Nafr High Court
Case Details
1 2025:CGHC:21570-DB NAFR HIGH COURT OF CHHATTISGARH AT BILASPUR WPC No. 2468 of 2025 M/s Jai Ambey Emergency Services (I) Pvt. Ltd., A Company Registered Under The Companies Act, 2013 Having Its Registered OfÏce At 2nd Floor, Right Side Global Tower, Near Vidya Niketan School, Avanti Vihar, Raipur- 492001, Chhattisgarh, ... Petitioner(s) versus 1 - State Of Chhattisgarh Through Principal Secretary, Department Of Health And Family Welfare, Government Of Chhattisgarh, Swastha Bhawan, North Block, Sector 19, Atal Nagar, Nava Raipur, District Raipur, Chhattisgarh- 492101 2 - Chhattisgarh Medical Services Corporation Limited (C.G.M.S.C.) Through Its Managing Director 4th Floor, Chhattisgarh Housing Board Commercial Complex, South East Corner, Sector 27, Atal Nagar, Nava Raipur, District Raipur, Chhattisgarh- 492015 ... Respondent(s) For Petitioner(s) : Mr. Manoj Paranjpe and Shikhar Shrivastava, Advocates. For Respondent No. 1/ State : Mr. Prafull N Bharat, Advocate General alongwith Mr. S.S.Baghel, Deputy Government Advocate. For Respondent No. 2 : Mr. Prafull N Bharat, Senior Advocate assisted by Mr. Trivikram Nayak, Advocate. 2 Hon'ble Shri Ramesh Sinha, Chief Justice Hon'ble
Legal Reasoning
Shri Arvind Kumar Verma , Judge Judgment on Board Per Ramesh Sinha, Chief Justice 09 /0 5 /2025 1 Heard Mr. Manoj Paranjpe, learned counsel for the petitioner, Mr. Prafull N Bharat, learned Advocate General assisted by Mr. S.S.Baghel, learned Deputy Advocate General for the State/respondent No. 1 as well as Mr. Prafull N Bharat, learned Senior Advocate assisted by Mr. Trivikram Nayak, learned counsel for the respondent No. 2. 2 The petitioner has prayed for the following relief(s): “a) Issue an appropriate writ, order, or direction declaring that the conditions stipulated under Clauses 3.3.1 and 3.3.2 of the Request for Proposal bearing Tender No. 195/CGMSCL/Rural Mobile Medical Unit in Selected Districts of Chhattisgarh/2025- unreasonable, 26/Date 11.04.2025 are arbitrary, discriminatory, ultra vires Articles 14 and 19(1)(g) of the Constitution of India; "a1) Issue an appropriate writ, order, or direction declaring that the amendment carried out by the Corrigendum dated 07.05.2025 to Clause 3.3.2 & Annexure 6 of the Request for No. 11.04.2025 dated bearing Tender Proposal 195/CGMSCL/Rural Mobile Medical Unit in Selected Districts of Chhattisgarh/2025-26 issued by Respondent No. 2 for the Operation, Maintenance and Management of Rural Mobile Medical Unit (RMMU) in Rural Areas of Chhattisgarh are arbitrary, unreasonable, discriminatory, and violative of Articles 14 and 19(1)(g) of the Constitution of India;" b) Issue an appropriate writ, order, or direction quashing and setting aside the impugned Request for Proposal dated 11.04.2025 bearing Tender No. 195/CGMSCL/Rural Mobile Medical of Chhattisgarh/2025-26/Date 11.04.2025 for selection of an agency for operationalization of Rural Mobile Medical Units in selected districts of Chhattisgarh as being arbitrary, Selected Districts Unit in 3 discriminatory, unreasonable, illegal, and unconstitutional; c) Direct the Respondents to re-issue a fresh Request for Proposal for operationalization of Rural Mobile Medical Units in selected districts of Chhattisgarh with fair, reasonable, proportionate, and transparent eligibilitycriteria, ensuring a level playing field and facilitating effective competition amongst all capable and competent bidders; d) Pass such other or further writ(s), order(s), or direction(s) as this Hon'ble Court may deem just, fit, and proper in the facts and circumstances of the case, in the interest of justice.” 3 The facts, as projected by the petitioner are that the Petitioner is a body corporate incorporated under the provisions of the Companies Act, 2013, engaged as a leading healthcare infrastructure and service provider offering comprehensive solutions for hospital operations, emergency medical services, and management across India. The Respondent No. 2 issued a Request for Proposal, bearing Tender No.195/CGMSCL/Rural Mobile Medical Unit in Selected Districts of Chhattisgarh/2025-26/Date 11.04.2025 for "Operation, Maintenance and Management of Rural Mobile Medical Units (RMMUs) in selected districts of Chhattisgarh for deployment and operation of 30 Mobile Medical Units across 19 districts of the State to provide primary healthcare services in rural and remote areas. The Petitioner had duly requested the concerned authority for issuance of updated experience certificates required for participation in the present tender; however, despite repeated requests and issuance of reminder