"corrupt practice,' means the offering, giving, receiving or soliciting oF anything of value to influence the action of the public official in the tender process or in the process of execution of contract; and b) \"Fra udu lent practice,, means m isrepresentation of facts in order to influence the tender process or execution of a contract to the detriment of CGHS, c) \"collusive pra ctice/ca rtelization,, means a scheme or arrangement among Bidder (prior to or after bid submission) designed to prices at artificial non -competitive deprive CGHS of the benefits of competition; establish bid levels and to free and fa ir d) \"coercive practice', means harming or threatening to harm, directly or indirecuy, perso n or therr property to influence their participation i n 11 the procurement Process a contract. or affect to execution of (iil) CGHS will reject a proposal for award of contra€t' if it determines that the bidder recommended for award has engaged himself in corrupt or fraudulent practices while competing for the contract in question; (iv) CGHS will declare a bidder ineligible' either indefinitely or for a speciFied period of time, for award of the contract if at any time it determines that the bidder was engaged in corrupt and fraudulent practices while competing for or in executing the contract' (v) The bidder shall not transfer, sublet or assign any part or whole of the contract to anyone else during the period of the contract. In the event of the bidder contravening this condition, it will be considered a fraudulent act. CGH S will terminate the contract and the Performance Bank Guarantee will be forfeited in addition to actions taken against the bidder for practising f ra ud u lent a cts. 16. RF ITURE P F M SECURTTY A. EMD shall be forfeited if: a) the bidder withdraws his bid during the period of bid va lid ity. 12 b) it is found during the bidding process that factual information is being suppressed, then the bidder will be debarred from forfeited. further participation and EMD will be c) the successful bidder fails to unconditionally accept the contract within one week of receipt of offer lette, and sign the Contract within a maximum of 21 days of un-condition acceptance of the contract. d) the successful bidder fails to deposit the performance Security as specified in the tender document and within the time Frame speciried. B. Performance Security/Bank Guarantee will be forfeited along with termination contract, if: a) the successful bidder Fails to abide by the terms and conditions of the contract, b) it is Found any time during the contract period and till 60 days of validity of pBG, that any factuat inFormation related to the contractor. contract has been suppressed by the c) the empanelled chemist supplies any sub_standard, spurious drugs or substitutes medicines. d) the empanelled chemjst delays supplies. e) the empanelled chemist over charges coercive and/or subcontracting. g) the medicines Chemist against 13 suPPlied bY the indents the Authorized Local placed on them in f) the chemist is found engaged in corrupt' collusive' fraudulent Practices including pursuance of this contract are subsequently found as having been stolen from conforming to quality' anywhere or are not h) the Chemist stops the supplies of medicines/drugs without glving 90 days prior notice' the .d t n 7. Co nte f r f co ar n vt le we n 1 5 r t 2 s n ic ra 7 \"3. In reply to para 2 of the Writ Petition' it is to subrnit that the petitioner failed to submit the documents called for verification and he failed to produce the same by saying that the Chartered Accountant is not available' As under para per the tender guidelines 6 of the guidelines / instructions for corrupt or fraudulent practices' CGHS will reject the proposal for award of contract' the EMD submitted by the bidcler stands forfeited and deposited into the Govt. account T m d he Tr f h e ti n r ith t d c m m in h n t ce he forfeited. 14 10. w sad a In th a nd figu res ( Profit a nd amounts to ss d oM h fi ure f CPP n 7. In reply to para 5 of the Wp. it is submitted that the e-bids were floated by this office of the Respondent No.3 on behalf of the Respondent No.1, The E_bid is of two stages one technical and commercial bid, the petitioner was successful in the e_bid and commercial bid and was oFfered as ALC and submitted EMD for Rs.8,41,000/-, 8. In reply to para 7 of the Wp, it is submitted the office of the respondent No.3 directed ail qualified bidders to submit the IT related document original for the financial year 2OI7-78 at 11 am on 1.10.2019, as discrepancies were noted in the Annual Turnover, Profit and Loss Account Furntshed in Central Govt. E-procurement portal (Cpp portal) submitted in Income Tax Returns and 3CB Loss Account) were not matching, which