SABYASACHI MUKHERJI, J. ( 1 ) THE petitioners in this application under Article 226 of the Constitution are Messrs. Piyali Pictures, a partnership firm, and one Shri Ashim Dutta, a partner of that firm. The respondents to this application are the State of West Bengal. Shri Budhadev Bhattacharyya the Minister concerned, Deputy Secretary and the respondent No. 4 Shri Dinesh Chandra Dey, in whose favour the impugned contract of distribution has been granted. ( 2 ) THE subject matter of challenge in this application is the grant of distribution right of the picture produced by the State Government 'ganadevata' based on the well known novel by the famous writer late Tarasankar Bandhyopadhyay. It appears that on the 8th March, 1978 there was a notification in the Amrita Bazar Patrika inviting sealed tenders from Bona fide film distributors for selection as distributor of the State Government's feature film 'ganadevata'. The said invitation to tender stated, inter alia, as follows:wanted Distributor for 'ganadevata' sealed tenders are invited from bonafide film distributors for selection as distributor of the State Govt. 's Bengali feature film 'ganadevata' in Eastman colour, produced under the direction of Shri Tarun Mazumder. Selected distributor will be required to bear the costs of prints and publicity, preparation of stills, trailers, booklets, etc. Tenders should accompany valid and upto date S. T. and I. T. Clearance Certificates and R. B. I. chalan for Rs. 500/- as earnest money deposited in favour of the Dy. Secretary, I and P. R. Deptt. , Govt. of West Bengal, Writers' Buildings, Calcutta. Details may be had from I and P. R. Deptt. Tenders will be received upto 2 P. M. and opened in public at 3 P. M. on March 21, 1978. (IPR 2083 (5)/78 ). PROFORMA of application and other details to be followed for submission of tenders for distributorship of 'ganadevata'. 1. Name of the applicant. 2. Detailed address. 3. Whether registered with E. I. M. P. A. and Registrar of Companies. 4. Experience and particulars of films previously dealt with and reference. 5. Present business. 6. Period of distribution right offered. 7. Region/regions to which the offer within India relates. 8. Out-line scheme with detailed budget for pre-release and post release publicity. 9. Whether the applicant would bear the print cost and costs for pre-release and post-release publicity including stills, trailors, booklets etc. 10. Rate of commission. 11.
5. Present business. 6. Period of distribution right offered. 7. Region/regions to which the offer within India relates. 8. Out-line scheme with detailed budget for pre-release and post release publicity. 9. Whether the applicant would bear the print cost and costs for pre-release and post-release publicity including stills, trailors, booklets etc. 10. Rate of commission. 11. Mode of payment of producer's share. 12. Other reference considered relevant. ( 3 ) PURSUANT to the said notification on or about the 20th March, 1978 the petitioner No. 1 duly submitted the tender. In the said tender the said petitioner mentioned what it considered to be its experience as a distributor and further stated that its average annual turnover from distribution of Bengali pictures was more than Rs. 20 lacs. The period of distribution offered was 10 years from the date of release or such period as the Producers would like them to be appointed and the region was all India. So far as for the budget, a schedule was attached and the rate of commission claimed was indicated to be 1 per cent of the building amount. The publicity budget indicated certain pre-release and certain post-release expenditure and also expenditure on booklets. It is not necessary for my present purpose to set out in detail the publicity budget which has been set out as an annexure to the tender that was submitted. A total sum of Rs. 30,000/- was indicated as pre-release budget and a sum of Rs. 1,215/- per week as post-release publicity budget. It was commented on behalf of the State Government as well as the respondent No. 4 that the publicity offered was, in the context of the importance of the film to be distributed, inadequate to meet the proper requirement of proper publicity. As I said before, I am not concerned here to examine in detail these questions. It appears that on or about the 21st March, 1978 at about 3 P. M. , according to the petitioners, the tenders were opened in the presence of the tenderers and their representatives and it transpired that the rate quoted by the petitioner No. 1 was the lowest and according to the petitioners the tender submitted by the respondent No. 4 did not comply with the tender requirements.
