SC Directs Fresh Tender For Bulk Supply Of Drugs For Polio Vaccines [Read Judgment]

The Supreme Court, on Thursday, directed floating of fresh tender for supply of drugs for manufacture of polio vaccines, holding that the tender floated earlier stood vitiated due to violation of the guidelines issued by the Central Vigilance Commission (CVC).

The Bench comprising Justice M.B. Lokur and Justice Deepak Gupta directed floating of an e-tender, in order to avoid the sort of allegations that had cropped up before it.

The impugned tender had been floated by M/s. Haffkine Bio-Pharmaceutical Corporation Ltd., which is a Government of Maharashtra undertaking engaged in the business of manufacture of vaccines and other pharmaceuticals and biological products. One of the main businesses of Haffkine is the manufacture of polio vaccines.

The tender notice had been issued in January last year, for supply of bulk drugs for the polio vaccines. The tender was awarded to a Thailand based company, Bionet-Asia Co. Ltd. This was, however, contested by another Nirlac Chemicals, which had been supplying the drugs to Haffkine for the past 15 years.

The Court was now hearing a batch of Petitions challenging an order passed by the Bombay High Court, wherein the tender, as well as the contract entered between Haffkine and Bionet had been set aside. The High Court had directed the State, through the Department of Public Health, to float a fresh tender within a period of eight weeks.

While Nirlac had relied on the High Court’s ruling to contend that the tender should have been awarded to it, the other parties had challenged the declaration that the tender process was vitiated.

The Supreme Court partly upheld the High Court ruling, observing that the entire tender process stood vitiated due to violation of CVC guidelines as the rival bid was not opened in front of the other side.

“When a technical bid is opened, it is the right of the rival bidders to see whether the documents attached by a bidder meet the technical requirements or not. This can only be done if the documents attached to the bid are shown to the other side. According to us, the violation of CVC guidelines is itself sufficient to vitiate the entire tender process,” it observed, concurring with the High Court that the tender was wrongly awarded to Bionet.

It, however, held that Nirlac was not qualified as it did not satisfy one of the conditions of the tender, which said that the bidder should be able to generate business for Haffkine for sale of minimum 70 million doses.

The Apex Court further ruled that the High Court had erred in directing that the fresh tender should be floated by the State, noting that Haffkine is a separate entity.

It then directed floating of an e-tender, ordering, “We, further direct that the terms of the tender should be clear and unambiguous setting out the period of tender and approximate quantities of both drugs required. If Haffkine wants any buy back or business generation clause, it must clearly mention the rate at which finished product, i.e. the oral polio vaccine must be purchased by the successful tenderer from Haffkine.”