Madras High Court
M/S.P.N.P.Constructions vs The State Of Tamil Nadu on 21 April, 2025
Author: J.Sathya Narayana Prasad
Bench: J.Sathya Narayana Prasad
2025:MHC:1022
W.P.No.3973 of 2025
IN THE HIGH COURT OF JUDICATURE AT MADRAS
DATED : 21.04.2025
CORAM:
THE HONOURABLE MR. JUSTICE J.SATHYA NARAYANA PRASAD
W.P.No.3973 of 2025
M/s.P.N.P.Constructions,
Rep. by its Manager,
Mr.A.Tamilselvan,
Having office at No.F/29, 7th Street,
Thanikachalam Nagar, Ponniammanmedu,
Chennai – 600 110.
...Petitioner
-Vs-
1.The State of Tamil Nadu,
Rep by its Secretary to Government,
Municipal Administration Department,
Secretariat, St.George Fort, Chennai.
2.The Managing Director,
Chennai Metropolitan Water Supply and Sewerage Board,
No.1, Pumping Station Board,
Chintradaripet, Chennai – 600 002.
3.The Chief Engineer (O&M),
Chennai Metropolitan Water Supply and Sewerage Board,
3rd Floor, No.1, Pumping Station Board,
Chintradaripet, Chennai – 600 002.
4.The Superintending Engineer (C&M),
Chennai Metropolitan Water Supply and Sewerage Board,
No.1, Pumping Station Board,
Chintradaripet, Chennai – 600 002. ...Respondents
1/27
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W.P.No.3973 of 2025
Prayer: Writ Petition filed under Article 226 of the Constitution of India,
praying for the issuance of a direction in the nature of Writ of Certiorari,
calling for the records relating to the impugned package tender Notification
issued by the 3rd respondent dated 01.01.2025 published in Tamil Daily
namely “THINATHANTHI” in respect of the works namely
COMPREHENSIVE OPERATION & MAINTENANCE OF WATER
DISTRIBUTION STATIONS, SEWAGE PUMPING STATIONS and
SEWER SYSTEM USING MACHINERIES for 5 vide contract Nos : 1)
CNT/WSS/SEW/NCB/MWB/3646/2024-25, 2)
CNT/WSS/SEW/NCB/MWB/3647/2024-25, 3)
CNT/WSS/SEW/NCB/MWB/3648/2024-25, 4)
CNT/WSS/SEW/NCB/MWB/3649/2024-25, 5)
CNT/WSS/SEW/NCB/MWB/3650/2024-25, quash the same and pass such
further orders.
For Petitioner : Mr.Nambi Arooran
for Mr.J.Prakash
For R1 : Mr.J.Ravindran,
Additional Advocate General
assisted by M/s.E.Ranganayagi,
Additional Government Pleader
For R2 to R4 : Mr.J.Ravindran,
Additional Government Pleader
assisted by M/s.K.Vasanthamala
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W.P.No.3973 of 2025
ORDER
This writ petition has been filed for issuance of a Writ of Certiorari,
calling for the records relating to the impugned package tender Notification
issued by the 3rd respondent dated 01.01.2025 published in Tamil Daily
namely “THINATHANTHI” in respect of the works, namely,
Comprehensive Operation & Maintenance of Water Distribution Stations,
Sewage Pumping Stations and Sewer System using Machineries for 5 vide
contract Nos :
1. CNT/WSS/SEW/NCB/MWB/3646/2024-25,
2. CNT/WSS/SEW/NCB/MWB/3647/2024-25,
3. CNT/WSS/SEW/NCB/MWB/3648/2024-25,
4. CNT/WSS/SEW/NCB/MWB/3649/2024-25,
5. CNT/WSS/SEW/NCB/MWB/3650/2024-25, quash the same.
2. The petitioner firm has been a registered Class-IV contractor under
the Board since 1999. Its object is to do business as "Contractors" of all
kinds, including Civil Works, Mechanical Works, Operation and
maintenance Works, Electrical Works, and other allied works from time to
time. Accordingly, it carries out works with the respondent Board, i.e., the
Chennai Metropolitan Water Supply and Sewerage Board. Accordingly, it is
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competent to carry out Civil and Pipe Laying works up to and above the
value of Rs.75,00,000/- and Electrical Mechanical, and Erection works up to
and above the value of Rs.75,00,000/-.
