Court upholds blacklisting of firm for backing out of tender bid

Following this, it was given the selection letter 20 days after the opening of the tender.

Published: 20th October 2021 05:24 AM  |   Last Updated: 20th October 2021 05:24 AM   |  A+A-

Madras High Court

By Express News Service

CHENNAI: A division bench of the Madras High Court upheld blacklisting and forfeiture of earnest money deposit (EMD) of Muthoot Exim Private Limited for backing out of its bid for supplying gold coins to be distributed to beneficiaries of the State government’s welfare schemes. The division bench of Justices Pushpa Sathyanarayana and Krishnan Ramasamy upheld the order of a single judge who dismissed the petitions of Muthoot, and stated that a judicial review cannot be invoked.

The Tamil Nadu Social Welfare department had floated a tender on 31 July, 2018 for supply of 1.11 lakh gold coins weighing eight grams of 22 carat for distribution to beneficiaries of five major welfare schemes. Muthoot Exim Private Limited participated in the tender and agreed to supply 20,000 gold coins.

Following this, it was given the selection letter 20 days after the opening of the tender. Citing steep rise in the price of gold during the intervening period, the firm requested the Social Welfare department to consider fixing the current gold rate or that it be allowed to withdraw its bid.

However, the department initiated proceedings for confiscating the EMD amount of Rs 53 lakh for not adhering to the firm order as per the rules the of Tamil Nadu Transparency in Tenders Rules, 2000 and clause 7 (e) of the tender document. Subsequently, the firm was blacklisted on 5 February, 2019 from entering into any government tenders.


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