CHENNAI: Observing that the low price quoted by the jewellers to supply gold for the TVK government’s ambitious Thaimaman Thanga Mothiram scheme was a business decision taken on the basis of their gold stocks and willingness to accept lower profit margins, the Madras High Court dismissed a PIL challenging the award of a tender to Joyalukkas India Limited and Kalyan Jewellers for supplying 4.41 lakh one-gram 22K gold rings under the scheme.

The PIL was filed by goldsmith G Raj, who challenged the Tamil Nadu Medical Services Corporation Limited's (TNMSCL) tender, floated on July 13, for procuring the gold rings for newborns and their mothers.

The tender requires to manufacture and BIS-hallmark the rings and transport them to 107 hospital hub centres across 38 districts.

Noting that Joyalukkas quoted Rs 0.01 per ring, making the total contract value Rs 4,416.67 for 4,41,667 rings, he argued that this was far below the statutory hallmarking fee of around Rs 2 crore.

Also, the mandatory hallmarking charge of Rs 45 per ring, excluding GST, would itself cost nearly Rs 2 crore, making the accepted rate mathematically impossible considering the scope of work under the tender, he added.

The petitioner had sought a stay on the August 21 award issued in favour of Joyalukkas and Kalyan Jewellers, its quashing, and a direction to TNMSCL to conduct the procurement afresh through a competent agency at a properly determined price.

During the hearing, the petitioner also argued that the corporation was established only for procuring medical supplies and did not have the expertise to assess the quality of gold.

He also contended that the two jewellers had quoted an abnormally low price, and that it was not commercially feasible to supply the rings at such a rate.

However, a division bench comprising Chief Justice SA Dharmadhikari and Justice G Arul Murugan observed that the price quoted was purely a business decision taken by the individual jewellers based on the gold stocks they possessed and their willingness to reduce their profit margins.

The chief justice also questioned how Raj, a goldsmith who had not participated in the tender process, could challenge the award of the contract through a PIL.

The court further questioned how public interest would be affected when the State had awarded the contract to jewellers who offered to supply the rings at the lowest cost among the bidders.

The court dismissed the petition and said that a detailed order would be passed later.