TaxTMI 
TaxTMI 
2019 (2) TMI 2028
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....ndargopal, M/s. K. Sumathi, Mr. T.V. Ramanujam, SC for M/s. R. Ramya For the R1 & R2 : Mr. Vijay Narayan, AG and Mr. C. Manishankar, AAG assisted by Mr. E. Balamurugan, SGP, Mr. R. Krishnamoorthy, SC for Mr. V.P. Sengottuvel COMMON ORDER Inasmuch as the issues involved in this batch of writ petitions are more or less identical, they were heard together and are decided by this common order. Reliefs sought:- 2.The petitioners, who are the food suppliers/small poultry farms with a capacity to produce less than one lac eggs per day, have called in question the validity of G.O.Ms.No.57 Social Welfare and Nutritious Meal Programme (SW 4-3) Department, dated 20.08.2018 (for short, "G.O.Ms.No.57") and consequential tender floated by the second respondent vide notification in Roc.No.20304/NMP/2018 dated 20.08.2018. The petitioners in WP.Nos.26732, 26890 and 27059 of 2018 have also challenged the rejection of their technical bids submitted, pursuant to the earlier tender notification in Roc.No.4554/NMP/2018 dated 11.06.2018. Conspectus of facts:- 3.1 Before proceeding to note the submissions of the learned Senior Counsel appearing for the respective parties, it is but ne....
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....ed by theSupreme Court. For the year 2018-19, tender was floated on 11.06.2018 and bids were received, in which, 6 firms participated. However, none got qualified in the technical bid. Hence, fresh tender was notified on 24.07.2018, the technical bid of which was scheduled to be opened on 24.08.2018. 3.6 While so, based on a representation dated 14.08.2018 submitted by the Tamil Nadu Muttai Kozhi Pannaiyalargal Marketing Society, the Government passed G.O.Ms.No.57 revoking the earlier G.O.Ms.No.264 dated 17.10.2012 and replacing the State level annual tender system to zone-wise tender system for six months. Consequently, the second respondent floated the impugned tender notification dated 20.8.2018, which is challenged herein. Submissions:- 4.1 Mr.S.Parthasarathy, learned Senior Counsel appearing for the petitioner in WP.No.22878 of 2018 submitted that the policy of a single State-wise tender has proved to be a success, which was even acknowledged by the Government as recently as on 18.07.2018, when it came out with a Press release recognising the history behind the introduction of G.O.Ms.No.264 dated 17.10.2012. Further, the said Government Order has also received the exp....
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....rative action, because, any action that is arbitrary must necessarily involve the negation of equality and as such, the impugned G.O.Ms.No.57 offers no rationale whatsoever for the change of decision to go from a State-wise tender to a District-wise tender for procurement of eggs for the Nutritious Meal Programme. Furthermore, the circumstances under which G.O.Ms.No.264 came to be enforced, have not been negated. Further, according to the learned Senior Counsel, the validity of a Government Order ought to be tested only on the basis of its contents and the Government cannot improve its case through its pleadings, as held by the Supreme Court in Mohinder Singh Gill v. Chief Election Commissioner [(1978) 1 SCC 405]. By stating so, the learned Senior Counsel sought to allow this writ petitionby quashing the impugned Government Order. 5.1 Mr.A.Thiagarajan, learned Senior Counsel appearing for the petitioner in WP.No.22888 of 2018 submitted that the decision taken by the second respondent is not a policy decision, but an executive order of the Government. He further submitted that the documents filed by the respondents would show that such decision was taken by the Minister for Socia....
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....nd therefore, publication in the All India Trade Journal is mandatory; a policy can always be challenged on the grounds of unreasonableness, discrimination, arbitrariness, perversity and mala fides; non-participation of the petitioner in the tenders from 2012 would not stand in their way from challenging the present impugned tender notification; the executive powers are co-extensive with the legislative powers of the State and hence, the respondents cannot pass an executive order, which creates an artificial restriction on Inter state trade and commerce; and such an arbitrary and unreasonable restriction has been held to be unconstitutional by the Apex Court in Jindal Stain steel Ltd v. State of Haryana [2017 12 SCC 1]. Thus, according to the learned Senior Counsel, the impugned Government Order, which prohibits participation of bidders from other States, is ultra vires Articles 19(1)(g) and 301 to 304 of the Constitution of India and the same is liable to be quashed. 7. Mr.K.M.Vijayan, learned Senior Counsel for the petitioner in WP.No.22956/2018 submitted that no opportunity was ever given to the agriculturists/small poultry farmers to present their case for implementing block....
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..... The learned Senior Counsel also submitted that since the petitioner has been a successful tenderer for 3 consecutive years by supplying 60%, 30% and 20% of the required numbers and the supply was always upto the standard expected by the respondents, the rejection of their bid on the ground that the undertaking affidavit and the no objection from the partners were not in the proper format, is arbitraryand illegal. 9.1 Mr.M.S.Krishnan, learned Senior Counsel for the petitioner in WP.Nos.25142 and 26890 of 2018 submitted that the petitioner is supplying eggs to nutritious meal programme for the past 5 years under the State level annual tender; they are the Agmark licence holder of eggs and they have the sufficient grading capacity to supply to the mid-day meal programme. According to the learned Senior Counsel, there is no complaint received by the Government during the period of functioning the State level tender; G.O.Ms.No.264 brought back a time tested and efficient method of ensuring supply of eggs and the same was well reasoned, the validity and efficacy of which, were upheld by the Division Bench in WA Nos.574 and 776 of 2013 and was affirmed by the Supreme Court; and the s....
