SANSE LABORATORIES P LTD Vs. ALFRED BERG

JUDGEMENT

(1.) Question raised in the connected Writ Appeals and the Writ Petition is one and the same i.e. whether the Government was justified in increasing incentives to local SSI units for supply of medicines from 5% to 10% over competitive bidders. Under Government Orders dated 13/05/2009, price preference given to local SSI units for supply of medicines to Government was 5%. This was part of the tender conditions issued by the Kerala Medical Services Corporation Ltd. (hereinafter referred to as the Corporation for short), 14th respondent in W.A. No. 1403/2010, which is a Company purely owned and controlled by Government of Kerala and engaged in procurement and supply of medicines to Government hospitals. Therefore, up to the financial year 2009-10, price preference given to the SSI units were only 5%. However, after the tenders were invited for purchases for the financial year 2010-11, the Government issued order dated 02/02/2010, which is produced as Ext. P4 in the Writ Petition, increasing the rate of price preference from 5% to 10%. This was questioned by other manufacturers from outside State, who had also participated in tenders. Since the tender conditions were varied after the tenders were submitted, this Court on that ground and also by relying on the earlier Government Order, viz. Ext. P3, vacated Ext.P4 produced in WP(C) No. 5606/2010, against which W.A. No. 1403/2010 is filed. However, under the impugned order, the learned Single Judge permitted supplies against the contracts awarded prior to the date of the judgment with 10% price preference. So far as subsequent tenders are concerned, the learned Single Judge prohibited giving price preference to SSI units over 5%. It is against this judgment of the learned Single Judge, the local SSI units have filed the two Writ Appeals, wherein the party respondents are outside suppliers, who have successfully opposed Ext. P4 before the learned Single Judge. The issue raised before the learned Single Judge was whether the Corporation is bound by the Government orders on price preference given to SSI units. Ext. P4 order applies for supplies up to 2010-11. However, for the current financial year 2011-12, the Corporation itself through a board resolution offered 10% price preference to SSI units, against which WP(C) No. 20849/2011 is filed by an outside manufacturer.

(2.) If the reasoning of the learned Single Judge in the judgment impugned in the Writ Appeal is accepted, which is based on Ext. P3 order issued by the Government, then WP(C) No. 20849/2011 filed by the outside manufacturer has to be allowed. If the Corporation's decision to give 10% price preference is vacated, necessarily Ext. P3 Government Order may not apply as such to the Corporation, and the Corporation will have to be directed to reconsider the matter.

(3.) We have heard learned counsel appearing for the SSI units, learned counsel appearing for outside manufacturers, learned Standing Counsel appearing for the Corporation and also learned Government Pleader appearing for the State.