Case Note & Summary
The petitioner, M/s Transasia Bio-Medicals Ltd., a leading diagnostic company, challenged an order dated 09-11-2022 passed by the Principal Secretary, Department of Health and Family Welfare, Government of Karnataka, dismissing its appeal against the rejection of its bid in a tender issued by the Karnataka State Drug Logistics and Warehousing Society. The tender was for the supply of diagnostic reagents and consumables. The petitioner was the lowest bidder, but its bid was rejected on the ground that it did not meet the condition of having supplied at least 50% of the tendered quantity to any State Government in the preceding year. The petitioner had supplied to the Government of Karnataka, but the authority interpreted the condition as requiring supply to a single State Government other than Karnataka. The appellate authority dismissed the appeal without hearing the petitioner. The High Court held that the rejection was arbitrary and that the appellate order violated principles of natural justice. The court quashed both the rejection and the appellate order, directing the respondents to reconsider the petitioner's bid afresh after affording a hearing.
Headnote
A) Administrative Law - Natural Justice - Audi Alteram Partem - The appellate authority dismissed the appeal without hearing the petitioner, violating the principle of audi alteram partem - Held that the order is void as it was passed without affording an opportunity of hearing (Paras 10-12). B) Public Procurement - Tender Conditions - Arbitrary Rejection - The tender condition required the bidder to have supplied at least 50% of the tendered quantity to any State Government in the preceding year; the petitioner had supplied to the Government of Karnataka, but the authority rejected the bid on the ground that the supply was not to a single State Government - Held that the interpretation was unreasonable and the rejection was arbitrary (Paras 13-18). C) Constitutional Law - Article 226 - Judicial Review - The High Court can interfere with administrative decisions that are arbitrary, irrational, or in violation of natural justice - Held that the impugned orders are quashed and the matter remitted for fresh consideration (Paras 19-22).
Issue of Consideration
Whether the rejection of the petitioner's bid and the dismissal of its appeal by the appellate authority were arbitrary and in violation of principles of natural justice.
Final Decision
The writ petition is allowed. The order dated 09-11-2022 passed by the Principal Secretary (Appellate Authority) and the rejection of the petitioner's bid are quashed. The matter is remitted to the respondents for fresh consideration of the petitioner's bid after affording an opportunity of hearing to the petitioner.
Law Points
- Natural justice
- audi alteram partem
- public procurement
- tender conditions
- arbitrariness
- judicial review under Article 226
- Section 8 of the Karnataka Transparency in Public Procurements Act
- 1999
