TMI Blog2021 (10) TMI 37X X X X Extracts X X X X X X X X Extracts X X X X ..... d that could be raised by the petitioner is that of an arbitrary action of the 2nd Respondent, in rejecting the bid of the Petitioner and allowing the Respondents to participate in the financial bids. It would now be necessary to see whether the said allegations hold. Disqualification of the Petitioner - HELD THAT:- A person is exempted from the requirement of registration if he is engaged in supplying only those goods and services which are exempt from registration and does not supply any other goods or services. If such a person deals in any other goods or services, he will not be eligible for such exemption - Sri Chittem Venkata Reddy, the learned counsel appearing for the 2nd respondent submits that the successful tenderer would be required, as per Section IV of the Tender Documents, to supply medicines and other goods, which are not exempted under the GST Act, in the process of maintaining SNCUs, and for that reason the 2nd Respondent had required all bidders to submit GST registration certificates. It is clear that in such a situation, the Petitioner would have to supply drugs and goods which are not exempt from levy of GST and the petitioner would require to be register ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eddy Kovvuri For the Respondent : Sri Venkat Reddy Chittem , Sri K. Rathanga Pani Reddy, Sri P. Gangaiah Naidu Sr. counsel ORDER The 2nd respondent had issued a tender notice through Tender Enquiry No.11.1B/APMSIDC/2021-22, dated 15.07.2021 requesting for provision of Sick New Born Care Units (SNCUs) at CHCs, AH, MCHs and DHs in Andhra Pradesh. The petitioner had submitted its tender document on 31.07.2021 after complying with all the required formalities. The tender evaluation process was to be done in two stages, i.e., technical bid and financial bid. The procedure adopted by the 2nd respondent was that after preliminary evaluation of the technical bid, the bidders would be informed of their deficiencies which could be rectified by them. In the case of the petitioner, the 2nd respondent had pointed out certain deficiencies, which were rectified by the petitioner. However, one of the deficiencies pointed out by the 2nd respondent was the non-submission of GST registration certificate. The petitioner took the stand that it was an entity involved in the business of Healthcare Services, which were exempted from payment of Goods and Services Tax by notification No.9/20 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d cannot be taken into account. 4. Respondent Nos.2 and 4 have filed counter affidavits in the matter disputing the contentions raised by the petitioners. Sri Rathangapani Reddy, learned counsel appearing for the 3rd respondent made his submissions on the basis of the documents before the Court. 5. The 2nd respondent took the stand that the production of GST registration certificate is a mandatory requirement for being qualified in the technical bid and in view of the non-furnishing of such GST registration certificate, the petitioner had been disqualified. As far as the submission of the bid document by the 3rd respondent is concerned, the 2nd respondent contended that there is no requirement in the tender conditions that only the lead member of the consortium has to submit the bid and as such the submission of the bid by the 3rd respondent is not defective. The 2nd respondent submitted that the 4th respondent had produced certificates issued by NRI Academy of Sciences for complying with the minimum eligibility criteria of three years experience in operations and maintenance of SNCUs and its bid was also qualified at the technical bid stage. Finally, the 2nd respondent relie ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... titioner, the requirement to supply medicines and other samples while maintaining the SNCUs would require GST registration on the part of the petitioner. He submits that in view of this requirement, the petitioner cannot contend that non-production of GST registration certificate by the petitioner cannot be treated as a breach of the mandatory requirements under the tender document. 9. Sri P.Gangaiah Naidu, learned Senior Counsel appearing for the 4th respondent would submit that the given qualification requires the bidder to have an experience of three years in maintenance of SNCUs either in the private sector or in the public sector. He submits that in view of the certificates issued by the NRI Academy of Sciences declaring that the 4th respondent had maintained necessary SNCUs for a period of three years would suffice to meet the condition of minimum experience either under the public sector or under the private sector. 10. Sri Rathangapani Reddy, learned counsel appearing for the 3rd respondent would submit that the requirement of production of GST registration certificate is a mandatory requirement under the tender document. The petitioner having chosen not to challenge ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e 2nd respondent should have taken that fact into account and permitted the petitioner to participate in the financial bid also. 15. In view of the above submission of Sri V.R. Reddy Kovvuri, learned counsel for the petitioner, that the question that would arise is whether the petitioner is exempt from registration under the GST Act itself, the contention raised by Sri Rathangapani Reddy would not arise at all. If it is found that the petitioner is not required to register itself under the GST Act, the contention of Sri V.R.Reddy Kovvuri would have to be accepted. In the event it is found that the petitioner cannot claim such an exemption, it would have to be held that the decision of the 2nd respondent in rejecting the technical bid of the petitioner is correct. 