S No.,"Name   of
the Drugs","Annual Turnover of the bidder for the last Â
three  preceding  years  (2016-17, 2017-18 &
2018-19) equal or more",,,,
1.,"A, B & C",X+Y+Z,,,,
2.,AÂ & B,X+Y,,,,
3.,B & C,Y+Z,,,,
4.,C,Z,,,,
Sn o,Clause of TE,Query/ Issue,Name of the Firm,Recommendations,Remarks,
11.,"Clause no 7
(I) (a)
Participating
PharmaceuticalÂ
firm should have
annual turnover
of each of the last
three preceding
financial years
(2016-
17, 2017-18,
2018-19)
equal or more
than the sum
amount of
individual
turnover of the
quoted list of the
drugs.
Individual
Turnover for each
drug has been
indicated in drug
schedule.","Item no 1471, TEÂ
144C, Human AlbuminÂ
20% Inj :- Each but to
contain: Human AlbuminÂ
20Â %Â - Turnover in the last
tender is Rs. 8 Crore only,Â
Annual demand was
around  Rs.    Â
69515428.  In  the
current tender annualÂ
turnover is Rs. 434471000/-
      Requested to
keep turnover Rs. 8 Crore.","Paviour
Pharmaceuticals
Pvt. Ltd","No    Â
Change     in
existing       Â
Policy recommended.","Not
Accepted.",
,,,"Item no.  1471, TEÂ
144C, Human Albumin Â
20%  Inj-  Each Â
bot  to contain: HumanÂ
Albumin 20%  -
Turnover i.e. Rs.Â
434471000/- for this  item
has been kept on a very
higher side which wouldÂ
abstain many importers toÂ
participate as this  Â
turnover  Â
can        only  Â
be maintained by manufacturers.
India   is  Â
dependent   mainly  Â
on Import of suchÂ
drugs.   These are
used  in  some Â
most  critical  life saving
conditions and do not enjoy
huge volume sales.
The  firm  dealing Â
with     Blood
Plasma     Â
Products      alongwith
various  other Â
products  may  be
eligible   to  Â
meet   the     Â
Annual turnover  clause
but  the firm who are   Â
typically   Â
specialized    and
pioneers in Blood Plasma
products will be deprivedÂ
to participate in the bidÂ
which may lead toÂ
impose gross  monopoly Â
by     those  few
eligible companies.
NIT requirement of other
Medical Services corporations
with respect to turnover for the
same products. The turnover
requirement is much lesser or
the turnover of the principal
manufacturer is considered.",Alpha Drugs,,
,,,"For item no 1409a, 1410a,
1411a, 1455a, 1455b- TE 144c
CAPD bags to beÂ
clubbed as one
qualifying   criteria  Â
of  Company TurnoverÂ
commensurate with the
procurement by ESICÂ
rather than each items with
restrictive Turnover and EMD
Criteria. Accordingly please
amend the Turnover Criteria to
Rs.10Cr for the Company and
EMD @2% for the tentative
procurement value by Bank
Guarantee","Mitra   Â
Industries Pvt Ltd.","No    Â
Change     in
existing       Â
Policy recommended.","Not
Accepted.
,,,,,,
,,,,,,
,,"Individual Turnover for item no
1866 of Rs. 122,64,44,000/-
Analgesic Cream- Only MNC or
large scale company can
participate for this item. As
MSME firm requested to kindly
reduces turnover for item no
1866 to receive more bidder for
this items.
