P. K. R. Thangamani, Sole Proprietor of M/s. Reliance Instruments Corporation v. Secretary to Government, Health and Family Welfare
2025-02-25
S.SOUNTHAR
body2025
DigiLaw.ai
ORDER : S. Sounthar, J. The writ petition is filed challenging the order passed by the 2 nd respondent, blacklisting the petitioner for a period of two years from participating in the tenders floated by the 2 nd respondent. 2. The petitioner has been in long standing relationship with the second respondent, as he came out successful in number of tenders floated by the second respondent for supplying the equipments to various Hospitals. 3. The issue involved in this writ petition pertains to the following three tenders: DATE OF TENDER TENDER REFERENCE PRODUCT 01.02.2021 649/CSSD/RC/TNMSC/ENGG/2021 TENDER FOR FIXING RATE CONTRACT FOR SUPPLY AND INSTALLATION OF CSSD AND LAUNDRY EQUIPMENT. 14.12.2021 E773/CSSD/NHM/TNMSC/ENGG/2021 ONLINE RATE CONTRACT TENDER FOR SUPPLY AND INSTALLATION OF GAUZE CUTTING MACHINE WITH TABLE, ENDOSCOPIC CLEANING AND DISINFECTION MACHINE PLASMA STERILIZER AND DRYING CABINET 04.08.2022 E851/ACL/RC/NHM/TNMSC/ENGG/2022 ONLINE TENDER FOR FIXING RATE CONTRACT FOR SUPPLY AND INSTALLATION OF AUTOCLAVE VERTICAL (2 BINS) TO VARIOUS GOVT INSTITUTIONS. 4. It is the case of the petitioner that pursuant to the letter of acceptance issued by the second respondent in respect of the above tenders, the second respondent placed various purchase orders on multiple dates for supply of equipments to various Hospitals/Government Institutions in the State and the said equipments were also delivered and installed in their destinations. After fulfilling the requirements as per the purchase order, the petitioner raised invoices corresponding to the supplied equipments and services. The second respondent had made partial payments towards invoices concerning all the three tenders and the petitioner was waiting for disbursal of the remaining outstanding amount. In these circumstances, on 20.06.2024, the second respondent had issued an e-mail to the petitioner stating that it had received certain bills and invoices certified by a King Institute Super Speciality Hospital (KCSSH), Guindy and requested petitioner to clarify whether the petitioner had collected the bill documents from the hospital and posted it to the second respondent. In response to the same, the petitioner had issued an e-mail to the second respondent on 21.06.2024 stating that the petitioner had not collected any bill documents from KCSSH and it was not posted by the petitioner. 5. It is further stated in the writ petitioner's affidavit that the second respondent issued a letter on 26.06.2024 stating that it received a set of documents pertaining to supply of various equipments.
5. It is further stated in the writ petitioner's affidavit that the second respondent issued a letter on 26.06.2024 stating that it received a set of documents pertaining to supply of various equipments. It was stated by the second respondent that the text signatures found in the above said documents appeared to be not from the concerned person of KCSSH and all the signatures found in the documents submitted were found to be forged. It was further mentioned in the communication that the printed invoices with numbers and dates mentioned in the documents could not have been prepared by a 3 rd party and hence it was concluded that prima facie, petitioner had forged the signature, stamp etc., and arranged to despatch the same to the second respondent, as if, it was sent by the Hospital. Since the action of the petitioner was held to be a fraudulent practice as per the terms of the tender conditions, the second respondent sought for a response from the petitioner as to why action could not be taken against the petitioner for the above mentioned fraudulent practice. The petitioner issued a communication reiterating that it had not collected any documents from KCSSH and posted the same to the second respondent. Thereafter, the second respondent sent another letter on 01.07.2024 stating that it received another set of documents pertaining to supply of equipments by the petitioner and those documents were also found to be forged. The second respondent sought for response from the petitioner by communication dated 01.07.2024. The petitioner reiterated its earlier stand by denying the act of forgery or despatch of documents from petitioner's side. The petitioner sought for furnishing of those forged documents for perusal of the petitioner. 6. On 09.07.2024, in response to the request made by the petitioner, the second respondent sent a communication enclosing photo copies of the documents received along with covering letter and requested the petitioner to submit a response within a week. It was further averred by the petitioner that after receiving the letter from the second respondent, the petitioner initiated enquiry on its own and the same led to a discovery of new facts. From the enquiry, the petitioner came to know that one Ramakrishnan employed as Admin support in the petitioner organisation colluded with competitors of the petitioner and committed acts of forgery.
