TMI Blog2020 (3) TMI 291X X X X Extracts X X X X X X X X Extracts X X X X ..... d decided not to reject the bid offered by the 4th respondent and had passed an order under Section 10 of the Tamil Nadu Transparency in Tenders Act, 1998, then, any aggrieved party can file an appeal as provided under Section 11 of the Tamil Nadu Transparency in Tenders Act, 1998. The scope of the Writ Petition cannot be expanded to determine whether the bid quoted by the 4th respondent is legal or illegal. The Writ Court while exercising its jurisdiction under Article 226 of the Constitution of India cannot venture into a roving examination of the facts and also cannot venture into applicability of certain provisions of law or not. The Writ Petitioners have embarked on a speculative journey to deliberately frustrate further progress in the tender process. Both the Writ Petitions have to suffer an order of dismissal and accordingly they are dismissed. - W.P.Nos.24412 & 27267 of 2019 and W.M.P.Nos.24145, 33240, 26692 & 26695 of 2019 - - - Dated:- 28-2-2020 - MR. JUSTICE C.V. KARTHIKEYAN J. For Petitioner: Mr. A.R.L. Sundaresan Senior Counsel for Mr. Nithyaesh Vaibhav (in W.P.No.24412 of 2019) Mr.Jeyash Dolia for M/s.Aiyar Dolia. (in W.P.No.27267 of 2019) Fo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Service Taxes (GST). The 4th respondent had submitted their bid by stating GST as 'zero'. The petitioner gave a representation on 11.07.2019, claiming that the petitioner is the lowest bidder and the 4th respondent had not included tax and duties and consequently must be considered as disqualified. It was claimed that if the 4th respondent was disqualified, the petitioner would emerge successful even in zone 1 to zone 4. The petitioner claimed that the tender document itself, in particular Form F clearly stated that when the bid is submitted, applicable taxes would also have to be included. It was stated that though 6 bidders had participated, only the 4th respondent had submitted their bid without including GST. The 1st respondent had issued a communication to the petitioner dated 14.08.2019, whereby they informed that the 4th respondent had been called for negotiation and the 4th respondent had revised their price for Zone 1 to Zone 4 by submitting revised bid with GST as '0 %'. The 4th respondent claimed that the 4th respondent had justified non-inclusion of GST placing reliance on Government of India Notification in GST No.12 of 2017 dated 28.06.2017 read with ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he Writ Petitioner had quoted their bid for all Five zones. The 4th respondent had also quoted their bit for Five zones. Similarly, the Writ Petitioner in W.P.No.27267 of 2019, had also quoted their bid for all the Five zones. After approval of the evaluation report by the Sub-committee of the Board, the evaluation report was published in the website on 02.07.2019. The price bids of the shortlisted bidders were opened on 04.07.2017. The 4th respondent, M/s.Krystal Integrated Services Pvt. Ltd., Mumbai, had quoted GST as 'zero' for all the Five zones, for which they had submitted bids. They emerged the successful bidder in Zone 1 to Zone 4. The Writ Petitioner, M/s.Padmavathi Hospitality Facilities Management Services, Chennai, emerged the successful bidder for Zone 5. It was stated that the 4th respondent had furnished along with their price bid, an explanatory note citing the notification No.12/2017 Central Tax (Rate) dated 28.06.2017, claiming that GST is not applicable for the services rendered. 8. The 1st respondent had taken an opinion of a GST consultant M/s.Sanjiv Shah Associate, Chartered Accountants, Chennai. They had also given an opinion that house keepi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... has been stated that since Section 97 of the Central Goods and Services Act, 2017 provided a statutory authority for obtaining Advance Ruling with respect to determination of the liability to pay tax on any goods or service or both, the 3rd respondent is not competent to give any opinion whether GST is applicable or not. Counter affidavit of the 4 th respondent: 11. In the counter affidavit of the 4th respondent, it had been stated that the Writ Petition is not maintainable, since if the petitioner is aggrieved by any order passed by the 1st respondent under Section 10 of the Tamil Nadu Transparency in Tenders Act, 1998, the petitioner must file an Appeal to the Government under Section 11 of the Tamil Nadu Transparency in Tenders Act, 1998, within 10 days from the date of receipt of the order. It is stated that the bid has not been awarded by the 1st respondent which was still at the evaluation stage. It had been stated that since, the Writ Petition had been filed before completing the tender evaluation, it is not maintainable. It had been stated that the 4th respondent had submitted their bid by stating that GST as 'zero'. It is their stand that house keeping an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... it filed in support of W.P.No.27267 of 2019: 14. In the affidavit filed by M/s.Agile Security Force Pvt. Ltd., having its Branch Office at Chennai, John Selwyn Samraj, Chief Operating Officer, stated that the Writ Petitioner had participated in the tender floated by the 1st respondent for outsourcing of Housekeeping and Security service in 94 Government Hospitals and Schools and Colleges for Nursing (increased to 95) under the control of the 2nd respondent namely, the Director of Medical Education, Chennai. 