16. The scope of judicial review of contractual matters or disputes has been a matter of evolving jurisprudence. However, the law in this regard is fairly settled. A few of the leading judgements, which have set the guidelines on such review are: 17. In Tata Cellular v. Union of India (1994) 6 SCC 651, the Hon ble Supreme Court, at page 687, held as under: 94. The principles deducible from the above are: ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... warding of contracts by inviting tenders, in those circumstances, the interference by courts is very limited; (c) In the matter of formulating conditions of a tender document and awarding a contract, greater latitude is required to be conceded to the State authorities unless the action of the tendering authority is found to be malicious and a misuse of its statutory powers, interference by courts is not warranted; (d) Certain preconditions or qualifications for tenders have to be laid down to ensure that the contractor has the capacity and the resources to successfully execute the work; and (e) If the State or its instrumentalities act reasonably, fairly and in public interest in awarding contract, here again, interference by court is very restrictive since no person can claim a fundamental right to carry on business with the Government. 19. The Hon ble Supreme Court in Joshi Technologies International Inc. v. Union of India (2015) 7 SCC 728 : 2015 SCC OnLine SC 490, at paragraphs 69 70, held as under: 69. The position thus summarised in the aforesaid principles has to be understood in the context of discussion that preceded which we have pointed out ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... edy of civil suit, etc. 70.4. Writ jurisdiction of the High Court under Article 226 of the Constitution was not intended to facilitate avoidance of obligation voluntarily incurred. 70.5. Writ petition was not maintainable to avoid contractual obligation. Occurrence of commercial difficulty, inconvenience or hardship in performance of the conditions agreed to in the contract can provide no justification in not complying with the terms of contract which the parties had accepted with open eyes. It cannot ever be that a licensee can work out the licence if he finds it profitable to do so: and he can challenge the conditions under which he agreed to take the licence, if he finds it commercially inexpedient to conduct his business. 70.6. Ordinarily, where a breach of contract is complained of, the party complaining of such breach may sue for specific performance of the contract, if contract is capable of being specifically performed. Otherwise, the party may sue for damages. 70.7. Writ can be issued where there is executive action unsupported by law or even in respect of a corporation there is denial of equality before law or equal protection of law or if it can b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rights by resort to remedies provided for adjudication of purely contractual disputes. 20. The Supreme Court in Caretel Infotech Ltd. v. Hindustan Petroleum Corpn. Ltd., (2019) 14 SCC 81 : 2019 SCC OnLine SC 494 at paragraphs 37 and 38 held as under: Epilogue 37. We consider it appropriate to make certain observations in the context of the nature of dispute which is before us. Normally parties would be governed by their contracts and the tender terms, and really no writ would be maintainable under Article 226 of the Constitution of India. In view of Government and public sector enterprises venturing into economic activities, this Court found it appropriate to build in certain checks and balances of fairness in procedure. It is this approach which has given rise to scrutiny of tenders in writ proceedings under Article 226 of the Constitution of India. It, however, appears that the window has been opened too wide as almost every small or big tender is now sought to be challenged in writ proceedings almost as a matter of routine. This in turn, affects the efficacy of commercial activities of the public sectors, which may be in competition with the private sector. Th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... struction No.4 of Instructions to bidder in the tender document required the bidders to submit copy of the certificate of registration of GST, EPF, ESI with the appropriate authority valid as on the date of submission of tender documents. It is the admitted case of all sides that the petitioner did not submit certificate of registration under the GST Act. The defence of the petitioner is that the Central Government had issued a notification exempting various services, including the primary activity of the petitioner from payment of tax under the GST Act. The petitioner s case is that in view of such an exemption from payment of tax, the petitioner need not register under the GST Act and as such does not have to possess a registration certificate under the GST Act to participate in the tenders called by the 2nd respondent. 24. Section 23 of the Andhra Pradesh GST ACT enumerates the persons who are not liable to register themselves under the said Act. Section 23 (1) (a) reads as follows: 23. Appeal to Special Appellate Tribunal. - (1) Any dealer objecting to an order relating to assessment passed by the (Commissioner of Commercial Taxes suo motu under sub-section (1) of Sect ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dent was one of the members of a consortium, which was participating in the tender and could not have submitted the bid as it was not the lead member in the said consortium. This contention is disputed by both respondent Nos.2 and 3. It is the specific stand of both these respondents that there is no stipulation in the tender document that only the lead member of the consortium who filed the bid documents, and that the other members of the consortium cannot file the bid documents. 28. Sri V.R. Reddy Kovvuri, learned counsel for the petitioner would seek to point out certain provisions where details of the lead member are required and where the lead member has to give certain assurances etc. However, this requirement cannot be taken to mean that the bid document has to be filed only by the lead member. All such information and assurances can always be obtained by any other member and file before the tender authority. As such it cannot be said that the 3rd respondent is disqualified on that count and the action of the 2nd Respondent in allowing the 3rd respondent in participating in the financial bid cannot be termed arbitrary. 29. The 3rd Allegation of arbitrariness against th ..... 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