fra udulent practice contravening Cta use 15(ii) (b) 11. In reply to para 9 it is submitted h d ta led tha t the s in t rd r sh P a dd Tur t n T et rn d et la o d w r n tmatch t or al for rifi on .As h nn al w nover ts Vital pata eterforselectionorocess, s J u ul n f e fi tl ures m un o n rt f ed Cl f, u e A(b)bv rfeit no thEEM amo unt. 15 8.7 L2. In reply to para 12 & 13 it is totally incorrect to state that order is vague, unspecific, discriminatory in nature, as detailed letter dated 14.10.2019 was addressed to the petationer giving him opportunity to present his documents before the Committee and Income tax officer which the petitioner failed to utilize, as he was fully aware that the figures submitted in Cpp portal were inflated to suit the tender terms and conditions. 15. In reply to para 16, as already averred that Clause 16 A (b) was invoked for willful suppression of factual information for wrongfully gaining the tendet hence payment of darnages does not arise. And question of mental agony to the petitioner does not arise as he willfully committed fraudulent practice for gainful needs. e learned counsel a ODearino on behalf of the Petitioner main VDu s-forth th llowino submi srons : e o t i. That the order impugned dated 29.11.2019 is vague, discriminatory, unspecific as to the error committed by the Petitioners. ii. The Petitioners have been unjustifiably disqualified without explaining the actual reason for disqualification. iii. The Petitioner being non-telugu speaking North Indian the Petitioner had been victimized. l6 iv. Withholding the EMD amount was highly illegal, arbitrary. v. The Petitioners legal notice dt, 05.07.2021, 18.05.2022, t4.10.2022 and 29.11.2022 had not been considered at all by the Respondents and have not been replied to by the Respondents till as on date. vi. On the basis of the above said submissions the Learned Counsel for the Petitioner contended that the Petitioners did not involve in any corrupt or fraudulent practices and therefore disqualifying the Petitioners on the ground of willful suppression of factual information for wrongfully gaining the tender invoking Clause 164(b) was totally unwarranted and uncalled for and therefore, the writ petition needs to be allowed as prayed for. 9. The learned counsel a oearino on behalf of the 3'd ResDondent Dlacinq reliance on the counter aff idavat fited bv the 3'd Resoonden mainlv outs-forth t t he followino submissions : A detailed letter dated 14.10.2019 was assued to the Petitioner calling upon the Petitioner to bring originals for verification purpose since the figures of t7 CPP porta I and fncome Tax Returns were not matching, but however, the petitioner failed to comply. ii. As the Annual Turnover is a vital parameter for selection process, submission of inflated figures amounts to fraudutent practice and therefore Clause 16A(b) of the Tender conditions was righfly enforced by forfeiting the EMD amount. rv. The office of the Respondent No.3 directed all the qualified bidders to submit the IT related documents in originat for the financial year 2(lll7_Lg at 1I.OO a.m., on Of .10.2Ol9 as certain discrepancies were noted in the annual turnover, profit and loss account furnished in Centrat Government E_procurement portat (Cpp portal) iii. The plea of the petitioner that the order is vague, unspecific is untenable since a detailed letter dated l4.l0.20J-g was addressed to the petitioner giving opportunity to the petitioner to present has documents before the Committee and fncome Tax Officer which the petitioner failed to utitize as petitioner was fully aware that the figures submitted in Cpp portal were inflated to suit the tender terms and conditions. 18 and figures submitted in Income Tax Returns and 3CB (Profit and Loss Account) since they were not matching' which amounts to fraudulent practice contravening clause 15(2)(b) and the Petitioner was addressed a mail on O3'1O'2O19 calling upon the Petitioner to appear before the 3'd Respondent with the originals of all IT approved IT related documents for financial year z[l7-Lgat 11'oo a'm' on O4'1O'2O19 without fail and the Petitioner replied on O4'1O'2O19 vide mail stating that the Petitioner is not able to produce the required originals since the Petitioner's tax consultant and his family went on a pilgrimage to Mecca Madina and the Petitioner requested to consider the copy submitted while applying for the tender and release the ALc appointment order' v. Income Tax Officials verified the IT returns of the Petitioner and since they were not matchinq when compared with the documents submitted the EMD was forfeited. There is no illegality in the order impugned and Clause 16A(b)' Clause Nos'a5(ii)(b)' 1s(iii)' 15(iv) 1 I 19 observe the highest standards during the