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....wadi/Noon Meal centres, ensuring prompt supply of the requisite quantity of eggs requires a central delivery system involving sufficient manpower and skillfully planned logistic support, which can be efficiently executed by a supplier of goods, who has a predominant activity rather than a poultry farmer and hence, the tender condition for the alleged reason of benefitting poultry farmers, has seriously compromised and jeoparadised the main object of supplying quality eggs to the noon meal centres for the benefit of children. The learned Senior Counsel also submitted that the previous tender notification permitted both the producers as well as the suppliers of eggs to be the tenderers and there was no stipulation as regards the capacity to produce 1 lakh eggs per day and therefore, any poultry farmer had the possibility to have a consortium with such other person, who had the pre-qualification and participate in the tender, which provided for an even platform for both egg producers and suppliers, whereas, the alleged and purported reasoning for modifying the methodology of the tender i.e. to benefit the poultry farmer, cannot and will not be achieved in terms of the conditions stipu....
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....ght of the petitioner cannot be denied for mere procedural infraction, especially when the respondents will not be prejudiced in any manner. Thus, the learned Senior Counsel sought to allow the writ petitions. 11. Ms.Sumathy, learned counsel for the petitioner in WP.No.26282 of 2018 submitted that by the impugned G.O.Ms.No.57 as well as the tender notice, the second respondent has introduced new qualifications/conditions for the tenderers, which are highly arbitrary and contradictory to the spirit of the benefitting the poultry farmers/stake holders of the State of Tamil Nadu and also opposed to the Tamil Nadu Transparency in Tenders Act 1998 and the Rules 2000. She further submitted that both the conditions in Clauses 2(3) and 2(4) have no rationale and logic and it would not serve the purpose of restoring the zonal wise tender. Further, there is lack of transparency and bona fides in the process of floating the tender. That apart, Clause 2(5) stipulates that a tenderer can bid for a maximum of three zones only, either individually or by the way of consortium, which gives a scope of two monopolies in the State. Thus, according to the learned counsel, the tender condition is in ....
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....y strictly following all the provisions of the Act and Rules and the various Government Orders, the tender conditions have been framed for the benefit of the beneficiaries and to bring healthy competition among the egg suppliers and support the egg producers of the State. Thus, according to the respondents, G.O.Ms.No.57 and the consequential tender notification are legally valid and the same call for no interference. 13.1 Reiterating the averments made in the counter affidavit, Mr.Vijay Narayan, learned Advocate General defended the impugned G.O.Ms.No.57 on behalf of the respondents 1 and 2. Pointing out the contents made in para 5 of G.O.Ms.No.57, he submitted that vide letter dated 07.08.2018, the remarks of the Commissioner of Social Welfare and the Director of Integrated Child Development Services Scheme have been called for, who, in turn, have submitted the merits and demerits of the State Level Annual Tender system and District/Zonal wise tender system. Thereafter, a meeting was convened in this regard by the Hon'ble Minister (SW and NMP) with the Chief Secretary to Government, the Additional Chief Secretary (Finance), the Principal Secretary (Social Welfare and Nutrit....
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....se. In support of his arguments, the learned Advocate General relied on the following decisions: (i) Tata Cellular v. Union of India [(1994) 6 SCC 651]; (ii) P.T.R.Exports v. Union of India [1996 (5) SCC 268]; (iii) Krishnan Kakkanth v. Government of Kerala and others [(1997) 9 SCC 495]; (iv) Union of India v. Kanndapara Sangatanda [2002 (10) SCC 226]; (v) Chairman & MD, BPL Ltd v. S.P.Gururaja and others [2003(8) SCC 567]; (vi) Bannari Amman Sugars v. Commercial Tax officer and others [2005(1)SCC 625]; (vii) Association of Registration Plates v. Union of India and others [(2005) 1 SCC 679]; (viii) Shimnit Utsch India Private Limited and another v. West Bengal Transport Infrastructure Development Corporation Limited and others [(2010) 6 SCC 303]; (ix) APM Terminals B.V. v. Union of India and another [(2011) 6 SCC 756]; (x) Michigan Rubber (India) Limited v. State of Karnataka and others [(2012) 8 SCC 216]; (v) Bharti Airtel v. Union of India [2015 (12) SCC 1]; (xi) Essar Steel Limited v. Union of India and others [(2016) 11 SCC 1]; (xii) V.Lavanya v. State of Tamil N....
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....lly qualified as per the tender conditions. He further submitted that it is the policy decision of the Government to call for Zone-wise tender for the supply of eggs and it will not be open to the petitioners to challenge the same, on the grounds that it is arbitrary and passed with an oblique motive. According to the learned Senior Counsel, the impugned G.O.Ms.No.57 has been passed on rational, reasonable and subjective satisfaction not only to ensure the procurement of Agmark specification eggs for Nutritious Meal Programme, but also to encourage the poultry farmers having capacity, capability and financial viability to take part in the tender process and to supply fresh eggs at a reasonable price fixed by the department to prevent loss of revenue to the poultry farmers and to avoid the middlemen from making unjust enrichment by causing loss to the poultry farmers as well as to the department. He also submitted that as per the tender conditions, not only the tenderers, but also the other egg producers who are entering into agreement with the tenderers are also directly benefitted under the impugned tender system. To substantiate his arguments, he placed reliance on the following ....
