HARYANA CHEMICALS AND PESTICIDES Vs. STATE OF GUJARAT

JUDGEMENT

(1.) As the controversy involved in these petitions are common in nature, all these Special Civil Applications are disposed of by this common judgment. The facts in brief are as under : In response to a notice inviting tenders by the Director, Central Medical Sotres Organisation, Gujarat for supply of Malathion 25% Water Dispersible Powder ("WDP with ISI mark") in the total quantity of 558 Metric Tons. 8 firms submitted tenders and quoted the prices as under : <FRM>JUDGEMENT_36_GCD(UJ)3_1996Html1.htm</FRM> It may be stated that the tenders were invited in anticipation of approval of the State Government. The decision of the State Government to accord sanction to procure insecticides, subject to one of the conditions to purchase the Malathion 25% cither from the public sector undertaking of the Central Government or from any other firm which is originally manufacturing pesticides by inviting tenders was conveyed under communication dated 14.12.1995. However, immediately a corrigendum dated 15.12.1995 was issued to the effect that purchase of Malathion 25% is to be made from Hindustan Insectides Ltd., a Government of India Undertaking which is also manufacturer of basic insecticide.

(2.) Mr. G.P. Patel, In-charge Assistant Director (R.C.) Central Medical Stores Organisation, Gandhinagar has filed affidavit-in- reply stating inter-alia that Malathion is an insecticide used for the purpose of Malaria Eradication Programme undertaken by the Government of Gujarat. The aforesaid programme is implemented through the respondent No. 2, the Commissioner of Health Service and Health Department. Malathion is to be used for insecticidal spray in the highly malaria infected area of the State. The Central Medical Stores Organisation (hereinafter referred to as 'CMSO') is the central purchasing authority for the Health Department to the Government. The programme is to be implemented through the respondent No. 2 Commissioner of Health Service and Health Department and thus on receiving the requirement from the Administrative Department the CMSO invites tenders in anticipation of the approval of the Government. In the present case, the CMSO send the proposal for purchase of insectciides to the State Government for approval and simultaneously invited tenders, in anticipation of approval, as entire process with respect to purchase of insecticides was to be completed before 31.3.1996. The Government approved grant by impugned resolution dated 14.12.1995 and 15.12.1995. The final decision is to be taken by the Secretaries/Purchase Committee in accordance with the policy decision taken by the Government. An affidavit is also filed by Mr. S.M. Chunara, Under Secretary, Health and Family Welfare, Sachivalaya, Gandhinagar, stating that the decision to purchase insecticides only from Hindustan Insecticides Ltd. (for short, 'HIL') is purely a policy decision taken by the Government based on past experience.

(3.) Mr. Y.N. Oza, learned Advocate submitted that in commercial transaction, no reservation can be made restricting to one party. A Government company cannot claim priority over other companies in commercial transaction. He relies on a decision of the Apex Court in the case of Sterling Computers Ltd. vs M/s. M & N Publications Ltd. & Ors., reported in 1993 (1) JT 187. He further submits that no reason has been assigned for excluding the petitioner and other companies from consideration. He has also pointed out that HIL has supplied Malathion 25% to other States at a lower price than what was quoted for State of Gujarat. By accepting the tender of HIL, the State Government will be put to loss of Rs. 10 to 15 crores.