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2020 Supreme(Mad) 88
IN THE HIGH COURT OF JUDICATURE AT MADRAS
C.V. KARTHIKEYAN, J.
M/s. Padmavathi Hospitality & Facilities Management Services, Rep. by its Partner & Authorized Representative Pradeep Kanumuri & Another - Appellant
Versus
The Tamil Nadu Medical Service Corporation (A Government of Tamil Nadu undertaking) Chennai & Others - Respondent
W.P. Nos. 24412 & 27267 of 2019 & W.M.P. Nos. 24145, 33240, 26692 & 26695 of 2019
Decided On : 28-02-2020
For the Petitioner:A.R.L. Sundaresan, Senior Counsel for Nithyaesh, Vaibhav, Jeyash Dolia for M/s. Aiyar, Dolia, Advocates. For the Respondents:R1, S.R. Rajagopalan, AAG. Assisted by R.A.S. Sakthivel, AGP., R. Shivakumar, Suresh, R2, J. Purushothaman, GA., R3 & R6, Santhanaraman, R4, A.L. Somayaji, SC, R5, Mohammed Shafi, Advocates.
The court emphasized the need for restraint and caution in judicial intervention in contractual or commercial matters involving public sector undertakings.
Headnote:
Tender Bidding - Tamil Nadu Medical Service Corporation - Tamil Nadu Transparency in Tenders Act, 1998, Rules 2000 - The court dismissed the writ petitions challenging the acceptance of the financial bid by the 4th respondent in a tender floated by the 1st respondent. The court held that it cannot substitute itself for the Tender Accepting Authority and that the Writ Court cannot venture into a roving examination of the facts or the applicability of certain provisions of law. The court emphasized the need for restraint and caution in judicial intervention in contractual or commercial matters involving public sector undertakings.
Fact of the Case:
The Writ Petitioners challenged the acceptance of the financial bid by the 4th respondent in a tender floated by the 1st respondent. The 1st respondent had floated an open tender for providing housekeeping, bio-medical waste management, security, and pest control services in 94 Government Medical Institutions, divided into five zones. The Writ Petitioners and the 4th respondent quoted their rates for all five zones. The 4th respondent emerged as the successful bidder for Zone 1 to Zone 4, and the Writ Petitioner emerged as the successful bidder for Zone 5.
Finding of the Court:
The court held that it cannot substitute itself for the Tender Accepting Authority and that the Writ Court cannot venture into a roving examination of the facts or the applicability of certain provisions of law. The court emphasized the need for restraint and caution in judicial intervention in contractual or commercial matters involving public sector undertakings.
Issues: The court addressed the challenge to the acceptance of the financial bid by the 4th respondent in a tender floated by the 1st respondent, and the appropriateness of the Writ Petitioners' approach in seeking judicial intervention in contractual or commercial matters involving public sector undertakings.
Ratio Decidendi: The court emphasized the need for restraint and caution in judicial intervention in contractual or commercial matters involving public sector undertakings. The court held that it cannot substitute itself for the Tender Accepting Authority and that the Writ Court cannot venture into a roving examination of the facts or the applicability of certain provisions of law.
Final Decision: The court dismissed the writ petitions challenging the acceptance of the financial bid by the 4th respondent in a tender floated by the 1st respondent. Each of the Writ Petitioners was directed to pay costs of Rs.5,00,000/- to the Chief Justice Relief Fund, High Court of Madras.
Key Points: - The court emphasized restraint and caution in judicial intervention in contractual or commercial matters involving public sector undertakings. (!) (!) - The writ court cannot substitute itself for the Tender Accepting Authority and cannot engage in roving examination of facts or applicability of law in tender matters. (!) (!) - The petitioner’s challenge to the acceptance of the financial bid by the 4th respondent was dismissed; remedy lies in appeal under Section 11 after notification of award. (!) (!) - The Tender process and price negotiation were conducted following the TN Tenders Act and Rules, with appellate rights available within specified timelines. (!) (!) (!) - The Supreme Court/Apex-level guidance on restraint in judicial review of tender processes is cited to support minimal interference. (!) (!) (!) - The judgment directs costs against the petitioners for misuse of the writ petition and from the relief fund. (!) - The tender invited for zone-based bids and the evaluation included GST considerations as per the tender terms. (!) (!) (!) (!) - (!)
