2021 Supreme(Mad) 3213
IN THE HIGH COURT OF JUDICATURE AT MADRAS
Sanjib Banerjee, Senthilkumar Ramamoorthy, JJ.
M/s. Kumbhat Holographics - Appellant
Versus
The Government of Tamil Nadu rep. by its Secretary Prohibition and Excise Department and ors. – Respondents
W.A.Nos.848 and 854 of 2021
Decided On : 29-04-2021
Advocate Appeared:
For the Appellant : Mr.R.Sandeep Bagmar
For the Respondent:Mr.P.H.Arvind Pandian Additional Advocate-General assisted by Mr.V.Jayaprakash Narayanan State Government Pleader , Mr.P.Wilson, Senior Counsel for M/s.M.Vasanthakumar , Mr.V.Prakash Senior Counsel for M/s.Abitha Banu
Headnote:
Constitution of India - Article 12 and 226 - Micro, Small and Medium Enterprises Development Act, 2006 - Limited Liability Partnership Act, 2008 – Transparency in Tenders (Public-Private Partnership Procurement) Rules 2012 - Rule 15 - Tamil Nadu Transparency in Tenders Rules, 2000 - Tamil Nadu Transparency in Tenders Act, 1998 - Tender - Whether such technical specifications were framed so as to eliminate other bidders is a distinct matter - Whether Technical Specification Committee deviated from and violated aforesaid mandate of framing technical specifications generically - Tender documents for production and supply of polyester based hologram excise labels on turnkey basis - Appellants question rationale for State to require only companies to participate in tender process and exclude other business entities. The appellants maintain that there is no nexus with object of tender to limit bidders to only registered companies. The more robust challenge is on ground that technical specifications and conditions laid down in initial tender terms left no manner of doubt that it was fourth respondent's patented technology that was being sought - Held, When viewed holistically, warrant interference with tendering process in public interest - Technical specifications were not framed in conformity with Government's mandate and eventually this resulted in participation of only two eligible bidders, whose nexus cannot be disregarded. This undermined and, indeed, vitiated tendering process - It is critical to ensure that least disruption is occasioned by cancellation of impugned tender. To that end, Uflex shall continue to perform its obligations for a further period of four months from date on same terms and conditions. During such period, State shall either float a fresh tender with technical specifications that are generic so as to ensure that there is wider participation or, if State is of view that these technical specifications are at heart of tender, opt for a single source procurement, albeit by adhering strictly to the requirements of the Tenders Act in such regard – Writ Appeal allowed.
JUDGMENT :
Senthilkumar Ramamoorthy, J.
Two of the six writ petitioners, who had approached this Court under Article 226 of the Constitution to complain of the unfair tender terms presented by the State, assail the common order dated February 10, 2021 dismissing the writ petitions.
2. At the outset, it must be observed that matters of the present kind must be treated with great circumspection, since the real fight is between the private parties to obtain a lucrative contract and the status of the employer is used as an excuse to approach the extraordinary jurisdiction under Article 226 of the Constitution. Further, the Court may not have the expertise to go into complex matters such as technical specifications. Equally, notwithstanding the employer being a State or other authority answering to the description under Article 12 of the Constitution, there is an element of latitude which has to be allowed for an employer to choose the product that would be best suited to it. The benefit of the doubt has always to be given to the employer in most cases and there is a presumption that the process adopted is fair and reasonable. However, such presumption is rebuttable.
3. It needs also to be acknowledged that, more often than not, the commercial entities approaching the Court seek to write down the very rules of the game that they aspire to participate in. But what is of paramount importance is the nature of the work that is required to be undertaken by the employer and how the employer may be best served. All the dramatis personae herein are armed with authoritative judicial pronouncements on the principles that they perceive are applicable, quite often endeavouring to twist a principle out of context and make it fit a situation not suited to it. Concepts that would apply to contracts and dicta that would hold good for tender matters are sought to be used interchangeably in a free-for-all where only the ends justify the means.
4. The challenge in the writ petitions was to certain terms contained in the tender documents for production and supply of polyester based hologram excise labels on turnkey basis. The appellant in W.A.No.848 of 2021 is a partnership firm which claims to have been in business from the year 2000. The appellant in W.A.No.854 of 2021 is a limited liability partnership registered under the Limited Liability Partnership Act, 2008. This appellant carried on business as a company between 1991 and 2018 and the company was converted into a limited liability partnership in August, 2018. The appellant in the second of the appeals is also registered under the Micro, Small and Medium Enterprises Development Act, 2006 (the MSMED Act) in the State of Uttar Pradesh.
5. The substance of the challenge in the writ petitions was to the tender terms announced by the State for stickers to be pasted across the caps of the bottles of liquor sold by the State Government through one of its instrumentalities, the Tamil Nadu State Marketing Corporation Ltd, popularly known as Tasmac. According to these appellants, the technical specifications and tender conditions were such that they were tailor-made to the patented technology, of which the fourth respondent and fifth respondents are licensees, and the tender process was a mere charade for a single vendor contract to be awarded to the fourth respondent. It is also the common case of the appellants that respondents 4 and 5, the only two bidders who qualified on all counts as per the tender specifications and conditions, are related parties, in the sense that there is substantial connection between the two entities for their source of the technology to be used for the purpose of the production and supply covered by the tender notice to be regarded as the same.
6. The appellants question the rationale for the State to require only companies to participate in the tender process and exclude other business entities. The appellants maintain that there is no nexus with the object of the tender to limit