Siemens Healthcare (Pvt.) Ltd. Versus Managing Director Punjab Procurement Regulatory Authority

Shujaat Ali Khan, J .--- Unnecessary details apart, the facts, forming factual canvass of this petition, are that the Project Management Unit, Health and Population Department. Government of the Punjab, Lahore (respondent No.3) got advertised a tender for procurement of eight Angiography Machines along with their accessories from prequalified bidders notified through Notification, bearing No.PMU/PRO/01-87/2024-25, dated 07.02.2025. The petitioner-company along with others participated in the bidding process while submitting tender documents. In the first phase, after evaluation of Technical Bids, the petitioner-company, along with Shirazi Trading (Pvt.) Ltd., Medequips (SMC-Pvt.) Ltd. (respondent No.2) and Matora Digionics (Pvt.) Ltd., was declared successful. Thereafter, respondent No.3 opened financial bids and the petitioner-company was declared lowest bidder. Being aggrieved of declaration of the petitioner-company as lowest bidder, respondent No.2 filed complaint, in terms of rule 67 of the Punjab Procurement Rules, 2014 (the Rules, 2014), before the Grievance Redressal Committee (GRC) set up by respondent No.3 inter-alia on the grounds that the bid submitted by the petitioner-company was non-compliant as it did not bifurcate the amount to be paid on account of custom duties and sales tax for third party items and insertion of arbitration clause made the bid conditional. After filing of complaint by respondent No.2, the petitioner-company submitted clarification, on 03.10.2025, to the effect that the financial bid submitted by it included all duties/taxes etc. The GRC rejected the complaint filed by respondent No.2, on 13.10.2025, as a result, Notification regarding award of contract in favour of the petitioner-company was issued, on 15.10.2025. On the other hand, respondent No.2 filed representation before the Managing Director, Punjab Procurement Regulatory Authority (PPRA-respondent No.1) who after conducting hearing on 20.10.2025, accepted the same vide order, dated 17.11.2025 (the impugned order); hence this petition.

2.The submissions made by learned counsel for the petitioner-company can be encapsulated in the words that while passing the impugned order respondent No.1 failed to consider that the bid documents submitted by the petitioner-company were fully compliant to the terms and conditions of the tender; that since respondent No.2 is sole distributor of Cannon Inc. the parent company has no physical existence in Pakistan whereas the petitioner-company is based in Pakistan but said fact escaped notice of respondent No.1; that after filing of the complaint by respondent No.2, the petitioner-company submitted clarification to the effect that the financial bid submitted by him included duties and taxes etc. and the arbitration clause was incorporated in the bidding documents due to some inadvertence, as a result, the GRC dismissed the complaint filed by respondent No.2 but respondent No.1 reversed said decision on the grounds which were non-existent and that since Angiography Machines and other allied items have already been exempted from custom duty. its bifurcation was inconsequential.

3.While defending the impugned order, the Consultant (Legal) representing respondent No.1, states that since the bidding documents of the petitioner-company were found violative of rules 4 and 31 of the Rules, 2014, no illegality has been committed by respondent No.1 while rendering the impugned decision. When posed with the query as to whether respondent No.1 has taken into consideration the fact that as Angiography Machines and its allied items are exempt from customs duty as to how the petitioner-company could be compelled to bifurcate the amount on said account in the bidding documents, the Consultant (Legal) states that since respondent No.1 had to decide the matter solely in line with the Rules, 2014, said fact had relevancy.

4.Learned counsel representing respondent No.2 contends that since after cancellation of the contract awarded to the petitioner-company, process for re-tendering has already been started, thus, instant petition for all intents and purposes has become infructuous; that the petitioner-company would be at liberty to participate in the re-bidding process which otherwise would provide an opportunity of healthy competition amongst the prospective bidders; that as certain ancillary items like generator etc., necessary for operation of Angiography Machines, are not exempt from customs duty, the petitioner-company was bound to bifurcate the amount to be paid on account of customs duty and sales tax etc., thus, bidding documents, submitted by the petitioner-company were, non-compliant to the terms and conditions of tender; that a cursory glance over the bidding documents, submitted by the petitioner-company, shows that the same were not in line with rule 4 of the Rules, 2014; that respondent No.1 after reaching to the conclusion that the bidding documents were not submitted by the petitioner-company in line with the criteria laid down under rule 32 of the Rules, 2014, was left with no option but to reverse the findings of GRC; that rule 67 of the Rules. 2014 empowers the procuring agency to redress grievance of an aggrieved person through GRC whereas rule 67-A empowers PPRA to adjudge the validity of any decision of GRC; that as per rule 4 of the Rules, 2014 the decision of PPRA is final and this Court cannot interfere with it especially when cogent reasons have been advanced and that since re-tendering process would be completed within a month or so, no prejudice would be caused to the petitioner-company if such process is allowed to be completed.

5.Learned Law Officer, while supporting learned counsel for the petitioner-company, states that the reasons advanced by respondent No.1 in the impugned order are not justified. Adds that as per rule 33(2) of the Rules, 2014 procuring agency can seek clarification from the bidder in case of any ambiguity and when the matter relating to customs duty and sales tax was clarified by the petitioner-company there was no reason to cancel the contract awarded in its favour, that since the petitioner-company is based in Pakistan in case of any issue qua working of Angiography Machines it would be most suitable entity to rectify the same; that since there is difference of about Rs.40,000,000/- in the bid offered by respondent No.2 and that offered by the petitioner-company, the petitioner-company is most suitable and that since 11 months were consumed in completion of bidding process wherein the petitioner-company was declared lowest bidder it is not possible to conclude re-tendering process within a period of one month, as stated by learned counsel for respondent No.2.