3. While the facts are so, the 3rd respondent herein published a
notification dated 01.01.2025 in the Tamil daily, namely
"THINATHANTHI" for a comprehensive package for specific works. The
pre-bid meeting was held on 20.01.2025. The last date of submission of bid
is on 05.02.2025 at 3:00 p.m.. The date of opening of technical bid is on
06.02.2025 at 3:30 p.m., and the period of contract is for 3 years. Aggrieved
by the conditions imposed by the impugned notification for tender, the
petitioner has come up with the present writ petition.
4. The learned counsel for the petitioner submits that in the above said
Impugned Package Tender consists of outsourcing works such as Operation
and Maintenance of Sewage Pumping Stations, Water Distribution Stations,
Desilting Machine vehicle and Jet Rodding Vehicle from different areas are
clubbed together under one package, and thereby the volume of contract
work has been increased with the sole object to eliminate competition, which
is leading to monopoly. Only big players such as Corporate alone manage to
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participate in the said Tender, small contractors like the petitioner firm are
unable to participate in the said tender in view of the present package system.
5. It is submitted that the said works, such as, Operation of Sewage
Pumping Stations, Water Distribution Stations, Desilting Machine Vehicle
and Jet Rodding Vehicle are being carried out only through manpower,
which does not require any special skill or technical features involved in
those works. Further those works are routine 24 x 7 operated by Labourers,
and there is no time limit or special skill required for those works. Therefore,
it is apparent that the inclusion of those routine works under the term of
comprehensive through Impugned Package Tender is against the object and
preamble of the Tamilnadu Transparency in Tender Act.
6. It is further submitted that, in view of the present Package Tender
System, the petitioner is not in a position to participate in this tender process,
which results in minimal competition as the number of participants is being
decreased in view of the impugned Package Tender System. It is understood
that the said system was introduced only to do favoritism, which is contrary
to the object of the Tamil Nadu Tender Transparency Act. Thus, the
impugned notification is nothing but bad in law, arbitrary and unsustainable.
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7. It is submitted that the impugned Tender Package system is
introduced by the Respondent only to evade and eliminate healthy
competition in the public contracts. The conditions imposed with regard to
the qualification of the Bidder in Clause 4 itself would be sufficient to prove
the object of the Tender. In these circumstances, the petitioner sent a
representation to the respondent board through mail dated 25.01.2025,
requesting them to follow the old tender system, enabling us to participate in
the tender process, but the same evoked no response.
8. In similar circumstances, this Court quashed several package
tenders. The State Government has passed G.O(Ms).No.139 dated
27.09.2021 by cancelling the Package Tender System in the Public Works
Department. When the Package Tender System is cancelled by the
Government of Tamilnadu in the Public Works Department, citing the above
said reasons, it is also applicable to the respondent board. From the above, it
is clear that the impugned notification is nothing but a violation of
Government's Policy decision as contemplated under the above said
Government order.
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9. Learned counsel for the petitioner would then place reliance on the
order passed by this Court in W.P.Nos.2868 & 1916 of 2021
(R.R.Palanisamy and another Vs. The State of Tamil Nadu, Rep. by its
Secretary to Government, Municipal Administration Department,
Secretariat, St.George Fort, Chennai and 2 others) dated 22.03.2021.
10. A counter-affidavit was filed by the 2nd respondent on 10.02.2025.
11. Learned Additional Advocate General appearing for the 2nd
respondent would submit that the Operation and Maintenance of Water
Distribution Stations, Sewerage Pumping Stations and Machinery, including
desilting machines, Jet-rodding/Jet-cum-suction machines, and super
suckers, are outsourced through numerous contracts which require frequent
approval and tendering processes and high expenditure. Also, it was found
that monitoring of contractors became very difficult due to a larger number
of contractors, and the work executed by the Contractors was not uniform,
and the service rendered by small-scale contractors is not up to the
requirements.
Sewage Pumping Stations/Water Distribution
Stations:
Skilled Man power shall be available round the clock
Constant monitoring of the level of suction well/under
ground sump
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When low levels are reached, the operator must switch
off the motor and ensure close follow up to switch on the pump
again once the sewage touches the maximum prescribed level.
