DANYA ELECTRIC COMPANY Vs. STATE OF TAMIL NADU

JUDGEMENT

(1.) The four petitioners have filed the above writ petition for the following relief. To issue a writ of declaration to declare clause 4(e) of G.O.Ms. No. 330, Finance (BPE) Department, dated 3-5-1991, and the consequential resolution of the Tamil Nadu Electricity Board dated 20-1 -1992, in so far as it relates to the supply of transformers/conductors to the Tamil Nadu Electricity Board is concerned, as ultra vires the Electricity (Supply) Act, unconstitutional and violative of Articles 14 and 19(l)(g) of the Constitution of India.

(2.) All the petitioners are Small Scale Units manufacturing power distribution transformers, electrical equipments, etc., in Tamil Nadu. They all joined together to file this writ petition in this Court as they are aggrieved with the issue of G.O.Ms. No. 330, Finance (BPE) Department, dated 3-5-1991 by the State of Tamil Nadu. The petitioners are engaged in the manufacturing business for many years. They supply electrical equipments to various organisations and in particular to the Tamil Nadu Electricity Board/ 3rd respondent. The 3rd respondent calls for tenders as and when they require transformers from the registered Small Scale Industrial Units in Tamil Nadu, and orders are placed only through tender system. According to the petitioners, this is the practice for several decades and the 3rd respondent and the petitioners have been fully satisfied with the functioning of the said system as it gives no room for any arbitrary preferences in the matter of purchase.

(3.) The 3rd respondent called for tenders for supply of transformers during the month of April, 1991, for their requirements of about 3,500 transformers. Open tender system was adopted and orders were issued in the month of February, 1992. Out of 3,500 transformers requirements, the 3rd respondent released orders only for about 2,800 transformers and kept the remaining requirements pending. The petitioners were under the bona fide belief that for the remaining quantity of the transformers requirement, the 3rd respondent would consider the earlier tender quoted by the petitioners and other Small Scale Industrial Units or call for fresh tenders. But, to the dismay of the petitioners, only Relmer Electrical Company Ltd./2nd petitioner and one Magdyne Electrical Products alone received an invitation from the Tamil Nadu Small Industries Development Corporation (hereinafter called SIDCO), calling for quotations for the supply of the distribution transformers to the 3rd respondent. The petitioners were shocked and surprised as they were not made aware that SIDCO was in any way involved in this process. The invitation dated 12-3-1992 calling for lowest offer stated that the offer must be sent in a sealed cover before 20-3-1992. The said letter was received only on 18-3-1992 by petitioners 2 and 3. They sought extension of time for the offer to be made by a month. No reply has been received so far to this request. The petitioners approached SIDCO to find out how SIDCO was involved in the process of supply of distribution transformers to the 3rd respondent. It was also represented to SIDCO that the said invitation was not sent to all other registered Small Scale Industrial Units in the State and the 2nd respondent stated that they had sent the letters only to those who were registered with them. The petitioners further learnt that the said invitation was not sent to all other registered Small Scale Industrial Units and the 2nd respondent had sent it only to those units that were registered with it under the Marketing Assistance Scheme. The petitioners state that the SIDCO is not adopting any uniform practice and that the petitioners were not given an opportunity to register themselves with the SIDCO. The petitioners further submit that on enquiry they have been given to understand that SIDCO has decided to give orders to four other units at their own whims and fancies without following any rational procedure. In the first instance, the petitioners submit that the 3rd respondent ought not to have gone to SIDCO for purchasing its requirements of stores. Secondly, assuming though not accepted, that the involvement of SIDCO is essential, then SIDCO should have followed a reasonable system, giving equal opportunity to all the units.