The petitioner challenged a State Government order rejecting his appeal against a tender award. The Court noted the petitioner was ranked low and had a higher bid, finding no legal infirmity in the appeal rejection or violation of the Act or Rules.
Writ petition dismissed; connected miscellaneous petition closed without costs.
This page shows the compact analysis of this judgement. The full analysis — procedural history, issue-by-issue holdings with ratio and obiter, advocates, and paragraph-level evidence for every claim — is being added to the record in batches and will appear here when this judgement has been through it.
IN THE HIGH COURT OF JUDICATURE AT MADRAS
DATED : 08.02.2013
CORAM
THE HONOURABLE MR.JUSTICE K.CHANDRU
W.P.No.28295 of 2012
and M.P.No.1 of 2012
P.Jaganathan, S/o.R.Palaniswamy, Proprietor, Sri Veni Industries, 110, Murugan Nagar, Peelamedu, Coimbatore-641 004. .. Petitioner
Vs.
1.The Secretary, Government of Tamil Nadu, Food and Consumer Protection Department, Fort St. George, Chennai-600 009.
6.Mantra Grinders, rep by its Proprietor, SF No.249/1A(1) Kadathur, Kattampaty Village, Coimbatore-641 107.
7.Lakshmi Engineering Products, rep by its Proprietor, No.31,Puliakullam Main Road, Opposite Dhamu Nagar, Coimbatore-641 045.
8.DRS Home Appliances, rep by its Proprietor, 155-A DPF Street, Pappanaickampalayam, Coimbatore-641 037.
9.Ponmani Industries, rep by its Proprietor, No.5, 1st Cross, Thaneerpandal, Peelamedu, Coimbatore-641 004.
10.Vijayalakshmi Marketing, rep by its Proprietor, No.90,VK Road,
Peelamedu, Coimbatore-641 004. .. Respondents
This writ petition is preferred under Article 226 of the Constitution of India praying for the issue of a writ of certiorarified mandamus to call for the records relating to the order passed by the first respondent dated 10.10.2012 in G.O.(2D) No.94 and quash the same and to further direct the 1st respondent to disqualify the 3rd respondent and pass appropriate orders amongst the other tenderers.
For Petitioner : Mr.Aditya Shivkumar
For Respondents : Mr.P.H.Arvindh Pandian,
Additional Advocate General
asst. by Mr.L.P.Shanmuga Sundaram, Spl.GP for RR1 and 2
Mr.T.V.Ramanujam, SC
for Mr.S.Elambarathi for R-3
Mr.P.Rajkumar Pandian for R-5 Mr.E.Jeeva for R-7 Mr.S.P.Patel for R-8
ORDER
This writ petition came to be posted on being specially ordered by the order of the Hon'ble Acting Chief Justice, dated 18.01.2013.
2.Heard the arguments of Mr.Aditya Shivkumar, learned counsel for the petitioner, Mr.P.H.Arvindh Pandian, learned Additional Advocate General, assisted by Mr.L.P.Shanmuga Sundaram, learned Special Government Pleader for respondents 1 and 2, Mr.T.V.Ramanujam, learned Senior Counsel leading Mr.S.Elambarathi, learned counsel for third respondent, Mr.P.Rajkumar Pandian, learned counsel for 5th respondent, Mr.E.Jeeva, learned counsel for 7th respondent and Mr.S.Patel, learned counsel for the 8th respondent.
3.The petitioner claiming to be the Proprietor of Sri Veni Industries has come forward to challenge an order passed by the State Government in G.O.(2D)No.94, Cooperation, Food and Consumer Protection Department, dated 10.10.2012, wherein and by which the appeal filed by the petitioner under Section 11 of the Tamil Nadu Transparency in Tenders Act, 1998 (for short TTT Act) was rejected.
