Karnataka HC Stays State Health Department's Tender On National Security Concerns

The Karnataka High Court has stayed all further proceedings in relation to a tender issued by the state Department of Health and Family Welfare in favour of a firm that is an agent of a Chinese company.

The High Court has cited the General Finance Rules 2017 which does not permit unregistered entities from participating in tenders if the bidder is from a country which shares a land border with India.

"The state government had specifically undertaken to abide by this policy decision of the central government evolved on the grounds of defence of India and the national security," the High Court said.

Philips India Limited had filed an intra-court appeal after its request for a stay on the tender issued to Foress Healthcare LLP was not considered by the court earlier. Foress Healthcare is an agent of the Shanghai United Imaging Healthcare Co Ltd, based in Shanghai, China.

The Director of Medical Education, for whom the tender process was initiated by the health department, is also a respondent in the writ.

"Having heard the learned counsel for the appellant, we are inclined to grant interim prayer as sought for in the accompanying application," the Division Bench of Justice Krishna S Dixit and Justice S Rachaiah said in its May 5 order.

Senior Advocate Sajan Poovaiah had appeared for the Appellant.

"Prima facie, the award of tender in favour of Respondent Nos. 4 & 5 is in violation of amendment to Rule 144(xi) of the General Finance Rules, 2017, which disentitles unregistered entities from participating in the tender process of the kind," it said.

Staying all further proceedings pursuant to the tender till the next date of hearing, the High Court stated, "The fifth respondent health care company is associated inter alia with China which shares long border with India and thus, the precondition for registration in terms of amended Rules is not satisfied." 

Click here to read/download Order

With PTI inputs