Judgment 1. The petitioner company has filed the present writ petition, seeking to challenge a Show Cause Notice dated 20.02.2007 and the final order dated 02.03.2007 issued by the first respondent Tamil Nadu Medical Services Corporation Limited. 2. By the impugned final order, the petitioner was informed as follows:- "(i) The Earnest Money Deposit furnished by you in this case stands forfeited to TNMSC, Chennai and (ii) You are blacklisted as a tenderer not only in the ongoing tender process of the present tender (iii) but also in all future tenders by TNMSC." 3. The writ petition was admitted on 07.03.2007. An interim stay was granted in so far as blacklisting the petitioner for future tenders in the first respondent company. The other issues were left open for adjudication after counter affidavit was filed by the respondent. An interim injunction was also granted for a period of two weeks restraining the respondent from in any manner invoking or encashing the bank guarantee. Subsequently M/s.Siemens Ltd., Medical Solutions was also impleaded as 4th respondent in the writ petition. 4. In this case, parties have strictly confined themselves in so far as petitioner company was blacklisted from participating in future tenders having regard to the finalisation of tender had been concluded and that the 4th respondent was a successful tenderer. 5. It is seen from the records that the petitioner company is engaged in the business of designing, sourcing and manufacturing complete range of diagnostic imaging systems such as Surgical C-arms, MR Subsystems and Coils, Generators, MR and Nuclear Positioners. It is also claimed that the petitioner is a Joint Venture Company floated by M/s.Wipro Limited and M/s.GE Healthcare. It was stated that the first respondent is a Government owned undertaking and the second respondent is the Managing Director and Tender Accepting Authority of the first respondent. The third respondent is the Health Secretary to the Government of Tami Nadu. It is also claimed that no relief is claimed against the third respondent and they was made a proforma party. 6. The first respondent floated an open tender on 04.10.2006 for supply, installation and commissioning of magnetic resonance imaging equipment with accessories to Government Medical College Hospitals in the State of Tamil Nadu. The invitation for bid was published in the Economic Times newspaper dated 11.10.2006. 6. The first respondent floated an open tender on 04.10.2006 for supply, installation and commissioning of magnetic resonance imaging equipment with accessories to Government Medical College Hospitals in the State of Tamil Nadu. The invitation for bid was published in the Economic Times newspaper dated 11.10.2006. The petitioner was one of the bidders in the tender floated by the first respondent and they submitted their bid documents on 09.11.2006. Apart from the petitioner, 4th respondent as well as one M/s.Philips India Limited were two other bidders. The bid was to be submitted in two covers namely Techno Commercial Bid (Cover -I) and the Price Bid (Cover II). As per the tender conditions, only bidders who have qualified in the Techno Commercial Bid were to be considered for the Price Bid opening. The Technco Commercial Bid under Cover-I of all the three bidders above named were opened by the Tender Opening Authority in the presence of the representatives of the said three bidders. It was found that the bid submitted by the petitioner and the 4th respondent alone were Techno Commercially responsive and the bid submitted by Philips India Limited was found to be not meeting the requirements. Accordingly, Philips India Limited was eliminated from the tender process leaving only the petitioner and the 4th respondent in the fray. It was thereafter bids submitted by the petitioner and the 4th respondent were referred to the Tender Evaluating Authority of the first respondent, also consisting of two members. The said Tender Evaluating Authority cleared the bids of the petitioner as well as the 4th respondent. 7. It was the stand of the petitioner that the 4th respondent quoted an outdated MRI Scanner without the feature of TIM (Total Imaging Matrix). It was the claim of the petitioner company that the product offered by them are more superior than the 4th respondent. It is unnecessary to go into the technical details of the superior claims made by the petitioner as this Court is not inclined to go into the issue relating to the Award of tender in favour of 4th respondent as noted already. 8. The only issue to be decided is whether the blacklisting of the petitioner company in the future bids to be invited by the first respondent is legally justified. 9. 8. The only issue to be decided is whether the blacklisting of the petitioner company in the future bids to be invited by the first respondent is legally justified. 