PHC annuls 'discriminatory' medicines contract

Express Tribune

03-04-2025

The Peshawar High Court (PHC) has annulled the award of a multimillion rupee medicine supply contract, calling the process "engineered", "discriminatory," and a "quintessential case of mis-procurement".
The decision may shake the Khyber Pakhtunkhwa (K-P) health procurement system.
The K-P Health Department had awarded a contract to M/s Frontier Dextrose Ltd for supply of hospital medicines for the fiscal year 2024–2025.
A citizen, Waqar Ahmad, filed a pro bono publico whistle-blower petition through Shumail Ahmad Butt Advocate challenging the legality of the public procurement process.
A PHC division bench comprising Justice Syed Arshad Ali and Justice Dr Khurshid Iqbal set aside the bid awarded to M/s Frontier Dextrose Ltd through an order dated March 25.
In its 10-page detailed order, the bench directed the K-P Health Department to cancel the existing award and reinitiate the procurement process strictly in accordance with the law.
"We allow this petition and direct respondent No 3 to cancel the bid offered by respondent No 6 for the supply of medicines for the financial year 2024-25 and to reinitiate the process of procurement of the medicines strictly in accordance with the law," it said.
The bench noted that the director general drugs and director general health services, who were present in court, were repeatedly asked to explain the rationale behind substituting the contents of an affidavit.
The affidavit was to include an undertaking stating: "The undersigned has not manufactured/supplied any batch of Medicine(s), Drugs, Medical Device(s), Surgical Disposable, Cotton, and related goods, etc., that have been declared spurious/adulterated by
the DTL (Drug Testing Laboratory) of the K-P or any other public DTL in Pakistan".
The order said the said officers were unable to provide any satisfactory response, apart from contending that such an eventuality was addressed under the Act of 1976.
"Notably, they neither offered an explanation nor placed any record before the court to demonstrate what necessitated the omission of this essential criterion.
"Likewise, it is perplexing that when this lapse was brought to the notice of the procurement authority, it admitted that such an omission should not be repeated in the future and directed that the said clause be reinstated in Bid Form-III (Affidavit).
"However, it condoned the omission in the present procurement solely on the ground that no competing bidder had raised an objection during the bidding process.
"It must be emphasized that it was not the responsibility of a competing bidder to raise this concern; rather, the authority ought to have sought comments from the procuring entity regarding the justification for the deletion/omission of the said clause," it said.
According to the order, upon careful consideration, it became evident that this omission was deliberately made to enable the participation of M/s Frontier Dextrose Ltd in the bidding process.
"This constitutes a quintessential case of mis-procurement, rendering the impugned procurement contrary to the public interest," it said.
The judgment referred to an Islamabad High Court's (IHC) decision which highlighted ethical obligations of procuring agencies while also condemning any practice that compromises the integrity of the process, including the acceptance of gifts from suppliers.
"The cited case-law collectively establishes that public procurement must adhere strictly to principles of transparency, fairness, and non-discrimination, ensuring that public resources are utilized efficiently and equitably.
"Thus, under no circumstances can any procurement process funded by public resources be deemed valid if it falls short of integrity, lacks fairness and transparency, is tainted with favoritism and nepotism, or is tailored to benefit a specific individual," it said.
The court found that a key clause in the tender documents was deliberately omitted to facilitate the eligibility of one bidder, with no plausible justification on record.
"This constitutes a quintessential case of mis-procurement, rendering the impugned procurement contrary to the public interest."
Citing a series of landmark judgments from the Supreme Court and high courts across Pakistan, the bench reinforced the constitutional necessity of transparency, fairness, and competition in all public procurement. The court emphasized that public funds cannot be dispensed through tailored or manipulated tendering processes.