Madras High Court

S.Thangappan vs The State Of Tamil Nadu on 7 September, 2022

                                                                          W.P.No.23986 of 2022

                                  IN THE HIGH COURT OF JUDICATURE AT MADRAS

                                              DATED:    07.09.2022

                                                    CORAM :

                        THE HON'BLE MR.MUNISHWAR NATH BHANDARI, CHIEF JUSTICE
                                                       AND
                                       THE HON'BLE MRS.JUSTICE N.MALA
                                             W.P.No.23986 of 2022
                                          and W.M.P.No.22965 of 2022
                     S.Thangappan                                          .. Petitioner

                                                        vs

                     1.The State of Tamil Nadu
                       Rep.by its Secretary to Government
                       Energy Department,
                       Fort St.George, Chennai 600 009.

                     2.The Chairman
                       TANGEDCO
                        Anna Salai, Chennai 600 002.

                     3.The Director-Generation
                       TANGEDCO, Anna Salai
                       Chennai – 600 002.

                     4.The Chief Engineer
                       MTPS-I, Mettur Dam – 636 404.                       .. Respondents


                     Prayer: Petition filed under Article 226 of the Constitution of India for
                     issuance of a Writ of Declaration declaring that the tender floated by
                     the 4th respondent on 25.07.2022 in specification No.CE/MTPS-
                     I/SE/M.II/OT.No.62/2022-23 as being illegal and contrary to public
                     interest.


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https://www.mhc.tn.gov.in/judis
                                                                                W.P.No.23986 of 2022




                                  For the Petitioner     : Mr.T.Sai Krishnan

                                  For the Respondents    : Mr.R.Shunmugasundaram
                                                           Advocate General assisted by
                                                           Mr.P.Muthukumar, State Govt.Pleader
                                                           Mrs.R.Anitha, Special Government
                                                           Pleader and Ms.G.Shakeenaa – for R1

                                                            Mr.P.Wilson, Senior Counsel
                                                            for M/s.L.Jai Venkatesh
                                                            - for Respondents 2 to 4

                                                            ORDER

(Order of the Court was made by the Hon'ble Chief Justice)

The Public Interest Litigation is filed to challenge the tender

floated by the fourth respondent on 25.07.2022 by the petitioner

claiming to be a person involved in politics rendering service to the

society.

2. The petitioner was the councilor of the 6 th Ward of Mettur

Municipality elected in the local body election held in the year 2011 as

the candidate sponsored by AIADMK. He is said to be the Joint

Secretary of MGR Mandram, Mettur Town which is affiliated to the

political party of AIADMK. The petitioner's annual income is said to be

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Rs.72,000/- and it is averred that he has paid Rs.10,000/- towards

professional fees for filing this writ petition which is filed in public

interest. We appreciate that the petitioner has fairly stated about his

involvement in politics and that he is a member of AIADMK, a political

party.

3. The petitioner has challenged the tender notice dated

25.07.2022 mainly in regard to the condition of Earnest Money Deposit

(EMD) which is said to be more than 1% of the total value of the work

as it is in violation of Rule 14 of the Tamil Nadu Transparency in

Tenders Rules 2000 (hereinafter referred to as Rules). Though the

petitioner is not a participant in the tender process, he claims to be

espousing the cause of the public as the tender condition may affect

the public exchequer and the petitioner being a public spirited person,

has filed the present writ petition.

4. Learned counsel for the petitioner submits that the petitioner

has gathered the details of the value of work done by each of the

contractor who are presently carrying out the works and has furnished

the same in the typed set of papers. A reference to the said annexure

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shows that the annual value of the work to be undertaken would be

approximately Rs.14.5 Crores and 1% of the annual value comes to

Rs.14.54 lakhs approximately, whereas the EMD quantified by the

respondents refers to a sum of Rs.3.99 Crores and thus not only it

violates Rule 14 of the Rules but it would also require public exchequer

and therefore the public interest litigation has been initiated to

challenge the tender conditions. The last date for submission of

tender/bid was 30.08.2022. The writ petition has been filed on

02.09.2022 immediately after the last date for submission of the bids.

5. Mr.R.Shunmugasundaram, learned Advocate General

appearing for the State and Mr.P.Wilson, learned Senior Counsel

appearing for TANGEDCO / respondents 2 to 4 submitted that the

public interest litigation is politically motivated in the hands of the

councilor of a political party and it does not involve any public interest.

The averments made by the petitioner based on the information from

the contractors cannot be said to be authentic so as to represent the

total quantity of the work annually as otherwise the duration of the

tender is for five years. The condition of EMD under challenge does not

affect the tender process and the petitioner has failed to show as to

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how the public exchequer could be affected other than to make a

statement for it.

6. Learned counsel for the respondents submit that this Court

may not cause interference in the tender at the instance of the person

who is not involved in the tender process, rather is a political person

and the petitioner has failed to show as to how the public exchequer

would be affected. Accordingly, the learned counsel pray for dismissal

of the writ petition.

7. We have considered the submissions made by the learned

counsel for both sides and have gone through the materials placed

before this Court.