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....ugned G.O.Ms.No.57 is not the complements/supplements of the earlier G.O.Ms.No.264, but only to satisfy a section of people. According to him, such action of the respondents is arbitrary, discriminatory and unfair, inasmuch as, it targets the upper segment of poultry farmers and egg producers for participation in tender and eliminates small farmers like that of the petitioner. The learned Senior Counsel also submitted that the tender conditions are fanciful, unworkable, onerous and in violation of the Act and also irrational, having no nexus with the object sought to be achieved and the whole object of the tender to promote competition, as claimed by the respondents, is totally baseless, as no promotion of the healthy competition is sought to be achieved between the tenders as major chunk of small farmers like that of the petitioner are still outside the realm of tenders called for by the respondents; there is no fair and equitable treatment of all the tenderers; hence, the questions of fairness, public confidence and interest; and transparency in the matter of procurement are all strikingly absent in the said tender. 18. Mr.P.S.Raman, learned Senior Counsel appearing for the pe....
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....Counsel appearing for thepetitioner in WP.No.25142 of 2018, in his reply, stated that the petitioner is not questioning the right of the Government to change the policy, but the manner in which it has been done. According to him, while issuing the impugned G.O.Ms.No.57 as well as the consequential tender notification, all the earlier safeguards framed by the Government for providing good quality eggs to beneficiaries, who are all school going children, have been completely given a go by, which may be detrimental to their interest; further, the Government, while dealing with the State largess, cannot have the right to choose a buyer from a particular group of individual, which is against Article 14 of the Constitution of India. The learned Senior Counsel also submitted that one of the sound reasonings assigned by the Government in arriving at the earlier policy decision in 2012 is that in a single State level tender system, a firm and stable price could be fixed due to the fluctuating price of eggs, whereas, the present tender notification is a notification inviting six separate tenders, which will again bring instability in the price of eggs. Further, there was no reason assigned b....
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....ed, whereas, G.O.Ms.No.57 is not a policy decision. The learned Senior Counsel further contended that the decision to introduce zonal level tender and the exclusion of egg suppliers from participation cannot be termed to be fair, just and legally valid; and the decision making process has not considered the relevant factors and the same is not justified, since the facts which ought not to be considered for arriving at the same, had been providing avenue of business to a few egg producers only. Adding further, the learned Senior Counsel submitted that contrary to the stand taken by the Government in the earlier round of litigation, the present tender has been devised for promoting egg commerce and market to the poultry owners; it has been floated for supply of eggs for 6 months only without any nexus to the object sought to be achieved viz., ensuring uninterrupted competitive one price for one year for supply of quality eggs to the children; and procurement of very large quantity of eggs from Namakkal area and transportation of the same throughout Tamil Nadu to about 1 lakh centres are the major operations in the tendered work and not production of eggs and hence, there is no added ....
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....ion, without the necessary expertise which itself may be fallible. 4) The terms of the invitation to tender cannot be open to judicial scrutiny because the invitation to tender is in the realm of contract. Normally speaking, the decision to accept the tender or award the contract is reached by process of negotiations through several tiers. More often than not, such decisions are made qualitatively by experts. 5) The Government must have freedom of contract. In other words, a fairplay in the joints is a necessary concomitant for an administrative body functioning in an administrative sphere or quasi-administrative sphere. However, the decision must not only be tested by the application of Wednesbury principle of reasonableness (including its other facts pointed out above) hut must be free of arbitrariness not affected by bias or actuated by mala fides. 6) Quashing decisions may impose heavy administrative burden on the administration and lead to increased and unbudgeted expenditure." (b) In Air India Ltd. v. Cochin International Airport Ltd. [(2000) 2 SCC 617], the Supreme Court observed as follows: "7.....The award of a contract, whether....
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....e of their powers of judicial review to prevent arbitrariness or favoritism. However, there are inherent limitations in the exercise of the power of judicial review in such matters. The point as to the extent of judicial review permissible in contractual matters while inviting bids by issuing tenders has been examined in depth by this Court in Tata Cellular v. Union of India; (1994) 6 SCC 651. (e) In State of U.P and Another. v. Johri Mal [(2004) 4 SCC 714], it was held as follows: "It is well settled that while exercising the power of judicial review the court is more concerned with the decision-making process than the merit of the decision itself. In doing so, it is often argued by the defender of an impugned decision that the court is not competent to exercise its power when there are serious disputed questions of facts; when the decision of the Tribunal or the decision of the fact-finding body or the arbitrator is given finality by the statute which governs a given situation or which, by nature of the activity the decision- maker's opinion on facts is final. But while examining and scrutinising the decision-making process it becomes inevitable to also appr....
