Dhiraj Singh Thakur, CJ.

1. Two Writ Appeals have been preferred against the common judgment and order, dated 01.08.2025, whereby the Interlocutory Applications bearing I.A.Nos.1 and 2 of 2025, arising out of Writ Petition Nos.19699 and 20133 of 2025 were dismissed.

2. W.P.No.19699 of 2025, was filed challenging the proceedings dated 23.07.2025, whereby the Director of Medical Education, Andhra Pradesh, directed the Additional Director of Medical Education/Superintendent of Government General Hospital (RIMS), Kadapa, to take up supplies from M/s.Shree Bharath Pharma and Medical Oxygen Distributors and M/s. Linde India Limited with effect from 01.08.2025.

3. Writ Petition No.20113 of 2025 was filed by the petitioner-appellant herein, challenging the order passed by the Additional Director of Medical Education/Superintendent, Government General Hospital (RIMS), Kadapa, cancelling the contract granted in favour of the petitioner for supply of liquid medical oxygen for the period 01.08.2025 to 31.07.2026 and further awarding the same in favour of Respondent Nos.7 and 8 in the writ petition i.e. M/s.Shree Bharath Pharma and Medical Oxygen Distributors and M/s. Linde India Limited respectively.

4. 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:

5. 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 Bharath Pharma 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.

6. 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.Shree Bharath 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.

7. It appears that, for some reason, M/s. Shree Bharath Pharma and Medical Oxygen Distributors and M/s. Linde India Limited were unable to execute the agreement with Government General Hospital (RIMS), Kadapa, and did not make supplies of liquid oxygen, which led the District Purchase Committee, headed by its Chairman i.e. Joint Collector, Kadapa, to take a decision to permit M/s. Varasi Oxygen – appellant herein to supply oxygen to the Government General Hospital (RIMS), Kadapa, for a period of 3 years.

                  The decision was taken, among others, keeping in view that M/s. Varasi Oxygen had been supplying Bulk Cylinders and Liquid Medical Oxygen to Government General Hospital (RIMS), Kadapa, without any trouble to the said hospital; that the supplies were made from Yerraguntla, which is close to Kadapa; that the supplies, whenever required, were made within half an hour of the requisition by the hospital authorities; and also keeping in view that the rate at which liquid oxygen was agreed to be supplied was lower than the rate which was fixed as per the Tripartite Agreement.

8. Consequently an Agreement, dated 02.05.2020, was executed between the petitioner and the Superintendent of the Government General Hospital (RIMS), Kadapa, for a period of 3 years, which was later extended on an annual basis, and was renewed by execution of Agreements, dated 19.11.2022 and 19.03.2024.Yet another Agreement, dated 23.07.2025, was executed between the aforementioned two parties, permitting the supply of liquid oxygen for the period 01.08.2025 to 31.07.2026.

9. From the record, it can be seen that on 23.07.2025, the Director of Medical Education, Andhra Pradesh, upon receiving a detailed report of supply of liquid medical oxygen by M/s. Varasi Oxygen, referring to Clause 8 of the Tripartite Agreement, directed the Superintendent of Government General Hospital, Kadapa, to take up supplies from M/s.Shree Bharath Pharma and Medical Oxygen Distributors and M/s. Linde India Limited with effect from 01.08.2025.Aggrieved by the aforesaid direction of the Director of Medical Education, W.P.No.19699 of 2025 has been filed by the petitioner.

10. As a necessary consequence of the order, dated 23.07.2025,the Additional Director of Medical Education/Superintendent, Government General Hospital (RIMS), Kadapa, on 26.07.2025, issued orders, cancelling with immediate effect, the contract with M/s. Varasi Oxygen for supply of Bulk Cylinders and Liquid Medical Oxygen. Challenging this, W.P.No.20113 of 2025 has been filed.

11. Learned Single Judge, by virtue of the common judgment and order impugned, dismissed the Interlocutory Applications filed in both the writ petitions, in which the petitioner was seeking interim relief for staying the operation of the orders impugned.

