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2025 Supreme(Mad) 3730
BEFORE THE MADURAI BENCH OF MADRAS HIGH COURT
L. Victoria Gowri, J.
M/s. Coresonant Systems Pvt. Ltd. - Petitioner
Versus
V.O. Chidambaranar Port Trust, Represented by its Chairman and ors. – Respondents
W.P.(MD)Nos.23924 and 25856 of 2024 and W.M.P.(MD) Nos.20265, 20267, 20268, 21944, 21946 and 21947 of 2024
Decided On : 18-02-2025
Advocate Appeared:
For the Petitioner: Mr.Issac Mohanlal, Senior Counsel, For Mr.A.Joseph Jerry
For the Respondent: Mr.B.Saravanan, Senior Counsel, For Mr.A.Arivu Chandran
A party cannot be disqualified from participating in a tender due to unresolved disputes regarding past dues, necessitating adherence to principles of natural justice and dispute resolution guidelines.
Headnote:(A) Tender Regulations - Disqualification of bidders based on outstanding dues - Communication invalidated for being arbitrary and against principles of natural justice - Petitioner eligible to participate in tender despite unresolved disputes concerning past dues - Tortious principles - Duty of authorities to provide opportunity for dispute resolution as per guidelines. (Paras 1, 6, 26)
(B) Jurisdiction - Maintenance of proceedings in local courts only - Clause in the tender document mandates specific jurisdiction. (Paras 8, 9)
Facts of the case:
The petitioner, a private company experienced in RFID-based systems, contested disqualification from bidding due to alleged pending dues from a previous contract. The disqualification was based on prior communications claiming outstanding amounts, which were challenged by the petitioner due to unresolved disputes. (Paras 3-6)
Findings of Court:
The authorities failed to consider the unresolved dispute appropriately, concluding that disqualifying the petitioner for a bona fide dispute lacks justification. (Paras 24-26)
Issues: Key questions included the legality of disqualification based on unresolved disputes and the correct procedures for consideration of tenders under the law. (Paras 16, 24)
Ratio Decidendi: The court emphasized that tender bids cannot be rejected based on pending disputes unless the parties have been duly informed and the disputes resolved. A refusal to conciliate should not hinder tender participation. (Paras 22-25)
Result: Writ Petitions allowed; impugned communications quashed.
| Table of Content |
|---|
| 1. writ petition seeks to quash unilateral decisions. (Para 2) |
| 2. background on tender disqualification and prior contract. (Para 3 , 4 , 5) |
| 3. arguments regarding tender disqualification. (Para 6 , 7 , 8) |
| 4. the court observes the intricacies involved in tender processes and previous contract disputes. (Para 9 , 10) |
| 5. conciliation request pending; unresolved disputes. (Para 11 , 12 , 13) |
| 6. unresolved disputes cannot disqualify participation. (Para 16 , 21) |
| 7. key legal considerations on debarment and the necessity for due process in dispute resolution. (Para 17 , 18) |
| 8. tender rejection based on disputes is unjustified. (Para 22 , 23 , 24) |
| 9. statutory duties can't be explained after decision. (Para 25 , 26) |
| 10. writ petitions allowed; previous orders quashed. (Para 27) |
ORDER :
L. Victoria Gowri, J.
The prayer in W.P.(MD)No.23924 of 2024 reads as follows :-
“Writ Petition is filed, for issuance of a Writ of Certiorarified Mandamus, calling for the records relating to the issuance of the impugned communication No.NIT.TRA- COMMORRFID(RFCO)/4/2023-Traffic(e.5003) dated 31.07.2024, issued by the 2nd respondent to quash the same as arbitrary, illegal and unjustified and consequently direct the respondents 1 and 2 to permit the petitioner herein to participate and open the price bid in the tender notification No.TRA-COMMORRFID(RFCO)/4/2023-Traffic(e.5003) dated 12.02.2024.”
2.The prayer in W.P.(MD)No.25856 of 2024 reads as follows :-
“Writ Petition is filed for issuance of a Writ of Certiorarified Mandamus, calling for the records relating to the issuance of the impugned order in TRA-COMMORRFID(RFCO)/4/2023-Traffic (e. 5003) D.470 dated 04.09.2024 and the letter of award in TRA- COMMORRFID(RFCO)/4/2023-Traffic (e.5003) D.565 dated 12.10.2024 issued by the 2nd respondent to quash the same as arbitrary, illegal and unjustified and consequently direct the 1st and 2nd respondents to award tender in favour of the petitioner by opening its price bid submitted in pursuant to the tender notification No.TRA-COMMORRFID(RFCO)/4/2023-Traffic (e.5003) dated 12.02.2024.”
3.The writ petitioner Company is a Private Limited Company, having its registered office at Hyderabad in the State of Telangana. The same is an organization, which possess persons with expert knowledge and multiple years of experience in the business of design, development, use, install, implement and support of RFID based access control systems including comprehensive annual maintenance contracts in 7 ports out of the 13 major ports including the first respondent Port. On 12.06.2024, the respondents issued an e-tender notification through the authorized traffic department, for supply, installation, testing, commissioning, operating, manning and maintenance of RFID based access control system on air basis with necessary hardware and software with all cabling at all entry/exit gates in the Port premises including comprehensive maintenance (inclusive of warranty) for a period of 5 years. Among the various companies which participated in the aforesaid tender, the petitioner Company also submitted their tender bid documents dated 18.03.2024, at 02.11 p.m., before the first and second respondents. During the pendency of the same, the respondents issued tender disqualification letter dated 31.07.2024, by a communication No.NIT: TRA-COMMORRFID(RFCO)/4/2023-Traffic (e.5003). Out of the 5 bidders, 3 including the petitioner Company were not considered for further valuation.
4.In response to the said tender disqualification letter dated 31.07.2024, the petitioner Company submitted an explanation on 02.08.2024, requesting the respondents to permit the petitioner Company to participate in the said tender notification dated 12.02.2024. The petitioner's explanation and request was not considered by the respondents and hence, the Writ Petition in W.P.(MD)No.23924 of 2024, came to be filed, challenging the impugned communication, disqualifying the tender of the petitioner Company and seeking t