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....the authority inviting tenders can enter into negotiations or grant relaxation for bona fide and cogent reasons provided such relaxation is permissible under the terms governing the tender process. 9. Suffice it to say that in the matter of award of contracts the Government and its agencies have to act reasonably and fairly at all points of time. To that extent the tenderer has an enforceable right in the Court who is competent to examine whether the aggrieved party has been treated unfairly or discriminated against to the detriment of public interest." Thus, the law laid down by the Supreme Court in the aforesaid judgments is that the Courts can scrutinise the award of the contracts by the Government or its agencies in exercise of its powers of judicial review to prevent arbitrariness or favoritism. Further, the Supreme Court indicated that interference in the contractual matters is permissible, if decisionmaking process is illegal, irrational, arbitrary and procedural impropriety and it must meet the test of reasons and relevance. 23. After recollecting the correct approach under Article 226 of the Constitution while dealing with tender matters, this Court now, pro....
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....d and scheduled to be opened on 24.08.2018 shall be cancelled. ii. State Level Zone -wise tender system (six zones) to procure eggs from the egg producers (hen) in Tamil Nadu for a period of six months shall be floated. iii. As the present extended supply contract expires on 31.08.2018, a short tender (15 days) shall be floated and finalized to procure eggs at the earliest. iv. The existing procedure of constitution of Tender Committees namely Tender Inviting Authority / Tender Scrutiny Committee / Tender Accepting Authority Committee, procurement of AGMARK quality eggs, allocation of funds, maintenance of accounts and settlement of bills, constitution of District/ Block Level Monitoring Committee etc., as in the Government order 1st read above shall be continued. v. The six zones shall be decided by the Tender Inviting Authority for the smooth implementation of the programme and the State Level Zone -wise Tender (six zones) shall be floated by the Tender Inviting Authority at the State Level by following Tamil Nadu Transparency in Tenders Act, 1998 & Rules, 2000. vi. The Tender scrutiny committee shall decide the eligibility criteria in....
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.... to delve into the grounds of each of the petitioners separately and it would suffice to discuss the following aspects. 25.1 The main ground of attack made by the petitioners is that the impugned decision made in G.O.Ms.No.57 excluding the egg suppliers from participation in the tender called for the procurement of eggs to the beneficiaries in Tamil Nadu under Nutritious Meal Programme and Integrated Child Development Services Scheme, is violative of Articles 19(1)(g), 301, 303 and 304 of the Constitution. The petitioners further alleged that the said decision is also violative of Article 14 of the Constitution. According to them, the classification made by the respondent authorities between the producers and suppliers of the eggs with regard to the object of the Scheme, is totally unreasonable, irrational, arbitrary and discriminative in nature; the decision to move away from a centralized State level tender to zone wise tender is also arbitrary, unfair and violative of the fundamental rights guaranteed under the Constitution. The learned Senior Counsel for the petitioners further submitted that the executive powers of the State are co-extensive with the legislative powers and ....
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....at while Article 14 forbids class legislation, it does not forbid reasonable classification for the purposes of legislation. In order, however, to pass the test of permissible classification two conditions must be fulfilled, namely, (i) that the classification must be founded on an intelligible differentia which distinguishes persons or things that are grouped together from others left out of the group and (ii) that differentia must have a rational relation to the object sought to be achieved by the statute in question. The classification may be founded on different bases; namely, geographical, or according to objects or occupations or the like. What is necessary is that there must be a nexus between the basis of classification and the object of the Act under consideration. It is also well established by the decisions of this Court that Article 14 condemns discrimination not only by a substantive law but also by a law of procedure. The contention now put forward as to the invalidity of the trial of the appellants has, therefore to be tested in the light of the principles so laid down in the decisions of this Court." (ii)The Supreme Court in EP Royappa v. State of Tamil Nad....
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....nner which does not disclose any discernible principle which is reasonable itself shall be labelled as arbitrary. Every State action must be informed by reason and it follows that an act uninformed by reason is per se arbitrary. 17. The courts as observed in G.B. Mahajan v. Jalgaon Municipal Council (1991) 3 SCC 91: AIR 1991 SC 1153 are kept out of lush field of administrative policy except where policy is inconsistent with the express or implied provision of a statute which creates the power to which the policy relates or where a decision made in purported exercise of power is such that a repository of the power acting reasonably and in good faith could not have made it. But there has to be a word of caution. Something overwhelming must appear before the Court will intervene. That is and ought to be a difficult onus for an applicant to discharge. The courts are not very good at formulating or evaluating policy. Sometimes when the Courts have intervened on policy grounds the Court's view of the range of policies open under the statute or of what is unreasonable policy has not got public acceptance. On the contrary, curial views of policy have been subjected to stringen....
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....is Court has held in more than one case that where the decision of the authority is in regard to a policy matter, this Court will not ordinarily interfere since these policy matters are taken based on expert knowledge of the persons concerned and courts are normally not equipped to question the correctness of a policy decision. But then this does not mean that the courts have to abdicate their right to scrutinise whether the policy in question is formulated keeping in mind all the relevant facts and the said policy can be held to be beyond the pale of discrimination or unreasonableness, bearing in mind the material on record....." "16.But then as has been held by this Court in the very same judgment that a public authority even in contractual matters should not have unfettered discretion and in contracts having commercial element even though some extra discretion is to be conceded in such authorities, the y are bound to follow the norms recognised by courts while dealing with public property. This requirement is necessary to avoid unreasonable and arbitrary decisions being taken by public authorities whose actions are amenable to judicial review. Therefore, merely because ....