6.Learned counsel appearing on behalf of respondents Nos.3 and 4 states that though after decision by respondent No.1 the contract awarded in favour of the petitioner-company was cancelled and process for re-tendering was started on 19.11.2025 but no further proceedings were carried out due to issuance of injunctive order by this Court.

7.Learned counsel representing respondent No.2, in furtherance of his above submissions, states that since Siemens has no physical existence in Pakistan, the petitioner-company does not enjoy better status as compared to respondent No.2. Adds that since no technical evaluation would be required in the re-tendering process, much less time would be needed to complete re-tendering process as compared to the earlier one.

8.In exercise of his right of rebuttal, learned counsel for the petitioner-company states that after issuance of contract the petitioner-company made all arrangements for import of Angiography Machines and in case this matter is decided in its favour same would be imported within shortest possible time and in case matter is put to re-tendering it would take months and months for its completion which would ultimately affect the output of health units where Angiography Machines are to be installed.

9.I have heard learned counsel for the parties at considerable length and have also gone through the documents, annexed with this petition.

10.A perusal of the impugned order shows that respondent No.1 accepted the representation filed by respondent No.2 against the decision of GRC on the ground that the bid documents submitted by the petitioner-company ambiguous and in support of said findings, respondent No.1 has relied upon the fact that the petitioner-company did not bifurcate the amount to be paid on account of custom duty and sales tax. In my humble opinion, while holding so, respondent No.1 did not consider the clarification submitted by the petitioner-company before respondent No.3, which for facility of reference is imaged below:-

11.It is very astonishing to note that while rendering the impugned decision, respondent No.1 has referred to rule 33 of the Rules, 2014, by holding that no party can be allowed to alter or modify his bid after closing of time for submission of bids but did not bother to go through sub-rule (2) of Rule 33 of the Rules, 2014, which for convenience of reference is reproduced here-in-below: -

A perusal of afore-quoted sub-rule (2) renders it crystal clear that procuring agency can seek clarification from a bidder and if the same is found genuine, the same can be accepted subject to the condition that the said clarification does not change the substance of the bid. Insofar as the case in hand is concerned, at the cost of repetition, it is observed that according to PCT Code No. 9938 of Pakistan Customs Tariff (available at page 34 of this petition) import of Angiography Machines and allied equipment is exempt from customs duty, thus, non-bifurcation of the amount of said amount was inconsequential in the instant matter.

12.It is not the case of the respondents that due to clarification submitted by the petitioner-company the substance of the bid was changed. In this backdrop, the reliance of respondent No.1, on rule 33 ibid solely, shows his partial approach while deciding the fate of the representation filed by respondent No.2, thus, its findings cannot be allowed to hold the field even for a moment.

13.Learned counsel for respondent No.2 has opted to plead that as certain items, necessary for operation of Angiography Machine, are not exempt from customs duty, the petitioner-company was bound to bifurcate the said amount, while submitting financial bid. In this regard, I am of the view that if the petitioner-company had clarified that his financial bid included all duties and taxes and in case he has to pay any duty/tax on the import of the Angiography Machines, it will bear the fiscal loss but at present, the ground agitated by learned counsel for respondent No.2, cannot be given any credence.

14.Now coming to the insertion of arbitration clause in the bidding documents submitted by the petitioner-company, I am of the view that the arbitration clause comes into play only after execution of formal contract. Moreover, when the petitioner-company has admitted that arbitration clause crept in due to some inadvertence, the same could be brushed aside by the procuring agency. Moreover, if the procuring agency is of the view that there should be no arbitration clause, it could execute the contract without said condition.

15.Insofar as the plea of respondent No.2 that since process for retendering has already been initiated, this petition has become infructuous is concerned, suffice it to note that since after completion of bidding process, contract was awarded in favour of the petitioner-company, valuable rights accrued in its favour, thus, this petition cannot be declared as having become infructuous especially when learned counsel for respondents Nos.3 and 4 has clarified that though process for retendering was started on 19.11.2025 but after issuance of injunctive order by this Court, no further steps were taken.

16.Considering from another angle, Angiography Machines have important role in diagnosing heart diseases and delay in procuring the same would deprive the masses from diagnostic facility especially in relation to heart diseases. As clarified by the learned Law Officer that in the first phase, bidding process took eleven months and in case the matter is put for retendering it is not possible that it would conclude in a month or so. A cursory glance over the comparative prices, provided by the petitioner-company in para No.5 of the writ petition, shows that bid amount offered by the petitioner-company was much less than that offered by respondent No.2, thus, continuation of contract awarded in favour of petitioner would benefit the national exchequer.

17.There is no cavil with the fact that when any material deficiency is noted in the bidding process firstly the procuring agency can strike down the bidding process and secondly, PPRA is empowered to do so while exercising its powers under rule 67-A of Rules, 2014, but the said power cannot be allowed to be exercised in a mechanical manner just to deprive a party of his right to complete the contract already awarded in its favour. As far as the matter in hand is concerned, a perusal of the order passed by the GRC shows that cogent reasons were advanced while dismissing the complaint filed by respondent No.2 but no persuasive reasons have been given by respondent No.1 while reversing the findings of GRC.

18.For what has been discussed above, I have no hesitation to hold that respondent No.1 misdirected itself while passing the impugned order and failed to comprehend the controversy between the parties in its true perspective. Consequently, this petition is accepted and impugned order passed by respondent No.1 is set aside, as a result the representation filed by respondent No.2 before respondent No.1 shall stand dismissed . No order as to costs.

19.Insofar as the connected Crl. Org. No.72264/2025 is concerned, suffice it to note that since main writ petition has already been decided, no further proceedings are required in the contempt petition which is accordingly disposed of .

UN/S-18/L Petition allowed.