What is... How to exercise restraint and caution in judicial intervention in contractual or commercial matters involving public sector undertakings?
What is... How to determine the role of the writ court versus Tender Accepting Authority under the Tamil Nadu Transparency in Tenders Act, 1998?
What is... What are the grounds for challenging tender awards and the appropriate appellate remedies under Sections 10 and 11 of the Tamil Nadu Transparency in Tenders Act, 1998?
JUDGMENT
(Prayer in W.P.No.24412 of 2019:Petition filed under Article 226 of the Constitution of India praying to issue a Writ of Mandamus, to direct the 1st respondent to reject the bid of the 4th respondent and consequently award the contract in Tender No.432/outsourcing/DME/TNMSC/Engg/2019 dated 19.02.2019 to the petitioner herein for all Zones namely, Zone 1-5.
In W.P.No.27267 of 2019:Petition filed under Article 226 of the Constitution of India praying to issue a Writ of Mandamus, directing the 1st respondent to reject the bids of the 3rd and 4th respondents and consequently direct the 1st respondent to award the contract in relating to Tender No.432/outsourcing/DME/TNMSC/Engg/2019 dated 19.02.2019 to the petitioner for Zones I to V.)
Common Order:
W.P.24412 of 2019:
1. Writ Petition filed in the nature of Mandamus to direct the 1st respondent, namely, The Tamil Nadu Medical Service Corporation (A Government of Tamil Nadu undertaking), to reject the bid of the 4th respondent namely, M/s.Krystal Integrated Services Pvt. Ltd., Mumbai, and consequently award the contract in Tender No.432/outsourcing/DME/TNMSC/Engg/2019 dated 19.02.2019 to the petitioner for all the zones namely, zones 1 to 5.
W.P.No.27267 of 2019:
2. Writ Petition filed in the nature of Mandamus, to direct the 1st respondent namely, the Tamil Nadu Medical Service Corporation Ltd., (A Government of Tamil Nadu Undertaking), to reject the bids of the 3rd respondent, M/s.Padmavathi Hospitality and Facilities Management Services, Chennai, (Writ Petitioner in W.P.No.24412 of 2019) and the 4th respondent, M/s.Krystal Integrated Services Pvt. Ltd., Mumbai, consequently, direct the 1st respondent to award the contract relating to Tender No.432/outsourcing/DME/TNMSC/Engg/2019 dated 19.02.2019 to the petitioner for Zones 1 to 5.
Affidavit filed in support of W.P.No.24412 of 2019:
3. In the affidavit filed by the Partner and Authorized representative of the Writ Petitioner, M/s.Padamavathi Hospitality & Facilities Management Services, it had been stated that the 1st respondent, Tamil Nadu Medical Service Corporation Limited had floated a Tender for outsourcing of house keeping and security services vide bid reference No.432/outsourcing/DME/TNMSC/Engg/2019 dated 19.02.2019 for 94 Government hospitals, schools and college for nursing under the control of the Directorate of Medical Education. It was claimed that the tender document stated that the price bids will have to be submitted for five different zones, namely zones 1 to 5.
4. The petitioner offered their bid for all the five zones. The price bids were opened on 04.07.2019. The 4th respondent emerged as successful bidder for Zone 1 to Zone 4. The petitioner emerged as successful bidder for Zone 5. The petitioner claimed that the 4th respondent had submitted his bid without including the Goods and Service Taxes (GST). The 4th respondent had submitted their bid by stating GST as 'zero'. The petitioner gave a representation on 11.07.2019, claiming that the petitioner is the lowest bidder and the 4th respondent had not included tax and duties and consequently must be considered as disqualified. It was claimed that if the 4th respondent was disqualified, the petitioner would emerge successful even in zone 1 to zone 4. The petitioner claimed that the tender document itself, in particular Form F clearly stated that when the bid is submitted, applicable taxes would also have to be included. It was stated that though 6 bidders had participated, only the 4th respondent had submitted their bid without including GST. The 1st respondent had issued a communication to the petitioner dated 14.08.2019, whereby they informed that the 4th respondent had been called for negotiation and the 4th respondent had revised their price for Zone 1 to Zone 4 by submitting revised bid with GST as 0 %'. The 4th respondent claimed that the 4th respondent had justified non-inclusion of GST placing reliance on Government of India Notification in GST No.12 o