During the emergency such as break down due to power
failure, immediate change over of Electrical energy to DG
supply and to ensure continuous uninterrupted pumping of
sewage to STP. As and when the electrical energy is resumes,
immediate change over from DG to Electrical power supply
shall be made.
Cleaning of SPS/WDS all-round the premises and
maintaining it very neat and tidy.
Operation and maintenance of vehicles owned by
CMWSSB.
12. He further submits that to overcome the above difficulties and to
minimise the number of contractors engaged for Operation and Maintenance,
the Board vide its Resolution No.89/2024, dated 08.08.2024, had resolved to
accord in-principle approval for “Comprehensive Operation & Maintenance
of Water Distribution Stations, Sewage Pumping Stations and Sewer Systems
using machineries for 3 years under the control of each territorial
Superintending Engineers”. Thereafter, an administrative approval was
obtained from the Board vide Resolution dated 08.11.2024 for the work of
“Comprehensive Operation & Maintenance of Water Distribution Stations,
Sewage Pumping Stations, and Sewer System using machineries for 3 years”
and to invite tender and to carry out the work for each package under each
territorial Superintending Engineer as one package.
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13. In pursuance of the decision of the Board, an e-tender Notification
was invited under a two-cover system on 01.01.2025 and published in
newspapers. As per the contract conditions, for the value of tenders, which is
more than 4 crores, the tenders have been invited under a two-cover system
conforming to the Tamil Nadu Transparency in Tenders Act, 1998 and Rules
2000. The sale period for the work of "Comprehensive Operation &
Maintenance of Water Distribution Stations, Sewage Pumping Stations and
Sewer Systems using machineries for 3 years under the control of each
territorial Superintending Engineer". As per the National Competitive
Tender, the Operation and Maintenance of WDS, SPS, and Sewer Systems
using machinery are designed and invited under the territorial jurisdiction of
the Superintending Engineer concerned for effective supervision and
delivery of services. The representations have been received from the
Contractors with a request not to club works into package tenders to give a
fair chance to all the existing registered contractors. The representations
received from the Contractors have been considered and briefed before the
Board of Directors).
14. He further submits that this Court, in an order dated 05.02.2025
made in W.P.Nos.3973, 3973 & 3973 of 2025, directed the 3rd and 4th
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respondents not to open the e-tender, which is scheduled to be held on
06.02.2025 at 3.30 p.m. Till 14.02.2025, and it has been further directed that
the 3rd and 4th respondents to consider the petitioners' e-mail representation
dated 03.01.2025 and pass appropriate orders on merits, in accordance with
law, on or before 12.02.2025, and further that the petitioners are also directed
to appear before the Managing Director for enquiry on 07.02.2025 at 11
a.m.).
15. During the enquiry, the contractors requested that their grievances
be reconsidered, and their representations were duly heard and considered by
the Managing Director. The second respondent explained the services
rendered by the Board to the public at large, as well as the Board’s decision
to float the tender in light of the contractors’ past performance.
16. The present system of operation & maintenance of SPS on
performance based contracts by engaging numerous contractors was
challenging to the board, mainly due to non-compliance with the schedule of
work/mandatory duties, especially during emergencies such as North-East
monsoon period, cyclone period, heavy floods, etc., in Chennai city, without
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engaging adequate manpower, maintenance of low levels, cleanliness, etc.
While questioning the adoption of the conditions of the contract, the
contractor expresses his inability, stating the reason that the contract is only
performance-based and that there is no responsibility for operating during
emergency conditions by the contractor.
17. These small individual contractors were also not able to mobilize
the manpower, diversion of manpower, engage heavy machines, cranes,
requirement additional higher capacity 100 HP and 150 HP pump sets fitted
with tractors, diesel requirements, etc., especially during times of
emergencies, such as North-East monsoons, floods, and cyclones in Chennai,
causing severe criticism from the public in the neighborhood. The sewage
pumping station system operates continuously, and any failure caused by an
individual contractor's inability will cascade into the sewerage system
network, resulting in sewage overflow on the roads and an unhygienic
situation.
18. For the better management of sewer machinery, with new
technology to compare the performance and the service delivery of the
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contractor, the following key performance indicators have been proposed in
the present tender contract:
i. Pumping quantity
ii. Manpower engaged
iii. Recording of operational data
iv. Periodical maintenance
v. Availability of safety equipment
vi. Cleanliness, etc.