9. The petitioner company on being aggrieved by the conduct of the first respondent submitted a representation dated 05.02.2007 to the Hon'ble Minister for Health and Family Welfare, Government of Tamil Nadu, complaining that the 4th respondent offer of the product was outdated. They also informed the Minister that he should take cognizance of the fact that the 4th respondent was adopting ingenious method to sell outdated machinery. They also claimed that they have right to make such a complaint in terms of Section 13 of the Tamil Nadu Transparency in Tender Act, 1998. Even before any action could be initiated on the representation, on finding that the 2nd respondent is attempting to favour the 4th respondent, the petitioner company submitted another representation dated 15.02.2007. 10. On receipt of the petitioner's second representation, certain informations were called for from the first respondent. It is also the case of the petitioner that the Health Minister orally instructed the first respondent not to finalise the tender in favour of the 4th respondent. In the mean while, the second respondent on being informed about the representation sent to the Minister dated 15.02.2007 issued a Show Cause Notice dated 20.02.2007 to the petitioner. They were aggrieved by the petitioner complaining to the Hon'ble Minister for Health whose Ministry is the controlling ministry of the first respondent Corporation. 11. It was stated in the Show Cause Notice that it was capricious intrusion subverting the tender process. The representation made by the petitioner/tenderer to the authorities like the Government or the Minister amounts to interference with the tender process. Such an interference directly or indirectly constitutes contempt of the tender process to affect the public confidence in the transparent manner in which the first respondent systematically deals with the tender. If such representation is allowed, it will give scope for a public opinion that a tenderer could get the favour successfully by adopting such extraneous practices of representation to Government or Minister to bring to bear upon the first respondent Corporation even if the petitioner is by chance successful by legitimate observance of the tender process by the Corporation. If such representation is allowed, it will give scope for a public opinion that a tenderer could get the favour successfully by adopting such extraneous practices of representation to Government or Minister to bring to bear upon the first respondent Corporation even if the petitioner is by chance successful by legitimate observance of the tender process by the Corporation. Therefore, they were asked to show cause as to why their Earnest Money Deposit should not be forfeited, the goods offered for supply by the tenderer should not be blacklisted in future tenders and as to why the tenderer should not be blacklisted in all future tenders. 12. The petitioner company sent a letter dated 27.02.2007 stating that they were in receipt of the show cause notice and it was sent to their Head Office at Bangalore and requested two more weeks' time to reply. But since reply was not forthcoming within the time stipulated therein and already a notice by fax message was sent to the petitioner company, final orders were passed as noted already. 13. The petitioner also filed an additional typed set containing various orders placed by the first respondent with the petitioner company. 14. In the counter affidavit filed on behalf of respondents 1 and 2, apart from justifying the Award of Contract in favour of 4th respondent in detail, in respect of the show cause notice and the final order of blacklisting, in paragraphs 48 and 71, it was averred as follows:- "48.) I further submit that the allegation in para 3.12 of the affidavit of the writ petitioner is exfacie, atrocious. The petitioner labours to justify with more excuses than reasons in his venture for a second representation dated 15.02.2007 to the Health Minister. The assertion that the petitioner requested the Health Minister to intervene in the matter for safeguarding the public interest and public money, is purely motivated to gain the tender from Siemens who was L1 as per the Board Meeting held on 02.02.2007. The assertion that the petitioner requested the Health Minister to intervene in the matter for safeguarding the public interest and public money, is purely motivated to gain the tender from Siemens who was L1 as per the Board Meeting held on 02.02.2007. This fact is basically the cause for provocation on the part of the petitioner to raise representations extraneous to the tender process firstly by his representation dated 05.02.2007 without the knowledge of the respondents and subsequent representation dated 15.02.2007 to the Health Minister, a copy of which was received by respondents that provided the inevitable, necessary basic cause of action by issue of a notice dated 20.02.2007, request for time by the petitioner dated 27.02.2007 for two weeks, the letter