Padmavathi Hospitality And Facilities Management Services  VS Tamil Nadu Medical Service Corporation

In 2019, two Writ Petitions, W.P.24412 and W.P.27267, were filed concerning the awarding of contracts by The Tamil Nadu Medical Service Corporation (TNMSC), a government undertaking in Tamil Nadu.

W.P.24412 was filed as a Mandamus petition, seeking direction to TNMSC to reject the bid of M/s.Krystal Integrated Services Pvt. Ltd., Mumbai, and award the contract in Tender No.432/outsourcing/DME/TNMSC/Engg/2019 to the petitioner, covering all zones from 1 to 5.

On the other hand, W.P.No.27267 was also filed as a Mandamus petition, urging TNMSC to reject the bids of M/s.Padmavathi Hospitality and Facilities Management Services, Chennai (who were the petitioners in W.P.No.24412 of 2019), and M/s.Krystal Integrated Services Pvt. Ltd., Mumbai. Instead, they requested TNMSC to award the contract related to the same tender to the petitioner for Zones 1 to 5.

Both petitions essentially sought judicial intervention to direct TNMSC’s contracting decisions regarding the outsourcing contract specified in Tender No.432/outsourcing/DME/TNMSC/Engg/2019 dated 19.02.2019. The primary contention was to reject certain bids and award the contract to the respective petitioners for zones 1 to 5.

In 2019, two Writ Petitions were filed regarding the awarding of contracts by The Tamil Nadu Medical Service Corporation (TNMSC), a Government of Tamil Nadu undertaking. The first petition, W.P.24412 of 2019, sought Mandamus to direct TNMSC to reject the bid of M/s.Krystal Integrated Services Pvt. Ltd., Mumbai, and instead award the contract in Tender No.432/outsourcing/DME/TNMSC/Engg/2019 dated 19.02.2019 to the petitioner for all five zones (zones 1 to 5).

The second petition, W.P.No.27267 of 2019, also in the nature of Mandamus, requested TNMSC to reject the bids of M/s.Padmavathi Hospitality and Facilities Management Services, Chennai (who was the petitioner in W.P.No.24412 of 2019), and M/s.Krystal Integrated Services Pvt. Ltd., Mumbai. The aim was to direct TNMSC to award the contract pertaining to the same tender to the petitioner for Zones 1 to 5.

Both petitions essentially contested the awarding of the contract under the mentioned tender and sought the involvement of the court to ensure a different outcome regarding the selection of the service provider.

In 2019, two writ petitions were filed concerning a tender process initiated by the Tamil Nadu Medical Service Corporation Ltd., a government undertaking in Tamil Nadu. The first petition, W.P.24412 of 2019, sought to direct the corporation to reject the bid of M/s.Krystal Integrated Services Pvt. Ltd. and award the contract to the petitioner for all five zones specified in Tender No.432/outsourcing/DME/TNMSC/Engg/2019. Similarly, the second petition, W.P.No.27267 of 2019, aimed to compel the corporation to reject bids from M/s.Padmavathi Hospitality and Facilities Management Services and M/s.Krystal Integrated Services Pvt. Ltd. and award the contract to the petitioner for the same zones.

The dispute arose from the bidding process where the petitioner submitted bids for all five zones while M/s.Krystal Integrated Services Pvt. Ltd. emerged as the successful bidder for zones 1 to 4 and the petitioner for zone 5. The petitioner alleged that M/s.Krystal Integrated Services Pvt. Ltd. had submitted its bid without including Goods and Service Taxes (GST), which the tender document mandated. The petitioner argued that this omission disqualified M/s.Krystal Integrated Services Pvt. Ltd., making the petitioner the lowest bidder for all zones.

The corporation initially called for negotiations with M/s.Krystal Integrated Services Pvt. Ltd. to rectify the issue by revising their bid to include GST. The petitioner protested this decision, claiming it to be illegal. Despite being given an opportunity to respond, the petitioner filed the writ petition without further engaging with the corporation’s process.

Additionally, the petitioner claimed that another bidder, M/s.Neat and Clean Services Squared, had been disqualified for not including service tax, which ultimately led to the petitioner’s success in zone 5. However, the corporation had not similarly disqualified M/s.Krystal Integrated Services Pvt. Ltd.

Overall, the petitions sought legal intervention to rectify what the petitioner saw as irregularities in the tender process, including the improper handling of bids lacking GST and the alleged selective disqualification of bidders.