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....khs only and hence, it is certainly open to the petitioners to bring eggs from neighbouring States and sell the same in the open market; thus, the eligibility condition in the tender that the petitioners should be the egg producers from Tamil Nadu, in no manner, affects the right of the egg producers from other States to sell eggs in Tamil Nadu and the same does not violate Articles 301, 303 and 304 of the Constitution. In support of the said submission, the learned Advocate General placed strong reliance on the following decisions: (i)The Allahabad High Court in International Data Management Ltd (supra), at paras 15 and 17, held thus: "15. Now, we come to the contention based upon Art.14 of the Constitution. It's principle has been well illustrated by several decisions of the Supreme Court, in particular Ramana Dayaram Shetty v. The International Airport Authority of India, (1979) 3 SCC 489: AIR 1979 SC 1628, Kasturi Lal Lakshmi Reddy v. The State of Jammu & Kasmir (1980) 4 SCC 1: AIR 1980 SC 1992. This aspect is also illustrated and emphasised by the decision of the Supreme Court in Erusian Equipment and Chemicals Ltd v. State of West Bengal, (1975) 1 SCC 70....
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.... this right, or guarantee as may be called, is defeated or restricted by the Government of UP in refusing to purchase the products of the petitioners. The guarantee no doubt extends not only to trade, commerce and intercourse with a State but also within the State but it is difficult to say that this guarantee takes in or confers upon the petitioners a right to sell their goods to the Government. In Ibrahim's case (1970) 1 SCC 386: AIR 1970SC 1275) (supra), Art. 301 was attracted because the respondents therein, who were licensees under the Andhra Pradesh Control Order and recognized dealers within the meaning of Central Order were totally excluded from their business, namely to deal in sugar by an executive order. Similarly in Mannalal Jain's case, AIR 1962 SC 386 (supra), the petitioner could not carry on business in food grains except under license and that was denied to him on the ground that the Government wishes to confine the said licenses only to co-operate societies. The relevant statutory order did not provide for creation of such a monopoly. No such deprivation or exclusion is present in this case. The petitioners are free to sell their goods not only throughout ....
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....rious restrictions imposed by giving abbreviation GX against all way side stations in the coal belt and restricting loading of coal in wagons from the stations categorised as GX and introducing preferential Traffic Schedule, in their cumulative effect resulted in total ban on transport of coal by Railways at their instance and such actions were violative of Articles 14 and 19(1) (g) of the Constitution. Repelling such contention, it has been held by this Court that whenever the court is called upon to examine the complaint that restrictions imposed on the freedom to carry on trade are unreasonable, it is necessary to find out what is the trade and business of the complainantpetitioner and to what extent the restriction, if any, is imposed upon the freedom to carry on trade or business and then to determine whether the restriction is' reasonable or not. It is the direct impact of the restriction on the freedom to carry on trade that has to be kept in view and not the ancillary or incidental effects of the governmental action on the freedom to carry on trade. (Emphasis supplied) It has also been indicated that prima facie it appears that petitioners business or trade as coal merc....
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....siness in question. Canalisation of a particular business in favour of specified individual has been held reasonable by this Court where vital interests of the community are concerned or when the business affects the economy of the country (P.T.C.S Vs. R.T.A. AIR 1960 SC 801: Meenakshi Mills Vs. Union of India, AIR 1979 SC 366 and Lala Harichand Seroa Vs. Mizo District Council and Anr, 1967(1) SCR 1012). 32.It may be indicated that although a citizen has a fundamental right to carry on a trade or business, he has no fundamental right to insist upon the Government or any other individual for doing business with him. Any government or an individual has got a right to enter into contract with a particular person or to determine person or person with whom he or it will deal. 34.It has already been indicated that in Vikalad's case (supra), it has been held by this Court that infringement of fundamental right under Article 19(1) (g) must have a direct impact on the restriction on the freedom to carry on trade and not ancillary or incidental effects on such freedom to trade and not ancillary or incidental effects on such freedom to trade arising out of any government....
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.... in favour of even a specified individual is reasonable where the interests of the country are concerned or where the business affects the economy of the country. (See Parbhani Transport Co-operative Society Ltd. v. Regional Transport Authority, Aurangabad and Others, AIR (1960) SC 901; Shree Meenakshi Mills Ltd. v. Union of India, AIR (1974) SC 365; Hari Chand Sarda v. Mizo District Council and Another, AIR (1967) SC 829; Krishnan Kakkanth v. Government of Kerala and Others, AIR (1997) SC 128 and Union of India and Another v. International Trading Co. and Another, [2003] 5 SCC 437." 25.4 This Court considered the rival submissions. Now, it is required to be noted here that Article 19(1)(g) provides a citizen a right to practise any profession or to carry on any occupation, trade or business. At the same time, Article 304(b) empowers the State Government to impose such reasonable restrictions on the freedom of trade, commerce or intercourse, with or within that State, as may be required in the public interest, but, a bill for this purpose has to be introduced or moved in the Legislature only with the previous sanction of the President. Such being the legal position, the classifi....