letters, the concerned authority has failed to provide the necessary certificates. The inaction and delay on the part of the authority have prejudicially affected the Petitioner's ability to comply with Clause 3.3.1 of the tender conditions, thereby jeopardizing its participation in the bidding. The impugned tender under Clause 3.3.2, require bidders to submit an afÏdavit that they have not been blacklisted in the past by any State or Union Government, government agency, or court for any civil or 4 criminal offence, are not defaulters or convicted, and will not form any coalition with any other bidder. Desirous of participating in the tender process, the Petitioner raised objections and submitted pre-bid queries via letter and e-mail dated 17.04.2025, highlighting several arbitrary, onerous, and unconstitutional conditions imposed in the eligibility criteria including those prescribed under Clauses 3.3.1 and 3.3.2. Apart from this tender, it is noteworthy that on 15.07.2022, Petitioner was blacklisted for a period of one year by the Additional Director General of Police, Police Headquarters, Bhopal, Madhya Pradesh, in relation to procedural compliance issues under a completely different project, namely the "Upgradation, Operation and Maintenance of Dial 100/112 Services" in Madhya Pradesh. The said blacklisting was solely on account of alleged deficiencies in vehicle documentation and not due to any operational failure, misconduct, or deficiency in service delivery. Importantly, the Dial 100/112 Services project is entirely distinct and unrelated to the Operationalization of Rural Mobile Medical Unit in Chhattisgarh now tendered by Respondent No. 2. Despite the Petitioner's specific objections, no corrigendum was issued by the Respondent No. 2 to address the grievances, and the impugned tender terms continued to remain ambiguous, arbitrary, and violative of Articles 14 and 19(1)(g) of the Constitution of India. The last date for submission of the bids is 13.05.2025. During the pendency of the present proceedings, the Respondent No. 2 issued Corrigendum whereby Clause 3.3.2 & Annexure 6 were modified to prescribe disqualification based on debarment/blacklisting "in the preceding last five (5) years". Details of the original condition and amended condition, which are under challenge in this petition, are as follows: Clause Original Term Amended Term 5 3.3.2 at Pg. No. 25 An afÏdavit to the effect The bidder must not be of the petition that the bidder has not debarred / blacklisted / been blacklisted in the banned / prohibited / past by any of the suspended or convicted State/Union by any organization / Governments / any Institution Department or government organization any State Govt. / Govt. of or by any court of law for India for corrupt or any criminal or civil fraudulent practices and offences across the its promoters or directors country and that he will should have not been not form any coalition convicted in India in last with any other bidder. five years from the date Bidder has to submit of publication of the afÏdavit on Rs. 100 tender. Updated stamp paper in this Annexure 6 Format for regard stating that they AfÏdavit is attached. are not defaulter/convicted or blacklisted. Annexure 6 I, M/s. ….. (sole I, M/s. ….. the names and applicant / member) (the addresses of the name and addresses of registered ofÏce) hereby the registered ofÏce) certify and confirm that hereby certify and we or any of our confirm that we or any of promoter(s) / director(s) our promoter(s) / are not debarred by directors are not barred CGMSCL or any other by CGMSCL / or any entity of GoCG other entity of ordepartments / Government or organizations in India in debarred / blacklisted by the preceding five (5) any State Government / years as on the date of Department / the publication of this Organization in India RFP / Tender. from participating in Project/s, as on the 6 ____(date of signing of Application) 4 Mr. Paranjpe, learned counsel for the petitioner submits that the impugned tender, under Clauses 3.3.2 imposes a sweeping and blanket disqualification based on any past blacklistingby any of the State/Union Governments/any government organization or by any court of law for any criminal or civil offences across the country without any time limitation or relevance to the present project. The adverse consequences of blacklisting cannot be indefinite and must cease once the prescribed debarment period has lapsed. Any perpetual disqualification imposed herein amounts to civil death for bidder and is wholly antithetical to the principles of proportionality, fairness, and reasonableness