From the enquiry, the petitioner came to know that one Ramakrishnan employed as Admin support in the petitioner organisation colluded with competitors of the petitioner and committed acts of forgery. Based on the enquiry finding, the petitioner preferred a criminal complaint against Ramakrishnan and thereafter on 15.07.2024 an order was issued terminating the service of said Ramakrishnan. Subsequently, the petitioner also informed the second respondent about the acts of forgery committed by its employee and the action taken by the petitioner and the termination of his employment. The petitioner reiterated that no document was collected by it and posted to the second respondent and it was only its employee Ramakrishnan, who had committed the same without the knowledge of the petitioner, in order to tarnish the image of the petitioner. 7. Thereafter, the second respondent issued impugned order of blacklisting of the petitioner for a period of two years on the ground that the petitioner involved in a fraudulent practice. Aggrieved by the same, the petitioner has come before this Court. 8. The learned Senior Counsel appearing for the petitioner submitted that the petitioner has not involved in any fraudulent practice as mentioned by the second respondent and the despatch of the forged documents to the second respondent was done by the employee of the petitioner and therefore, the second respondent ought not have taken action against the petitioner for the mis-deeds of the said employee without the knowledge of the petitioner. The learned Senior Counsel forcefully contended that there is no Clause in the tender floated by the second respondent for blacklisting the petitioner for a period of two years and the same is untenable in law. The learned senior counsel by inviting the attention of this Court to Clause 32.2 of General conditions of contract, Section III submitted that if any employee of the supplier is engaged in fraudulent practice during purchase of the goods, then the said employee shall be removed and as per the said Clause, the petitioner had taken action against the employee involved in fraudulent activity by terminating his employment. Therefore, according to him, the second respondent was not justified in passing the order of blacklisting against the petitioner.
Therefore, according to him, the second respondent was not justified in passing the order of blacklisting against the petitioner. Thirdly, the learned senior counsel appearing for the petitioner submits that the impugned order was passed by the petitioner on 02.08.2024, informing the petitioner about the blacklisting and the same also mentioned that an appeal shall lie to the Managing Director. Therefore, the petitioner submitted an appeal before the Managing Director of the second respondent Corporation on 12.08.2024 and the same was rejected on 28.08.2024. Both the original order passed by the second respondent and the subsequent order passed in appeal are challenged in this writ petition. The learned senior counsel submitted that when the first impugned order dated 02.08.2024 was passed by the Managing Director, preferring an appeal before the very same authority is not acceptable and hence the impugned order is liable to be set aside. 9. Per contra, the learned senior counsel appearing for the second respondent by inviting the attention of this Court to Clause 32 (V) (d) of instrucions to bidders, Section II of tender invitation submitted that in case of fraudulent practice by the purchaser, the second respondent is entitled to blacklist the said purchaser for indefinite period or any other specific period. Therefore, the impugned order has been passed by invoking Clause 32(V) (d) of Section II of tender invitation. He further submitted that under Clause 32.2 of Section III of tender invitation r/w Section 11 of Tender Transparency Act, the petitioner is entitled to challenge the impugned order before the Government and without availing the appeal remedy, the petitioner has filed this writ petition. Therefore, according to him the writ petition shall be dismissed for failure of the petitioner to avail appeal remedy available under Section 11 of Tender Transparency Act. He further submitted that Clause 14 of special conditions of contract, Section IV of tender invitation provides for resolution of the disputes arising between the parties by arbitration and hence the petitioner is not entitled to invoke the writ jurisdiction without invoking the arbitration Clause.
