The main legal point established in the judgment is that the Tamil Nadu Transparency in Tenders Act, 1998 (TTIT Act) was enacted to prevent executive interferences and provide transparency in tender decision making. The court emphasized the limitations of the government as the appellate authority in resolving disputes between tenderers and tender floating authorities.

1. Heard both sides. Original Application No.658 of 2008 is filed by the plaintiff, seeking for grant of an interim injunction, restraining the first defendant from in any way imposing a treat of invoking bank guarantee and forfeiting the earnest money deposit through the second defendant or recommending the applicant/plaintiff to be blacklisted to the Government and its agencies or in any other manner.

2. The plaintiff filed a suit for the relief of declaration that the letter, dated 4. 2008 sent by the first respondent/defendant does not create any legal relationship between the plaintiff and the first defendant by way of any concluded contract as per the tender submitted by the plaintiff. When the matter came up on 16. 2008, this Court granted an interim injunction from invoking the bank guarantee for a period of 10 days. On 112. 2008, this Court continued the interim order. Subsequently, this Court, once again on 30.03.2009 directed the plaintiff to keep alive the bank guarantee for another three months from the date of the order.

3. When the interim order was in force, the first defendant filed A.No.3059 of 2008 under Order 7 Rule 11 (d) of CPC for rejecting the plaint. According to the applicant/defendant, the suit is barred by Section 19 of the Tamil Nadu Transparency in Tenders Act, 1998 (for short TTIT Act). Therefore, these two applications were taken up together for disposal.

4. At this stage, it is not necessary to go into details of the controversies raised by both parties. It is suffice to state that the plaintiff was one of the bidders in the international tender floated on behalf of the first defendant. The project cost was fixed at Rs.140 crores and the EMD was fixed at Rs.1.40 crores. After the offer was given by the plaintiff, no concluded contract emerged. While the plaintiff wanted escalation of cost, the defendant did not agree for the same. Even after an award was made for executing the contract by the defendant, the plaintiff did not execute the contract. It was at this stage, the defendant threatened the plaintiff that if they did not sign the agreement, the EMD amount will be forfeited and the name of the plaintiff Company will be recommended for blacklisting by the Government. Aggrieved by this communication, the plaintiff filed the suit and the O.A.

5. The contention of the defendant was that the suit itself was not maintainable in view of the statutory prohibition contained under Section 19 of TTIT Act, 1998 and therefore, the bar of jurisdiction was raised to reject the plaint in terms of Order VII Rule 11 (d). Since the issue raised went in to the root of the matter, this application was taken first for hearing.

6. Mr. G. Masilamani, learned Advocate General, appearing for the defendant Company, submitted that the defendant Company is a Government Company incorporated pursuant to the Government’s Order in G.O.Ms.No.49, Industries Department, dated 22. 2007. The share holdings of the company is as follows:

Tidel Park Coimbatore Ltd.

Equity of M/s. Tidel Park Coimbatore Ltd. Rs.45 Crores and it subscribed by TIDCO, ELCOT, TIDEL & STPI as given below; Equity Percentage Amount ELCOT 50.00% Rs.22.50 Crores TIDCO 40.00% Rs.18.00 Crores TIDEL 5.00% Rs.2.25 Crores STPI 5.00% Rs.2.25 Crores Total Equity 100.00% Rs.45.00 Crores

7. It is also claimed that it is a Government Company in terms of Section 617 of the Companies Act 1956. The definition of the Government Company under Section 617 is as follows:

“617. Definition of “Government Company”.- For the purpose of (this Act) Government Company means any company in which not less than fifty-one per cent of the (Paid-up share capital) is held by the Central Government, or by any State Government or Government, or partly by the Central Government and partly by one or more State Governments [and includes a company which is a subsidiary of a Government company as thus defined.

According to the learned Advocate General, the said Government Compa