4.The petitioner had participated in the tender floated by the second respondent, i.e., Tamil Nadu Civil Supplies Corporation, for the purchase of 35 lakhs of table top wet grinders. He became one of the 24 eligible and qualified tenderers. On 15.6.2012, there was a pre-bid meeting that took place at the office of the second respondent. At the pre-bid meeting, one of the question posed to the second respondent was whether the excise duty could be calculated on the MRP of the product. The response to the query by the second respondent was that the tender falls under the "Priceless Wet Grinder Scheme" and once cannot calculate the MRP of this product. The excise duty should be calculated on the basic cost of the product. He also stated that any participant who calculates excise duty on the MRP is liable to be disqualified from the tender process. The tender was opened on 30.8.2012 and all the 24 tenders were opened by the second respondent and prices were disclosed and displayed on projector screens. All the 24 tenderers were asked to reassemble at 4.00 p.m. for an evaluation meeting. But after the prices were displayed on the projector screen, a few of the tenderers felt that something was amiss in relation to the price quoted by L-1 (third respondent). The breakup figure quoted by the third respondent was basic cost Rs.1874.02, excise duty Rs.172.65 and TNVAT Rs.102.33 and total Rs.2149.00. Subsequently, a written representation was given by L-2 to L-24 explaining the mistake in calculation of excise duty by L-1.
5.It was stated that despite bringing to the notice an apparent error before the tender accepting authority, no action was taken. The excise duty as stipulated under the Central Excise Act is 12.36% on basic cost. If the excise duty as stipulated is taken into account, the tender floated by L-1 should have the cost of https://hcservices.ecourts.gov.in/hcservices/ Rs.2210.92. The miscalculation of the excise duty by L-1 during
the tender process was informed. The L-1 was invited for a closed door discussion. Disregarding the procedures prescribed under the TTT Act, the mistake committed by the third respondent was adjusted and the cost of the product was worked out to Rs.2046.00. The entire process was vitiated and violative of Rule 23 of the Tamil Nadu Transparency in Tenders Rules, 2000 (for short TTT Rules). It clearly shows that after opening the price bid, the second and third respondents have altered and modified the quotation. The rejected persons like the petitioner were not given reason for rejection, thereby contravening Section 10(7) of the TTT Act. The petitioner earlier filed W.P.No.26376 of 2012 seeking for restraining the second respondent from releasing the purchase order consequent to his order dated 17.9.2012. But, notwithstanding the same, since an appeal is provided under Section 11, the petitioner has moved the State Government along with the stay application. After hearing the same, the impugned order came to be passed. Therefore, it is contended that the action of the second respondent in awarding the contract to the third respondent is arbitrary and even applying Rule 29(2)(f), there is only selective application.
6.Per contra, in the counter affidavit filed by the second respondent, it was stated that the price bid Part-II cover was opened on 30.08.2012 in the presence of the 24 qualified tenders and the members of the tender scrutiny committee. The offer prices were evaluated in accordance with the provisions of the Act and Rules. The third respondent Butterfly Gandhimathi Appliances was the L-1 bidder, who offered 35 lakhs pieces of Table top wet grinder (entire proposed quantity) and quoted his offer price of Rs.2046.67. Therefore, they were called for negotiation on the same day on 30.8.2012. Finally, they reduced the rate and agreed to supply at the rate of Rs.2040/-. However, they were allowed only 60% of the tendered quantity, i.e., to the tune of 21 lakhs pieces in terms of Rule 31(4) of the TTT Rules taking into consideration that the purchase was vital in nature and failure to supply will affect the public interest. To allocate the remaining quantity of 14 lakhs pieces, the next lowest tenderers in the strict ascending order were called for negotiation and they have matched the L-1 price. Accordingly, 14 lakhs pieces have been allotted among them as per their offer quantity and their capacity to supply based on rule 31(1) of the TTT Rules. The supply orders were also issued on 21.09.2012 and 22.09.2012. The petitioner aggrieved by the order filed an appeal before the State Government. The State Government had correctly rejected the appeal. There was no violation of any provisions of the Act and rules. The petitioner is ranked only as L-16 and his price stands at Rs.2292/- which is higher than the price of L-1, which is Rs.2046.67. Only the 4th respondent M/s.Balaji Machine Works Pvt. Ltd. alone qualified for matching price preference for L-1. But they were not a SSI industry. The excise duty is payable only by the parties and the respondent corporation is not liable to pay the same. The excise duty is collected based on the cost of the wet grinders supplied by the parties. The supplier has to remit the excise duty based on the supply made to the respondent corporation. As per the tender https://hcservices.ecourts.gov.in/hcservices/ condition, the petitioner ought to inform the second respondent
that they have paid the excise duty and TNVAT to the Government. If there is any deficiency in payment of excise duty payable, the supplier is liable to pay the balance amount.