enshrined under Articles 14 and 21 of the Constitution of India. The Petitioner's blacklisting & termination of contract by letter dated 15.07.2022 by the Madhya Pradesh Police in connection with a different project entirely Dial 100/112 operations and for procedural lapses unrelated to service quality or performance. The said blacklisting has since lapsed and bears no nexus to the present tender for ambulance-based RMMU services in Chhattisgarh. However, treating a contract termination or blacklisting, which is irrelevant to RMMU Work, as disqualification violates Articles 14 and 21 and amounts to imposing a civil death on the bidder without due process. Clause 3.3.1 of the impugned tender mandates submission of experience certificates not older than six months from the date of application, which places the Petitioner in a manifestly disadvantageous position through no fault of its own. The Petitioner has been consistently seeking updated experience certificates from the Concerned Authority (Directorate of Health Services, Raipur), however, the Concerned 7 Authority has failed and neglected to issue the requisite certificates within time or at all, thereby frustrating the Petitioner's ability to comply with the eligibility requirements. The impugned eligibility taken as a whole, erects high and arbitrary barriers to entry, creates conditions favoring a narrow segment of large incumbents, and stifles fair and healthy competition & undermine principle of providing a level playing field. Despite the Petitioner's detailed objections raised during the Pre-Bid Query process highlighting the arbitrary, onerous, and unconstitutional conditions imposed in the eligibility criteria, the Respondent No. 2 has failed to issue any corrective corrigendum or amendments. The failure to consider legitimate grievances and proceed with the impugned tender in its present form reflects non-application of mind, denial of opportunity, and unjustified exclusion of fair bidders. The Corrigendum dated 07.05.2025, while limiting disqualification to any blacklisting in last five years from the date of publication of the tender, still fails to satisfy the test of reasonableness and proportionality. It mechanically treats all past debarments as fatal, even those which are already expired, and has no nexus to the present scope of services. Any disqualification based on "debarment /blacklisting in last five years from the date of publication of the tender" are arbitrary and bad in law in view of judgment passed by the Hon'ble Apex Court in M/s Kulja Industries Limited v. Chief General Manager W.T. Proj. BSNL & Ors. {(2014) 14 SCC 731} and a Division Bench of the High Court of Delhi in MI2C Security Facilities Pvt. Ltd. versus North Delhi Municipal Corporation and Ors. {2021 SCC Online Del 3682}. The Petitioner was previously awarded the tender for operating and managing the 108 Sanjeevani Express Emergency Ambulance Services & Mobile Medical Units in the State of Chhattisgarh. Despite a blacklist order dated 15.07.2022 issued by the Government of 8 Madhya Pradesh in relation to an entirely unrelated project, the Respondents have continued to engage the Petitioner's services without interruption, and this shows that the Petitioner's performance in Chhattisgarh has remained unhindered even post-blacklisting. However, despite such proven credentials and operational track record, the Petitioner is now barred from participating in the impugned tender solely due to the mechanical and arbitrary application of Clause 3.3.2 & Annexure 6-which completely disregard contextual relevance, expiry of the blacklist order, and satisfactory post-blacklisting conduct of the Petitioner in the present 108 Emergency & MMUs services in State of Chhattisgarh. The impugned eligibility clauses Clause 3.3.2 and Annexure 6 have the effect of excluding not only the Petitioner but also other competent and qualified service providers solely due to past blacklisting which has already expired. Such blanket disqualifications distort level playing field and restrict meaningful competition, thereby undermining the principles of fair tendering and hampers the larger public interest in securing the best possible services. The only legally tenable interpretation of Clause 3.3.2 and Annexure 6 is to restrict their application to existing or subsisting blacklisting. Any interpretation that extends their applicability to expired blacklisting orders-especially in the absence of present disqualification or misconduct-would be manifestly arbitrary and violative of Article 14 of the Constitution. Such an interpretation is also inconsistent with the established principle that the adverse consequences of blacklisting must cease with the expiry of the order itself, particularly where the bidder has subsequently demonstrated satisfactory performance. 