TaxTMI 
TaxTMI 
TaxTMI 
2020 (3) TMI 291
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.... reject the bid of the 4th respondent namely, M/s.Krystal Integrated Services Pvt. Ltd., Mumbai, and consequently award the contract in Tender No.432/outsourcing/DME/TNMSC/Engg/2019 dated 19.02.2019 to the petitioner for all the zones namely, zones 1 to 5. W.P.No.27267 of 2019: 2. Writ Petition filed in the nature of Mandamus, to direct the 1st respondent namely, the Tamil Nadu Medical Service Corporation Ltd., (A Government of Tamil Nadu Undertaking), to reject the bids of the 3rd respondent, M/s.Padmavathi Hospitality and Facilities Management Services, Chennai, (Writ Petitioner in W.P.No.24412 of 2019) and the 4th respondent, M/s.Krystal Integrated Services Pvt. Ltd., Mumbai, consequently, direct the 1st respondent to award the contract relating to Tender No.432/outsourcing/DME/TNMSC/Engg/2019 dated 19.02.2019 to the petitioner for Zones 1 to 5. Affidavit filed in support of W.P.No.24412 of 2019: 3. In the affidavit filed by the Partner and Authorized representative of the Writ Petitioner, M/s.Padamavathi Hospitality & Facilities Management Services, it had been stated that the 1st respondent, Tamil Nadu Medical Service Corporation Limited had floated a Tender for outsourcin....
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....ransparency in Tender Act, 1998 and Rules framed thereunder. The 1st respondent stated that time was extended till 20.08.2019 to the petitioner to submit their reply insofar as the issue relating to GST is concerned. However, without submitting any further reply, the petitioner had filed this writ petition for the relief as stated above. 5. The petitioner also filed an additional affidavit, claiming that another bidder M/s.Neat and Clean Services Squared had originally emerged as the successful bidder for Zone 5, but was disqualified for not submitting their bid along with service tax and it was only because of such disqualification that the petitioner had emerged as the successful bidder for Zone 5. However, it was pointed out that the 1st respondent had not similarly disqualified the 4th respondent. Counter affidavit of the 1 st respondent: 6. In the counter affidavit filed by the 1st respondent, it had been stated that the 1st respondent is the Nodal Agency for procurement and distribution of Drugs,Surgical and Suture items for about 11,000 Government Medical Institutions all over Tamil Nadu, and also having the responsibility of finalizing the Agencies for providing House Ke....
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.... was stated that still the 4th respondent emerged the successful bidder for Zone 1 to Zone 4 and the petitioner emerged the successful bidder for Zone 5. The 1st respondent gave a working sheet relating to the prices quoted by the 4th respondent. It was stated that the 1st respondent as the Tender Inviting Authority and also as the Tender Accepting Authority, had taken a decision with respect to applicability or nonapplicability of GST without deviating from any of the provisions of the Tamil Nadu Transparency in Tenders Act, 1998 and the Rules thereunder and also the terms of the tender. It is claimed that substantial reduction for the price in Zone 1 to Zone 4 had been obtained. It is also stated that the procedure adopted was not contrary to Rule 29(d) of the Tamil Nadu Transparency in Tenders Rules and Section 10 of the Tamil Nadu Transparency in Tenders Act, 1998. It was also stated that the 1st respondent was in the process of negotiations and the tender process had not yet been completed and not yet been approved by the Tender Accepting Authority, which is the Board of Directors of the 1st respondent. It was stated that the petitioner had come to Court at pre-mature stage an....
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....). It was also stated that even if GST is to be paid, it was the responsibility of the 4th respondent to pay the GST. Therefore, it was stated that the 1st respondent was justified in holding that the 4th respondent was the lowest bidder for Zone 1 to Zone 4. It was therefore stated that the Writ Petition should be dismissed. Memo filed by the 1 st respondent: 12. In the memo dated 10.09.2019, filed during the pendency of the Writ Petition, the 1st respondent had stated that the tenure of the contract awarded to the Writ Petitioner, M/s.Padmavathi Hospitality & Facilities Management Service, in the previous tender had expired on 30.04.2019 and it was extended till 31.07.2019. It was further stated that further extension till 30.10.2019 was placed before the Government and further orders are awaited. It was stated that the petitioner is the successful bidder insofar as the Zone 5 is concerned and the letter of award of contract was issued on 07.09.2019 to the successful tenderer. A further memo was filed by the 1st respondent on 30.10.2019 stating that the extension of the existing contract in favour of the petitioner for 67 institutions, would cost an additional expenditure of Rs....