19. The TWAD Board, a similar Organization for providing water
supply and drainage meant for all the districts (except Chennai) in the State
of Tamil Nadu, is functioning under the administrative control of the 1st
respondent. The TWAD Board had invited a similar package system
consisting of 33 numbers covering all districts of Tamil Nadu (except
Chennai) for operation and maintenance of various numbers of CWSS in
each district, clustering numbers of CWSS in all districts, and a settled work
order with JV. A sample work order with JV dated 31.10.2023 issued for the
work of O&M for 27 & 22 CWSS in Theni and Tuticorin Districts,
respectively, including repair and rectification works and supply of
chemicals, for the period of 5 years from 01.7.2023 to 31.03.2026. It was
ascertained from the officials of the TWAD Board that the contractors'
performance was found to be more satisfactory than the earlier contractors
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maintaining a single CWSS.
20. The work of Comprehensive Operation and Maintenance of Water
Distribution Stations, Sewage Pumping Stations and Sewer Systems using
machineries for 5 territorial jurisdictions of the Superintending Engineers
was called for considering the following factors:
• Settlement and monitoring of existing works contract is
given to at all levels. For example, for consideration of every 3 SPS is
given to 1 contractor, the Board has to give it to 120 contractors for
all 360 SPS and the 120 contracts have to be settled work order
issued and monitored by the Board and it is found to be very difficult
to monitor and ensure effective service delivery.
• Whereas in the new tender system, the total control system
and the responsibilities lies only with the 5 successful contractors
under the territorial jurisdiction of the Superintending Engineers and
it is very easy to monitor and ensure effective service delivery. As the
control would be better with the limited number of available
contractors, the service delivery will be improved.
• Neighboring area alone are clubbed together, that too under
the jurisdiction of the each territorial Superintending Engineer.
• Based on the performance linked payment is introduced, so
as to bind the Contractors to perform well and for service delivery
with improved and easy monitoring.
• If any one of the SPS fails, it will impact the total payment
under the new system. Hence, the Contractors will operate
professionally and ensure their prompt service to the fullest
satisfaction of the Board.
• All the present contractors can very well associate
themselves with the lead partners as JV members and perform the
O&M work.
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• As the works are split into 5 packages, there is every
possibility of larger participation of all the eligible bidders, who are
likely to participate.
• The G.O.Ms.No.139, Public Works (G2) Department, dated
27.09.2021 is exclusively applicable to the Public Works Department
alone and there is no mention about its applicability to this Board,
since this Board has autonomous power under the provisions of
CMWSS Act, 1978.
• Floating of tender is the prerogative of the Board by
following the tender transparency Act and Rules.
21. Learned Additional Advocate General would then place reliance
on the following rulings:
a) The judgment of the Hon'ble Supreme Court of India in the case of
Airport Authority of India Vs. Centre for Aviation Policy, Safety
& Research (CAPSR) & Others reported in 2022 Livelaw (SC) 814.
b) The judgment of the Hon'ble Supreme Court of India in the case of
Tata Motors Limited Vs. The Brihan Mumbai Electric Supply &
Transport Undertaking (Best) and Others reported in 2023
LiveLaw (SC) 467.
c) The judgment of the Division Bench of this Court in the case of
N.Gunasekaran Vs. State of Tamil Nadu, Rep. by its Secretary to
Government, Highways & Minor Ports Department, Secretariat,
Chennai – 600 009 and 2 others in W.A.No.3302 of 2019.
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d) The judgment of the Division Bench of this Court in the case of
B.Sambath Vs. State of Tamil Nadu, Rep. by its Secretary to
Government, Highways & Minor Ports Department, Secretariat,
Chennai – 600 009 and 2 others in W.A.Nos.3597, 3598, 3602,
batch of 2019 wherein the challenge to G.O.Ms.No.162 was rejected.
The Division Bench, while dismissing the said writ appeals, upheld the
validity of the packaging system introduced by the Government. It is
pertinent to note that an identical issue was also considered and
dismissed in N. Gunasekaran v. State of Tamil Nadu, W.A. No. 3302
of 2019, which also dealt with the same Government Order. Both
judgments have attained finality and bind the present parties.
e) The judgment of the Division Bench of this Court in the case of
N.Chelladurai Vs. The Secretary to the Government, Highways &
Minor Ports (HN1) Department, Secretariat, Chennai and 2
others) in W.P.(MD)Nos.26373, 25514, 25611, 25612 & 27530 of
2024.