He further submitted that Clause 14 of special conditions of contract, Section IV of tender invitation provides for resolution of the disputes arising between the parties by arbitration and hence the petitioner is not entitled to invoke the writ jurisdiction without invoking the arbitration Clause. The learned counsel further submitted that as per Clause 14 of letter of acceptance, the petitioner/supplier is entitled to 100% payments only on certification by the consignee and in order to fullfill Clause 14 of letter of acceptance and to receive the payments, the petitioner produced bogus covering letter and other documents, as if the same was issued by the consignee KCSSH. The learned counsel further submitted that the petitioner is bound by the acts and deeds of its employee and it cannot separate itself from the illegal acts of its employee and escape from the consequential liability. 10. It is not in dispute that the second respondent had floated 14 various tenders from time to time for supply of hospital equipments to various hospitals and institutions situated in various parts of Tamil Nadu. It is also not in dispute that in respect of the three tenders floated by the second respondent mentioned above, the petitioner's bid was accepted and the letter of acceptance was issued in favour of the petitioner. It is claimed by the petitioner that as per the obligation on its part, it supplied necessary equipments to the respondent and when it was waiting for the payment, the impugned order has been passed on the ground that the petitioner posted forged documents to the second respondent, as if, it was prepared and despatched by one of the consignees namely KCSSH. It is admitted case of the petitioner, as seen from its affidavit that on receiving information from the second respondent regarding the receipt of forged invoices and documents which were disowned by consignee KCSSH, an enquiry was conducted in the petitioner's organisation and it was found that one Ramakrishnan employed as Admin support in the petitioner's organisation had committed forgery and despatched the objectionable documents to the second respondent. It is claimed by the petitioner that said employee in connivance with its competitors committed this illegal act just to tarnish the image of the petitioner. 11.
It is claimed by the petitioner that said employee in connivance with its competitors committed this illegal act just to tarnish the image of the petitioner. 11. Therefore, the petitioner clearly admitted that objectionable documents were forged and despatched to the second respondent by its employee just to tarnish its image and hence he was terminated from service. Now, the question to be decided is whether action can be taken against the petitioner for the illegal acts of its employee. It is settled law, the Master is responsible for the actions and deeds of his servant. It is an admitted case of the petitioner that the above said Ramakrishnan was employed as an Admin support of petitioner's organisation. Therefore, the Master - servant relationship is admitted and the petitioner is certainly liable for the acts and deeds of its employee. The petitioner cannot simply point its accusing finger to its employee that forgery was committed by him in his individual capacity and therefore, no action shall be taken against the petitioner. As per letter dated 24.06.2024 included in the Page No.1 of the second respondent's typed set dated 02.12.2024, the Director of Kalaignar Centenary Super Speciality Hospital (KCSSH) addressed a letter to the second respondent, wherein, it was clearly mentioned that as per the despatch Register available with their institute, on 30.03.2024 no letter was despatched to the second respondent. It was also mentioned that the stock entry details mentioned in the documents relating to the petitioner did not tally with their records. It was also mentioned that the font and certain words in the rubber stamp used in the documents did not tally and hence the seal affixed in the objectionable document was forged. It was also mentioned that the signatures found in the objectionable documents were not that of employees of KCSSH. As per Clause 14 of letter of acceptance issued to the petitioner, payment will be made to the petitioner only after certification of the consignee. In the case on hand, the consignee (KCSSH) in its letter clearly mentioned that the documents allegedly despatched by it were found to be forged. The beneficiary of the objectionable documents despatched to the second respondent is doubtlessly the petitioner. The reason being that unless those documents were submitted to the second respondent, the petitioner will not be paid for the equipments supplied.