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....ter a lapse of 23 months from the date of Gazette Notification dated 04.01.2017. It was stated that since the 3rd and 4th respondents have to be disqualified, the petitioner as the 3rd successful bidder should be considered for award of the contract. The petitioner prayed that the Writ Petition should be allowed. Counter affidavit of the 1 st respondent: 17. In the counter affidavit filed by the 1st respondent, it had been stated that the 1st respondent was the Nodal Agency for procurement and distribution of Drugs,Surgical and Suture items for about 11,000 Government Medical Institutions all over Tamil Nadu, and also having the responsibility of finalizing the Agencies for providing House Keeping, Security and other related services for the Government Medical Institutions in the State of Tamil Nadu. The 1st respondent had floated an open tender in reference No. 432 / outsourcing / DME /TNMSC/Engg/2019 dated 19.02.2019, for providing service of house keeping, bio-medical waste management, security and pest control services in 94 Government Medical Institutions under the control of Director of Medical Education. The number of institutions was later increased to 95. The i....
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....ions of the Tamil Nadu Transparency in Tenders Act, 1998 and the Rules thereunder and also the terms of the tender. It was claimed that substantial reduction for the price in Zone 1 to Zone 4 had been obtained. It was also stated that the procedure adopted was not contrary to Rule 29(d) of the Tamil Nadu Transparency in Tenders Rules and Section 10 of the Tamil Nadu Transparency in Tenders Act, 1998. It was also stated that the 1st respondent was in the process of negotiations and the tender process had not yet been completed and not yet been approved by the Tender Accepting Authority, which is the Board of Directors of the 1st respondent. It was stated that the petitioner had come to Court at pre-mature stage and they can approach the Appellate Authority under Section 11 of the Tamil Nadu Transparency in Tenders Act, 1998, after notification of the award based on the orders to be passed by the Tender Accepting Authority. It was therefore stated that the Writ Petition should be dismissed. 20. The other respondents in W.P.No.27267 of 2019 did not file their counter affidavit. 21. The Assistant Commissioner (CT), State GST, Chennai and the Tamil Nadu Advance Ruling Authority, Chenn....
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....tion 11 of the Tamil Nadu Transparency in Tenders Act, 1998, that any tenderer aggrieved by the order of the Tender Accepting Authority under Section 10 of the Act, may appeal to the Government within 10 days from the date of receipt of the order. Section 10 of the Act, is as follows: 10. Evaluation and Acceptance of Tender.- (1) The Tender Accepting Authority shall cause an objective evaluation of the tenders taking into consideration the schedule of rates as mentioned in the tender document and the prevailing market rate for procurement and comparison of the tenders in accordance with the procedure and criteria specified in the tender document. (2) After evaluation and comparison of tenders as specified in sub-section (1), the Tender Accepting Authority shall accept the lowest tender ascertained on the basis of objective and quantifiable factors specified in the tender document and giving relative weights among them. (3) Notwithstanding anything contained in sub-section (2), if the Tender Accepting Authority decides that the price of the lowest tender is higher with reference to the prevailing market rate or the schedule of rates, 9[the said authority] may negotiate for a....
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....ency in Tenders Rules, 2000, is as follows: "29. Determination of the lowest evaluated price.- (1) Out of the tenders found to be substantially responsive after the initial examination, the tenderers who has bid the lowest evaluated price in accordance with the evaluation criteria or the tenderers scoring the highest on the evaluation criteria specified as the case may be shall be determined. (2) In determining the lowest evaluated price, the following factors shall be considered, namely:- (a) the quoted price shall be corrected for arithmetical errors; (b) in cases of discrepancy between the prices quoted in words and in figures, lower of the two shall be considered; (c) adjustments to the price quoted shall be made for deviations in the commercial conditions such as the delivery schedules and minor variations in the payment terms which are quantifiable but deemed to be non-material in the context of the particular tender; (d) the evaluation shall include all central duties such as customs duty and central excise duty and sales tax as a part of the price, as detailed below: - (i) in evaluation of the price of an imported item, the price has to be determined inclusive....