22. Learned Additional Advocate General raised a preliminary
objection, submitting that G.O.Ms.No.162 had already been upheld by a
Co-ordinate Bench of this Court in N. Gunasekaran v. State of Tamil
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Nadu, W.A.No.3302 of 2019, and in B. Sambath and Others v. State of
Tamil Nadu, W.A. No. 3597 of 2019 (batch), wherein the packaging
system introduced through the said G.O. was affirmed and the
judgments have attained finality. It was therefore contended that the
present writ petitions challenging the same G.O. are not maintainable.
23. Heard both sides and perused the materials available on record.
24. In the present case, the impugned Package Tender notification
issued by the 3rd respondent dated 01.01.2025 issued in Tamil Daily
“Thinathanthi” in respect of works, namely, Comprehensive Operation &
Maintenance of Water Distribution Stations, Sewage Pumping Stations and
Sewer Systems using Machineries was challenged by the petitioner herein.
25. The main grievance of the petitioner is that the petitioner's firm is
doing business as "Contractors" of all kinds, like Civil Works, Mechanical
Works, Operation and maintenance Works, Electrical Works, and such other
allied works from time to time. Accordingly, they carry out works with the
respondent Board, i.e., Chennai Metropolitan Water Supply and Sewerage
Board. Several hundreds of works were carried out by the petitioner's firm
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for the past 26 years for and on behalf of the respondent board. The 3rd
respondent herein published a notification dated 01.01.2025 in the Tamil
daily, namely, “Thinathanthi” for a comprehensive package for the following
works:
1. Package – I, Area I, II and III –
CNT/WSS/SEW/NCB/MWB/3646/2024-25 – Tender Value Rs.75.08
Crore.
2. Package – II, Area IV, V and VI –
CNT/WSS/SEW/NCB/MWB/3647/2024-25 – Tender Value Rs.110.64
Crore.
3. Package – III, Area VII, VIII and IX –
CNT/WSS/SEW/NCB/MWB/3648/2024-25 – Tender Value Rs.142.20
Crore.
4. Package – IV, Area X, XI and XII –
CNT/WSS/SEW/NCB/MWB/3649/2024-25 – Tender Value Rs.112.92
Crore.
5. Package – V, Area XIII, XVI and XV –
CNT/WSS/SEW/NCB/MWB/3650/2024-25 – Tender Value Rs.103.96
Crore.
26. If the impugned tender package system is introduced by the
respondent only to evade and eliminate healthy competition, which is leading
to monopoly, only big players such as Corporate alone manage to participate
in the said Tender. Small contractors like the petitioner firm are unable to
participate in the said tender in view of the present package system. In view
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of the present Package Tender System, the petitioner is not in a position to
participate in this tender process, which results in minimal competition as the
number of participants is being decreased. In view of the impugned Package
Tender System, it is understood that the said system was introduced only for
the purpose of doing favouritism, which is contrary to the object of the
Tamilnadu Tender Transparency Act.
27. Another contention of the petitioner is that the small contractors
like the petitioner and the labourers will suffer a lot in view of the impugned
package tender notification issued by the Board. The impugned
comprehensive package tender is highly motivated, and it will also lead to
5000 workers under them losing their jobs. The introduction of the impugned
package tender system in the respondent board has disqualified more than
450 contractors of CMWSSB in various classes from Class-I to Class-IV will
also get affected.
28. The judgment passed by the Hon'ble Supreme Court of India in the
case of Tata Motors Limited Vs. The Brihan Mumbai Electric Supply &
Transport Undertaking (Best) and Others reported in 2023 LiveLaw (SC)
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467, which held as follows:
“52. Ordinarily, a writ court should refrain itself from
imposing its decision over the decision of the employer as to
whether or not to accept the bid of a tenderer unless something very
gross or palpable is pointed out. The court ordinarily should not
interfere in matters relating to tender or contract. To set at naught
the entire tender process at the stage when the contract is well
underway, would not be in public interest. Initiating a fresh tender
process at this stage may consume lot of time and also loss to the
public exchequer to the tune of crores of rupees. The financial
burden/implications on the public exchequer that the State may
have to meet with if the Court directs issue of a fresh tender notice,
should be one of the guiding factors that the Court should keep in
mind. This is evident from a three-Judge Bench decision of this
Court in Association of Registration Plates v. Union of India and
Others, reported in (2005) 1 SCC 679.”
