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2019 (2) TMI 2028 - HC - Indian LawsValidity of G.O.Ms.No.57 Social Welfare and Nutritious Meal Programme (SW 4-3) Department, dated 20.08.2018 - supply of eggs to all the noon meal centres - replacing the State level annual tender system to zone-wise tender system for six months - while some of the petitioners challenge the validity of G.O.Ms.No.57, a few of the petitioners also question the rejection of their technical bid to the tender notice dated 20.08.2018 floated pursuant to the said G.O. - 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. HELD THAT - The policy decision of the Government can always be subjected to judicial review on the grounds of unreasonableness, discrimination, arbitrariness, perversity and mala fides. The impugned G.O.Ms.No.57 modifying the State-wise tender to that of a zone-wise tender does not contain any valid and acceptable reason necessitating/warranting modification of the earlier policy decision of G.O.Ms.No.264, by which, directions were given to float State-wise tenders. The impugned G.O.Ms.No.57 does not also contain any reason to come to the conclusion that zone-wise tenders will be more beneficial to the Government than State-wise tenders, as compared to G.O.Ms.No.264 especially when G.O.Ms.No.264 was confirmed by the Division Bench of this Court, vide judgment dated 25.04.2014 in W.A.Nos.574 and 776 of 2013 accepting the stand and reasoning put forth by the Government and the same was also affirmed by the Supreme Court vide order dated 13.04.2015 in SLP No.6375 of 2015. Further, the impugned G.O.Ms.No.57 has been issued within a short span of time i.e., within six working days and there is no nexus corresponding to the object sought to be achieved and 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. That apart, the qualifying conditions for deciding the eligible tenderers and other stipulations mentioned in the consequential tender notification dated 20.08.2018 issued pursuant to G.O.Ms.No.57, are neither supportive of the alleged reasoning i.e., benefiting poultry farmers, nor have any nexus to the object of the Nutritious Meal Scheme i.e., ensuring uninterrupted supply of quality eggs at a competitive same price for the whole year to the children. The terms and conditions framed in the tender notification dated 20.08.2018 are violative and contrary to the relevant Act and Rules. Issuance of G.O.Ms.No.57, ie., zone-wise tender and the terms of the subsequent Notification excluding the egg traders and suppliers like that of the petitioners, are colourable exercise of power and are unreasonable, arbitrary, irrational and discriminatory and also violative of Article 19(1)(g) of the Constitution. It is nonetheless important to mention here that the public interest is paramount; there should not be any arbitrariness in the tender matters; all the participants in the tender process should be treated alike and there should not be any discrimination and unreasonableness. The impugned G.O.Ms.No.57 and the consequential tender notice are quashed - Petition allowed.
Issues Involved:
1. Validity of G.O.Ms.No.57 and the consequential tender notification. 2. Exclusion of egg suppliers from the tender process. 3. Classification between egg producers and suppliers. 4. Alleged violation of Articles 14, 19(1)(g), 301, 303, and 304 of the Constitution. 5. Procedural defects in the tender process. 6. Alleged haste in issuing G.O.Ms.No.57. 7. Creation of cartel and monopoly. 8. Comparison with the earlier G.O.Ms.No.264 upheld by the courts. Detailed Analysis: 1. Validity of G.O.Ms.No.57 and the Consequential Tender Notification: The petitioners, who are food suppliers/small poultry farms, challenged the validity of G.O.Ms.No.57 and the related tender notification dated 20.08.2018. They argued that the policy of a single State-wise tender had been successful and was even acknowledged by the Government. The impugned G.O.Ms.No.57 excluded egg processing units from the tender process, which the petitioners claimed was unconstitutional. The respondents contended that the new policy aimed to support local poultry farmers and prevent exploitation by middlemen. 2. Exclusion of Egg Suppliers from the Tender Process: The petitioners argued that excluding egg suppliers from the tender process was arbitrary and violated their fundamental rights under Article 14 of the Constitution. They contended that the classification between egg producers and suppliers lacked a rational nexus with the objective of ensuring the supply of quality eggs. The respondents maintained that the decision aimed to support local poultry farmers and ensure fair competition. 3. Classification Between Egg Producers and Suppliers: The petitioners argued that the classification between egg producers and suppliers was unreasonable and discriminatory. They cited several Supreme Court judgments to support their claim that the classification did not bear a rational nexus with the objective of the tender. The respondents countered that the classification was reasonable and aimed to support local poultry farmers. 4. Alleged Violation of Articles 14, 19(1)(g), 301, 303, and 304 of the Constitution: The petitioners claimed that the impugned G.O.Ms.No.57 violated Articles 14, 19(1)(g), 301, 303, and 304 of the Constitution. They argued that the decision to exclude egg suppliers and restrict participation to local producers was arbitrary and discriminatory. The respondents argued that the decision was a reasonable classification aimed at supporting local poultry farmers and ensuring fair competition. 5. Procedural Defects in the Tender Process: The petitioners alleged that the tender process had several procedural defects, including non-publication in the Indian Trade Journal and All India Newspapers. They argued that the respondents violated the provisions of the Tamil Nadu Transparency in Tenders Act, 1998, and the Tenders Rules, 2000. The respondents countered that they had followed all relevant provisions and that the tender conditions were transparent and aimed at ensuring fair competition. 6. Alleged Haste in Issuing G.O.Ms.No.57: The petitioners argued that G.O.Ms.No.57 was issued in undue haste without providing an opportunity for all stakeholders to be heard. They pointed out that the representation from the Tamil Nadu Muttai Kozhi Pannaiyalargal Marketing Society was processed and acted upon within six working days. The respondents contended that the decision was taken after careful consideration and that there was no undue haste. 7. Creation of Cartel and Monopoly: The petitioners argued that the impugned G.O.Ms.No.57 and the tender notification created a cartel and monopoly by excluding egg suppliers and favoring a select group of large poultry farmers. They contended that the tender conditions were arbitrary and aimed at creating a monopoly. The respondents argued that the decision aimed to prevent cartelization and ensure fair competition among local poultry farmers. 8. Comparison with the Earlier G.O.Ms.No.264 Upheld by the Courts: The petitioners pointed out that the earlier G.O.Ms.No.264, which introduced a State-level tender system, had been upheld by the Division Bench of the High Court and affirmed by the Supreme Court. They argued that the impugned G.O.Ms.No.57 was contrary to the settled decision and lacked any valid reason for changing the policy. The respondents argued that the new policy was a complement/supplement to the earlier policy and aimed at supporting local poultry farmers. Findings and Disposition: The Court found that the classification made in G.O.Ms.No.57 was unreasonable and violated Articles 14, 19(1)(g), 301, 303, and 304 of the Constitution. The Court also found that the impugned G.O.Ms.No.57 was issued in undue haste and lacked any valid reason for changing the earlier policy upheld by the courts. The Court held that the tender conditions created a cartel and monopoly and were arbitrary and discriminatory. Conclusion: The Court quashed G.O.Ms.No.57 and the consequential tender notice dated 20.08.2018. The respondents were directed to issue a fresh tender notification in terms of G.O.Ms.No.264 and in accordance with the Tamil Nadu Transparency in Tenders Act, 1998, and the Tenders Rules, 2000. The existing suppliers were allowed to continue supplying eggs until the completion of the new tender process.
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