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2022 Supreme(Mad) 1581

IN THE HIGH COURT OF JUDICATURE AT MADRAS
ANITA SUMANTH, J.
M/s. XO Footwear Pvt.Ltd., Rep by its Director, New Delhi - Appellant
Versus
The Managing Director & Tender Inviting Authority, Tamil Nadu Text Book & Educational Services Corporation, Chennai - Respondent
W.P. No. 9046 of 2022 & W.M.P. No. 8845 of 2022
Decided On : 21-04-2022

Advocates appeared:
For the Petitioner:SatishParasaran, Senior Counsel, D. Jitender Mehta, Advocate. For the Respondent:J. Ravindran, Additional Advocate General assisted by D. Ravichander, Special Government Pleade, S. Varsha, Advocate.

The consequence of blacklisting cannot be indefinite, and there must be transparency in the tender process while maintaining confidentiality.

Headnote:

Writ Petition - Tender Evaluation - Tamil Nadu Transparency in Tenders Act, 1998, Rule 27 - The court found that the petitioner's debarment had expired and was stayed by the Supreme Court, and the respondent failed to consider the petitioner's explanation, violating principles of natural justice. The court directed the bid to proceed, subject to the result of the Writ Petition.

Fact of the Case:

The petitioner, a company based in New Delhi, submitted a bid for a tender to supply socks to school children in Tamil Nadu. The respondent issued a show cause notice based on the petitioner's prior debarment, which had expired and was stayed by the Supreme Court. The respondent failed to deliberate on the petitioner's response, leading to the Writ Petition.

Finding of the Court:

The court found that the respondent violated principles of natural justice by not considering the petitioner's explanation and directed the bid to proceed, subject to the result of the Writ Petition.

Issues: The issues raised were whether the entity once debarred/blacklisted is to be punished indefinitely and the level of transparency required in the tender process.

Ratio Decidendi: The court held that the consequence of blacklisting cannot be for all times and that the tender documents must provide clarity on blacklisting/debarment. It also emphasized the need for transparency in the tender process while balancing confidentiality.

Final Decision: The Writ Petition was disposed in favor of the petitioner, and the tender process was directed to continue in accordance with the law and tender conditions.

JUDGMENT

(Prayer: Writ Petition filed under Article 226 of the Constitution of India, to issue aWrit of Mandamus, directing the respondent to consider the petitioner as qualified in the technical bid and further direct them to open and consider the financial bid of the petitioner in the Tender REF.RC.NO.10454/PUR-1/2021.)

1. The petitioner is a company based in New Delhi that claims to be engaged in the manufacture and supply of shoes, socks and bags. It claims to have been awarded and successfully executed several contracts, both with the Government as well as with private entities.

2. The petitioner responded to Notification dated 20.12.2021 issued by the Tamil Nadu Text Book and Educational Services Corporation (respondent/Corporation) inviting applications for the supply of 71.30 lakhs pair of socks for school going children studying in Government and aided schools of Tamil Nadu on Annual Rate Contract basis for the academic year 2022-2023. The petitioner submitted its bid on 28.01.2022 believing itself to be in compliance of all required parameters.

3. The petitioner has received a communication dated 01.03.2022 from the respondent stating that from the available records of the Jharkhand High Court, it was noticed that the petitioner had been debarred/blacklisted by the Jharkhand Education Project Council and the debarment has been confirmed by the Hon’ble Court in L.P.A.No.186 of 2020 and S.L.P.(c) No.015791-/2020 before the Hon’ble Supreme Court of India.

4. The views of the petitioner in regard to the aforesaid observations along with its explanation enclosing relevant documents were directed to be provided within a period of four days from date of receipt of the letter, failing which, the authority stated that he would assume that the observations were true and would proceed accordingly.

5. On 03.03.2022, the petitioner responded to the communication pointing out that the contents of the letter were not correct. They conceded that there had, no doubt, been a debarment order passed by the Jharkhand Education Project Council on 18.09.2019. The term of debarment was one year and as such, the debarment had expired on 17.09.2020.

6. Notwithstanding such expiry, the debarment had itself been the subject matter of challenge before the Hon’ble Supreme Court, as rightly noted by the authority. However, the statement that the debarment had been confirmed was erroneous, as, on the contrary, a three Judge Bench of the Hon’ble Supreme Court had stayed the debarment, vide its order dated 29.01.2021. The SLP is pending till date. There was no response received after the petitioner filed its reply.

7. The petitioner thus proceeded on the assumption that the reply had been accepted. In such circumstances, it was surprised to find, when the short list of tenderers who had passed the technical evaluation was put up, that it had not made the cut. Bearing in mind the position that as on the date when the short list of tenderers was put up, the only information available with the petitioner that might be held against it was the factum of prior debarment, the present Writ Petition came to be filed challenging the non-selection of the petitioner for the second stage of tender.

8. When the matter came up for admission on 08.04.2022, after hearing the parties, the following order was passed:

Mr.D.Ravichander, learned Special Government Pleader, assisted by Ms.Varsha, accepts notice for the respondents and both learned counsel are in full possession of facts to enable consideration of interim protection as sought for by the petitioner.

2. The petitioner has submitted a bid in response to a tender for the supply and delivery of socks to school children in Tamil Nadu on actual rate basis for the year 2022-2023.

3. The trigger for the present Writ Petition is at the instance of the respondents who had issued show cause notice on 01.03.2022 calling for an explanation as to why the bid not be rejected, since the petitioner had been debarred/black li

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