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1966 DIGILAW 101 (KER)

Pylee Pillai And Company v. The KSEB Trivandrum

1966-04-06

V.P.GOPALAN NAMBIYAR

body1966
JUDGMENT V.P. Gopalan Nambiar, J. 1. The reliefs prayed for in this writ petition are a writ of certiorari quashing me order of the 1st respondent (The Kerala State Electricity Board) dated 7-3-1966 deciding to award the work of construction of a Power Tunnel for the Idukki Hydro Electric Project, to the 4th respondent and for a writ of mandamus directing the respondents to award the contract above mentioned to the petitioners as the lowest tenderers in respect of the work. There is also a prayer for mandamus directing the 1st respondent to frame regulations under S.79(g) of the Indian Electricity Supply Act (Act LIV of 1948) regarding the procedure to be followed in inviting, considering and accepting tenders. 2. In respect of the construction of a Power tunnel for the Idukki Hydro Electric Project, tenders were called for by the Chief Engineer (the 3rd respondent), Ext. P. 1 (a) is a copy of the relevant extract from the tender notification. The entire tender notification was made available to me at the hearing. The petitioner and others submitted tenders. There was no controversy at the hearing that the petitioner's tender was subject to certain conditions. The tenders were opened by the third respondent and after evaluation he rated the tender of the Associated contractors represented by the 5th and 6th respondents as the lowest, and the petitioner's as the next in order. As the 5th respondent had no experience in the work, the 3rd respondent decided to award 60 per cent of the work, on difficult terrain to the petitioner and 40 per cent to the Associated Contractors. There was no controversy before me that as the work involved was above Rs. 10,00,000/- the tenders had to be disposed of and finalised by the Electricity Board (1st respondent) after considering the recommendations of the Chief Engineer. The 3rd respondent accordingly submitted his proposals to the 1st respondent. At a meeting of the Board held on 26-2-1966, it was decided to invite fresh tenders for the work. There was another urgent meeting of the Board on 7-3-1966. At the said meeting it was decided to award the contract entirely to the 4th respondent. Ext. R4 dated 8-3-1966, is the copy of the Board's letter sanctioning the award of the contract to the 4th respondent, and Ext. There was another urgent meeting of the Board on 7-3-1966. At the said meeting it was decided to award the contract entirely to the 4th respondent. Ext. R4 dated 8-3-1966, is the copy of the Board's letter sanctioning the award of the contract to the 4th respondent, and Ext. R5 is a copy of the letter from the Secretary to the Board to the 4th respondent intimating the acceptance of his tender. 3. The Board's action is challenged on the following grounds by the petitioner's counsel, and his contentions were supported by the Counsel for respondents 5 and 6. In the first place, the 3rd respondent alone was competent to accept the tenders and the Board's interference with, and variation of, the decision of the 3rd respondent was illegal. Secondly, the decision having been taken at the meeting of the Board on 26-2-1966 to invite fresh tenders, the matter was brought up again before the Board on 7-3-1966 without its being included in the agenda at all for the said meeting. Thirdly, while certain directions are seen issued by the Board against the acceptance of tenders with conditions and negotiations with such tenderers, these directions were relaxed, as and when it pleased the Board to do so. Fourthly it was submitted that the decision of the Board to award the contract in favour of the 4th respondent was largely, if not solely, influenced by the wrong statements placed before it by its Chairman (the 2nd respondent) regarding the efficiency and the financial stability of the 4th respondent. 4. Condition No. 4 of the tender notification, as given in Ext. P. 1 (a) reads as follows: "Acceptance of the tender “ The acceptance of the tender rests with the Engineer or his authorised representative according to the devolution of powers in force. The Engineer is not bound to accept the lowest or any tender, neither will he be responsible for any expense or losses that may be incurred by the tenderer in the preparation of the tender." From this it was argued that on the terms of the tender notification, the 3rd respondent was the authority to accept the tenders. For the respondents 1 to 4, reliance was placed on the Office Orders Exts. R1 and R2. Ext. R1 dated 1-11-1960 stated that subject to the relevant rules in force, tenders for works above Rs. For the respondents 1 to 4, reliance was placed on the Office Orders Exts. R1 and R2. Ext. R1 dated 1-11-1960 stated that subject to the relevant rules in force, tenders for works above Rs. 10,00,000/- had to be disposed of by the Board after considering the recommendation of the 3rd respondent. Ext. R2 stated inter alia that no negotiation should be made with the tenderers after the tenders are opened except with the approval of the Board. Ext. R1 is headed "Subject: Acceptance of contracts delegation of powers proposals regarding". For the respondents, it was contended that Clause.4 of the tender notification extracted supra is itself subject to Exts. R1 and R2, and the reference to the devolution of powers contained therein was to Ext. R1. 