Controller General of patents ‘caught in’ computer scam

A committee set up by Union Commerce and Industry Ministry has indicted Professor Dr Unnat P Pandit, Controller General of Patents, Designs and Trade Marks (CGPDTM), for alleged “administrative lapses” in the purchase of 1,200 ‘all-in-one’ personal computers for offices spread across the country at an inflated cost of ₹9,99,75,600.

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Despite the indictment, Dr Pandit continues to be the Controller General of Patents, Designs and Trade Marks supervising the working of, among others, the Patents Act, 1970, the Designs Act, 2000 and the Trade Marks Act, 1999 and rendering advice to the Government on all matters relating to these subjects.

All efforts to get a response from Dr Pandit with regard to his indictment and the inquiry that led to it proved futile as he did not respond to businessline’s e-mails, Whatsapp messages and phone calls to him as well his Mumbai office.

The deal

The deal for which the Controller General has been indicted came under the scanner after Dr Pandit gave a go ahead to a tender with single effective bid in July last year, and without taking the consent of Union Commerce and Industry Minister Piyush Goyal as rules prescribe.

The office of CGPDTM purchased the computers from Minitek Systems India Private Ltd through a work order of July 7, 2023, rejecting seven of eight vendors. The seven vendors were rejected on grounds such as “non-submission of EMD (earnest money deposit)“, “non submission of undertaking” to create a single bid situation during tendering through the Government e-Marketplace (GeM) -- the government procurement portal, information accessed by businessline revealed.

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This led the Commerce Minister to convene a meeting in January, this year, to review the major capital expenditures of the Mumbai-based office of Dr Unnat. The Controller General is the administrative head of the government entity on Intellectual Property Right (IPRS), and performs statutory functions under the Patents Act, 1970, the Designs Act, 2000, the Trade Marks Act, 1999, Copy Rights Act and Geographical Indications Act.

The Minister-chaired committee directed to refer this matter to GeM alongwith all relevant documents for proper scrutiny which eventually unravelled the large-scale irregularities in the computer purchase.

GeM, in its report submitted to the Ministry on January 19, 2024, flagged serious violations of various government procurement processes that prompted the Secretary, Department For Promotion of Industry and Internal Trade (DPIIT), to constitute a three member committee headed by Chief Controller of Accounts Rajesh Kumar, Director of Intellectual Property Right (IPR) Dr Kajal and Senior Technical Director Anil Awasthi to probe the contract.

“There were administrative lapses on the part of the CG (Controller General). There is a blatant violation of the GFR Rules, 2017, as well as the Delegation of Financial Powers by the CG, as he did not obtain the approval of competent authority, Commerce and Industry Minister, before placing the instant order,” the three-member panel concluded in its three-page report of March 5, this year. It requested the Ministry for “further necessary action”.

On March 29, the IPR section of DPIIT issued a show-cause notice to Dr Pandit seeking an explanation in writing over “why disciplinary action should not be initiated against you for violation of delegated financial powers and the provisions contained in the GFR, 2017”.

Dr Pandit has responded to the charges made out against him, sources in the Ministry said. However, the response was prima facie not satisfactory but a decision on action against Pandit and bid evaluation committee members is yet to be taken, Ministry sources added.

Referring to Rule 21(b) of the Delegation of Financial Power Rules (DFPR, 1978), which says any procurement related to negotiated or single tender above ₹5 crore should be done with the approval of the Minister-in-charge, the panel said the tender was floated by the office of Pandit “without the approval of the competent authority”.

The report relied on Rule 173 (xxi) of the GFR, which says a limited or open tender resulting in only one effective offer shall be treated as a single tender contract. “As the instant tender resulted in a single bid, the technical evaluation committee referred the matter for directions to the CG, who approved the technical bid and allowed them to open the financial bid,” the fact finding committee charged.

Not just that, the committee said “the tendering process is vitiated as there are instances of collusion between two bidders, rejection of bidders due to non-submission of EMD (which was exemptable) and undertaking, non-discovery of reasonable price, etc..”

For the 1,200 desktop computers, Minitek Systems India Pvt Ltd quoted ₹83,313 per PC with 5-year onsite warranty. “No efforts were made for any market research. Further, the chairman of the bid evaluation committee of the O/o CGPDTM failed to explain the rationale behind the fixing the estimated price of 1,200 PCs at ₹10.80 cr,” the panel alleged.

However, chairman of the bid evaluation committee told the inquiry committee that they discovered the prices through the GeM portal where cost of each computer was showing an average of ₹1,11,000 at that time.

“..The committee feels that had the price discovery been done through market research as well and a fair chance was given to vendors who were disqualified, these computers might have been obtained at a lower price,” the three-member panel observed.

The panel recommended to GeM through a letter dated February 6, 2024, that Arihant Enterprise and Jintech Solution Ltd should be blacklisted for further bidding for having Parasmal Prem Chand Jain as the common Director in both the companies which indicated “cartel formation”. Both the companies from Ahemdabad also used a common IP address for bid submission, the panel noted.