dated 28.02.2007 in reversion rejecting the request by the respondent and thereafter the orders dated 02.03.2007 by the respondents all of which are necessary actions as warranted by law and facts, the whole of which are sought to be challenged by the petitioner in this writ petition, when the tender process is not yet complete, against which there is a bar of jurisdiction to call in question such actions in any court under Section 19 of the Act. 71.) It is consistent with these provisions that the respondent had acted as it did. Had it not so acted it would have been a failure to apply the tender terms and Tender Act provisions, which every statutory authority is bound to do. The action of the respondent is only to ensure that honesty is the best policy and should in fact be the only policy. The message of the respondent is clear that such influences and pressures sought to be exerted by the petitioner have been the bane of our society. This respondent is bound to honour the same and that it has succeeded in so doing is to be appreciated and applauded and not criticized. This respondent would respectfully submit that it does not have any personal interest or benefit whichever tenderer is awarded the tenders. In fact this respondent has handled hundreds of tender over the years and has become an example for other organisations to follow. It is always difficult to be honest but it is always satisfying to be honest. This respondent would respectfully submit that it does not have any personal interest or benefit whichever tenderer is awarded the tenders. In fact this respondent has handled hundreds of tender over the years and has become an example for other organisations to follow. It is always difficult to be honest but it is always satisfying to be honest. This respondent's action has been consistent to ensure that honesty, commitment and integrity are not mere words to mouth but principles to follow, which it should despite any provocation, according to the quality policy of the respondent corporation." 15. The petitioner also filed a rejoinder dated Nil (April 2007). Mr.R.Senthil Kumar, learned counsel for the petitioner submitted that the final order passed was done in a haste manner without providing opportunity despite their seeking time for getting instructions from the headquarters. It was hurriedly passed and on that ground, the impugned order must be set aside. Even if that course is adopted, necessarily, the show cause notice which is also under challenge will have to be retained. Therefore parties were allowed to address on the legality of the show cause notice issued by the first respondent. 16. The learned counsel for the petitioner contended that before blacklisting any tenderer, principles of natural justice must be scrupulously followed and he placed reliance on the judgment of the Supreme Court reported in (1975) 1 SCC 70 [M/s.Erusian Equipment and Chemicals Ltd., v. State of West Bengal and another). Reliance was placed on paragraph 12, which is as follows:- "12.) Under Article 298 of the Constitution the executive power of the Union and the State shall extend to the carrying on of any trade and to the acquisition, holding and disposal of property and the making of contracts for any purpose. The State can carry on executive function by making a law or without making a law. The exercise of such powers and functions in trade by the State is subject to Part III of the Constitution. Article 14 speaks of equality before the law and equal protection of the laws. Equality of opportunity should apply to matters of public contracts. The State has the right to trade. The State has there the duty to observe equality. An ordinary individual can choose not to deal with any person. The Government cannot choose to exclude persons by discrimination. Article 14 speaks of equality before the law and equal protection of the laws. Equality of opportunity should apply to matters of public contracts. The State has the right to trade. The State has there the duty to observe equality. An ordinary individual can choose not to deal with any person. The Government cannot choose to exclude persons by discrimination. The order of blacklisting has the effect of depriving a person of equality of opportunity in the matter of public contract. A person who is on the approved list is unable to enter into advantageous relations with the Government because of the order of blacklisting. A person who has been dealing with the Government in the matter of sale and purchase of materials has a legitimate interest or expectation. When the State acts to the prejudice of a person it has to be supported by legality." 