Advanced Bionics INDIA Private Limited vs. Gujarat Medical Service Corporation Limited

Held

The Court held that the action of the Respondent Corporation in qualifying Respondent No. 2 was not arbitrary, irrational, unreasonable, mala fide, or biased. The Court found that the Corporation's decision served public interest by securing a cost advantage of approximately Rs. 16.00 Crores. The Court noted that Respondent No. 2 fulfilled other requirements and specifications, and the Corporation had granted similar opportunities to other bidders. The Court also emphasized that the Petitioner was not denied any opportunity. The Court cited Apex Court observations stating that courts will not judicially review administrative decisions unless they are arbitrary, irrational, unreasonable, mala fide, or biased, and will not interfere at the behest of an unsuccessful bidder regarding technical or procedural violations. The Court further noted that the Petitioner declined the Corporation's offer to bifurcate the work order by matching Respondent No. 2's price. Therefore, the Court found no justification to interfere with the Corporation's discretion and decision.

Facts

The Gujarat Medical Service Corporation Limited (Respondent No. 1) issued a tender in November 2018 for the supply of Cochlear Implants on a rate contract basis for two years. Advanced Bionics India Private Limited (Petitioner) and Gujarat Medical Service Corporation Limited (Respondent No. 2) were among the bidders. Initially, the Petitioner was declared qualified at the technical stage, while Respondent No. 2 and another bidder were disqualified. However, the Corporation later changed its position and declared Respondent No. 2 as also qualified at the technical stage. Consequently, the commercial bids of both the Petitioner and Respondent No. 2 were considered, and a Letter of Intent was issued in favour of Respondent No. 2. The Petitioner protested this change in decision, alleging it was arbitrary and illegal, and filed a writ petition before the High Court.

Key Issues

1. Whether the action of Respondent No. 1 in qualifying Respondent No. 2 as an L-1 bidder, after initially disqualifying it at the technical stage, was illegal, arbitrary, unconstitutional, and ultra vires the tender conditions? The Petitioner argued that the Corporation's sudden change of stance regarding Respondent No. 2's technical qualification was arbitrary and in contravention of the tender specifications, as Respondent No. 2 had already been disqualified. The Petitioner contended that this action led to the commercial bid of Respondent No. 2 being considered, despite its initial disqualification, thereby undermining the fairness of the tender process. The Petitioner sought a writ of mandamus to declare it as the successful bidder and award the contract. 2. Whether the Court should interfere with the administrative decision of the Corporation regarding the tender process? The Respondent Corporation argued that its decision to qualify Respondent No. 2 was not arbitrary or mala fide. It contended that this decision resulted in a cost advantage of approximately Rs. 16.00 Crores for the Corporation, thus serving public interest. The Corporation asserted that Respondent No. 2 met other requirements and that its action did not eliminate competition. The Corporation also highlighted that the Petitioner refused an offer to divide the work order if it matched Respondent No. 2's price.