5 On the other hand, Mr. Prafull N Bharat, learned Senior Advocate who appears both on behalf of the State as well as the respondent-CGMSC 9 submits that it is the prerogative of the authority issuing the tender to impose conditions as per its requirement and the same cannot be as per the feasibility of the petitioner. Mr. Bharat places reliance on the decisions of the Supreme Court in Slippi Constructions Contractors v. Union of India {(2020) 16 SCC 489} and N.G.Projects Ltd. v. Vinod Kumar Jain {(2022) 6 SCC 127} to contend that the position of law with regard to interpretation of the terms of contract is that the question as to whether a term of contract is essential or not is to be viewed from the perspective of the employer and by the employer. Further, the scope of judicial review in respect of government contract is the exercise of restraint and caution. If two interpretations are possible, then the interpretation of the author must be accepted. The Courts should give way to the opinion of the experts unless the decision is totally arbitrary or unreasonable. Mr. Bharat further submits that conditions of the NIT upon which the petitioner had objection, was revisited by the State and has been amended as aforesaid and as such, the grievance raised by the petitioner stands redressed. However, each and every condition stipulated in the NIT cannot suit all the intending bidders and neither the respondents are obliged to lay down the conditions as per the wishes of the bidder. 6 We have heard learned counsel for the parties, perused the pleadings and documents appended thereto. 7 There is no disagreement on the point that the authority issuing the NIT can lay down the conditions as per its requirement but if the authority issuing the NIT is the State or its instrumentalities, the conditions cannot be laid arbitrarily. The conditions which are sought to be challenged in these petitions are purely within the domain of the respondents, however, 10 the clauses which relate to the fact that any intending bidder is blacklisted in the past and the blacklisting is generally for a specified period of time, and after expiry of the said period, the said party is permitted to participate. However, in the present cases, the clauses relating to blacklisting are such that a party, even if it had been blacklisted at any point of time or that the blacklisting period is over, then also, it would be debarred from participating in the tender process which appears to be unreasonable. The Annexure in which declaration is to be given that the said party was never blacklisted, also appears to be unjustified. If any intending bidder has been blacklisted on any earlier point of time, then he can never file an afÏdavit stating that he had never been blacklisted the result of which would be that such bidder will not have the opportunity even to participate. In the corrigendum, the term ‘blacklisted’ has been deleted as far as it relates to Annexure-6. 8 Recently, the Apex Court, in the matter of Banshidhar Construction Pvt. Ltd. v. Bharat Coking Coal Ltd. & Others, {Civil Appeal No. 11005 OF 2024, decided on 04.10.2024}, taking note of the decisions rendered in various other celebrated judgments, observed as under: “21. There cannot be any disagreement to the legal proposition propounded in catena of decisions of this Court relied upon by the learned counsels for the Respondents to the effect that the Court does not sit as a Court of Appeal in the matter of award of contracts and it merely reviews the manner in which the decision was made; and that the Government and its instrumentalities must have a freedom of entering into the contracts. However, it is equally well settled that the decision of the government/ its instrumentalities must be free from arbitrariness and must not be affected by any bias or actuated by malafides. Government bodies being public authorities are expected to uphold fairness, equality and public interest even while dealing with contractual matters. Right to equality under Article 14 abhors arbitrariness. Public authorities have to ensure that no bias, favouritism or arbitrariness are shown 11 during the bidding process and that the entire bidding process is carried out in absolutely transparent manner. 22. At this juncture, we may reiterate the well-established tenets of law pertaining to the scope of judicial intervention in Government Contracts. 