17. The learned counsel also placed reliance on the judgment of the Supreme Court reported in (2010) 13 SCC 427 [Oryx Fisheries Private Limited v. Union of India and others] and referred to the following passages found in paragraphs 31,32,42 and 43:- "31.) It is of course true that the show-cause notice cannot be read hypertechnically and it is well settled that it is to be read reasonably. But one thing is clear that while reading a show-cause notice the person who is subject to it must get an impression that he will get an effective opportunity to rebut the allegations contained in the show-cause notice and prove his innocence. If on a reasonable reading of a show-cause notice a person of ordinary prudence gets the feeling that his reply to the show-cause notice will be an empty ceremony and he will merely knock his head against the impenetrable wall of prejudged opinion, such a show-cause notice does not commence a fair procedure especially when it is issued in a quasi-judicial proceeding under a statutory regulation which promises to give the person proceeded against a reasonable opportunity of defence. 32.) Therefore, while issuing a show-cause notice, the authorities must take care to manifestly keep an open mind as they are to act fairly in adjudging the guilt or otherwise of the person proceeded against and specially when he has the power to take a punitive step against the person after giving him a show-cause notice. 32.) Therefore, while issuing a show-cause notice, the authorities must take care to manifestly keep an open mind as they are to act fairly in adjudging the guilt or otherwise of the person proceeded against and specially when he has the power to take a punitive step against the person after giving him a show-cause notice. 42.) In Institute of Chartered Accountants of India v. L.K. Ratna it has been held: (SCC pp. 553-54, para 18) “18. ‘after the blow suffered by the initial decision, it is difficult to contemplate complete restitution through an appellate decision. Such a case is unlike an action for money or recovery of property, where the execution of the trial decree may be stayed pending appeal, or a successful appeal may result in refund of the money or restitution of the property, with appropriate compensation by way of interest or mesne profits for the period of deprivation. And, therefore, it seems to us, there is manifest need to ensure that there is no breach of fundamental procedure in the original proceeding, and to avoid treating an appeal as an overall substitute for the original proceeding.” (emphasis in original) 43.) For the reasons aforesaid, this Court quashes the show-cause notice as also the order dated 19-3-2008 passed by the third respondent. In view of that, the appellate order has no legs to stand and accordingly is quashed." 18. The learned counsel also referred to the fact that tender documents do not prescribe any such condition that person appearing for tender should not make a complaint to the higher authorities regarding the process of tender and therefore, show cause notice itself is without jurisdiction. 19. Per contra, Mr.John, learned counsel appearing for the 4th respondent and Mr.Shivakumar learned counsel appearing for respondents 1 and 2 submitted that inasmuch as principles of natural justice was followed, the petitioner cannot be heard to contend the contrary. The scope of blacklisting came to be considered in more than one decisions of the Supreme Court. 19. Per contra, Mr.John, learned counsel appearing for the 4th respondent and Mr.Shivakumar learned counsel appearing for respondents 1 and 2 submitted that inasmuch as principles of natural justice was followed, the petitioner cannot be heard to contend the contrary. The scope of blacklisting came to be considered in more than one decisions of the Supreme Court. The Supreme Court in Grosons Pharmaceuticals (P) Ltd. v. State of U.P., reported in (2001) 8 SCC 604 , in paragraph 2 held as follows:- "2.) Learned counsel appearing for the appellant urged that seeing the nature and seriousness of the order passed against the appellant, the respondent ought to have supplied all the materials on the basis of which the charges contained in the show-cause notice were based along with the show-cause notice and in the absence of supply of materials, the order impugned is against the principles of natural justice. We do not find any merit in this contention. Admittedly, the appellant has only contractual relationship with the State Government and the said relationship is not governed by any statutory rules. There is no statutory rule which requires that an approved contractor cannot be blacklisted without giving an opportunity of show-cause. It is true that an order blacklisting an approved contractor results in civil consequences and in such a situation in the absence of statutory rules, the only requirement of law while passing such an order was to observe the principle of audi alteram partem which is one of the facets of the principles of natural justice. The contention that it was incumbent upon the respondent to have supplied the material on the basis of which the charges against the appellant were based, was not the requirement of the principle of audi alteram partem. It was sufficient requirement of law that an opportunity of show-cause was given to the appellant before it was blacklisted. It is not disputed that in the present case, the appellant was given an opportunity to show cause and it did reply to the show-cause which was duly considered by the State Government. We are, therefore, of the view that the procedure adopted by the respondent while blacklisting the appellant was in conformity with the principles of natural justice." 