                  The reason given by learned Single Judge for rejecting the prayer for interim relief and in dismissing the applications was based on the ground that the direction issued by the Director of Medical Education in his capacity as Head of the Medical Education, had not been followed by the Additional Director of Medical Education and the Administrator, Government General Hospital (RIMS), Kadapa, and while extending the ‘proposals’ in favour of Varasi Oxygen, no reference at all to the Tripartite Agreement had been made, notwithstanding the fact that M/s. Shree Bharath Pharma and Medical Oxygen Distributors respondent No.7 had been regularly following up with the authorities to clear the operational issues and asking them to execute the Agreement as per the directions of the Director of Medical Education. What was held by the learned Single Judge in paragraph 10, finally, is reproduced hereunder:

                  “10. When a comprehensive procedure was implemented, by calling for tenders and culminating in a tripartite agreement for the supply of medical oxygen, an essential consumable good/drug, to the Hospital, the agreement must be given effect unless the competent authority rescinds it. It appears from the material papers filed by the 7threspondent that it had approached the 5threspondent immediately after the tripartite agreement and was following it up with the 5threspondent for carrying out of the necessary civil works for establishment of the tank. Under such circumstances, the 5threspondent without giving any notice to the 7threspondent submitted proposals to the Joint Collector, to grant extension in favour of the writ petitioner in 2020 and the same has been continued till yesterday, ignoring the tripartite agreement entered into by their Director and without calling for fresh tenders. Thus, through the impugned proceedings, the cart has been placed on the track. Therefore the impugned proceedings, prima facie, do not appear as arbitrary. The I.As seeking suspension of the impugned proceedings and for a direction to allow the petitioner to supply the oxygen are accordingly dismissed.”

12. Learned Senior Counsel for the appellant, Mr. O. Manoher Reddy, would submit that after having executed an agreement with the petitioner, there was no justification in law to cancel the contract without affording to the petitioner - appellant, an opportunity of being heard. It was further urged that respondents Nos.7 and 8 i.e., M/s. Shree Bharath Pharma and Medical Oxygen Distributors and M/s. Linde India Limited, had not come forward to supply the medical oxygen even during the testing times of COVID, whereas the appellant ensured during those difficult times a smooth supply of oxygen to the Govt. General Hospital at Kadapa at rates which were more competitive than the one which had been fixed as per the Tripartite Agreement.

13. The scope of interference by an appellate Court against an order passed by a learned Single Judge, exercising its discretion, is permissible only where the discretion has been exercised arbitrarily or capriciously. In Wander Limited and another vs. Antox India Pvt. Ltd.( (1990) Supp. SCC 727), the Apex Court held:

                  “The appeals before the Division Bench were against the exercise of discretion by the Single Judge. In such appeals, the Appellate Court will not interfere with the exercise of discretion of the court of first instance and substitute its own discretion except where the discretion has been shown to have been exercised arbitrarily, or capriciously or perversely or where the court had ignored the settled principles of law regulating grant or refusal of interlocutory injunctions. An appeal against exercise of discretion is said to be an appeal on principle. Appellate Court will not reassess the material and seek to reach a conclusion different from the one reached by the court below if the one reached by the court was reasonably possible on the material. The appellate court would normally not be justified in interfering with the exercise of discretion under appeal solely on the ground that if it had considered the matter at the trial stage it would have come to a contrary conclusion. If the discretion has been exercised by the Trial Court reasonably and in a judicial manner the fact that the appellate court would have taken a different view may not justify interference with the trial court's exercise of discretion.”

                  The aforementioned settled proposition of law has been followed consistently and reiterated in the case of Purshottam Vishandas Raheja & another Vs. ShrichandVishandas Raheja and Ors2.

14. In the instant case, when we test the order passed by the learned Single Judge, dismissing the application for grant of interim relief, on the law laid down in the aforementioned judgments, we cannot persuade ourselves to hold that the exercise of discretion was in any manner arbitrary, capricious or the view expressed was perverse. It is also not a case where the learned Single Judge had ignored any settled principle of law before rejecting the prayer for grant of interim relief.

15. In our opinion, the judgment and order impugned, requires no interference and the Writ Appeals are found to be without any merit and are accordingly dismissed.

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