29. The judgment passed by the Hon'ble Supreme Court of India in the
case of Airport Authority of India Vs. Centre for Aviation Policy, Safety
& Researcg (CAPSR) & Others reported in 2022 LiveLaw (SC) 814,
which held as follows:
“6. Even otherwise, even on merits also, the High Court has
erred in quashing and setting aside the eligibility criteria/tender
conditions mentioned in the respective RFPs, while exercising the
powers under Article 226 of the Constitution of India. As per the
settled position of law, the terms and conditions of the Invitation to
Tender are within the domain of the tenderer/tender making
authority and are not open to judicial scrutiny, unless they are
arbitrary, discriminatory or mala fide. As per the settled position of
law, the terms of the Invitation to Tender are not open to judicial
scrutiny, the same being in the realm of contract. The
Government/tenderer/tender making authority must have a free
hand in setting the terms of the tender”.
30. The judgment passed by the Division Bench of this Court in
W.P.No.3302 of 2019 (N.Gunasekaran Vs. State of Tamil Nadu, Rep. by
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its Secretary to Government, Highways & Minor Ports Department,
Secretariat, Chennai – 600 009 and 2 others), wherein this Court held as
follows:
“16.In that case, the question that fell for consideration was
change of policy with regard to allowing the local manufacturers for
supply of High Security Vehicle Registration Plates. Though the
Hon'ble Supreme Court upheld the tender document when challenged
by Indian Manufacturers in the case of "Association of registration
plates Versus Union of India and others" reported in "(2005) 1
Supreme Court Cases 679", subsequently, there was a change in the
policy of the Government to allow the local manufacturers also to
supply the High Security Vehicle Registration Plates (HSVRPs).
When the policy allowing local manufacturer to participate in the
tender was challenged by the foreign manufacturers and the Hon'ble
Supreme Court held that the subsequent policy cannot be interfered
with because of the change in circumstances, even though the
Hon'ble Supreme Court earlier upheld the tender by which only the
foreign supplier alone was eligible to participate in the tender. In
Paragraph No.58, the Hon'ble Supreme Court holds that unless it is
arbitrary, the policy of the Government cannot be interfered with and
the said paragraph is usefully extracted as follows:
"58.The statement of law exposited in S.Nagaraj is beyond
question. As noticed above, in Assn. of Registration Plates this
Court did not find any fault with the controversial conditions
in NIT and overruled all objections raised by the petitioners
therein in challenge to those conditions. The impugned
conditions of NIT in that group of cases were not held to be
arbitrary, discriminatory or irrational nor amounted to
creation of any monopoly as alleged. The declaration of law
by this Court in Assn. of Registration Plates is that in the
matter of formulating conditions for a contract of the nature of
ensuring supply of HSRP, greater latitude needs to be
accorded to the State authorities. We find it difficult to hold
that by virtue of that judgment the impugned conditions were
frozen for all times to come and the States were obliged to
persist with these conditions and could not alter them in
larger interest of the public. In our view, the decision of this
Court in Assn. of Registration Plates did not create any
impediment for the States to alter or modify the conditions in
NIT if the circumstances changed in material respects by lapse
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of time."
Hence, it is evident that change in policy of the Government has been
upheld by the Hon'ble Supreme Court.
17. In this case on hand, the condition imposed is that every
tenderer should have achieved annual turn over in the last five
years of 40% of the value of the contract. The appellant is no way
near to that amount. Even though he is a class I contractor, the
works done by him are stated as follows viz.,
(i) Cleaning the road, black & white painting.
(ii) white washing
(iii)removal of deposited earth
(iv) De-silting the culvert & drains, greeneries, maintenance
(v) removal of debries
(vi) supply of carted earth
(vii)drain (70m) repairing of footpath, centre median, platform
& handrails
(viii)supply of labour & mini lorry
whereas, works awarded here are different for which he does not
have the man power or machine support and financial capacity to
execute the contract. Hence, the contentions put forth by the
appellant, very elaborately by Mr.S.Doraiswamy, learned Counsel
for the appellant cannot be accepted.