5. Regarding the 2nd ground of attack namely the non inclusion of the item in the agenda of the meeting on 7-3-1966, it was argued that the item though not included in the agenda was brought up and considered and decided upon by the Board, that the decision was binding on the Board, and that the 'petitioner who was not a member of the Board had no right to complain against the said decision. Reliance was placed on the decision in Vice Chancellor, Utkal University and Others v. S. K. Ghosh and Others ( AIR 1954 SC 217 ) where the Supreme Court upheld the transaction of an item of business by a University body, which had not been specifically included in the agenda and which was brought up and proposed in the course of the meeting. 6. In support of the 3rd ground of attack, the petitioner's counsel invited my attention to Ext. R2 where negotiations with tenderers except with the previous approval of the Board were prohibited and also to the remarks of the Accounts Member seen endorsed in Ext. R3 to the effect that offering tenders with conditions and, after opening the tenders withdrawing such conditions as are necessary for becoming the lowest tenderer, and securing the contract should be viewed as sharp practice in tendering, and suggesting the award of the contract to the clearest tenderer, if otherwise competent. In Para.5 of his affidavit, the petitioner maintained that it was normal and usual to submit statements for clarification along with the tenders and gave instances in support thereof. In Para.5 of his affidavit, the petitioner maintained that it was normal and usual to submit statements for clarification along with the tenders and gave instances in support thereof. These allegations have been answered in Para.11 and 12 of the counter affidavit of the 1st respondent, and have been further clarified in Para.3 to 5 of the reply affidavit of the petitioner. Counsel for the 1st respondent contended that negotiations in regard to the conditions attached were conducted at the Board level, and not so as to change the order of cheapness of the tenders. 7. Strong criticism was voiced by the petitioner's counsel and concurred in by the counsel for the 5th and 6th respondents, in regard to the remarks of the 2nd respondent seen endorsed in Ext. R3. For awarding the contract to the 4th respondent, the 2nd respondent stated two things: (1) As far as experience is concerned, the 4th respondent had successfully completed the inclined tunnel at Kuttiadi and (2) that his reputation as far as financial capacity and efficiency are concerned is above board. On these, he recommended the award of the contract to the 4th respondent as the first alternative. The Board acted on this recommendation. The petitioner's counsel contended that the statements of the 2nd respondent were patently wrong and deliberately made to mislead the Board and to favour the 4th respondent. In Para.32 of the counter affidavit of the 1st respondent it had been admitted that the work in regard to the Kuttiadi tunnel was entrusted to the 4th respondent's son, and it was argued that it was wrong and wholly unjustified to identify the son's experience with the father, for the purpose of awarding the contract. Mention was made in Para.16 (c) of the petitioner's affidavit of the laxity of the work of the 4th respondent in regard to the execution of the Kuttiadi Project and to the issue of several notices to him about the said laxity. Reference was also made to the slow progress of the work as evidenced by the progress report relating to the same. As far as the financial stability of the 4th respondent is concerned, it was averred that the 4th respondent had borrowed huge amounts and that money had been advanced by the 1st respondent to the 4th respondent to carry on the work already undertaken. As far as the financial stability of the 4th respondent is concerned, it was averred that the 4th respondent had borrowed huge amounts and that money had been advanced by the 1st respondent to the 4th respondent to carry on the work already undertaken. The complaint was that these facts had been suppressed by the 2nd respondent in his remarks in Ext. R3. Para.21 of the reply affidavit of the petitioner was also relied on in support of this contention. For the respondents, it was answered in