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....warranted in the case of undue haste on the part of the respondents in taking such a decision. To substantiate the same, the learned Advocate General relied on the judgement of the Supreme Court in Chairman and MD, BPL Ltd case, wherein, at para 34, it has been pointed out as under: "34.Undue haste also is a matter, which by itself would not have been a ground for exercise of the power of judicial review, unless it is held to be mala fide. What is necessary in such matters is not the time taken for allotment but the manner in which the action had been taken. The Court, it is trite, is not concerned with the merit of the decision, but the decision-making process. In the absence of any finding that any legal malice was committed, the impugned allotment of land could not have been interfered with. What was only necessary to be seen was as to whether there had been fair play in action." 26.3 This Court finds some bona fides in the contention made on the side of the petitioners, in regard to the pace at which the Government has travelled to process the said representation, the dates and event ofwhich, for better appreciation, are narrated hereunder: 06.08.2018 - Tam....
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....vel at a great speed is laudable. However, it should not be forgotten by them that at times, travelling at such a breakneck speed, amounts to driving in a rash and negligent manner, leading to unforeseen accidents. Hence, this Court is of the opinion that the impugned G.O.Ms.No.57 has been passed in a complete hasty manner and hence, the same is liable to be quashed. 27.1 The next plank of ground made by the petitioners is that the impugned G.O.Ms.No.57 is to create cartel and monopoly. According to the petitioners, the impugned G.O and consequential tender notice create two classes of poultry farmers -one, who is able to bid under the tender notification and another is meant to be kept out of the purview of the tender notification intentionally, with a view to help the upper segment of poultry farmers, for the reasons best known to the respondents; though it is the stand of the respondents that the tender has been floated with a view to safeguard and support the egg producers of the State, in reality, it is just against the small egg producers like those of the petitioners, who are simply left at the mercy of the large players and are eagerly awaiting the decision of the State ....
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....f fundamental right guaranteed under Article 19(i) (g). If the action of the executive only indirectly creates some prejudice in carrying on any trade or business such action per se does not offend Article 19(i) (g). In support of such contention, Mr Bhat has referred to the decision of this Court in Viklad Coal Merchant Patiala versus Union of India (1984 (1) SCR 657 (682). In the said case, the Coal Merchant challenged the vires of Section 27A of the Indian Railways Act and circular issued thereunder relating to preferential Traffic Schedule providing for priorities for movement of different goods. A circular was issued by the Ministry of Railways in connection with movement of some goods including coal. The petitioners who were coal merchants, alleged that sum total of various restrictions imposed by giving abbreviation GX against all way side stations in the coal belt and restricting loading of coal in wagons from the stations categorised as GX and introducing preferential Traffic Schedule, in their cumulative effect resulted in total ban on transport of coal by Railways at their instance and such actions were violative of Articles 14 and 19(1) (g) of the Constitution. Repellin....
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....1453). 28.Under Clause (1) (g) of Article 19, every citizen has a freedom and right to choose his own employment or take up any trade or calling subject only to the limits as my be imposed by the State in the interests of public welfare and the other grounds mentioned in clause (6) of Article 19. But it may be emphasised that the Constitution does not recognise franchise or rights to business which are dependent on grants by the State or business affected by public interest Saghir vs. State of U.P. 1955 (1) SCR 707). 29.It may be indicated that where a right is conferred on a particular individual or group of individuals to the exclusion of others, the reasonableness of restrictions has to be determined with reference to the circumstances relating to the trade or business in question. Canalisation of a particular business in favour of specified individual has been held reasonable by this Court where vital interests of the community are concerned or when the business affects the economy of the country (P.T.C.S Vs. R.T.A. AIR 1960 SC 801: Meenakshi Mills Vs. Union of India, AIR 1979 SC 366 and Lala Harichand Seroa Vs. Mizo District Council and Anr, 1967(1) SCR 1012)....
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....terest of the general public and not from the standpoint of the interests of persons upon whom the restrictions have been imposed or upon abstract consideration. A restriction cannot be said to be unreasonable merely because in a given case, it operates harshly. In determining whether there is any unfairness involved the nature of the right alleged to have taken infringed, the underlying purpose of the restriction imposed, the extent and urgency of the evil sought to be remedied thereby, the disproportion of the imposition, the prevailing condition at the relevant time enter into judicial verdict, the reasonableness of the legitimate expectation has to be determined with respect to the circumstances relating to the trade or business in question. Canalisation of a particular business in favour of even a specified individual is reasonable where the interests of the country are concerned or where the business affects the economy of the country. (See Parbhani Transport Co-operative Society Ltd. v. Regional Transport Authority, Aurangabad and Others, AIR (1960) SC 901; Shree Meenakshi Mills Ltd. v. Union of India, AIR (1974) SC 365; Hari Chand Sarda v. Mizo District Council and Another,....
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....he provisions of the Tamil Nadu Transparency in Tenders Act, 1998 (for short, "the Act") and Tenders Rules, 2000 (for short, "the Rules"). According to them, as per Rule 11 of the Rules, the Tender Inviting Authority shall have the notice inviting tenders published in the Indian Trade Journal in all cases where the value of the procurement exceeds Rs.50 crores; and the provisions of Rule 11 is also supported by the provisions of Section 9(3) of the Act. They further submitted that the respondents have also violated Rule 20 of the Rules by not providing 30 days time for the submission of the tenders between the date of publication of notice inviting tenders and the last date for submission of tenders. Placing reliance on the decision of this Court in Sri Venkatram Spinners Pvt. Ltd v. State of Tamil Nadu and others (W.P.Nos.17261, 18987 and 18988 of 2017), the petitioners stated that when Rule 20(2) of the Rules is not followed, then the tender is liable to be quashed and it is not open for the respondents to claim that the conditions are in the frame of policy making and hence, the tender notification dated 20.08.2018 is liable to be quashed. The learned Senior Counsel for the peti....