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.... 2 M/s.Krystal Integrated Services Pvt. Ltd., Mumbai All 5 zones 3 M/s. Sumeet Facilities Pvt. Ltd., Chennai All 5 zones 4 M/s. All Services Global Pvt. Ltd., Hyderabad All 5 zones 30. There were four other bidders who had quoted for 1 or 2 or 3 out of the 5 zones. After evaluation, one of the bidders was rejected. Among the tender rules, clause 1.1.13 relates to tax and duties. It is as follows: "1.1.13.Taxes and Duties: The bidder must consider in the price all duties, royalties and applicable GST.No extra claim will be entertained during execution of the Contract, except change in GST rates as applicable." 31. The format for submission of the bid had been given in Format - F. The format is as follows: "Format - F Covered in the zone, (c) Man power cost for Zonal Level (D) Resource cost for Zonal Level Management (E) Zone No: Summary of man power cost for all the hospitals covered in Zone as per Format C Summary of Resource cost equipment / consumables for all the hospitals covered in the zone as in Format C Man Power cost for zone level management as in Format D Resource cost for zonal level management as in format E Total For Zone 1 2 3 ....
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....T Rs. Position 1 M/s.Padmavathi Hospitality & Facilities Management Services, Chennai 39,17,23,920.00 7,05,10,306 00 46,22,34,226.00 L1 2 M/s.Krystal Integrated Services Pvt. Ltd., Mumbai 46,38,27,576.40 0 46,38,27,576.40 L2 3 M/s.Agile Security Force Pvt. Ltd., Hyderabad 41,85,58,760.00 7,53,40,576.80 49,38,99,336.80 L3 33. It had been stated that the 4th respondent, M/s.Krystal Integrated Services Pvt. Ltd., Mumbai, had relied on Notification No.12/2017 - Central Tax (Rate) dated 28.06.2017 for nonapplicability of GST for the services for which the tender had been floated. It is also seen that the 1st respondent had sought a clarification from M/s M/s.Sanjiv Shah & Associate, Chartered Accountant, Chennai, GST consultant who had also given his opinion as follows: "t).In view of the above deliberations the housekeeping and security service provided at the Medical College and Hospitals, School 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.12/2017 - CT (Rate), dated 28.06.2017." 34. It is therefore seen that to the....
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....nnot venture into applicability of certain provisions of law or not. 37. In 2017 4 SCC 318, Tamil Nadu Generation and Distribution Corporation Limited (TANGEDCO) Rep.by its Chairman and Managing Director and Another V. CSEPDITRISHE Consortium Rep by its Managing Director and Another, the Hon'ble Supreme Court had observed as follows: "37. Before parting with the case we are constrained to add something. We do so with immense pain. The respondent, before finalisation of the financial bid submitted series of representations and seeing the silence of the owner it knocked at the doors of the writ court which directed for consideration of the representations. We are disposed to think that the High Court at that stage should have exercised caution. If the courts would exercise power of judicial review in such a manner it is most likely to cause confusion and also bring jeopardy in public interest. An aggrieved party can approach the Court at the appropriate stage, not when the bids are being considered. We do not intend to specify. It is appreciable the owner in certain kind of tenders call the bidders for negotiations to show fairness transparently. But the present case is not on....
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....no responsible authority, acting reasonably and in accordance with law, could have reached such a decision. It has been cautioned that constitutional courts are expected to exercise restraint in interfering with the administrative decision and ought not to substitute their view for that of the administrative authority. Mere disagreement with the decision-making process would not suffice." (Emphasis Supplied) 39. In 2019 SCC Online SC 1133, Silppi Constructions Contractors V. Union of India and Another, the Hon'ble Supreme Court, observed as follows: "19. This Court being the guardian of fundamental rights is duty bound to interfere when there is arbitrariness, irrationality, mala fides and bias. However, this Court in all the aforesaid decisions has cautioned time and again that courts should exercise a lot of restraint while exercising their powers of judicial review in contractual or commercial matters. This Court is normally loathe to interfere in contractual matters unless a clear-cut case of arbitrariness or mala fides or bias or irrationality is made out. One must remember that today many public sector undertakings compete with the private industry. The contract....