20. It is not disputed that in the present case, the appellant was given an opportunity to show cause and it did reply to the show-cause which was duly considered by the State Government. We are, therefore, of the view that the procedure adopted by the respondent while blacklisting the appellant was in conformity with the principles of natural justice." 20. However, the Supreme Court held that if any malafides are alleged, it has to be done by the person who alleges as held in the decision of the Supreme Court in Delhi Development Authority v. UEE Electricals Engg. (P) Ltd., (2004) 11 SCC 213. In paragraph, 16,the Supreme Court held as follows:- "16.) Doubtless, he who seeks to invalidate or nullify any act or order must establish the charge of bad faith, an abuse or a misuse by the authority of its powers. While the indirect motive or purpose, or bad faith or personal ill will is not to be held established except on clear proof thereof, it is obviously difficult to establish the state of a man's mind, for that is what the employee has to establish in this case, though this may sometimes be done. The difficulty is not lessened when one has to establish that a person apparently acting in the legitimate exercise of power has, in fact, been acting mala fide in the sense of pursuing an illegitimate aim. It is not the law that mala fides in the sense of improper motive should be established only by direct evidence. But it must be discernible from the order impugned or must be shown from the established surrounding factors which preceded the order. If bad faith would vitiate the order, the same can, in our opinion, be deduced as a reasonable and inescapable inference from proved facts. (See S. Partap Singh v. State of Punjab.) It cannot be overlooked that burden of establishing mala fides is very heavy on the person who alleges it. The allegations of mala fides are often more easily made than proved, and the very seriousness of such allegations demands proof of a high order of credibility. (As noted by this Court in E.P. Royappa v. State of T.N.)" 21. The allegations of mala fides are often more easily made than proved, and the very seriousness of such allegations demands proof of a high order of credibility. (As noted by this Court in E.P. Royappa v. State of T.N.)" 21. But in the present case, the question is whether the petitioner complaining to the Hon'ble Minister for Health and Family Welfare can be considered to be prejudicial to the interest of the first respondent and whether the first respondent has jurisdiction to issue show cause notice followed by a final order. 22. As rightly contended, there was no clause in the tender document that any attempt to bring external pressure will invalidate the offer of tender which will consequently lead to blacklisting. In the absence of incorporating such a clause whether there is any inherent power in the first respondent Corporation to blacklist the petitioner for reasons which are not set out in the tender document cannot be accepted to be a valid exercise of power. After all each Public Sector Corporation functions under the concerned ministry and in the present case, the ministry being Ministry of health and Family Welfare and therefore, it is always open to an aggrieved person to complaint to the Minister who is incharge of the portfolio in case he is aggrieved. Excepting forwarding the petitioner's complaint nothing is alleged against the Minister for Family Welfare and the first respondent was able to award the contract in favour of the 4th respondent without being intimated by such letter being redirected to them. Therefore, it cannot be said that the first respondent can be said to be aggrieved by the conduct of the petitioner complaining to the Hon'ble Minister for Health and Family Welfare. 