Writ Petition 24412 of 2019 was filed as a Mandamus petition urging the Tamil Nadu Medical Service Corporation to reject the bid of M/s.Krystal Integrated Services Pvt. Ltd., Mumbai, and instead award the contract to the petitioner for all zones (zones 1 to 5) in Tender No.432/outsourcing/DME/TNMSC/Engg/2019.

In a similar vein, Writ Petition 27267 of 2019 sought to direct the Tamil Nadu Medical Service Corporation to reject the bids of M/s.Padmavathi Hospitality and Facilities Management Services, Chennai (the petitioner in W.P.No.24412 of 2019), and M/s.Krystal Integrated Services Pvt. Ltd., Mumbai, and to award the contract for all zones (zones 1 to 5) to the petitioner.

The dispute arose from the bidding process where the petitioner claimed that M/s.Krystal Integrated Services Pvt. Ltd. had submitted their bid without including Goods and Service Taxes (GST), while the petitioner included applicable taxes in their bid as required by the tender document. The petitioner argued that the non-inclusion of GST should disqualify M/s.Krystal Integrated Services Pvt. Ltd. The petitioner also pointed out discrepancies in the treatment of bidders, claiming that another bidder, M/s.Neat and Clean Services Squared, was disqualified for a similar reason, yet M/s.Krystal Integrated Services Pvt. Ltd. was not.

In response, the Tamil Nadu Medical Service Corporation stated that they followed all procedures outlined in the Tamil Nadu Transparency in Tender Act, 1998, and the rules framed thereunder. They also cited an opinion from a GST consultant suggesting that housekeeping and security services provided at medical institutions controlled by the Directorate of Medical Education might be exempt from GST.

The case involved complex arguments regarding the interpretation of tender documents, compliance with tax regulations, and the fairness of the bidding process. Both parties presented their positions, with the petitioner seeking intervention from the court to rectify what they perceived as unfair treatment in the bidding process.

The case in question involves two Writ Petitions, W.P. No. 24412 of 2019 and W.P. No. 27267 of 2019, both concerning the awarding of contracts for various services by the Tamil Nadu Medical Service Corporation (TNMSC), a government undertaking.

In W.P. No. 24412 of 2019, the petitioner sought a Mandamus directing TNMSC to reject the bid of M/s. Krystal Integrated Services Pvt. Ltd. and award the contract to the petitioner for all zones (1 to 5). Similarly, in W.P. No. 27267 of 2019, the petitioner urged TNMSC to reject the bids of M/s. Padmavathi Hospitality and Facilities Management Services (the petitioner in W.P. No. 24412) and M/s. Krystal Integrated Services Pvt. Ltd., and award the contract to the petitioner for zones 1 to 5.

The dispute arises from the bidding process for housekeeping, security, and other related services in various government medical institutions. Both petitioners bid for all five zones, while M/s. Krystal Integrated Services Pvt. Ltd. also bid for all five zones.

The main contention of the petitioner in W.P. No. 24412 is that M/s. Krystal Integrated Services Pvt. Ltd. did not include Goods and Services Taxes (GST) in their bid, which, according to the tender document, was a mandatory requirement. The petitioner argued that M/s. Krystal Integrated Services Pvt. Ltd. should be disqualified for this reason. However, TNMSC allowed M/s. Krystal Integrated Services Pvt. Ltd. to revise their bid, including GST at ‘0 %’, citing certain government notifications exempting GST for the services provided.

In response, TNMSC contended that the tender process was conducted transparently and in accordance with the Tamil Nadu Transparency in Tenders Act, 1998, and its rules. They argued that they had obtained opinions from GST consultants supporting the exemption of GST for the services in question. Furthermore, TNMSC asserted that negotiations were ongoing and no final decision had been made on the awarding of contracts.

Additionally, the petitioner alleged irregularities in the disqualification of another bidder, M/s. Neat and Clean Services Squared, for not submitting their bid with service tax included, which allegedly allowed the petitioner to win the bid for Zone 5.

Both parties presented their arguments before the court, with the petitioner seeking the rejection of M/s. Krystal Integrated Services Pvt. Ltd.’s bid and the awarding of contracts to themselves for all zones. On the other hand, TNMSC defended their actions and argued that the petitioner’s claims were premature, suggesting that they should seek recourse through the Appellate Authority after the completion of the tender process.

The court will have to consider the legality of TNMSC’s actions, including the acceptance of bids without GST included and the disqualification of other bidders. The outcome of the case will determine the awarding of contracts for housekeeping and related services in government medical institutions in Tamil Nadu.

Download PDF:

For Reference Visit
Madras High Court 

Read Another Case Law:
GST Case Law