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....nating irregularities and corrupt practices in the tender processes, (b) to provide for fair and equitable treatment to all, and (c) to make the whole process transparent. Therefore, the tripod on which the Act stands, comprises (i) fairness, (ii) equitable treatment of all, and (iii) transparency. Admittedly, the tender notification was not published in the Newspapers and in the All India Trade Journal. As per the provisions of Section 9(3) of the Act, the Tender Inviting Authority shall also publish the notice inviting tenders in Indian Trade Journal and in daily Newspapers having wide circulation depending upon the value of the procurement prescribed. As per Rule 11 (1) of the Rules, the Tender Inviting Authority shall have the notice inviting tenders published in the Indian Trade Journal in all cases where the value of procurement exceeds Rs.50 crores. Therefore, as per Section 9(3) of the Act and Rule 11 (1) of the Rules, if the value of the tender is more than Rs.50 crores, the tender notice should be published in the Indian Trade Journal. Under the Act, the aforesaid objects are sought to be achieved by looking at the whole tender process in a three dimensional setting. All ....
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....nefiting poultry farmers nor have any nexus to the object of the Nutritious Meal Scheme viz., ensuring uninterrupted supply of quality eggs at a competitive same price for the whole year to the children; and the tender conditions were formulated in such a way that the successful poultry farmers are going to do the same work as the egg traders and suppliers in the single state level tender, but by excluding them; as such, the terms and conditions of the tender excluding the egg traders and suppliers are veritably colourable exercise of power and violative of the fundamental rights guaranteed under the Constitution. 29.2 The respondents have strenuously refuted the submissions so made by the petitioners. According to them, the impugned G.O.Ms.No.57 is only complementing/supplementing the earlier G.O.Ms.No.264; even assuming that the contention raised by the petitioners to be true, the scope of interference of the Court in the policy decision of the Government is very limited. The learned Advocate General for the respondents submitted that the Court cannot embark upon wisdom of policy choices and it is for the Government to look into the impact, if any, of its policy on the public.....
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....olicy was necessary in the public interest, it would be entitled to revise the policy and lay down new policy. The Court, therefore, would prefer to allow free play to the Government to evolve fiscal policy in the public interest and to act upon the same. Equally, the Government is left free to determine priorities in the matters of allocations or allotments or utilisation of its finances in the public interest. It is equally entitled, therefore, to issue or withdraw or modify the export or import policy in accordance with the scheme evolved. We, therefore, hold that the petitioners have no vested or accrued right for the issuance of permits on the MEE or NQE, nor the Government is bound by its previous policy. It would be open to the Government to evolve the new schemes and the petitioners would get their legitimate expectations accomplished in accordance with either of the two schemes subject to their satisfying the conditions required in the scheme. The High Court, therefore, was right in its conclusion that the Government are not barred by the promises or legitimate expectations from evolving new policy in the impugned notification." (ii)In Union of India v. Kannadapar....
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.... to point out at this juncture that the very same respondent authorities had filed a detailed counter affidavit in support of their earlier decision to have a State-wise tender to overcome the difficulties of having District-wise tenders, which has been accepted by the Division Bench of this Court for the reason of State-wise tenders being in larger public interest and the welfare of the children, who are the beneficiaries of the nutritious noon meal scheme. Such being the case, the issuance of G.O.Ms.No.57 changing its policy decision, excluding the egg suppliers and creating embargo on the egg producers from outside the State is a colourable excise of power and infringes the rights guaranteed under the Constitution. 30.1 Yet another ground made by the petitioners is that the earlier G.O.Ms.No.264 has been elaborately and extensively dealt with by the Division Bench of this Court vide order dated 25.04.2014 in WA Nos.574 and 776 of 2013 along with WP.No.13320 of 2013 and has also been affirmed by the Supreme Court vide order dated 13.04.2015 in Special Leave to Appeal (C) No.6375 of 2015 and hence, the impugned G.O.Ms.No.57, subsequently issued, is unwarranted and hence, the sa....
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....licy decision is taken in public interest to further the advancement of reserved categories. A policy decision taken by the State in exercise of its jurisdiction under Article 162 of the Constitution of India is subservient only to the mandate of the constitutional provisions and the recruitment rules framed by the State itself, either in terms of a legislative act or an executive order. The relaxation provided by the State Government and criteria of selection laid down vide impugned government orders are in exercise of the powers provided under the proviso to Article 309 of the Constitution of India and being a policy decision in terms of its extant reservation policy cannot be impeached on the ground that the relaxation has been given to suit some specific class of individuals." 30.2 To appreciate the rival submissions, it is but appropriate to traverse into the questions raised, discussions made and conclusion arrived at by the Division Bench of this Court, in detail, which are profitably reproduced hereunder. The Division Bench, at para 28 of its judgment, raised the following questions for determination: (i) Whether G.O.Ms.No.264, Social Welfare and Nutritious Meal....