8. The writ petition has been filed at the instance of a political

person as declared by the petitioner himself. It is otherwise by a

person having income to the extent of only Rs.6000/- per month as

disclosed in the writ petition and has paid Rs.10,000/- towards

professional fees for filing this writ petition. The aforesaid is only one

part, otherwise the writ petition has been filed after collecting

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information by the petitioner on his own to find out the annual value of

the work. The said statement cannot be considered to be authentic

because the collection of information by the petitioner is from different

contractors and not from the respondents.

9. The issue raised by the petitioner is that the tender violates

Rule 14 of the Rules of 2000. The said Rule is quoted hereunder for

ready reference.

“14. Commercial Conditions.- 14[(1) The tender documents shall require all tenderers without exception to pay an Earnest Money Deposit (EMD) ordinarily not exceeding one per cent of the value of the procurement by means of [electronic mode of payment or] in the form of a demand draft, bankers cheque, specified small savings instruments or where the procuring entity deems fit, irrevocable bank guarantee in a prescribed form. The tender documents shall clearly state that any tender submitted without the Earnest Money Deposit (EMD) in the approved form be summarily rejected:”

10. Rule 14(1) of the Rules of 2000 requires tenderers to pay

EMD not exceeding 1% of the value of procurement. The use of the

word “ordinarily” would not mean that the EMD cannot exceed 1% of

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the value of the procurement. The petitioner, however, gave an

interpretation of Rule 14 of the Rules of 2000 as if in no case the EMD

can exceed 1% of the value of procurement and alleging that the

condition of EMD in the tender in question is exceeding 1% of the

value of the procurement.

11. This is apart from the fact that this Court may not cause

interference in the terms and conditions of the tender as the judicial

review should be exercised with great care, caution and circumspection

and the Court should not ordinarily interfere with the policy decisions

of the Government in financial matters even according to the judgment

cited by the learned counsel for the petitioner in the case of Centre

for Public Interest Litigation -Vs- Union of India reported in

(2012) 3 S.C.C. 1, where the Hon'ble Apex Court has held as follows.

"99. In majority of judgments relied upon by learned Attorney General and Learned Counsel for the Respondents, it has been held that the power of judicial review should be exercised with great care and circumspection and the Court should not ordinarily interfere with the policy decisions of the Government in financial matters. There cannot be any quarrel with the proposition that the Court cannot substitute its opinion for the one formed by the experts in the particular field and due

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respect should be given to the wisdom of those who are entrusted with the task of framing the policies. We are also conscious of the fact that the Court should not interfere with the fiscal policies of the State. However, when it is clearly demonstrated that the policy framed by the State or its agency/instrumentality and/or its implementation is contrary to public interest or is violative of the constitutional principles, it is the duty of the Court to exercise its jurisdiction in larger public interest and reject the stock plea of the State that the scope of judicial review should not be exceeded beyond the recognised parameters.

100. When matters like these are brought before the judicial constituent of the State by public spirited citizens, it becomes the duty of the Court to exercise its power in larger public interest and ensure that the institutional integrity is not compromised by those in whom the people have reposed trust and who have taken oath to discharge duties in accordance with the Constitution and the law without fear or favour, affection or ill will and who, as any other citizen, enjoy fundamental rights and, at the same time, are bound to perform the duties enumerated in Article 51A. Reference in this connection can usefully be made to the judgment of the three Judge Bench headed by Chief Justice Kapadia in Centre for P.I.L. v. Union of India, (2011) 4 SCC 1."

12. Another judgment cited by the learned counsel for the

petitioner is in the case of Natural Resources Allocation In RE

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Special Reference No.1 of 2012 reported in (2012) 10 S.C.C.1 in

particular reference to Para 107 of the said judgment, wherein it was

held as follows.

“4.2 From a scrutiny of the trend of decisions it is clearly perceivable that the action of the State, whether it relates to distribution of largesse, grant of contracts or allotment of land, is to be tested on the touchstone of Art.14 of the Constitution. A law may not be struck down for being arbitrary without pointing out a constitutional infirmity. Therefore, a State action has to be tested for constitutional infirmities qua Art.14 of the Constitution. The action has to be fair, reasonable, nondiscriminatory, transparent, non- capricious, unbiased, without favouritism or nepotism, in pursuit of promotion of healthy competition and equitable treatment. It should conform to the norms which are rational, informed with reasons and guided by public interest, etc. All these principles are inherent in the fundamental conception of Art.14. This is the mandate of Art.14.of the Constitution of India.”

13. We are of the opinion that the case in hand does not require

any interference of this Court in tender condition when the impugned

tender notice is not in violation of Article 14 of the Constitution and the

petitioner has even failed to show as to how the public exchequer

would be affected by the condition of the EMD given under the

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impugned tender. The petitioner has not given any facts and figures

to indicate the effect on the public exchequer by incorporating the

amount quoted by participation of number of contractors in the tender

process or any other relevant fact to make out a case. The

assumption of effect on the public exchequer cannot be presumed