7.It was further stated that the third respondent was the lowest bidder and even as per the calculation of the petitioner, the rate quoted by the third respondent still remains as lowest. The distribution of grinders is based on Priceless Scheme and there cannot be any rate fixed to calculate the MRP. Hence there was no question of MRP rate for these grinders. Since the excise duty is fully borne out by the parties based on the basic cost of the wet grinder, the contention of the petitioner that calculation of excise duty on MRP rate does not find place. The contention of the petitioner regarding excise duty on the MRP rate is outside the tender process and beyond the purview of the tender conditions. It was further stated that L-1 to L-8 have been allotted different quantities and that the entire 35 lakhs wet grinders have been agreed to supply by those tenderers. The petitioner being L-16 will have no chance even on that account. Hence they prayed for dismissal of the writ petition.
8.The counsel for the petitioner strenuously contended that the procedure has been flawed. He placed reliance upon a judgment of the Supreme Court in Natural Resources Allocation, in Re, Special Reference No.1 of 2012 reported in (2012) 10 SCC 1 for contending that the executive must ensure that all eligible persons get a fair opportunity to compete. For awarding contracts or licences, the executive should adopt a rational method, so as to ensure that claims of worthy applicants are not scuttled. In a tender process, a tenderer has the right to fair treatment and the right to be treated equally. The evaluation of tenders must be transparent and free from any hidden agenda. The exercise of discretion which enables the competent authority to arbitrarily pick and choose out of several persons falling in the same category would be arbitrary, and as such violative of Article 14 of the Constitution of India. Therefore, criteria or procedure have to be adopted so that the choice among those falling in the same category is based on reason, fair play and non-arbitrariness.
9.The other judgments relied on by the counsel were based upon the same reasoning and it is unnecessary to recapitulate the same as in the Special Reference case, the other judgments were also referred to and considered.
10.Mr.P.H.Arvindh Pandian, learned Additional Advocate General, stated that the third respondent's quotation was the lowest and they have agreed to further reduce the amount by another Rs.6.67 on negotiation and that no rules have been violated.
11.In the present case, it is unnecessary to go into the details of the tender process. It is suffice that the petitioner had raised all these ground in the appeal and the appeal has been rejected by the State Government by a speaking order. The only https://hcservices.ecourts.gov.in/hcservices/ question is whether the order of the appellate authority in any way
suffers from any legal infirmity. Inasmuch as the petitioner was ranked L-16 and admittedly, the rate quoted by him was highest than the rate quoted by the third respondent, who is L-1, this court do not find any case made out to interfere with the action initiated by the second respondent. Neither the provisions of the Act nor rules have been violated.
12.In the light of the above, the writ petition will stand dismissed. No costs. Consequently, connected miscellaneous petition stands closed.
Sd/
Asst. Registrar
/true copy/
Sub Asst.Registrar
vvk
To
1.The Secretary,
Government of Tamil Nadu,
Food and Consumer Protection Department,
Fort St. George,
Chennai-600 009.
2.The Managing Director,
Tamilnadu Civil Supplies Corporation,
12,Thambuswamy Road,
Kilpauk, Chennai-600 010.
+ 1 cc to Mr. Aditya Shivkumar, Advocate Sr.7605
+ 1 cc to Mr. E. Jeeva, Advocate Sr.7683
+ 1 cc to Mr.L.P. Shanmuga Sundaram, Advocate Sr. 7663
+ 1 cc to Mr. S.P.Patel, Advocate Sr.7084
+ 1 cc to Mr.K.J. Rebello, Advocate Sr.7479
+ 1 cc to Government pleader Sr.7898
W.P.No.28295 of 2012
RSI(CO)
Eu 14.2.13
3 issues framed by the court
Whether the appellate authority committed an error of law in rejecting the petitioner's challenge to the tender award.
Whether the tender evaluation process violated the principles of fairness, transparency, and non-arbitrariness under Article 14 of the Constitution.
Whether the State Government was justified in dismissing the appeal filed by the petitioner regarding the tender adjudication.
Colour shows how this judgement treated each authority
Re Natural Resources Allocation, Special Reference No.1 of 2012Referred¶40
(2012) 10 SCC 1 · Who else cites this
7 provisions across 3 enactments
P. Jaganathan
Secretary, Government of Tamil Nadu
Managing Director, Tamilnadu Civil Supplies Corporation
Butterfly Gandhimathi Appliances
K. Chandru J
As recorded by the court registry
Judgements on the same questions, provisions and authorities, from every court