18. Hence, the appeal fails and the same is dismissed. No
costs. Consequently, connected miscellaneous petition is closed.
However the matter is kept pending for larger issue by raising
appropriate queries.”
31. The judgment passed by the Division Bench of this Court in
W.P.(MD)Nos.26373, 25514, 25611, 25612 & 27530 of 2024
(N.Chelladurai Vs. The Secretary to the Government, Highways &
Minor Ports (HN1) Department, Secretariat, Chennai), wherein this
Court held as follows:
“4. The learned Additional Advocate General raised a
preliminary ground stating that G.O.(Ms) No.162 was already put to
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challenge before a Co-ordinate Bench of this Court in the case of
N.Gunasekaran Vs. State of Tamil Nadu, Highways & Minor Ports
Department and Others passed in W.A.No.3302 of 2019, as well as in
the case of B.Sambath and Others Vs. State of Tamil Nadu, Highways
& Minor Ports Department and Others passed in W.A.No.3597 of
2019, batch and this Court had upheld the packaging system
introduced through G.O.(Ms) No.162, which judgments have become
final and therefore, the present Writ Petitions, challenging the very
same Government Order, is not maintainable. The learned
Additional Advocate General further submitted that the Writ
Petitions are liable to be dismissed, on the ground of delay and
laches, since the challenges to the Government Order is made after
an inordinate delay of 12 years, without any reasonable or
acceptable explanation. Insofar as the applicability of G.O.(Ms)
No.162 is concerned, he would submit that the NABARD is neither a
Ministry nor a Department of the Central Government and therefore
cannot be termed as a centrally sponsored scheme. On the other
hand, in order to qualify a scheme as centrally sponsored, the
funding should be only by the Central Ministry or the concerned
Department. According to him, the role of the NABARD will not fall
within the meaning of centrally sponsored scheme, but on the other
hand, the NABARD is termed to be only a Bank, which sponsors state
projects by lending money and is not a “centre” simpliciter. By
placing reliance on several decisions of the Hon'ble Supreme Court,
the learned Additional Advocate General submitted the scope of
judicial review of a tender notification by this Court, in exercise of its
powers under Article 226 of the Constitution of India, is very limited
and should not normally venture to test the tender conditions.
6. The Tamil Nadu Transparency in Tenders Act, 1998, has
been enacted to foster and encourage effective participation by the
tenderers in the process of tenders and to promote healthy
competition by providing fair and equitable treatment to all the
tenderers. By clubbing several work orders into a single package and
imposing pre-qualification conditions to suit the value of the tenders,
may preclude small time contractors to even qualify for
participation. One of the basic requirements of Article 14 of the
Constitution of India is fairness in action by the State and non-
arbitrariness in essence and substance is the heart beat of fair play.
With this prelude in mind, we shall now deal with the submissions
made by the respective counsels.
7. The first and foremost submission of the learned counsel
appearing for the petitioners is that the decision of the Government
in G.O(Ms)No.162 is arbitrary and unreasonable, which paves way
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only for the big time contractors to qualify in a package system
tenders, thereby eliminating the small time contractors for want of
qualifications.
9. G.O(Ms)No.162 was the subject matter of challenge before
the Writ Court in W.P.No.28340 of 2019 and by an order dated
25.09.2019, a learned Single Judge had upheld the Government
Order, which order came to be challenged in W.A.No.3302 of 2019.
The Coordinate Bench of this Court rejected the contentions of the
appellant in the writ appeal that the said Government Order was
tainted with arbitrariness, since the same was in favour of the
selected few contractors, who could participate in the package
system tenders, depriving the other regular contractors. The Co-
ordinate Bench had also gone into the question of scope of judicial
review and held that the policies of the Government in matters of
tenders, cannot be interfered with by the Writ Court, in exercise of
its powers under Article 226 of the Constitution of India.
12. In two of the writ petitions in the present batch of cases
also, the same G.O(Ms)No.162 is assailed. In the light of the decision
of the Hon'ble Supreme Court in Devilal Modi's case (supra), the
challenge in these writ petitions to G.O(Ms)No.162, would be hit by
the principles of res judicata.
