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2023 Supreme(Mad) 1392

IN THE HIGH COURT OF JUDICATURE AT MADRAS
M. DHANDAPANI, J.
Quality Property Management Service Private Limited, rep. by its Director Chinta Bharath Chennai – Appellant
Versus
Tamil Nadu Textbook & Educational Services Corporation Chennai & Another – Respondents
W.P. NO. 7276 OF 2023 & W.M.P. NOS. 7326 & 7327 OF 2023
Decided On : 16-03-2023

Advocates appeared:
For the Petitioner:Murali Kumaran, SC, M/s. McGan Law Firm Advocate. For the Respondents: J. Ravindran, AAG Assisted by Varsha, Std., Counsel.

The main legal point established in the judgment is the limitation of judicial review in tender matters, the need for commercial prudence in evaluating tenders, and the importance of fairness and non-arbitrariness in the tender process.

Headnote:

Tender Eligibility Criteria - Facility Management Service - Tamil Nadu Transparency in Tenders Act, 1998 - Criteria III (3), (4) and (5) - The court discussed the eligibility criteria fixed by the respondents in the tender document, the impact on MSMEs, and the principles of fairness and non-arbitrariness under Article 14 of the Constitution. The court emphasized the limitations of judicial review in tender matters and the need for commercial prudence in evaluating tenders. It held that the eligibility criteria were formulated by the Tender Inviting Authority (TIA) based on the requirements and enormity of the tender, and therefore, should not be subject to judicial review unless actuated by fraud and malice. The court dismissed the petition, stating that the petitioner's apprehension and mere allegations of discrimination were not sufficient to quash the tender document.

Fact of the Case:

The petitioner challenged the eligibility criteria fixed by the respondents in the tender document for facility management service, alleging violation of Article 14, 19 (1) (g), and the Tamil Nadu Transparency in Tenders Act, 1998. The petitioner contended that the eligibility conditions favored large corporations and excluded MSMEs, creating discrimination.

Finding of the Court:

The court found that the eligibility criteria were formulated by the TIA based on the requirements and enormity of the tender, and therefore, should not be subject to judicial review unless actuated by fraud and malice. It dismissed the petition, stating that the petitioner's apprehension and mere allegations of discrimination were not sufficient to quash the tender document.

Issues: The issues involved the legality and fairness of the eligibility criteria in the tender document, the impact on MSMEs, and the principles of non-arbitrariness and fairness under Article 14 of the Constitution.

Ratio Decidendi: The court emphasized the limitations of judicial review in tender matters, the need for commercial prudence in evaluating tenders, and the importance of fairness and non-arbitrariness in the tender process. It held that the eligibility criteria were within the realm of the TIA and should not be subject to judicial scrutiny unless actuated by fraud and malice.

Final Decision: The court dismissed the petition challenging the eligibility criteria in the tender document, stating that the petitioner's apprehension and mere allegations of discrimination were not sufficient to quash the tender document.

JUDGMENT

(Prayer: Writ Petition filed under Article 226 of the Constitution of India praying this Court to issue a writ of certiorari calling for the records pertaining to the impugned notice issued by the 1st respondent dated 27.02.2023 in Tender Ref. RC No.613/PUR-1/2023 insofar as it relates to Criteria III (3), (4) and (5) and quash the same.)

1. Challenging the eligibility criteria fixed by the respondents in the tender document calling for tender relating to facility management service, the present petition has been filed, alleging that the fixation of eligibility criteria is in violation of Article 14, 19 (1) (g) and is violative of the Tamil Nadu Transparency in Tenders Act, 1998.

2. It is the averment of the petitioner that the petitioner company is in the field of facility management service and is a company of repute, being awarded with contract for the upkeep and maintenance of 54 Government Hospitals and also the Integrated Hospital Facility Management Services at Osmania General Hospital.

3. It is the further averment of the petitioner that the 1st respondent invited tender for House Keeping, Sanitation and Security Services for the Government Schools. However, the conditions of eligibility prescribed in the tender document are of such a nature that it reveals that the tender conditions have not been prepared by the 1st respondent but by some other entity and that it is a reproduction of the tender floated by the Delhi Government.

4. It is the further averment of the petitioner that the eligibility conditions prescribed in the tender document, more particularly Criteria No. III (3), (4) and (5) does not create a level playing field, thereby the participation of MSME’s are curtailed, as the conditions imposed are not only onerous, which are incapable of being fulfilled, more so, the period during which fulfillment is sought is during the pandemic period. It is the further averment of the petitioner that the bidding is intended only for big stakeholders in deprivation of MSME’s in view of imposing restrictive eligibility conditions, which creates discrimination.

5. It is the further averment of the petitioner that the impugned tender conditions are devoid of crucial details and further the eligibility conditions have absolutely no nexus with the objective sought to be achieved. It is the further averment of the petitioner that the eligibility conditions imposed are not only arbitrary but is offending the mandate of Article 14 of the Constitution. It is the further averment of the petitioner that though the prebid queries were directed to be raised four days before the pre-bid meeting on 4.3.2023, the notification itself was published only on 27.2.2023, which gives only four days time to the intending participant in which time it is a practical impossibility for the intending participant to visit 6000 schools all over Tamil Nadu, which clearly reflect the pre-determined mind of the tender inviting authority.

6. It is the further averment of the petitioner that the petitioner had successfully submitted his tender document on 4.3.2023. However, in view of the above fallacies in the tender document and the mala fide nature of the same, the present writ petition has been filed challenging the eligibility imposed in the tender conditions.

7. Learned senior counsel appearing for the petitioner submits that the impugned tender conditions stipulated by the respondents is patently illegal, arbitrary, untenable and beyond the statute, which severely jeopardizes the rights of the petitioner. The tender conditions stipulated by the respondents are without any basis and without adhering to the principles of natural justice, which affects the rights of the petitioner.

8. It is the further submission of the learned senior counsel that MSME’s are thoroughly sought to be excluded from the purview of this tender through the aforesaid conditions stipulated in the eligibility criteria at Criteria No.III (3), (4) and (5). It is the further submi

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