Judicial Analysis Court Copy Headnote Facts Arguments Court observation

2012 Supreme(Mad) 2221

High Court of Judicature at Madras
K. CHANDRU
WIPRO GE Medical Systems Pvt. Ltd., represented by The Business Manager Tamil Nadu, Ganesh
Versus
Tamil Nadu Medical Services Corporation Ltd., Represented by its Managing Director & Others
W.P.No.8617 of 2007 & M.P.Nos.1 and 3 of 2007
Decided on: 05-06-2012

Advocates Appeared:
For the Petitioner:R. Senthilkumar, Advocate.
For the Respondents:R1 & R2 - K. Balamurali for M/s. Shivakumar and Suresh, R3 -M. Dig Vijaya Pandian, AGP, R4 - P. John for M/s. T.S. Gopalan and Co., Advocates.

The main legal point established in the judgment is that the blacklisting of a tenderer must adhere to the principles of natural justice, and the absence of specific clauses in tender documents prohibiting complaints to higher authorities may impact the validity of blacklisting decisions.

Headnote:
Blacklisting - Tender Process - Tamil Nadu Transparency in Tender Act, 1998 - Section 13, Section 14 - The judgment discusses the blacklisting of a petitioner company from future tenders by the first respondent. The court examines the legality of the blacklisting and the principles of natural justice. It also considers the petitioner's complaint to the Minister for Health and Family Welfare and its impact on the blacklisting decision.
Fact of the Case:

The petitioner company challenged a Show Cause Notice and a final order issued by the first respondent, which blacklisted the petitioner from future tenders. The petitioner was a bidder in a tender for the supply of medical equipment to Government Medical College Hospitals in Tamil Nadu. The petitioner's complaint to the Health Minister about the successful bidder's outdated product led to the Show Cause Notice and subsequent blacklisting.
Finding of the Court:

The court found that the blacklisting of the petitioner company was not legally justified. It held that the first respondent's actions showed undue haste and hypersensitivity. The court also emphasized the petitioner's right to complain to the Minister for Health and Family Welfare and the absence of a clause in the tender documents prohibiting such complaints.
Issues: The main issue was whether the blacklisting of the petitioner company in future tenders by the first respondent was legally justified. The court also considered the principles of natural justice and the impact of the petitioner's complaint to the Health Minister on the blacklisting decision.
Ratio Decidendi: The court held that the blacklisting was not valid as there was no inherent power in the first respondent to blacklist the petitioner for reasons not specified in the tender document. It also emphasized the petitioner's right to complain to the Minister for Health and Family Welfare and the government's power to seek information and records related to tender processes.
Final Decision: The court set aside the Show Cause Notice and the final order issued by the first respondent, thereby allowing the writ petition. No costs were awarded, and the connected miscellaneous petitions were closed.

Judgment

1. The petitioner company has filed the present writ petition, seeking to challenge a Show Cause Notice dated 20.02.2007 and the final order dated 02.03.2007 issued by the first respondent Tamil Nadu Medical Services Corporation Limited.

2. By the impugned final order, the petitioner was informed as follows:-

"(i) The Earnest Money Deposit furnished by you in this case stands forfeited to TNMSC, Chennai and

(ii) You are blacklisted as a tenderer not only in the ongoing tender process of the present tender

(iii) but also in all future tenders by TNMSC."

3. The writ petition was admitted on 07.03.2007. An interim stay was granted in so far as blacklisting the petitioner for future tenders in the first respondent company. The other issues were left open for adjudication after counter affidavit was filed by the respondent. An interim injunction was also granted for a period of two weeks restraining the respondent from in any manner invoking or encashing the bank guarantee. Subsequently M/s.Siemens Ltd., Medical Solutions was also impleaded as 4th respondent in the writ petition.

4. In this case, parties have strictly confined themselves in so far as petitioner company was blacklisted from participating in future tenders having regard to the finalisation of tender had been concluded and that the 4th respondent was a successful tenderer.

5. It is seen from the records that the petitioner company is engaged in the business of designing, sourcing and manufacturing complete range of diagnostic imaging systems such as Surgical C-arms, MR Subsystems and Coils, Generators, MR and Nuclear Positioners. It is also claimed that the petitioner is a Joint Venture Company floated by M/s.Wipro Limited and M/s.GE Healthcare. It was stated that the first respondent is a Government owned undertaking and the second respondent is the Managing Director and Tender Accepting Authority of the first respondent. The third respondent is the Health Secretary to the Government of Tami Nadu. It is also claimed that no relief is claimed against the third respondent and they was made a proforma party.

6. The first respondent floated an open tender on 04.10.2006 for supply, installation and commissioning of magnetic resonance imaging equipment with accessories to Government Medical College Hospitals in the State of Tamil Nadu. The invitation for bid was published in the Economic Times newspaper dated 11.10.2006. The petitioner was one of the bidders in the tender floated by the first respondent and they submitted their bid documents on 09.11.2006. Apart from the petitioner, 4th respondent as well as one M/s.Philips India Limited were two other bidders. The bid was to be submitted in two covers namely Techno Commercial Bid (Cover -I) and the Price Bid (Cover II). As per the tender conditions, only bidders who have qualified in the Techno Commercial Bid were to be considered for the Price Bid opening. The Technco Commercial Bid under Cover-I of all the three bidders above named were opened by the Tender Opening Authority in the presence of the representatives of the said three bidders. It was found that the bid submitted by the petitioner and the 4th respondent alone were Techno Commercially responsive and the bid submitted by Philips India Limited was found to be not meeting the requirements. Accordingly, Philips India Limited was eliminated from the tender process leaving only the petitioner and the 4th respondent in the fray. It was thereafter bids submitted by the petitioner and the 4th respondent were referred to the Tender Evaluating Authority of the first respondent, also consisting of two members. The said Tender Evaluating Authority cleared the bids of the petitioner as well as the 4th respondent.

7. It was the stand of the petitioner that the 4th respondent quoted an outdated MRI Scanner without the feature of TIM (Total Imaging Matrix). It was the claim of the petitioner company that the product offered by them are more superior than the 4th

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