Madras High Court
S.Mahadevan vs The Commissioner on 28 September, 2021
W.P.No.20842 of 2021
IN THE HIGH COURT OF JUDICATURE AT MADRAS
DATED : 28.09.2021
CORAM :
THE HONOURABLE MR.JUSTICE N.ANAND VENKATESH
Writ Petition No.20842 of 2021
S.Mahadevan ... Petitioner
-Vs-
1.The Commissioner
Greater Chennai Corporation
Rippon Building, Chennai 600 003.
2.The Superintending Engineer
Storm Water Drain
Rippon Building
Greater Chennai Corporation
Chennai – 600 003. …. Respondents
Prayer : Writ Petition under Article 226 of the Constitution of India praying for the
issuance of a Writ of Certiorarified Mandamus to call for the records of the 2 nd
respondent tender notification in BRR.C.No.B4/2553-1 and 2/2020 uploaded website
dated 20.09.2021 and quash the same and consequently direct the respondents to
consider the representation of the petitioner dated 21.09.2021.
For Petitioner : Mr.E.C.Ramesh
For Respondents : Ms.P.T.Ramadevi
Standing Counsel
1/7
https://www.mhc.tn.gov.in/judis/
W.P.No.20842 of 2021
ORDER
This writ petition has been filed challenging Clause 33.2 of the tender
notification dated 20.09.2021.
2. The case of the petitioner is that, he is a registered Class-I contractor and he
is undertaking various contractual works in the Government Departments and also at
the level of local authorities. The second respondent issued an e-tender notification
inviting bids for carrying out the work of the restoration of the road cut made by
TANTRANSCO laying a 230KV cable at Pantheon Road and Ethiraj Salai.
2. The grievance of the petitioner is with regard to Clause 33.2 of the tender
notification and for proper appreciation, the same is extracted hereunder.
“33.2. As per Council Resolution No.456/2002 dated 28.11.2002 the
amount of Additional Security Deposit to be paid by the Contractor
along with the tender for various percentage of rebate are as follows:
Percentage of Amount of Additional Security Deposit
Rebate payable in the form of Demand Draft
5 to less than 15% 2%
15% to 20% 50% of Difference between Office value of
work and Tender amount
Above 20% Same as above
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W.P.No.20842 of 2021
3. According to the petitioner, the additional security deposit that was insisted
in the said Clause will cause grave prejudice to the participants in the tender, since
there is a huge outflow of cash and considering the pandemic situation, many
contractors will not be able to participate in the tender and consequently it will limit
the number of participants in the tender process. The other grievance expressed by
the petitioner is that, if in spite of the payment of the additional security deposit, the
tender is not ultimately accepted, it becomes more difficult for the participants to get
refund of the money. Therefore, considering the present position and the financial
constraints faced by the contractors, the above Clause has been put to challenge in
the present writ petition.
4. Heard Mr.E.C.Ramesh, learned counsel for the petitioner and
Ms.P.T.Ramadevi, learned Standing Counsel appearing for the respondents.
5. Insofar as the scope of interference in tender conditions, the law is governed
by the judgment of the Hon'ble Supreme Court in “Michigan Rubber (India)
Private Limited -Vs- State of Karnata and Others reported in 2012 (8)
S.C.C.216. The guidelines given by the Supreme Court is extracted hereunder.
“ 23.From the above decisions, the following principles emerge:
(a) the basic requirement of Article 14 is fairness in action by the State,
and non-arbitrariness in essence and substance is the heartbeat of
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W.P.No.20842 of 2021
fair play. These actions are amenable to the judicial review only to
the extent that the State must act validly for a discernible reason and
not whimsically for any ulterior purpose. If the State acts within the
bounds of reasonableness, it would be legitimate to take into
consideration the national priorities;
(b) fixation of a value of the tender is entirely within the purview of the
executive and courts hardly have any role to play in this process
except for striking down such action of the executive as is proved to
be arbitrary or unreasonable. If the Government acts in conformity
with certain healthy standards and norms such as awarding of
contracts by inviting tenders, in those circumstances, the interference
by Courts is very limited;
(c) In the matter of formulating conditions of a tender document and
awarding a contract, greater latitude is required to be conceded to
the State authorities unless the action of tendering authority is found
to be malicious and a misuse of its statutory powers, interference by
Courts is not warranted;
(d) Certain preconditions or qualifications for tenders have to be laid
down to ensure that the contractor has the capacity and the resources
to successfully execute the work; and
(e) If the State or its instrumentalities act reasonably, fairly and in
public interest in awarding contract, here again, interference by
Court is very restrictive since no person can claim fundamental right
to carry on business with the Government.”
5. The above judgment was also followed by this Court in a recent judgment in
“SDV Chandru -Vs- Tamil Nadu Civil Supplies Corporation” reported in 2020
(2) C.T.C.285.
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W.P.No.20842 of 2021
6. It is clear from the above judgments that, in the matter of formulating
conditions of tender documents and awarding the contract, greater latitude is required
to be conceded to the State authorities unless the action is found to be malicious and
it is misuse of statutory powers. If the Court finds that the condition is not totally
unreasonable, the mere fact that the participants will face hardship due to their
financial constraints cannot be a ground for interfering with the condition imposed in
the tender notification. There is a reason as to why the second respondent has
included Clause 33.2 in the tender notification seeking for payment of additional
security deposit and this Court does not want to question the wisdom of the
respondents in adding such a Clause in the tender notification. This Court does not
find anything unreasonable in the above said Clause and the same cannot be
interfered by this Court.
7. It is brought to the notice of this Court that the petitioner has already
participated in the tender and submitted the bid. It is made clear that the amounts
deposited by the participants whose bids are ultimately rejected must be immediately
refunded to them since they have to maintain the cash flow in order to run their
business. Withholding the amount will only cause prejudice to the participants and it
will be a disincentive for the participants to participate in the future tender invited by
the authorities. This has to be kept in mind by the authorities.
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W.P.No.20842 of 2021
8. In the result, this Court does not find any ground to interfere with the tender
notification issued by the second respondent and accordingly this writ petition is
dismissed. No costs. Consequently, connected miscellaneous petitions are also
dismissed.
28.09.2021
Index :Yes/No
Internet : Yes/No
KST
To
1.The Commissioner
Greater Chennai Corporation
Rippon Building, Chennai 600 003.
2.The Superintending Engineer
Storm Water Drain
Rippon Building
Greater Chennai Corporation
Chennai – 600 003.
https://www.mhc.tn.gov.in/judis/
W.P.No.20842 of 2021
N.ANAND VENKATESH, J.
kst
W.P.No.20842 of 2021
28.09.2021
https://www.mhc.tn.gov.in/judis/