23. In Sterling Computers Limited vs. M/s. M&N Publications Limited and Others1, this Court while dealing with the scope of judicial review of award of contracts held: - “18. While exercising the power of judicial review, in respect of contracts entered into on behalf of the State, the Court is concerned primarily as to whether there has been any infirmity in the “decision making process”. In this connection reference may be made to the case of Chief Constable of the North Wales Police v. Evans [(1982) 3 All ER 141] where it was said that: (p. 144a) “The purpose of judicial review is to ensure that the individual receives fair treatment, and not to ensure that the authority, after according fair treatment, reaches on a matter which it is authorised or enjoined by law to decide for itself a conclusion which is correct in the eyes of the court.” By way of judicial review the court cannot examine the details of the terms of the contract which have been entered into by the public bodies or the State. Courts have inherent limitations on the scope of any such enquiry. But at the same time as was said by the House of Lords in the aforesaid case, Chief Constable of the North Wales Police v. Evans [(1982) 3 All ER 141] the courts can certainly examine whether “decision-making process” was reasonable, rational, not arbitrary and violative of Article 14 of the Constitution.” 24. In Tata Cellular vs. Union of India2, this Court had laid down certain principles for the judicial review of administrative action. “94. The principles deducible from the above are: (1) The modern trend points to judicial restraint in administrative action. (2) The court does not sit as a court of appeal but merely reviews the manner in which the decision was made. (3) The court does not have the expertise to correct the administrative decision. If a review of the administrative decision is permitted it will be substituting its own 1 2 (1993) 1 SCC 445 (1994) 6 SCC 651 12 decision, without the necessary expertise which itself may be fallible. (4) The terms of the invitation to tender cannot be open to judicial scrutiny because the invitation to tender is in the realm of contract. Normally speaking, the decision to accept the tender or award the contract is reached by process of negotiations through several tiers. More often than not, such decisions are made qualitatively by experts. (5) The Government must have freedom of contract. In other words, a fair play in the joints is a necessary concomitant for an administrative body functioning in an administrative sphere or quasi-administrative sphere. However, the decision must not only be tested by the application of Wednesbury principle of reasonableness (including its other facts pointed out above) but must be free from arbitrariness not affected by bias or actuated by mala fides. (6) Quashing decisions may impose heavy administrative burden on the administration and lead to increased and unbudgeted expenditure. Based on these principles we will examine the facts of this case since they commend to us as the correct principles.” 25. It has also been held in ABL International Limited and Another vs. Export Credit Guarantee Corporation of India Limited and Others3, as under: - “53. From the above, it is clear that when an instrumentality of the State acts contrary to public good and public interest, unfairly, unjustly and unreasonably, in its contractual, constitutional or statutory obligations, it really acts contrary to the constitutional guarantee found in Article 14 of the Constitution.” 26. In Jagdish Mandal vs. State of Orissa and Others4, this Court after discussing number of judgments laid down two tests to determine the extent of judicial interference in tender matters. They are: - “22. (i) Whether the process adopted or decision made by the authority is mala fide or intended to favour someone; or Whether the process adopted or decision made is so arbitrary and irrational that the court can say: “the decision is such that no responsible authority acting reasonably and in accordance with relevant law could have reached;” 3 4 (2004) 3 SCC 553 (2007) 14 SCC 517 13 (ii) Whether public interest is affected. If the answers are in the negative, there should be no interference under Article 226. Cases involving blacklisting or imposition of penal consequences on a tenderer/contractor or distribution of State largesse (allotment of sites/shops, grant of licences, dealerships and franchises) stand on a different footing as they may require a higher degree of fairness in action.” 