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4. Learned counsel would further contend that T.S.Kumarasamy related firms, rather than supplying the commodities directly to TNCSC, sub-contracted the supply to the previously eligible https://www.mhc.tn.gov.in/judis ( Uploaded on: 06/05/2025 03:05:10 pm ) firms and those firms sold the goods at market prices to T.S.Kumarasamy and his group concerns, who in turn supplied them to TNCSC at the inflated tender rates. This practice indicates collusion and price manipulation resulting in artificial inflation of prices and wrongful gain to T.S.Kumarasamy and his group concerns at public money. The above conduct is in clear violation of the Competition Act, 2002.
6. It is respectfully submitted that the enquiry revealed that a total of 17 tenders for procurement of Dhall were floated by the Tamil Nadu Civil Supplies Corporation (TNCSC) during the period from 2015 to 2021. Out of these, in 2 tenders, Dhall was procured at rates marginally higher than the prevailing market prices-by 2.38% and 0.21%, resulting in an additional expenditure of Rs.
https://www.mhc.tn.gov.in/judis ( Uploaded on: 06/05/2025 03:05:10 pm )
7. It is respectfully submitted that the enquiry found that the Tamil Nadu Civil Supplies Corporation (TNCSC) floated a total of 24 tenders for the purchase of Palmolein between 2017 and 2021. Out of these, in 10 tenders, Palmolein was bought at rates slightly higher than the market price-by 0.95%, 3.54%, 2.49%, 1.53%, 1.65%, 0.05%, 0.92%, 0.27%, 2.72%, 4.70%, and 2.51%, which led to an extra cost of Rs. 56,61,26,250/-. The Tender Committee gave valid reasons for approving the higher prices. These included the need to buy in advance during the festival season, a sudden increase in import duty, an urgent need to stock the item due to rising market prices, and the need to avoid public complaints. It was also necessary to build up stock during the COVID-19 pandemic. The reasons were considered acceptable based on the situation at that time.
12. It is submitted that the enquiry found that the 2019-2024 TNCSC transportation tender violated GOI guidelines, with the contract period extended to five years instead of the prescribed two years, and no Schedule of Rates (SOR) was set. According to the Internal Audit report, the Government incurred a loss of Rs.2,489.52 Crores (comprising Transport -Rs.2,226.91 Crores and Wagon https://www.mhc.tn.gov.in/judis ( Uploaded on: 06/05/2025 03:05:10 pm ) Rs. 262.61 Crores) over the five-year period from 2019 to 2024. After recalculating a 16% markup for the period from January 2020 to February 2023, as the tender was pre-closed in 28.02.2023, the loss amounted to Rs. 1,324.64 Crores. The AG Audit estimated an avoidable expenditure of Rs. 2,518.52 crores, citing improper market rate comparisons and the awarding of contracts at high rates. TNCSC has submitted a response to the AG audit's objections, and the reply from the AG Audit on the para-wise objections is awaited. During the enquiry, the Managing Director and the Manager (Marketing) of TNCSC clarified that, in addition to the disputed amount of Rs. 1,300 Crores withheld as per the Arbitral Award, a pending bill of Rs. 92.65 Crores remains with TNCSC and has yet to be disbursed to the tenderers. Therefore, there is no actual loss to the Government. The Arbitral proceedings, conducted under the direction of the Hon'ble High Court, are binding on TNCSC.