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2009 Supreme(Mad) 1382
IN THE HIGH COURT OF JUDICATURE AT MADRAS
V. Dhanapalan, J.
T.M. Anandha Raj
Versus
District Collector, Inspector of Panchayat, Collectorate Complex, Coimbatore and Others
W.P. No. 2194 of 2005
Decided on : 24th April, 2009.
N. Manokaran, for Petitioner
N. Senthil Kumar, Additional Government Pleader and P.S. Jayakumar, for Respondents
The central legal point established in the judgment is the requirement to follow the prescribed procedure and principles of natural justice, including issuing notice, obtaining explanation, and affording an opportunity of hearing before taking a decision on renewal or removal of a contractor.
Headnote:
Panchayat Act - Renewal of Contractor's Registration - Tamil Nadu Panchayats (Preparation of Plans and Estimates for Works and Mode and Conditions of Contracts) Rules, 1988, Tamil Nadu Transparency in Tenders Act, 1998 - Rule 18, Rule 11, Rule 13(7) - The court discussed the provisions of the Tamil Nadu Panchayats (Preparation of Plans and Estimates for Works and Mode and Conditions of Contracts) Rules, 1988 and the Tamil Nadu Transparency in Tenders Act, 1998. It highlighted the requirement for renewal of contractor registration within a specified time frame, the procedure for removal of a contractor, and the principles of natural justice to be followed in such cases. The court emphasized the need for issuing notice, obtaining explanation, and affording an opportunity of hearing before taking a decision on renewal or removal of a contractor.
Fact of the Case:
The petitioner, a contractor, challenged the non-renewal of his contract period by the panchayat and the subsequent order preventing him from participating in tenders. The petitioner alleged unfair treatment and demanded renewal of his registration.
Finding of the Court:
The court found that the non-renewal and subsequent order preventing the petitioner from participating in tenders were not in conformity with the Rules and principles of natural justice. The court set aside the impugned proceedings and remitted the matter back to the respondents for fresh consideration, emphasizing the need to follow the prescribed procedure and afford a reasonable opportunity of hearing.
Issues: The issues revolved around the non-renewal of the petitioner's registration, unfair treatment by the panchayat, and the subsequent order preventing the petitioner from participating in tenders.
Ratio Decidendi: The court held that the non-renewal and subsequent order were unsustainable in law as they did not adhere to the prescribed procedure and principles of natural justice. It emphasized the need for issuing notice, obtaining explanation, and affording an opportunity of hearing before taking a decision on renewal or removal of a contractor.
Final Decision: The writ petition was allowed, and the impugned proceedings were set aside. The matter was remitted back to the respondents for fresh consideration, with a directive to follow the prescribed procedure and afford a reasonable opportunity of hearing to the parties concerned.
The petitioner has challenged two proceedings dated 24.9.2004 passed by the second and third respondents and the proceedings dated 3.1.2005 passed by the second respondent. In the first proceedings, resolution of the panchayat has been passed, whereby and whereunder, the petitioner's contract period has not been renewed. In the second proceedings, based on the resolution, the Executive Officer has passed an order that as per the Engineering Manual of Urban Local Bodies in Tamil Nadu, the renewal of registration has to be done within three months time otherwise their names from the registration will be removed. Also, the order includes a decision that out of 15 members of the panchayat, 14 members have taken a decision not to renew his contract. Both the above decisions are under challenge and the petitioner is seeking to quash the same.
2. The case of the petitioner is that he is a contractor in Coimbatore District, doing various contract works and there is no remarks from any one at any point of time about his performance. The respondents are the authorities functioning under the provisions of the Tamil Nadu Panchayat Act. The said Act has been enacted to impart certainty continuity and to strengthen the democratic unit of self Government. The various tender and contractual works in the panchayat are being regulated by the Tamil Nadu Panchayats (Preparation of Plans and Estimates for Works and Mode and Conditions of Contracts) Rules, 1988 and also under the provisions of the Tamil Nadu Transparency in Tenders Act, 1998.
3. It is stated that the Tamil Nadu Panchayat Rules, 1988 came into force with effect from 31.12.1998 to provide transparency in the public procurement and to regulate the procedure, while inviting and accepting tenders and matters connected there with. The object of the enactment is to promote healthy competition among the tenderers and to provide fair and equitable opportunity to all the tenderers. According to Rule 18, only tenders from the registered contractors shall be considered but in exceptional cases, the panchayat can deviate from the normal process of inviting tenders subject to the limitation prescribed under Rule 11. In all other cases, the tenders should be invited only from the registered contractors.
4. It is the further case of the petitioner that he being one of the registered contractors in the second respondent panchayat, participated in various tenders for the last two years and obtained tenders. He has completed all the works allotted to him to the satisfaction of the respondents. It is also stated that the third respondent used to demand 2% commission to award contract work and if any contractor refused to pay the said commission, the third respondent will instruct the second respondent not to issue tender schedule to the said contractor.
5. It is submitted by the petitioner that in the above said situation, the petitioner made a representation to the first respondent, who is the Inspector of Panchayats, complaining the activities of respondents 2 and 3 in refusing to issue tender schedule to the petitioner, especially when they are bound to follow the procedure contemplated under the Tamil Nadu Transparency in Tenders Act, 1998. Immediately, the then Collector of Coimbatore District issued instruction to the second respondent to follow the mandate inbuilt in the above said Act and also directed to furnish tender schedule to the petitioner. Thereafter, the petitioner was awarded contract work on various occasions.
6. As there is no provision in the Tamil Nadu Panchayat Act and the Tamil Nadu Panchayat Rules, 1988 compelling the registered contractors to renew their names every year in the list of contractors maintained by the second respondent, the petitioner submitted a representation dated 9.8.2004 for renewal of registration of his name in the list of contractors, to which, the second respondent gave a reply by his proceedings dated 18.8.2004 that the petitioner's request will be pla