15. The Hospitals / Schools / Colleges were divided into Five zones namely, Zone 1 to Zone 5. The petitioner had also submitted the bid for all the Five zones. It was stated that the petitioner possessed the requisite experience in the field of Facility Management. They had also deposited ₹ 50,00,000/- as EMD for all the Five zones. It was also stated that the Writ Petitioner's representative participated in the opening of the price bid on 04.07.2019. The petitioner emerged as the 3rd lowest bidder. The petitioner claimed that the 4th respondent, M/s.Krystal Integrated Services Pvt. Ltd., had submitted their bid without including GST and by stating GST as ' ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ndent, M/s.Krystal Integrated Services Pvt. Ltd., Mumbai, had quoted GST as 'zero' for all the Five zones, in which they had submitted bids. They emerged the successful bidders in Zone 1 to Zone 4. The 3rd respondent, M/s.Padmavathy Hospitality and Facilities Management Services emerged as the successful bidder for Zone 5. It was stated that the 4th respondent had furnished along with their price bid, an explanatory note citing the notification No.12/2017 Central Tax (Rate) dated 28.06.2017, claiming that GST is not applicable for the services rendered. 19. The 1st respondent had taken an opinion of an expert from a GST consultant M/s.Sanjiv Shah Associate, Chartered Accountant, Chennai. They had also given an opinion that the house keeping and security services provided at the Medical College and Hospital, Schools of Nursing etc., which are controlled by the Directorate of Medical Education Health and Family Welfare Department, Government of Tamil Nadu is exempted vide entry No.3 of the Notification No. 12 of 2017 CT (Rate) dated 28.06.2017. Thereafter, the 4th respondent was called for price negotiation for Zone 1 to Zone 4 and the 3rd respondent was called for p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ned Government Advocate for R2, Mr.Santhanaraman, learned counsel for R3 and R6 and Mr.A.L.Somayaji, learned Senior Counsel for R4 and Mr.Mohammed Shafi, learned counsel for R5. 23. Since the issues raised in both the Writ Petitions and the Writ Petitioners in both the Writ Petitions have questioned the acceptance of the Financial bid offered by the 4th respondent namely, M/s.Krystal Integrated Services Pvt. Ltd., Mumbai, in the tender floated by the 1st respondent, a common order is passed in both the Writ Petitions. 24. The 1st respondent, the Tamil Nadu Medical Service Corporation Ltd., is the Nodal Agency for procurement and distribution of Durgs, Surgical and Suture items for about 11,000 Government Medical Institutions all over Tamil Nadu. They are also the procurement agency for medical equipments. They also impart training to Pharmacists and Doctors deputed from various State Governments, the World Health Organization and from other countries like, Myanmar, Nepal and Sri Lanka. They are also entrusted with the responsibility of finalizing the agents for providing Housekeeping, Security and other related services for the Government Medical Institutions in the State. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... could not be done equally, 9[the said authority] shall record reasons for the same. (6) If the Tender Accepting Authority proposes to accept the tender as per the provisions of this section, 9[the said authority] shall pass orders accepting the tender together with reasons for such acceptance.10[Provided that if the tenderer is unable to supply the entire quantity required, the Tender Accepting Authority may follow the fixed rate contract procedure as may be prescribed.] (7) The Tender Accepting Authority shall intimate the information regarding the name and address of the tenderer whose tender has been accepted along with the reasons for rejection of other tenders to the appropriate Tender Bulletin Officers. 26. Section 11 of the Act, is as follows: 11. Appeal.- (1) Any tenderer aggrieved by the order passed by the Tender Accepting Authority under section 10 may appeal to the Government within ten days from the date of receipt of order and the Government shall dispose the appeal within fifteen days from the date of receipt. (2) In disposing of an appeal under subsection (1), the Government may, after giving the party an opportunity of making his repre ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Value Added Tax levied under Tamil Nadu Value Added Tax Act, 2006 (Tamil Nadu Act 32 of 2006) shall be excluded for the evaluation of the price. (e) in the case of purchase of equipment, the operation and maintenance and spare part costs for appropriate periods as may be specified in bid documents may be quantified, where practicable and considered. (3) In order to secure the best possible procurement price, negotiations with tenderer determined as per 45[sub-rules (1) and (2) of this rule] are permissible subject to provisions in section 10 of the Act. (4) In the event that two or more tenderers have made the same financial bid and the splitting of the tender is not possible in accordance with sub-section (5) of section 10 