23. Further even while the tender process, the Government has got power to obtain information from the tender finalising authorities. Under Section 14 of the Act, it can also seek for all records relating to tender. The State Government is also an appellate authority under Section 11 of the Act. Therefore, the Government cannot be said to be an alien in the process of finalising a tender and the first respondent cannot take exception to the petitioner sending a representation to the elected member of people's representative and being incharge of the said department. The Hon'ble Minister is neither a stranger nor an alien to the activities of the first respondent corporation. The Hon'ble Minister is neither a stranger nor an alien to the activities of the first respondent corporation. The first respondent Corporation has shown hypersensitivity about the complaint made by the petitioner/tenderer and showed unwanted speed in blacklisting them. When they issued show cause notice to answer within seven days, it is not as if the date fixed by them is covered by any limitation. When the petitioner has sought for time to submit explanation after consulting their headquarters, they could have easily granted time but without waiting for the same, they have simply verbatim reproduced the show cause notice and made a final order blacklisting the petitioner. It showed undue haste on the part of the first respondent. 24. Whether complaining to the Minister incharge of the Department concerned can result in disqualification came to be considered by the Supreme Court vide its judgment reported in (2009) 7 SCC 462 [Ravi Development v. Shree Krishna Prathisthan]. In paragraphs 31 to 36, the Supreme Court observed as follows:- "31.) As rightly pointed out by Mr P.P. Rao, learned Senior Counsel, if there was no decision by MHADA in respect of their proposal dated 25-8-2006, naturally the party concerned viz. Ravi Development in the normal circumstances could approach the higher authorities, in the case on hand, the Cabinet Minister of the Housing Department (i.e. the Chief Minister of Maharashtra), hence rightly approached the Chief Minister by submitting the same proposal on 11-10-2006 which cannot be motivated or deemed as contrary to any of the government orders. 32.) It was pointed out that the Chief Minister or the Government has not at all favoured Ravi Development and no order or endorsement to that effect was either made or reflected anywhere in the record. On the other hand, the Desk Officer of the Housing Department of the Government of Maharashtra, by Letter dated 20-10-2006, simply forwarded the proposal submitted by Ravi Development to MHADA thereby calling upon a detailed report. 33.) Pursuant to the said communication, the CEO, MHADA recommended the proposal of Ravi Development on 4-12-2006 and also submitted a detailed study report on 24-4-2007 to the Principal Secretary, Housing Department, Government of Maharashtra after examining the merits and demerits of ‘West Bengal Joint Venture method’ and ‘Jaipur Swiss Challenge method’ and recommended for following the Swiss Challenge method and sought the Government's approval. It is seen that thereafter, the Housing Department of the Government of Maharashtra, by Letter dated 17-5-2007, issued directions to follow Swiss Challenge method as recommended by MHADA and also directed MHADA to take policy decision at its own level for other similar proposals in future. It was pointed out that thereafter, by a letter dated 14-6-2007, in terms of Ravi Development's willingness to match the highest bid, MHADA took a decision on 22-11-2007 to award the said contract to Ravi Development. 34.) In those circumstances and in view of the materials placed, particularly, two Letters dated 20-10-2006 and 10-5-2007 issued by the Housing Department of the Government of Maharashtra, it is clear that no favouritism was ever shown to Ravi Development at the instance of the Chief Minister of Maharashtra. We are satisfied that contrary observations of the High Court are baseless and not warranted. 35.) Apart from the above information and conclusion by us, it was highlighted that MHADA, as a State Government undertaking, works under the control of the Housing Department of the Government of Maharashtra and as per Section 164 of the MHADA Act, 1976, the Government could issue instructions if it really had to favour Ravi Development and the same would be statutorily binding on MHADA. However, the materials placed by the State and MHADA show that on receipt of the representation from Ravi Development without any endorsement or direction to consider the case of Ravi Development, the officer concerned merely forwarded the same to the Chief Executive Officer, MHADA to offer their remarks. 36.) As rightly pointed out, perusal of the entire documents clearly shows that there was no attempt either from the authorities of the State of Maharashtra or from the Chief Minister to favour Ravi Development. In such circumstances, the contention of the learned Solicitor General appearing for the State and MHADA is well founded and the contrary conclusion of the High Court is liable to be rejected." 25. In the light of the above authoritative pronouncement, this Court has no hesitation to set aside the impugned show cause notice dated 20.02.2007 as well as the final order dated 02.03.2007 passed by the first respondent Corporation. Accordingly, the impugned orders will stand set aside. The writ petition stands allowed. No costs. Consequently, connected miscellaneous petitions are closed.