M.N.Shukla, J. - (1.) This writ petition raises some constitutional and legal questions of considerable importance. The phenomenon has been noticed by jurists as well as Courts which have had occasion to decide such matters, that the ramifications of governmental functions and State activities in this era of welfare State are fast expanding. A necessary concomitant of this is the anxiety to keep the State within bounds and not permit it in the course of its stride to ride rough shod over certain well established guarantees and safeguards enjoyed by the people. This has resulted, inter alia, in importing some salutary inhibitions even in the realm of administrative law which until sometime ago was regarded as comparatively immune from constitutional restraints. The development of this aspect of law is clearly revealed in cases where the State indulges in such activities as carrying on business, making of a contract etc., functions which are undertaken by the State obviously in the exercise of its statutory or executive authority.
(2.) The instant case arises out of a contest between rival tenderers for supplying medicines to the Swarup Rani Nehru Hospital, Allahabad (hereinafter described as the hospital). Tenders were invited for supplying medicines to the Hospital for the year 1980-81. An advertisement was inserted in the newspaper on 5-3-1980 & 7-3-1980, saying that the last date for submitting the tenders was 20th of March 1980, till 11.30 A.M. and that all the tenders offered would be opened at 3 P.M. on the same day. It is significant that the advertisement also said that full particulars could be obtained from the office of the Senior Medical Superintendent of the hospital. A copy of the notice of tender was affixed on the Notice Board of the office of the Senior Medical Superintendent. It has been filed as Annexure-I to the writ petition and is the bed-rock of the petitioner's entire case. It is not disputed that the conditions of the tender have been incorporated in this notice. A perusal of the same would indicate that a tenderer who intends to submit his tender must satisfy certain objective tests:-- (i) The tenderer in medicine must have a local medical shop. (ii) He must be a registered and licenced drug dealer and must produce proof of the same along with the tender of medicines. (iii) Only those who hold licence for all drugs including dangerous drugs should submit tender for medicines (it may be noted that the requirements about holding a licence for dangerous drugs was not enforced.) and (iv) Tenders would be opened in the office of the Senior Medical Superintendent on 20th March 1980, at 3 P. M. in the presence of such tenderers of their authorised representatives, who may choose to attend. Tenders for supply of drugs will be accepted from registered and licenced drugs dealers only, who also hold licence for dangerous drugs and they must produce proof of the same.
(3.) The petitioner as well as opposite party No. 3, namely, M/s. National Medical Stores, Fatehpur submitted their tenders within the date prescribed. While the rate quoted by the petitioner in their tender was 17.6% the rate quoted by the opposite party No. 3 was 8.62 per cent. The tenders were opened on 20th March 1980 and according to the allegations of the petitioner the tender submitted by him was orally accepted and he was directed to supply the medicines to the hospital with effect from 1st of April, 1980. However, on 16th July, 1980, the petitioner received a letter from respondent No. 2, the Senior Medical Superintendent to the effect that the contract of medicines had been finalised and another contractor, i.e., opposite party No. 3, had been appointed for the supply of medicines for the year 1980-81 and he would start supplying the medicines to the hospital with effect from 19th April 1980. The petitioner supplied medicines only upto July 1980, and not thereafter. It was alleged that the petitioner satisfied all the conditions of the notice of the tender, and the opposite party No. 3 was not eligible to submit the tender as he did not satisfy the aforesaid conditions and consequently the decision of the respondent No. 2, in accepting the tender of opposite party No. 3 was arbitrary, discriminatory and based on extraneous and irrelevant considerations.;