of the Act, the Tender Accepting Authority shall identify the lowest tenderer by adopting one of the following approaches, which shall be pre-specified in the Tender Documents: (a) In case of multi-stage tenders, by taking into account the qualification score of each tenderer from the first stage and the tenderer with higher score shall be adjudged the Lowest Tenderer; or (b) By asking the two tenderers to provide their best and final o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 1 2 3 4 (1+2+3+4)=5 Price in (Rs)/Year excluding service tax Add Proportionate cost of man power of State Level Management for Zone (6) Add Proportionate cost for Resource for State Level Management for Zone (7) Grand Total cost of man power, resources for hospitals and man power and resources cost for zonal and State level management for zone (5+6+7) = (8) Add GST applicable (9) Grand Total Including Service Tax for Zone: (8+9)=(10) 32. The zone wise prices quoted by the Writ Petitioners in the two Writ Petitions and by the 4th respondent is given below: Zone 1 Sl.No. Bidder Quoted Rate excl. GST Rs. GST Rs. Quoted Rate incl.GST Rs. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... L3 Zone 4 Sl.No Bidder Quoted Rate excl. GST Rs. GST Rs. Quoted Rate incl.GST Rs. Position 1 M/s.Krystal Integrated Services Pvt. Ltd., Mumbai 29,94,97,221.04 0 29,94,97,221.04 L1 2 M/s.Padmavathi Hospitality Facilities Management Services, Chennai 27,24,41,748.00 4,90,39,515.00 32,14,81,263.00 L2 3 M/s.Agile Security Force Pvt. Ltd., Hyderabad 29,49,31,444.00 5,30,87,659.92 34,80,19,103.92 L3 Zone 5 Sl. No Bidder Quoted Rate excl. GST Rs. GST Rs. Quoted Rate incl.GST Rs. Position 1 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 35. Similarly, the petitioner was also invited for price negotiation and they offered the following as their revised price for Zonal 5: Zone Quoted Price excl.GST @ 18% Revised price excl. GST @ 18% M/s.Padmavathi Hospitality Facilities Management Services, Chennai 5 39,17,23,920/- 39,15,11,736/- 36. The 1st respondent had also verified the revised prices with Zero GST and with GST, if it becomes applicable. It was found that in the opinion of the 1st respondent, the bid offered by the 4th respondent need not be rejected. It has also been pointed out by the learned Senior Counsel for the 4th respondent that they would take up the burden of payment of GST. At this stage, this Court is not examining whether GST is applicable or not applicable for the Service for which the tender had been floated. This Court is not prepared to examine whether the prices offered by the 4th respondent and by the petitioner for Zone 1 to Zone 4 and Zone 5 respectively are competitive prices or not. They are to be decided only ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rporation Limited and Others , the Hon'ble Supreme Court, observed as follows: 38. We consider it appropriate to make certain observations in the context of the nature of dispute which is before us. Normally parties would be governed by their contracts and the tender terms, and really no writ would be maintainable under Article 226 of the Constitution of India. In view of Government and public sector enterprises venturing into economic activities, this Court found it appropriate to build in certain checks and balances of fairness in procedure. It is this approach which has given rise to scrutiny of tenders in writ proceedings under Article 226 of the Constitution of India. It, however, appears that the window has been opened too wide as almost every small or big tender is now sought to be challenged in writ proceedings almost as a matter of routine. This in turn, affects the efficacy of commercial activities of the public sectors, which may be in competition with the private sector. This could hardly have been the objective in mind. An unnecessary, close scrutiny of minute details, contrary to the view of the tendering authority, makes awarding of contracts by government a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and the havoc which needless interference in commercial matters can cause. In contracts involving technical issues the courts should be even more reluctant because most of us in judges' robes do not have the necessary expertise to adjudicate upon technical issues beyond our domain. As laid down in the judgments cited above the courts should not use a magnifying glass while scanning the tenders and make every small mistake appear like a big blunder. In fact, the courts must give fair play in the joints to the government and public sector undertakings in matters of contract. Courts must also not interfere where such interference will cause unnecessary loss to the public exchequer. 20. The essence of the law laid down in the judgments referred to above is the exercise of restraint and caution; the need for overwhelming public interest to justify judicial intervention in matters of contract involving the state instrumentalities; the courts should give way to the opinion of the experts unless the decision is totally arbitrary or unreasonable; the court does not sit like a court of appeal over the appropriate authority; the court must realise that the authority floating the te ..... X X X X Extracts X X X X X X X X Extracts X X X X
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