The beneficiary of the objectionable documents despatched to the second respondent is doubtlessly the petitioner. The reason being that unless those documents were submitted to the second respondent, the petitioner will not be paid for the equipments supplied. Therefore, the petitioner is the beneficiary of the forged documents submitted before the second respondent. The petitioner clearly admitted that the forged documents were submitted by the employee of the petitioner. In such circumstances, the second respondent is justified in holding that the petitioner is responsible for the submission of forged documents before the second respondent. Though it was argued that there was no Clause in the contract for blacklisting of the petitioner and as per Clause 32.2 of General Conditions of contract of Section (III), only action against the erring employee is contemplated, as rightly pointed out by the learned senior counsel for the second respondent, Clause 32 (V) (d) of Section II of tender invitation clearly provides for blacklisting of the supplier engaged in fraudulent practice. The relevant Clause reads as follows: “32. Fraud and Corruption It is purchaser's policy to require that the bidders, suppliers and contractors and their subcontractor observe the highest standard of ethics during the procurement and execution of such contracts.
The relevant Clause reads as follows: “32. Fraud and Corruption It is purchaser's policy to require that the bidders, suppliers and contractors and their subcontractor observe the highest standard of ethics during the procurement and execution of such contracts. In pursuance of this policy, the purchasers; (a) defines, for the purposes of this provision, the terms set forth below as follows: (i) “corrupt practice” is the offering, giving, receiving or soliciting, directly or indirectly, of anything of value to influence improperly the actions of another party; (ii) “fraudulent practice” is any act or omission, including a misrepresentation, that knowingly or recklessly misleads, or attempts to mislead a party to obtain a financial or other benefit or to avoid an obligation; (iii) “collusive practice” is an arrangement between two or more parties designed to achieve an improper purpose, including to influence improperly the actions of another party; (iv) “coercive practice”is impairing or harming or threatening to impair or harm, directly or indirectly, any party or the property of the party to influence improperly the actions of a party; (v) “obstructive practice” is (aa) deliberately destroying, falsifying, altering or concealing of evidence material to the investigation or making false statements to investigators in order to materially impede a investigation into allegations of a corrupt, fraudulent, coercive or collusive practice; and/or threatening, harassing or intimidating any party to prevent it from disclosing its knowledge of matters relevant to the investigation or from pursuing the investigation; or (bb) acts intended to materially impede the exercise of the purchaser's inspection and audit rights provided for under sub-clause 32 I below. (b) will reject a proposal for award if it determines that the bidder considered for award has, directly or through an agent, engaged in corrupt, fraudulent, collusive, coercive or obstructive practices in competing for the contract in question; (c) will cancel the contract if the purchaser determines at any time that the bidder, supplier and contractors and their sub contractors engaged in corrupt, fraudulent, collusive, or coercive practices; (d) will sanction a firm or individual, including declaring ineligible, either indefinitely or for a stated period of time, to be awarded a contract if it at any time determines that the firm has, directly or through an agent, engaged in corrupt, fraudulent, collusive, coercive or obstructive practices in competing for, or in executing, a contract; and” 12.
In the case on hand, forged documents were despatched to the second respondent, so as to make the second respondent to pay the petitioner. Therefore, the submission of forged documents certainly come within the definition of fraudulent practice as found in Clause 32 of Section II extracted above. Clause 32(V) (d) of Section II makes it clear that any supplier who is engaged in fraudulent practice either directly or through an agent is liable to be declared ineligible for awarding a contract either for indefinite period or for specific period. In the case on hand, the petitioner's employee engaged in forgery of documents and despatched the same to the second respondent. Therefore, the second respondent is justified in holding the petitioner responsible for the said act and blacklisting the petitioner for a period of two years by invoking Clause 32 (V) (d) of Section II of tender invitation. 13. Submitting a forged documents for the purpose of financial gain is a serious matter and hence imposition of two years blacklisting against the petitioner cannot be said to be disproportionate to the act done by the petitioner. Therefore, I am unable to find any reason to interfere with the impugned order of blacklisting by the second respondent and accordingly, the writ petition is dismissed. No costs. Consequently, connected miscellaneous petitions are closed.