M/S.Ltb Infraconsultants PVT.LTD vs. State Of Odisha

Held

The Court noted the specific stand taken by the opposite parties that the rate of RT-PCR testing kits had substantially reduced to Rs. 379.80 per kit, with expectations of further reduction in the tender process. In light of the communication from the opposite parties to the petitioner soliciting their willingness to supply the remaining kits at the L-1 rate, and considering the petitioner's grievance, the Court directed the petitioner to submit a written offer at the L-1 rate or any other reduced rate to the Odisha State Medical Corporation. The Corporation was then instructed to make a decision on this offer by passing a reasoned and speaking order within 15 days in accordance with the law. The Court did not explicitly decide on the justification of the cancellation but facilitated a resolution based on current market rates. The primary issue addressed was how to proceed with the remaining supply given the changed circumstances and rates.

Facts

M/s LTB Infraconsultants Pvt. Ltd. (petitioner) filed a writ petition challenging the Odisha State Medical Corporation Ltd. (opposite party no.2) for not accepting the supply of 45,000 RT-PCR testing kits as per a purchase order dated May 11, 2020. The petitioner had supplied 5,000 kits, which were validated by RMRC on May 15, 2020, and payment was released. Subsequently, the Corporation issued a letter on May 23, 2020, inquiring about supplying the remaining kits at a rate to be finalized in a short tender. The petitioner was surprised to receive a cancellation letter on May 29, 2020. Despite representations, the Corporation did not respond. The petitioner then offered to supply the balance 45,000 units at the L-1 rate from a subsequent tender. The petitioner alleged that the Corporation was procuring supplies from other vendors but not from them.

Key Issues

1. Whether the Odisha State Medical Corporation Ltd. was justified in cancelling the purchase order dated May 11, 2020, for RT-PCR testing kits, despite the initial supply being validated and accepted. 2. Whether the petitioner is entitled to supply the remaining 45,000 testing kits at the L-1 rate finalized in a subsequent tender, given the Corporation's communication soliciting willingness to supply at such rates. Petitioner's arguments: The petitioner contended that their initial supply of 5,000 kits was validated, and payment was received, fulfilling the conditions of the purchase order. They argued that the subsequent communication from the Corporation suggesting supply at new rates was unwarranted as the original purchase order was not cancelled at that point. They also claimed that the Corporation was procuring from others while refusing them. They relied on the purchase order dated May 11, 2020, and their subsequent offer to supply at the L-1 rate. Revenue/State's arguments: The Odisha State Medical Corporation stated that the purchase order was cancelled on May 29, 2020. They submitted that no further purchase orders were issued to any supplier, including the petitioner, after the cancellation. They explained that due to a revised testing strategy by the Indian Medical Council and adequate existing stock, they floated new tenders. The rate for RT-PCR kits was finalized at Rs. 379.80 per kit, a significant reduction from the earlier emergency procurement rate. They expected further rate reductions in subsequent tenders.