Dhiraj Singh Thakur, CJ.

1. The present Writ Appeal has been filed against the judgment and order, dated 18.09.2025, passed in W.P.No.14358 of 2025, whereby the Writ Petition filed by the petitioner – appellant herein was dismissed.

2. With a view to understand the background in the light of which the present controversy has arisen, it is necessary to give material facts in brief:

3. A Tripartite Agreement came to be executed on 20.09.2018, between the Director of Medical Education, Vijayawada,(Procurer) of the One Part, M/s. Shree BharathPharma and Medical Oxygen Distributors (Service Provider) of the Second Part and M/s. Linde India Limited (Manufacturer) of the Third Part.

                  The service provider was responsible for the uninterrupted supply of medical oxygen to all the teaching hospitals in the State of Andhra Pradesh. The service provider was also responsible for the Operation, Management and Maintenance of the medical oxygen supply system in all the health centers. The Agreement was to remain in operation for a period of 10 years, during which the service provider was required to provide the medical oxygen with an in-house liquid oxygen tank facility, with refilling option and other back up cylinders in all the Teaching Hospitals in the State of Andhra Pradesh.

                  The service provider as per the terms and conditions of the Agreement, among others, which pertained to the oxygen cylinders, was also required to supply the gas in the cylinder with connection to the existing pipeline system in the health centers. According to the terms and conditions of the Agreement, which can be seen to be quite comprehensive, the service provider had to ensure the supply, installation, testing and commissioning of the oxygen flowmeter with humidifier, adapter, tubing etc. in accordance with the specifications which were prescribed.

                  The service provider was also required to inspect the medical gas system to ensure that it complied with the medical devices safety standards for purposes of ensuring efficient performance.

                  Clause 5 of the Agreement gives an option to the party of the First Part to terminate the contract, which reads as under.

                  “5. Termination of Contract:

                  The purchase may terminate the contract, if the successful tenderer withdraws its tender after its acceptance or fails to submit the required Performance Securities for the initial contract and or fails to fulfill any other contractual obligations. In that event, the purchaser will have the right to purchase the same goods/ equipment from next eligible bidder and the extra expenditure on this account shall be recoverable from the defaulter. The earnest money and the performance security deposited by the defaulter shall also be recovered to pay the balance amount of extra expenditure incurred by the purchaser.”

                  In case of a dispute, the differences were envisaged to be resolved through the mechanism of arbitration, as per Clause 6.

4. Pursuant to the execution of the Tripartite Agreement, the Director of Medical Education addressed a communication, dated 27.09.2018, requiring all Superintendents of Teaching Hospitals under the control of Director of Medical Education, Andhra Pradesh, to enter into Tripartite Agreement with parties of the Second Part and Third Part immediately for providing medical oxygen to the hospitals. It was however made clear that if in any of the hospitals there were existing suppliers other than M/s.ShreeBharath Pharma and Medical Oxygen Distributors, and M/s. Linde India Limited, then the agreement would come into effect after completion of their existing contract period.

5. Notwithstanding the execution of the Tripartite Agreement, for some reason, when the supplies of Liquid Medical Oxygen was not made by the parties of the Second and the Third Part, the District Collector, Anantapur, vide proceedings, dated 12.05.2020, is stated to have issued instructions that supplies be received from M/s. Varasi Oxygen, inasmuch as M/s. Shree BharathPharma and Medical Oxygen Distributors and M/s. Linde India Limited, had not come forward to supply the medical oxygen gas since 2018,‘as the civil and other works for installation of oxygen plant would take at least four to five months at Government General Hospital, Anantapur’.

                  The other reason for selecting the appellant M/s. Varasi Oxygen as the supplier as per the Collector's instructions was that the rate at which the supplies were agreed to be made was more competitive than the rates which were finalized as per the Tripartite Agreement.

6. Based upon the decision so taken, an Agreement came to be executed between M/s. Varasi Oxygen and the Additional Director of Medical Education/Superintendent of Government General Hospital, Anantapur, for supply of liquid medical oxygen for a period of five years from 20.06.2020. This period came to an end on 19.06.2025.

7. It appears that even before the expiry of the five-year contract period, the Director of Medical Education, Vijayawada, Andhra Pradesh, by his proceedings, dated 04.06.2025, instructed the Superintendent of Government General Hospital, Anantapur, to take up supplies from M/s. Shree Bharath Pharma and Medical Oxygen Distributors and M/s. Linde India Limited with effect from 20.06.2025.

                  Subsequently, in terms of the directions so issued, it appears that, an Agreement has been executed between M/s. Shree Bharath Pharma and Medical Oxygen Distributors and the Superintendent of Government General Hospital, Anantapur, on 25.09.2025.

8. The proceedings, dated 04.06.2025 came under challenge before the learned Single Judge who considered the issue and dismissed the Writ Petition.

9. We are now told that the Agreement has since been executed on 25.09.2025 and supplies are being made continuously by M/s. Shree Bharath Pharma and Medical Oxygen Distributors, after the dismissal of the Writ Petition.

10. The learned Single Judge rejected the contention of the petitioner– appellant herein that since M/s. Shree Bharath Pharma and Medical Oxygen Distributors had failed to honour its commitment as per the Tripartite Agreement, the Agreement must be deemed to have been terminated. It was held that the Tripartite Agreement was concerning all the Teaching Hospitals in the State and since the contract had not been terminated, it remained in force, as the option to terminate was at the discretion of the purchaser i.e. the Director of Medical Education, which had not been exercised.

11. What was urged before us, also, by Mr. O. Manoher Reddy, learned Senior Counsel for the appellant, is on the same lines.

12. Two aspects have been highlighted. Firstly, that notwithstanding the execution of the Tripartite Agreement, M/s. Shree Bharath Pharma and Medical Oxygen Distributors and M/s. Linde India Limited, having failed to make the supplies for as long a period of 5 years, the said Agreement ought to be deemed to have been terminated. Secondly, that the appellant, having supplied oxygen during the interregnum under valid instructions of the District Collector, ought to have been continued as the supplier.

13. We are not convinced with the argument advanced by the learned Senior Counsel, especially for the simple reason that the Tripartite Agreement executed between the parties was to remain valid for a period of 10 years, which period has still not expired. If there were any arrangements made by authorities at the district-level, in the interregnum, they were in fact in contravention of the principal agreement executed between the three parties, which was to hold good for all the Teaching Hospitals in the entire State of Andhra Pradesh. The fact that an interim arrangement was permitted to continue for some time would not create a better right in favour of the appellant as against Respondent Nos.7 and 8 in the present Writ Appeal.

14. The option to terminate the contract having not been exercised by the Director of Medical Education, Vijayawada, Andhra Pradesh and the terms and conditions of the said Tripartite Agreement having been honoured, even till date by the official authorities, and the issue being one which is contractual in nature, we feel that no relief could be granted in favour of the appellant. More so, when the contractual period of 5 years has since expired without any challenge from Respondent Nos.7 and 8 or for that matter the Director of Medical Education.

15. The entire effort of the appellant at this stage is to question the Tripartite Agreement with a view to lay a claim for supplies for the present and in the immediate future, which in our opinion is impermissible, keeping in view the terms and conditions of the Tripartite Agreement.

16. Having heard learned counsel for the parties, we find no merit in the present Writ Appeal, which is accordingly dismissed.

                  No costs. Pending miscellaneous applications, if any, in this case, shall stand closed.