27. In Mihan India Ltd. vs. GMR Airports Ltd. and Others5, while observing that the government contracts granted by the government bodies must uphold fairness, equality and rule of law while dealing with the contractual matters, it was observed in Para 50 as under: - “50. In view of the above, it is apparent that in government contracts, if granted by the government bodies, it is expected to uphold fairness, equality and rule of law while dealing with contractual matters. Right to equality under Article 14 of the Constitution of India abhors arbitrariness. The transparent bidding process is favoured by the Court to ensure that constitutional requirements are satisfied. It is said that the constitutional guarantee as provided under Article 14 of the Constitution of India demands the State to act in a fair and reasonable manner unless public interest demands otherwise. It is expedient that the degree of compromise of any private legitimate interest must correspond proportionately to the public interest.” 28. It was sought to be submitted by the learned Counsels for the Respondents relying upon the observations made in Central Coalfields Limited and Another vs. SLL-SML (Joint Venture Consortium) and Others6, that whether a term of NIT is essential or not is a decision taken by the employer which should be respected. However, in the said judgment also it is observed that if the employer has exercised the inherent authority to deviate from the essential term, such deviation has to be made applicable to all the bidders and potential bidders. It was observed in Para 47 and 48 as under:- “47. The result of this discussion is that the issue of the acceptance or rejection of a bid or a bidder should be looked at not only from the point of view of the unsuccessful party but also from the point of view of the employer. As held in Ramana Dayaram Shetty [Ramana Dayaram Shetty v. International Airport Authority of India, (1979) 3 SCC 489] the terms of NIT cannot be ignored as being redundant or superfluous. They must be given a 5 6 (2022) SCC OnLine SC 574 (2016) 8 SCC 622 14 meaning and the necessary significance. As pointed out in Tata Cellular [Tata Cellular v. Union of India, (1994) 6 SCC 651] there must be judicial restraint in interfering with administrative action. Ordinarily, the soundness of the decision taken by the employer ought not to be questioned but the decision-making process can certainly be subject to judicial review. The soundness of the decision may be questioned if it is irrational or mala fide or intended to favour someone or a decision “that no responsible authority acting reasonably and in accordance with relevant law could have reached” as held in Jagdish Mandal [Jagdish Mandal v. State of Orissa, (2007) 14 SCC 517] followed in Michigan Rubber [Michigan Rubber (India) Ltd. v. State of Karnataka, (2012) 8 SCC 216]. 48. Therefore, whether a term of NIT is essential or not is a decision taken by the employer which should be respected. Even if the term is essential, the employer has the inherent authority to deviate from it provided the deviation is made applicable to all bidders and potential bidders as held in Ramana Dayaram Shetty [Ramana Dayaram Shetty v. International Airport Authority of India, (1979) 3 SCC 489] . However, if the term is held by the employer to be ancillary or subsidiary, even that decision should be respected. The lawfulness of that decision can be questioned on very limited grounds, as mentioned in the various decisions discussed above, but the soundness of the decision cannot be questioned, otherwise this Court would be taking over the function of the tender issuing authority, which it cannot.” 9
Decision
In view of the above discussion, this Court is of the considered opinion that the clause 3.3.2 of the Request for Proposal dated 11.04.2025 bearing Tender No. 195/CGMSCL/Rural Mobile Medical Unit in Selected Districts of Chhattisgarh / 2025-26 (as amended vide corrigendum dated 07.05.2025) so far it relates to the blacklisting only, be quashed. It is made clear that if the bidder has earlier been blacklisted and the period of blacklisting is over, he would be eligible to participate in the tender process subject to fulfillment of other stipulated conditions. It is further made clear that if the blacklisting of any bidder is in operation/existence, the said bidder would not be entitled to participate in the tender process/NIT. It is ordered accordingly. 15 10 With the aforesaid observation and direction, this petition stands disposed of. Sd/- Sd/- (Arvind Kumar Verma) (Ramesh Sinha) JUDGE CHIEF JUSTICE Ashu / Amit AMIT KUMAR DUBEY Digitally signed by AMIT KUMAR DUBEY Date: 2025.05.10 18:50:31 +0530