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2024 Supreme(Online)(MAD) 18394
HIGH COURT OF MADRAS
Hon`ble Mr Justice S.M. SUBRAMANIAM
M/S. SHIRDI SAI ELECTRICALS – Appellant
Versus
STATE OF TAMILNADU – Respondent
The court established that all parties involved in a tender process must be afforded the right to a fair hearing prior to the rejection of submissions critical to their participation.
Headnote:
Mandamus - Tender Process - Tamil Nadu Transparency in Tenders Act - Section 11 - The court addressed the right to appeal under the Tamil Nadu Transparency in Tenders Act, emphasizing the necessity for fair hearings and compliance with procedural norms before awarding contracts.
Fact of the Case:
The petitioner sought a writ of mandamus for the first respondent to consider their appeal against an order rejecting a bank guarantee essential for a tender process, which was dismissed due to its invalidity.
Finding of the Court:
The court found merit in the petitioner's argument that they were not given a personal hearing prior to the rejection of their bank guarantee, which was necessary as per the procedural requirements.
Issues: Whether the rejection of the bank guarantee without a personal hearing was valid, and if the appeal process was maintainable under the Tamil Nadu Transparency in Tenders Act.
Ratio Decidendi: The court held that the lack of personal hearing before the rejection of the bank guarantee violated principles of natural justice, thus necessitating a reconsideration of the petitioner's representation.
Final Decision: Mandamus issued to hear and dispose of the petitioner's representation.
O R D E R
The writ of mandamus has been instituted to direct the 1st respondent to consider the Appeal dated 21.03.2024, filed by the petitioner against the order dated 11.03.2024 passed by the 3rd respondent in accordance with Section 11 of the Tamil Nadu Transparency in Tenders Act, 1998.
2. The facts in the present case are similar to those dealt in W.P.Nos.2911, 2912 etc., of 2024 that was disposed on 08.02.2024.
3. The petitioner had participated in a tender for appointment of Advanced Metering Infrastructure (AMI) Service Provider for Smart Prepaid Metering and Smart System Metering for the respondent on DBFOOT basis under Revamped Distribution Sector Scheme under Global Open Tender Two Part System, issued on 18.08.2023.
4. The tender itself had been the subject matter of litigation at the instance of the petitioner, since other prospective bidders challenged the reverse bidding process on which the tender was based. A learned Single Judge of this Court had accepted the submissions holding that reverse bidding process was not an appropriate methodology to be followed.
5. The order of the learned single Judge dated 04.01.2024 was carried in appeal by TANGEDCO and the First Bench of this Court, after hearing the parties, by order dated 31.01.2024, reversed the order of the learned Single Judge and allowed the appeals. As against the order of the Division Bench, Special Leave Petition is pending before the Hon'ble Supreme Court.
6. In the meantime, on 10.10.2023, the petitioner had participated in the bids and submitted the Bank Guarantee having validity of eight months. As per Clause 12.3 of ITB, bid security produced along with the tender application shall be valid for 1 year inclusive of the bid validity period. Admittedly, the petitioner/company inadvertently submitted their bids on 10.10.2023 with bid securities valid for a period of 8 months, instead of 1 year as required under ITB 12.3.
7. The petitioner has immediately filed a representation on
14.11.2023 to the 3rd respondent requesting for an opportunity to be given to the consortium to correct the error and to extend the validity of the Bid Security/Bank Guarantee. The technical bid came to be rejected vide communication dated 16.12.2023 as non-responsive, as the accompanying bank guarantee was not in consonance with the tender conditions. Therefore, the petitioner had filed W.P.No.2524 o 2024 before this Court seeking a direction to the 3rd respondent to consider the representation dated 14.11.2023. This Court vide order dated 05.02.2024 directed the 3rd respondent to consider the representation of the petitioner in accordance with the law and all prevailing rules and regulations prior to the opening of the Financial bid.
8. As per the order of this Court dated 05.02.2024, the petitioner has submitted a representation dated 06.02.2024 along with a copy of the order passed in WP.No.2524 of 2024 and a copy of the extended bank guarantee. However, the 3rd respondent issued an order dated 11.03.2024, rejecting the extended bank guarantee.
9. Aggrieved by the order dated 11.03.2024, the petitioner preferred an appeal dated 21.03.2024 and also has filed the present writ petition seeking a mandamus directing the 1st respondent to dispose of the appeal dated 21.03.2024 filed by the petitioner as against the order dated 11.03.2024 as expeditiously as possible.
10. The first objection raised by Mr.D.R.Arunkumar, who appears for the 2nd and 3rd respondent is that the appeal itself is not maintainable. He points out that Section 11 of the Act provides for an appeal to be filed as against the order of the Tender Accepting Authority. The orders impugned in those statutory appeals are passed by the Tender Inviting Authority and do not constitute final orders.
11. In this regard, he would also draw attention to a judgment of the Hon'ble Supreme Court in the case of National High Speed Rail Corporation Limited v. Montec Arlo Limited and another (2022) 6 SCC 401, particularly paragraphs
