Madras High Court quashes tender to supply two lakh packets of palmolein for PDS

Ukraine war and supervening ban on palm oil export by Indonesia altered market situation, says court while granting relief to suppliers

Published: 02nd June 2022 04:21 AM  |   Last Updated: 02nd June 2022 04:21 AM   |  A+A-

Palm oil

Palm oil (Representational Image)

Express News Service

CHENNAI: The Tamil Nadu Civil Supplies Corporation (TNCSC) cannot take advantage of the unfortunate situation of suppliers, the Madras High Court said on Wednesday, quashing the tenders for supply of two lakh packets of palmolein, weighing one litre each, for PDS outlets.

Justice GR Swaminathan granted the relief to the edible oil suppliers - KTV Health Foods Pvt Ltd and Ruchi Soya Industries - based on the writ petitions filed by them seeking to quash the bids since the Ukraine war had an adverse impact on the international market.

The principles of fairness and reasonableness are very much applicable to the facts of these cases, he said.

"The following circumstances viz, (1) the supervening event has had a significant effect (2) the petitioners could not reasonably have contemplated the same at the time when they made the offer and (3) it would be unjust to require them to stand by their offer, lead me to the conclusion that the petitioners have clearly made out a case for grant of relief," he said while quashing the tender process.

KTV Health Foods and Ruchi Soya Industries participated in the tender called for by the TNCSC, for which notification was issued on April 4, 2022, for the supply of two lakh packets of one-litre palmolein. The tender date was fixed as April 21. The price bids were not opened on the same date but only on April 28.

They contended that the situation in the international market changed owing to the Ukraine war and in the intervening period, Indonesia imposed a ban on exports of palmolein and other such products on April 27. They sought nullification of the entire tender process citing the sudden development as a force majeure event.

The judge observed that the conduct of the respondents in not opening the tender on time was not in consonance with the statutory provision read with the relevant tender clause and opined that the ban imposed by Indonesia, clearly a supervening event, had ‘momentous consequences’ and ‘fundamentally altered’ the market situation.

Meanwhile, Justice Swaminathan dismissed a batch of petitions filed by Starshine Logistics and other suppliers--which were already given tender for the supply of four crore packets of palmolein--seeking to quash the order to supply an additional 25 per cent quantity.

The court also dismissed a petition filed by Arunachala Impex Pvt Ltd challenging the notice of TNSCS warning levying of fine for failing to fulfil a commitment of supplying the remaining part of one crore packets.    


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