Item no 2414, TE- 146C,
Surgical Spiritâ€" 1ltr,
Turnover 10 Crore: and Item no
1265a, TE 146C, Antiseptic
Liquid-500ml-to reduce 5 Cr","Hab
Pharmaceuticals &
Research Limited
The Swastik
Pharmaceuticals",,,
of arbitrariness and irrationality and is liable to be quashed.â€(emphasis supplied),,,,,,
17. Mr. Gupta submits that after rejection of the petitionerâ€s technical bid, the petitioner had also placed before the respondent material to establish",,,,,,
that it is a subsidiary of the German Company. The Letter Head of the petitioner clearly indicates so. Mr. Gupta submits that the turnover criteria,,,,,,
itself prescribes that group turnover would not be considered. However, the same does not apply to Drugs and their formulations. The petitionerâ€s",,,,,,
bid relates to a Drug and its formulation. Thus, in the petitionerâ€s case, group turnover, namely, that of the petitioner, and the German Company",,,,,,
should have been considered. Petitioner had provided alongwith its bid, the turnover of the German Company as well.",,,,,,
18. On the other hand, Mr. Chandra â€" who appears for the respondent, has submitted that the respondents had made clear their stand well in",,,,,,
advance, at the pre-bid meeting, by issuing the aforesaid pre-bid corrigendum. The pre-bid corrigendum had been published on the respondentâ€s",,,,,,
website and all the bidders were obliged to follow up the same. He submits that this procedure of inviting objections/ suggestions at the pre-bid stage,,,,,,
and sharing the same with all the bidders was not adopted in the RFP â€" which was issued in the year 2018.,,,,,,
19. He submits that the petitioner â€" being the bidder, had to fulfill the turnover criteria on its own. Since it does not fulfill the same, the petitionerâ€s",,,,,,
bid has rightly been rejected by the respondent.,,,,,,
20. In these proceedings, we have only to examine whether the action of the respondents in rejecting the petitionerâ€s bid on technical grounds, could",,,,,,
be said to be unreasonable, or arbitrary, or whimsical, or mala fide. We cannot step into the shoes of the respondent, and reassess the correctness of",,,,,,
the commercial decision taken by them, while assessing the petitionerâ€s technical bid. As to whether the turnover criteria should have been less; the",,,,,,
respondents should have adopted a different mechanism to determine the turnover of the bidder, and; the manner in which the expression",,,,,,
“Bidder†should be understood, are all issues of policy and are commercial decisions, which only the respondent could take. It is not for this Court",,,,,,
to dwell into those aspects. Pertinently, the petitioner has participated in the tender process and never challenged any of the tender conditions, or even",,,,,,
the pre-bid corrigendum. Thus, the petitioner is precluded from doing so now.",,,,,,
21. The turnover criteria as laid down in Clause 7 of the Tender, apply to the participating pharmaceutical firms. It is not the petitionerâ€s case that",,,,,,
the petitioner and its German supplier â€" of which the petitioner claims to be a subsidiary, jointly made the bid. The bid had been made only by the",,,,,,
petitioner company â€" which is an Indian registered company. The turnover criteria set out in Clause 7(1), therefore, had to be met by the petitioner",,,,,,
on the strength of its own financial performance during the Financial Years 2016-17, 2017-18, and 2018-19. Admittedly, the petitioner did not meet the",,,,,,
same. The pre-bid corrigendum, which the petitioner claims is not relevant, in fact, has the effect of informing the petitioner â€" well in advance, that",,,,,,
the petitioner would not be entitled to add or count the turnover of its German supplier as its own.,,,,,,
22. Several bidders, including Paviour Pharmaceutical Pvt. Ltd. and Alpha Drugs raised the specific issue that they could not meet the turnover",,,,,,
criteria on account of the demand of the Drug â€" in which they were dealing, not being much. Paviour Pharmaceutical Limited raised a grievance",,,,,,
that in the tender in question, annual turnover requirement is Rs. 43,44,71,000/-. They requested that the same be limited to Rs. 8 crores. Alpha Drugs",,,,,,
offered their justification for lowering of the turnover criteria in relation to the item 1471, TE 144C, Human Albumin 20% Inj, by stating that the",,,,,,
turnover criteria had been kept on a very high side, which would abstain many importers to participate, as this turnover can only be maintained by",,,,,,
manufacturers. They stated that India is dependent mainly on import of such drugs, which are used in some most critical life saving conditions, and do",,,,,,
not enjoy huge volume sales. The firm dealing in Blood Plasma products alongwith various other products may be eligible to meet the Annual Turnover,,,,,,
Clause, but the firm, who are typically specialized and pioneers in Blood Plasma products will be deprived to participate in the bid which may lead to",,,,,,
monopoly by those few eligible companies.,,,,,,
23. The respondents, however, did not accept these suggestions, as is evident from the pre-bid corrigendum dated 11.02.2021.",,,,,,
24. It is not in dispute that answers to pre-bid queries, i.e. the pre-bid corrigendum, is published on the website of the respondent, and, therefore, all the",,,,,,
bidders are expected to be aware of the same, as they are obliged to keep themselves abreast of all developments in relation to the tender they are",,,,,,
interested in.,,,,,,
25. The submission of Mr. Gupta that the queries raised/ suggestions made by the aforesaid prospective bidders were not relevant for the petitioner,",,,,,,
cannot be accepted. The petitioner also claims to be acting as a importer of the Drug “Povidone’. Merely, because the petitioner claims to be",,,,,,
subsidiary of the German manufacturer of the drug, in our view, makes no difference.",,,,,,
26. Therefore, the petitioner participated in the bidding process knowing fully well that the pre-bid corrigendum at Serial No. 11 may act as a stumbling",,,,,,
