Plasmagen Biosciences Private Limited v. Govt. of NCT of Delhi & Ors.

1. By way of the instant Writ Petition, the Petitioner seeks to challenge the decision dated 06.01.2022 by which the Respondent No.3 herein has been declared as L[1] bidder in a tender floated by the Respondent No.2 herein for supply of injections of Rabies Immunoglobulin 150 IU/ 2ml vial & Hepatitis B Immunoglobulin 100 IU/0.[5] ml vial, on the ground that the bid of the Respondent No.3 could not be accepted because it has not met with the tender conditions inasmuch as they have not submitted a World Health Organization - Good Manufacturing Practice ("WHO-GMP") compliance certificate of Pharmaceutical Products issued to the manufacturer of the medicines and they have also indulged in 'Fraudulent Practice' as defined in Clause 6.1(ii) of Section IV (General and Special Conditions) of the Tender Documents.

2. It is submitted by the Petitioner that it is a biopharmaceutical company specializing exclusively in plasma protein and specialty care therapy. It is stated that the Central Procurement Agency, through Respondent No.2 herein, i.e. Directorate of Health Services, GNCTD invited a tender, being Tender ID: 2021_DHS_207626, for the supply of Rabies Immunoglobulin 150 IU/ 2m[1] vial & Hepatitis B Immunoglobulin 100 IU/0.[5] ml vial injections.

3. Clause 2.[9] of the tender document required the bidders to produce a WHO-GMP certificate for the products during the entire contract period. The said Clause requires the importer to produce a WHO-GMP compliant Certificate of Pharmaceutical Product (COPP) issued to the manufacturer, or a certificate which is at par with WHO-GMP standards issued by exporting countries such as US-FDA approval, etc. Clause 2.[9] of the tender document, which is relevant for the present case, reads as under: “2.[9] Should have a WHO-GMP certification for inject able medicines given in group A, B, C, D & E in Annexure- L and for drugs manufactured under loan license. The Firm will continue to hold WHO-GMP Certificate for the product during entire rate contract period of the product. If WHO-GMP certificate expires, it is firm's responsibility to inform CPA about the same. The WHO-GMP certificate must not be older than one year from the due date of Bid submission in case where validity is not mentioned in the certificate. The WHO-GMP certificate of all the manufacturing plants, of which products have been quoted, should be submitted. The Importer should produce WHO- GMP/COPP of the manufacturing firm or a certificate which is at par with WHO-GMP issued by exporting countries like US-FDA approval, etc, in the case of imported drugs, labels and product literature of all quoted products must be submitted. In case a WHO- GMP certificate has expired, but the bidder has submitted an application to the drug authority for its extension, the said certificate shall be acceptable during evaluation of the tender, if a copy of that application duly received with stamp of the drug authority along with a copy of receipt of renewal fee, is submitted with the tender. However, the payment for supply of the items related to such a WHO GMP certificate shall be done only on production of the renewed certificate”

4. It is stated that the Petitioner and the Respondent No.3, along with other participants, participated in the tender. The results of the tender were declared and Respondent No.3 was declared as L[1] bidder. It is the primary contention of the Petitioner that the Respondent No.3 has not satisfied the requirements of Clause 2.[9] of the tender document and has also misrepresented certain financial documents. The reasons, as stated in the Petition, for not satisfying the eligibility criteria are being reproduced as under: “a) The Respondent No.3 has submitted Chinese GMP Certificate instead of WHO-GMP Certificate as mandated by Clause 2.[9] of the E-Tender documents under the heading Preparation of Bids. b) The COPP Certificate submitted by the Respondent No.3 only indicates compliance to Chinese GMP instead of WHO-COPP Certificate as mandated by Clause 2.[9] of the E-Tender documents under the heading Preparation of Bids. c) Though COPP Certificate is submitted by the Respondent No.3 in WHO-GMP format but nowhere it is indicated that the said Injections are compliant to WHO-GMP requirements. d) The label and literature of the said Injections and the Import License of the Respondent No.3 does not indicate any compliance with pharmacopoeia specifications. e) The financial statement submitted by the Respondent No.3 for the current year was signed on 2 1.09.2021 and it bears the signature of Mr. Rajeev Kumar Pathak but as per the MCA records maintained by the was appointed as Director of the Respondent No.3 w.e.f. 25.10.2021. f) As per the financial statement submitted by the Respondent No.3 for the FY 20 19-2020 shows a profit of Rs. 12,20,308.77/-. However, as per the MCA records maintained by the Registrar of Companies, the Respondent No.3 had earned a profit of Rs. 6,206/only for the FY 2019-2020. g) There is clear and unambiguous evidence which shows that the Respondent No.3 had submitted false, misleading and contrary data w.r.t its Turnover for the FY 2016-2017 and 2017-2018 in different Tenders floated by the Respondent No.1 & 2 vide E-Tender No.18_03, E-Tender No.19_01 and the subject E- TenderNo.21_05.”