24. Though we are constrained to reject the challenge to
G.O(Ms)No.162 in these writ petitions, we are conscious of the fact
that such an order has been made on technicalities with regard to the
maintainability of the writ petition. During the course of arguments,
we were apprised of the fact that it is only the Public Works
Department in the Government of Tamil Nadu, which calls for tender
notifications through package system. When a package tender system
was earlier introduced in the Public Works Department, the same
was withdrawn, based on the proposal of the high level officials of
that department. We were also apprised of the fact that when similar
package system tender notification was issued by the Tiruppur
Corporation, the same was quashed by the Writ Court, holding it as
unconstitutional. While deprecating the drawing of tenders through a
package system, it was held that grouping of several works into one
tender is irrational and made with an object to eliminate certain
class of contractors, thereby avoiding healthy competition. The Tamil
Nadu Transparency in Tenders Act, 1998, was also introduced to
encourage effective participation of tenderers and to promote healthy
competition, by providing fair and equitable treatment to all the
tenderers. Above all, Article 14 of the Constitution of India has an
in-built requirement of fairness in all actions by the State and non-
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arbitrariness as a sine qua non. Though we are conscious of the
fact that the present mode of tender adopted by the department is
against the constitutional mandate under Article 14 and can also
be termed to be arbitrary, since it effectively eliminates the small
time contractors, even for qualifying to participate, we are
hamstrung, in view of the unsuccessful challenge to
G.O(Ms)No.162, in the earlier round of litigations before this
Court. However, since G.O(Ms)No.162 effectively deprives healthy
competition, by providing fair and equitable treatment to all the
tenderers, we strongly recommend to the Government to re-
consider their decision by discontinuing with the package system
tender at the earliest.”
32. In view of the above dictum laid down by the Hon'ble Supreme
Court of India and the Division Bench of this Court, this Court cannot
interfere with the terms of the tender prescribed by the Government and
the terms of the conditions of the tender unless they are shown to be
arbitrary, discriminatory or malafide.
33. In the present package tender notification, there is no material
to establish that the conditions imposed are arbitrary, discriminatory, or
actuated by mala fides. The impugned tender conditions are in line with
the policy decisions of the Government, which have already been upheld
by the Co-ordinate Bench of this Court in earlier judgments. Hence, in
view of the settled position of law and the principle of res judicata, this
Court cannot re-examine the validity of the very same Package Tender
Notification.
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34. In view of the above factual matrix of the case and the ratios laid
down by the Hon'ble Supreme Court of India and the Division Bench of this
Court, this Court is not inclined to interfere with the impugned package
tender Notification issued by the 3rd respondent dated 01.01.2025 published
in Tamil Daily namely “THINATHANTHI” in respect of the works, namely,
Comprehensive Operation & Maintenance of Water Distribution Stations,
Sewage Pumping Stations and Sewer Systems using Machineries for 5 vide
contract Nos :
1) CNT/WSS/SEW/NCB/MWB/3646/2024-25,
2) CNT/WSS/SEW/NCB/MWB/3647/2024-25,
3) CNT/WSS/SEW/NCB/MWB/3648/2024-25,
4) CNT/WSS/SEW/NCB/MWB/3649/2024-25,
5) CNT/WSS/SEW/NCB/MWB/3650/2024-2, are hereby confirmed.
In the result, the writ petition stands dismissed with the above
observations. No costs.
21.04.2025
cda
Index : Yes
Speaking Order : Yes
Neutral Citation : Yes
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To
1.The Secretary to Government,
The State of Tamil Nadu,
Municipal Administration Department,
Secretariat, St.George Fort, Chennai.
2.The Managing Director,
Chennai Metropolitan Water Supply and Sewerage Board,
No.1, Pumping Station Board,
Chintradaripet, Chennai – 600 002.
3.The Chief Engineer (O&M),
Chennai Metropolitan Water Supply and Sewerage Board,
3rd Floor, No.1, Pumping Station Board,
Chintradaripet, Chennai – 600 002.
4.The Superintending Engineer (C&M),
Chennai Metropolitan Water Supply and Sewerage Board,
No.1, Pumping Station Board,
Chintradaripet, Chennai – 600 002.
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J.SATHYA NARAYANA PRASAD, J.
cda
21.04.2025
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