block. The petitioner did not challenge â€" either the turnover criteria as laid down by the respondent in the RFP, or the pre-bid corrigendum. Having",,,,,,
participated in the bidding process with open eyes, it is not open to the petitioner to now question either the turnover criteria, or the pre-bid",,,,,,
corrigendum.,,,,,,
27. The prescription of the turnover criteria, in any tendering process, is done for a very good reason. The authority inviting the bids wishes to be",,,,,,
satisfied that the bidder has the requisite financial and supply capacity to make supplies, in case the tender is awarded to the bidder. This means that",,,,,,
the bidder has to show not only its capacity to either manufacture, or otherwise procure and supply the goods in question for the quantities required,",,,,,,
but also that it has the financial capacity to deal with large volumes of supplies. Constraints of working capital and liquidity are bound to affect the,,,,,,
delivery schedules. The benchmark turnover criteria tells the authority inviting the bids, that the bidder has the financial and logistical wherewithal to",,,,,,
perform the contract.,,,,,,
28. The holding company of the bidder company may have the requisite turnover, but that does not mean that the holding company is obliged to",,,,,,
commit to meet the monetary requirements of the bidder to fulfill its contractual obligations. There is no binding obligation cast on the holding company,,,,,,
to do so, and the same cannot be enforced either by the bidder, or the authority inviting the bids. The approach of the respondents in insisting that the",,,,,,
bidder itself has met the turnover criteria, therefore, cannot be faulted and there is nothing unreasonable or arbitrary about the same.",,,,,,
29. Reliance placed on New Horizons (supra), in our view, is misplaced. In New Horizons (supra), the Supreme Court was, firstly, dealing with a case",,,,,,
where the bidder NHL was claiming the requisite experience on the basis of the experience of its promoters. It was not a case relating to fulfillment,,,,,,
of financial criteria, like the present. Secondly, the two sets of promoters of NHL had formed the Joint Venture to promote the bidder company, i.e.",,,,,,
NHL and, therefore, the Supreme Court held that the experience of the two Joint Venture partners enured for the benefit of the Joint Venture bidder",,,,,,
company. In the present case, there is no Joint Venture between the petitioner and the German company. The absence of the Joint Venture has the",,,,,,
effect of not binding the German company with any of the terms & conditions of the tender in question, or the eventual contract, that may be",,,,,,
awarded.,,,,,,
30. We may also take note of the decision of the Division Bench of the Punjab & Haryana High Court in A.G. Construction Co. Vs. Food Corporation,,,,,,
of India & Others, (2021) SCCOnline P&H 306. The petitioner had sought to place reliance on New Horizons (supra) in this case as well, for claiming",,,,,,
the requisite experience on the basis of the experience of its partners. The Division Bench dealt with and explained the decision of the Supreme Court,,,,,,
in New Horizons (supra) and, inter alia, observed as follows:",,,,,,
“34. Similarly, even in the instant case, the petitioner sole proprietorship concern having applied for the tender independently, sought to rely on an",,,,,,
experience certificate (P-13) issued to a third party (i.e., M/s. B.G. Constructions Co.). Further, the relationship/linkage of Ajay Kumar Garg",,,,,,
(proprietor of the petitioner concern) with such third party (erstwhile firm) does not engender any benefit to the petitioner concern for reasons already,,,,,,
recorded in the preceding paragraphs. Therefore, the petitioner herein having applied independently without any partners, consortium or joint venture,",,,,,,
cannot rely upon the technical qualifications of a third party (erstwhile firm) to claim eligibility. In this respect, the position of law emerging from",,,,,,
Municipal Corporation, Ujjain (supra) is that as long as a person or entity cannot in law, validly claim experience that exists in the name of a third-",,,,,,
party, that third-party remains a stranger to the subject tender.",,,,,,
35. There cannot be any quarrel with the proposition of law either that the interpretation, construction and as to how a provision, clause or a condition",,,,,,
of a tender document has to be construed is primarily the domain of the author of such document (in this case, the authority framing the NIT). For",,,,,,
none else is better positioned and equipped than such authority itself in understanding the tender document's requirements, as also the purport and",,,,,,
intent of its terms and conditions. Therefore, a reference, in this regard, to a few decisions of the Supreme Court, shall be inevitable.†(emphasis",,,,,,
supplied),,,,,,
31. The Division Bench went on to take note of several decisions, including Central Coalfields Limited Vs. SLL-SML (Joint Venture Consortium),",,,,,,
(2016) 8 SCC 622; Afcons Infrastructure Ltd. Vs. Nagpur Metro Rail Corporation Ltd., (2016) 16 SCC 818; Montecarlo Limited Vs. NTPC Ltd.,",,,,,,
(2016) 15 SCC 272; State of Madhya Pradesh Vs. U.P. State Bridge Corporation Limited, (2020) 13 Scale 774; and others, to observe that the",,,,,,
interpretation of the contractual terms given by the authority inviting tender should be deferred to unless there are good grounds to interfere with the,,,,,,
same. The respondent ESIC is entitled to construe the clause relating to Turnover Criteria and the construction adopted by the respondent cannot be,,,,,,
construed as either irrational, arbitrary or whimsical. We, therefore, reject the petitionerâ€s reliance on New Horizons (supra).",,,,,,
32. For the aforesaid reasons, we do not find any merit in the writ petition and dismiss the same leaving the parties to bear their respective costs.",,,,,,