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....of five to six districts, and the advantages over existing system may be compared and then if advantageous, it may be expanded to the rest of the State. 10) Villupuram or Thiruvannamalai are having problems in procurement. In that case monthly tender or Zonal base as indicated above may be implemented in the Zone covering these two contiguous districts. The periodicity of the tenders may be at least monthly, given the frequent price fluctuations." 29(ii) Thereafter, G.O.Ms.No.264 Social Welfare and Nutritious Meal Programme (NMP-3) Department, dated 17.10.2012, was issued by the first respondent and in reference No.13, the above said letter dated 14.5.2012, has also been referred. In paragraph No.4 of the above said Government Order, it has been stated that the Director of Social Welfare, who was consulted in the matter, has stated that the State Level Tender System has both advantageous and disadvantageous and the advantageous are that cartel formation by the contractors may be avoided, expenditure on advertisement and staff cost at district level may be reduced and more organisations will participate in the tender and disadvantageous are that separate arrangemen....
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.... a. Suppliers should be asked to indicate a single and firm price valid for entire period of one year duration. This method of price fixation will absorb month to month fluctuation in the market price of the egg and at the same time it will also counter year to year increase in the price of eggs. b. The quotation through open tender system should be compared with the average National Egg Co-ordination Committee rates and reasonableness of the rate quoted should be decided. IV. In view of the special provision available for Integrated Child Development Services scheme under Rule-31 of the Tamil Nadu Transparency Act in Tenders 1998 and Rules 2000, Principal Secretary/Special Commissioner of Integrated Child Development Services scheme shall be the Tender Inviting Authority as per section 7(1) of the Act. V. A Committee shall be constituted under the Chairmanship of the Special Commissioner Integrated Child Development Services Scheme which shall act as Tender Accepting Authority as per section 7(2) of the Act. This committee will have following composition:- The Principal Secretary/ Special Commissioner of Integrated Child Development....
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.... spoiled eggs, the quality of eggs should be checked at the supply point itself. ii) The arrival of eggs to the centres should be monitored and deficiencies, if any, should be intimated to the collectors concerned immediately. iii) The committee should also ensure that good quality eggs are given to the students and children regularly as per the schedule fixed by the Government. iv) These should take all other precautionary vigil for better implementation of this scheme. X. The District Collectors concerned shall take immediate necessary action for deficiencies pointed out. The quality lapses should be viewed seriously and appropriate penal provision including penal deduction shall be recommended to the Director of social welfare. In case of repeated and serious lapses, blacklisting of such supplier should be resorted to. XI. The Government further direct that the procedures and guidelines already fixed in the above read and other Government orders should be followed scrupulously in order to secure continuous and uninterrupted supply of egg to the students and children. 9. This order issues with the concurrence of the Finance De....
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....ertified by the Chartered Accountant. The tender document also stipulates that to prove quality control competency, the tenderer should have supplied Eggs (hen) or any other food material to any Department of Government under the Technical Project Consultancy Arrangement entered with any Government Food Research Laboratory during the preceding three years and the Project Consultancy Arrangement entered with any Government Food Research Laboratory for supply of Eggs (hen) or any other food material, should be valid as on date. The tenderer should also have experience in Hazard Analysis Critical Control Point (HACCP) Practices for egg (hen) or any other food material during the preceding three years and it should possess a valid HACCP certificate for the supply of Eggs (hen) or any other food material as per AGMARK Specification issued by any National Accreditation Board for Certification Bodies (NABCB) and to prove hygiene practices, the tenderer should also have valid BIS product license at least during the preceding three years for egg (hen) or any other food material as per IS 2491-1998 Standards. 29(v) The above said Clauses would disclose that great care has been besto....
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....ise tender systems and the same, though administrative in nature, contains elaborate reasons as to the passing of the said Government Order and therefore, it cannot be treated as arbitrary or discriminatory or passed in favour of a particular person/group of persons and accordingly, the said Government Order was confirmed. Aggrieved over the said judgment, the Government preferred SLP No.6375 of 2015, which was dismissed by the Supreme Court vide order dated 13.04.2015, confirming the judgment passed by the Division Bench. In such circumstances, this Court has no hesitation to hold that when the earlier G.O.Ms.No.264 attained finality, the same cannot be subjected to modification by supplementing/complementing any clauses, as it amounts to contrary to the settled decision. On this score also, the impugned G.O.Ms.No.57 is liable to be quashed. 31. Though the learned Senior Counsel appearing for the third respondent made his submissions to support the impugned G.O.Ms.No.57 and the consequential tender notice issued by the respondent authorities and placed reliance on a catena of decisions with regard to the scope of judicial review in tender matters, the same do not inspire the co....
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....levant Act and Rules. That apart, there is no basis to state that producers of eggs would be better suited persons than the egg suppliers to ensure adequate and proper uninterrupted supply of eggs to several thousand noon meal centres all over the State. Thus, this Court is of the opinion that the impugned G.O.Ms.No.57 and the tender notification have nothing to offer to the beneficiaries, who are covered under the Noon Meal programme, but it is only a lame excuse that even small producers would get benefit by the issuance of the said G.O. When the decision taken by the Government was challenged and was subsequently, approved by the Supreme Court, they are estopped from adopting different method, which was negatived in the earlier proceedings. G.O.Ms.No.57 and the subsequent tender notification are arbitrary, mala fide, bad in law and not in public interest, as the same are contrary to the judgment of the Supreme Court and it creates monopoly in favour of one party, without affording an opportunity to others to compete. Since the same are not based on any rational or relevant principle, it is violative of Article 14 of the Constitution and also the rule of administrative law, which....