A C CHANDRAKUMAR Vs. STATE OF KARNATAKA

JUDGEMENT

(1.) against the dismissal of a few writ petitions writ appeals are filed by the petitioners. Other writ petitions were referred to the division bench by the learned single judge in view of the pendency of the writ appeals. All the parties are referred with reference to their rankings in the writ petitions. However, one of the parties impleaded subsequently i.e., Karnataka antibiotics and pharmaceuticals Ltd., A public sector undertaking is referred as kapl.

(2.) petitioners question the legality and propriety of the government order dated 23-2-1991 (referred as the impugned order). By this order the state government approved the purchases of the drugs and i.v. fluids required by government hospitals from public sector undertakings ('psu' for short) on the basis of an alleged recommendations of a high power committee. The conditions stated in the said impugned order are 7 in number, they are as follows:

(3.) according to the petitioners the rates at which the psu supply the Articles in question (medicines, drugs etc.) Are far in excess of the rates at which the petitioners are willing to supply. It is also the case of the many of the petitioners that the government had already approved the rates quoted by the petitioners for the supply of the various Articles and the said approval is to be operative till the end of august, 1991. These petitioners are all small scale industries started mainly with the hope of supplying the Articles to the governmental institutions and these industries are substantially financed by the state finance corporation and are heavily indebted to the said state finance institution. The sudden change of the policy of the government to place orders substantially from kapl and other psu would be injurious to these small scale industries. Their investments in the business of manufacturing these Articles will be jeopardised by the curtailment of the available market the state being the main consumer of these articles. The petitioners have brought out the injury to the public interest caused by the impugned order by illustrating the difference in the rates of the Articles at which the petitioners are willing to supply and the rates at which the government has agreed to purchase the Articles from the psus, by way of illustration 23 items are highlighted. In respect of the particular quantity estimated to be required during one year regarding these 23 items the cost of purchase from psus will be Rs. 1,071.40 lakhs while, if the purchases were to be made from the petitioners the cost will be only Rs. 557.70 lakhs and thus the excess payment to be made to the psus for the supplies from the latter will be Rs. 513.70 lakhs per annum. Apart from these 23 items there are several hundreds of other drugs involved and the loss to the public exchequer by the impugned order will be quite enormous. The impugned order is thus attacked as arbitrary and based on irrelevant considerations resulting in injury to the public interest.