5. It is stated that the Petitioner herein brought to the notice of the Respondent No.2 the irregularities in the bid documents submitted by the Respondent No.3 through letters dated 03.01.2022, 05.01.2022, 06.01.2022 and 07.01.2022 to the Respondent No.2. However, Respondent No.2 ignored the letters and proceeded to declare the Respondent No.3 as technically compliant and subsequently declared the Respondent No.3 as L[1] for supply of injections of Rabies Immunoglobulin 150 IU/ 2ml vial & Hepatitis B Immunoglobulin 100 IU/0.[5] ml vial. The Petitioner herein has been declared as L[2] for Rabies Immunoglobulin 150 IU/ 2ml vial and L[3] for Hepatitis B Immunoglobulin 100 IU/0.[5] ml vial. Challenging the proposed award of tender to the Respondent No.3 herein, the Petitioner has filed the instant petition with the following prayers: "a) Issue a Writ or Order or Direction in the nature of Certiorari for quashing the Declaration dated NIL issued by Respondent No.1 & 2, whereby the Respondent No.3 has been declared L[1] by the Respondent No.1 & 2 in E-Tender No. 21_05 for supply of injections namely, Inj. Rabies Immunoglobulin 150 IU/ 2m[1] vial & Inj. Hepatitis B Immunoglobulin 100 IU/0.[5] ml vial; b) Issue a Writ or Order or Direction in the nature of Mandamus directing the Respondent No.1 & 2 to reevaluate the technical bids of all the bidders excluding the Respondent No.3, for supply of the Inj. Hepatitis B Immunoglobulin 100 IU/0.[5] ml vial and Inj. Rabies Immunoglobulin 150 IU/ 2ml vial; c) Issue a Writ or Order or Direction in the nature of Mandamus directing the Respondent No.1 & 2 to blacklist/ban/debar the Respondent No.3 to participate in future tenders of the Respondent No.1 & 2 as the Respondent No.3 has indulged in 'Fraudulent Practice' as defined in Clause 6.1(ii) of Section IV (General and Special Conditions) of the Tender Documents by disclosing false and misleading information and by suppressing the material information in its bidding affidavit and thereby, the Respondent No.3 has clearly breached the express terms and conditions of the E- Tender Documents; and d) Pass any other order as this Hon'ble Court may deem fit and proper in the interest of justice."

6. At this stage, it is pertinent to reproduce the GMP certificates filed by the Petitioner and the Respondent No.3 GMP certificates as filed by the Petitioner in the writ petition:

7. The GMP certificates filed by the Respondent No.3 are as under: Identical certificate has been filed by the Respondent No.3 for import of Rabies Immunoglobulin 150 IU/ 2ml vial from the same Chinese manufacturer.

8. Learned Counsel for the Petitioner submits that the GMP certificate submitted by the Respondent No.3 is not compliant with the tender requirements. He has drawn the attention of this Court to the certificates filed by the Petitioner which are issued by the Korean and the Israeli authorities for Hepatitis B Immunoglobulin 100 IU/0.[5] ml vial injections & Rabies Immunoglobulin 150 IU/ 2m[1] vial injections respectively which conforms to WHO-GMP. He has then drawn the attention of this Court to certificate submitted by the Respondent No.3, which has been issued by the Chinese authorities, and states that that certificate only conforms to the format recommended by the World Health Organization. He states that when a specific query as to whether the Chinese manufacturer of the products which are to be supplied by the Respondent No.3 herein conforms to the GMP as recommended by the WHO or not, the Chinese manufacturer has answered “No”. He states that just by endorsing that the “certificate conforms to the format recommended by the World Health Organization” by the Chinese Government is not sufficient compliance of the requirements under Clause 2.[9] of the tender documents.

9. Per contra, learned Counsel for the Respondent No.2 submits that the experts in the field have analysed the requirements and they have scrutinized the tender and have come to the conclusion that the certificates given by the Petitioner herein and the Respondent No.3 herein conform to the GMP requirements and, therefore, both the companies are eligible to participate in the tender process.

10. Heard the counsels for the parties and perused the material on record.

11. In dealing with the issues pertaining to tenders, which are technical in nature, the law is settled that the Courts must be circumspect while sitting over the judgments arrived at by experts and by the framers of the contract who know best as to whether the terms of the tender have been complied with or not.

12. In Silppi Constructions Contractors vs. Union of India and Anr., (2020) 16 SCC 489, the Apex Court has observed as under:-

government and public sector undertakings in matters of contract. Courts must also not interfere where such interference will cause unnecessary loss to the public exchequer.

20. The essence of the law laid down in the judgments referred to above is the exercise of restraint and caution; the need for overwhelming public interest to justify judicial intervention in matters of contract involving the State instrumentalities; the courts should give way to the opinion of the experts unless the decision is totally arbitrary or unreasonable; the court does not sit like a court of appeal over the appropriate authority; the court must realise that the authority floating the tender is the best judge of its requirements and, therefore, the court's interference should be minimal. The authority which floats the contract or tender, and has authored the tender documents is the best judge as to how the documents have to be interpreted. If two interpretations are possible then the interpretation of the author must be accepted. The courts will only interfere to prevent arbitrariness, irrationality, bias, mala fides or perversity. With this approach in mind we shall deal with the present case." (emphasis supplied)