Para.32 of the counter affidavit that the contract regarding the Kuttiadi tunnel was entrusted to the 4th respondent's son on the strength of a letter from the 4th respondent, that the 4th respondent stood surety for him and guaranteed the Board against any damage or loss in the execution of the work, and that the work at Kuttiadi was being done by the father and the son together by their combined efforts. Reliance was placed by the respondents on Ext. R7 which is a copy of the report by the Additional Chief Engineer dated 18th March 1966, stating that the progress of the work at Kuttiadi was satisfactory and that there were no lapses on the part of the contracts and that the progress achieved was commensurate to the facilities afforded by the Board and available at the site. For the petitioner this document Ext. R7 was condemned as having been 'procured' after the filing of this writ petition, and opposed to the other records referred to by them, regarding the progress of the work at Kuttiadi and the efficiency of the contractor entrusted with the same. Arguments were also addressed that the decision of the Board was vitiated by mala fides on the part of the 2nd respondent. 8. At the stage of the reply arguments, the petitioner's counsel contended that the case of the respondents that Exts. R1 and R2 had to be read into condition No. 4 of the tender notification was wholly unacceptable, that by proceedings dated 18-12-1963 and 22-1-1965, the P. W. D. Account Code had been made applicable to the Board from 1-1-1964, and that according to item 16 of the said Code the acceptance of the tender was in all cases, and without any money limit, to be by the Superintending Engineer. Copies of the proceedings were filed as Exts. Copies of the proceedings were filed as Exts. XI and X2 along with an additional affidavit dated 4-4-1966. For the respondents, it was complained that this new case was sprung on them at the very conclusion on the hearing. Besides, it was pointed out that even under the P. W. D. Code sought to be relied on by the petitioner, the right of acceptance was with the Superintending Engineer, and none of the parties had any case that he was the authority either competent to accept, or who had in fact accepted, the tenders in the instant case. I have set out the contentions of the parties fairly fully. I should now notice the preliminary objection which was seriously urged on behalf of the respondents 1 to 4 that a petition under Art.226 would not lie either for a writ of certiorari or for mandamus. It was contended that neither any judicial nor any quasi judicial function was involved in the acceptance of the tenders or the award of the contract in question, and therefore there was no case for the issue of a writ of certiorari. It was again contended that neither the petitioner nor the respondents 5 and 6 who supported them had any legal right to the acceptance of their tenders or to the award of the contract nor were respondents 1 to 3 under any legal obligation vis a vis the acceptance or the award. Therefore it was claimed no writ of mandamus would lie against the respondents 1 to 3. It was further argued that the obligation to call for lenders, to deal with them and to award the contract had not been defined or delimited either by the statute or by statutory rules and in the absence of any such clearly defined obligation the present petition was misconceived. This position was fairly recognised and frankly conceded by the counsel for the petitioner and in answer 10 a question by me he sought to place his case only on the footing that there was a duty to accept the tenders and to award the contract in a reasonable manner. 9. This position was fairly recognised and frankly conceded by the counsel for the petitioner and in answer 10 a question by me he sought to place his case only on the footing that there was a duty to accept the tenders and to award the contract in a reasonable manner. 9. For the respondents, it was contended that the matter involved in this O. P. related if at all, essentially to a breach of contract or irregular performance of contract for which the proper remedy was by a civil suit, and not by a petition, under Art.226 of the Constitution. It was pointed out that the 5th and 6th respondents had resorted to their remedy by way of civil suit and have filed O. S. No. 226 of 1966 Munsiff's Court, Trivandrum, for a permanent injunction restraining the Board from awarding the contract to any one other than the plaintiffs and also for restraining the Chief Engineer from entering into any agreement with the 4th defendant (Vide Ext. R9) 10. For the 4th respondent, it is stressed that there was a concluded contract with him as seen from Exts. R.4 and R.5, that even a suit for specific performance of the contract in favour of the present petitioner would not lie in view of the provisions of S.10 of the Specific Relief Act 1963 by which such a suit is barred where pecuniary compensation is an adequate relief. Ex hypothese, it is argued that a mandamus to award the contract in favour of the petitioner will not lie as the same is not to be regarded as a substitute for the ordinary remedy of a Civil suit. Reliance was placed on the decision of the Supreme Court in Achuthan's case (AIR 1959 SC 409) where it was held that no one can claim fundamental right to enter into a contract with another or with the Government, and that there was no violation of Art.14 where one person is chosen for awarding the contract in preference to another. 