tender process and execution of such contract. of ethics and conduct afterwards during the of the terms and conditions of the tender document had been rightly invoked. vi. On the basis of the above said submissions the Learned Counset for the Respondent contended that the Writ Petition needs to be dismissed. DISCUSSION AN D CONCLU SION 10. A bare perusal of the order impugned dated 29.t:-.zo,;g bearing No.CGHS/Hyd/Admn/LC/2oL9/ L4O-L4Z issued by the 3'd respondent indicates that on the ground that the Petitioner adopted fraudulent practice and misrepresented facts in order to influence the tender process for gainful needs and indulged in wilfu! suppression of factual information, the 3'd Respondent concluded that the Petitaoner failed to 11. This Court opines that the judgment relied upon by the Learned Counset for the Petitioner in C'A'No'6772/ 2013 in Rashmi Metaliks Ltd., & Another vs' Kolkata 20 Metropolitan Devetopment Authority & Ors., is not applicable to the facts of the present case in view of the fact that though the petitioner has been provided with an opportunity to present petitioner,s documents in original before the Committee and Income Tax Officer, the Petitioner failed to utitize the said opportunaty and hence the 3'd Respondent was constrained to invoke Clause 16A(b), Ctause No.1S(ii)b, 1s(iii), 15(iv) of the subject tender conditions (referred to and extracted above). L2. Taking into consideration the averments made in the counter affidavit filed by the 3.d Respondent tn particular para 3 7 8 71, L2, 15 (referred to and extracted above), this Court opines that the prayer sought for by the petitioner seeking setting aside of the impugned order vide No.CGHS/HydlAdmn.lLC/ZOtg/ l4O-742, dt. 29.11.2019 of the 3.d Respondent herein cannot be granted in view of the decision taken by the 3'd Respondent to reject the proposal for award of contract of the tender document in favour of the Petitioner herein invoking Clause 164(b), Clause 2t 15(ii)b, 15(iii), 15(iv) of the terms and conditions of tender documents, in view of the admitted fact as borne on record that the Petitioner did not sub it the orrolnals for ver fica on ourDose s souo ht fo hv the I rd onde il d .10.20 n the I er dated 14. O.2O19 and i stead the P itioner the rd co r he co submitted bv the Petitioner at the time of aoolication of the subiect tender and release ALC apDointment order in favour of t e Petitioner. 13. In so far as grant of the 2nd limb of the prayer as sought for by the Petitioner as concerned pertaining to refund of kUO paid by the Petitioner on L7-O7.2O1} t amounting to Rs.8r41rOOOl-, and payment of interest on the said amount, this Court opines that it is the 3'd Respondent who has to consider the representations of the Petitaoner dated L8.O5.2O22, L4.LO.2O22, 29.LL.2(J22 seeking refund of Rs.8,41,OOO/- paid by the Petitioner towards EMD in response to the Open Tender Notice No.F.No.CGHS/HydlAdmn' / ALC/ 2OL9-22/ L-L3, issued by the Central Government Health Scheme, 22 //TRUE COPY// ASSISTANT REG,STAR Hyderabad, dated 01.O7.2O19 and take a decision in the matter and pass appropriate orders duly communicating the decision to the petitioner. The Writ petition is accordingly disposed of directing the 3'd Respondent to consider the petitioners representations dated 18.05.2022, L4.LO.2O2Z and 29.LL.2O22 submitted by the Petitioner to the 3.d Respondent an accordance to subject tender conditions, and as per the 3.d respondents discretion within a period of 3 weeks from the date of receipt of copy of the order and duty communicate the decision to the petitioner. However, there shal! be no order as to costs, I 4iscellaneous petitions, if any, pending shall stand closed SD/. G. SIREESHA SECTION OFFICER To, One Fair Copy to the Hon'ble MRS Justice SUREPALLI NANDA (For Her LadYshiPs Kind Perusal) The Secretary, The Unron of lndra, Minastry of Health and Family Welfare, Central Government Health Schenre (CGHS), New Delhi, lndia. ine Director General, Centrai Government Health Scheme (CGHS)' at Nirman Bhavan, New Delht, Indra The Additronal Drrector, Central Government Health Scheme (CGHS) Kendriya Swasthya Bhavan, 1-8 445, Airport Colony, Patigadda, Begumpet, Hyderabad, Telangana - 500 016 11 LR Copres The Under Secretary, Unron of lndra Ministry of Law, Justice and Company Affairs, 1 2 3 4 5 New Delhr 6. The Secretary Telangana Advocates Associatron, Library, High Court Buildings Hyderabad 7. One CC to Srr Jakkamsettr Ravindra. Advocate [OPUC] 8. One CC to Srr Gadr Praveen Kumar (Dy. Solicitor General of lndia) [OPUC] 9. Two CD Copr:s TJ GJP g- HIGH COURT DATED:21 11212023 -a 6E slAf4: ( 1-t o z 1 B I'IAR 2[ll DFSPATC ORDER WP.No.44213 of 2022 DTSPOSING OF THE WRIT PETITION WITHOUT COSTS. c4 ,{.,-,} o a+ * t * Y^a -fl* "