11. It seems to me that the matter involved in this writ petition is essentially one relating to a contract for the execution of a work. The terms of the contract were governed by the tender notification issued not under any statutory provisions or Rules, but essentially as in the case of any ordinary contract. 11. It seems to me that the matter involved in this writ petition is essentially one relating to a contract for the execution of a work. The terms of the contract were governed by the tender notification issued not under any statutory provisions or Rules, but essentially as in the case of any ordinary contract. Assuming that there was any breach of the conditions of the tender notification as to the authority to accept the tender or to award the contract, or in regard to any of the other matters alleged by the petitioner and by the 5th and 6th respondents, as to which I express no opinion it seems to me to be essentially a matter for which the remedy lies by way of a civil suit and not in proceedings under Art.226. 12. S.79(g) of the Indian Electricity Supply Act, 1948 enables the Board to frame regulations to provide for the procedure to be followed by the Board in inviting, considering and accepting tenders. This admittedly has not been done in spite of the fact that the failure to do so, was commented upon by this Com; in its judgment in O. P. 3321 of 1964 dated 18-1-1965. It has been averred in Para.33 of the counter affidavit that the Board is at present engaged in framing regulations under S.79(g) of the Act above noticed. In view of the said averment, the relief of mandamus asked for against the Board to frame the said regulations cannot be granted. However regrettable the omission to frame the regulations may be, the fact remains that in the absence of the regulations there is no clear and well defined statutory duty on the part of the Board in the matter of the award of the contracts. The lines and the limits of the obligations cannot be clearly drawn in these proceedings on any concept of reasonableness, as is sought to argued by the counsel for the petitioner. That being the position, it is not possible to grant the relief of mandamus even on the footing that there is a well defined obligation to exercise the power of awarding the contracts in a particular manner and that the same has not been done, in the instant case. There is also the fact that as against the 4th respondent, who is a private individual, no mandamus can lie. 13. There is also the fact that as against the 4th respondent, who is a private individual, no mandamus can lie. 13. On the facts above noticed, I find no substance in the arguments based upon the violation of Art.14 of the Constitution. Indeed, little was said by the petitioner's counsel to substantiate this plea. Nor is it necessary or desirable express any opinion on the case of mala fides. Mala fides was alleged only again the 2nd respondent in that he deliberately misled the Board by presenting a false picture about the financial stability and the efficiency of the 4th respondent. These have been hotly denied by the 2nd respondent and by the other contesting responds and they raise controversial questions of fact which can hardly be resolved in these proceedings. Besides, it was pointed out that the 2nd respondent, though the chairman is only one of the members of the Board. No mala fides has been attributed in these proceedings to the Board as such. I do not wish to pursue this matter further or to venture an expression of opinion either way, as it might tend to prejudice any other remedy which the parties might be advised to take in respect of this matter. As noticed, the matter is already before the Munsiff's Court, Trivandrum in O. S. No. 226 of 1966, at the instance of respondents 5 and 6 and it is but proper that I refrain from any expression of opinion on the merits of the contentions raised herein. 14. I am satisfied that this petition under Art.226 of the Constitution is not maintainable as the matter can relate, if at all, essentially to a breach of contract or to an illegal and improper execution of a contract for which the proper remedy appears to be a civil suit. 15. I dismiss the petition, but make no order as to costs