The terms and conditions upon which the respondent No. 4 submitted its tender would appear from the Annexure to the Supplementary affidavit of Shri Dinesh Chandra Dey affirmed on the 7th June, 1979. In the said letter dated the 17th March, 1978 the respondent No. 4 stated, inter alia, as follows: - in this connection we may mention to your goodself that we feel, it is our bounden duty to co-operate with the present working class Government of the State which has come into power after long sufferings of the working class people in general during the last several years in their endeavour to ameliorate the condition of the common people of the State. Keeping this spirit of co-operation in mind, we place our services at the disposal of the Government for our appointment as distributor of the film 'ganadevata' for the whole of India in the manner and conditions as may be desired and decided by the Government without any pre-conditions from our side. Please be rest assured that the exploitation and exhibition of the picture will be done by us in the best manner as possible in the trade. Necessary papers as required are sent herewith. ? so far as the tender form is concerned, apart from giving certain experience of their past performance the respondent No. 4 stated that the period of distribution right was to be fixed as considered by the Government of West Bengal and an outline scheme of expenditure as directed by the Government of West Bengal was also given. The respondent No. 4 also stated in that tender form that the rate of commission was also to be fixed as considered by the Government of West Bengal. Thereafter, by a further letter dated July, 1978, the period of distribution was indicated to be 7 ?% years from the date of the first release of the picture and the rate of commission was indicated to be as follows: -A)2 % upto Rs. 5 (five) lakhs. b) 5% from Rs. 5 (five) Lakhs to Rs. 10 (Ten) Lakhs. c)7 % from Rs. 10 (Ten) Lakhs to Rs. 15 (fifteen) Lakhs. d)10% from Rs. 15 (fifteen) lakhs to Rs. 20 (twenty) lakhs. e) commission above Rs. 20 (twenty) Lakhs may be decided on mutual discussion.
5 (five) lakhs. b) 5% from Rs. 5 (five) Lakhs to Rs. 10 (Ten) Lakhs. c)7 % from Rs. 10 (Ten) Lakhs to Rs. 15 (fifteen) Lakhs. d)10% from Rs. 15 (fifteen) lakhs to Rs. 20 (twenty) lakhs. e) commission above Rs. 20 (twenty) Lakhs may be decided on mutual discussion. On the 3rd July, 1978, the respondent No. 4 further wrote as follows: - apropos the discussion the undersigned had with you in your office on the subject noted above, I would inform you that during the discussion our intention contained in our letter dated 17. 3. 78 was fully explained to you wherein we unequivocally expressed that we are desirous of taking the distributorship of the film 'ganadevata' to the best interest of public revenue on the terms and conditions to be determined by Government. ( 4 ) DURING discussion, we were advised to offer our terms etc. As such, we are reluctantly furnishing the same in a separate sheet of paper enclosed. Incidentally, it is again mentioned categorically that we do not propose or intend to take the distributorship of film 'ganadevata' from the business point of view but with the intention to explicit the film in the best possible manner to the best interest of the Government. The Government will be at liberty to alter or revise the terms the terms etc. and we agree to accept the altered and revised terms without any condition, as we consider the present Government as the peoples' Government and we feel, it is our bounded duty to help and cooperate with the Government in any matter and in any way be desired by this Government. Subsequently there was another letter dated the 10th Novembe,r 1978 which is not material for the present purpose. According to the petitioners on the basis of the rate of commission that the petitioners claimed, the petitioner no. 1 would be entitled to only Rs. 20,000/- as commission on the basis of the rate of commission, while on the basis of the rate of commission that had been subsequently quoted by the respondent No. 4 the respondent No. 4 had to be paid a total sum of Rs. 1,25,000/ -.
1 would be entitled to only Rs. 20,000/- as commission on the basis of the rate of commission, while on the basis of the rate of commission that had been subsequently quoted by the respondent No. 4 the respondent No. 4 had to be paid a total sum of Rs. 1,25,000/ -. It is the case of the petitioners that on the 6th December 1978 the petitioners came to learn from the bulletin of the Eastern India Motion Pictures Association that the respondent No. 4 had been appointed distributor of the said picture for a period of 7 ? years with effect from the 2nd December, 1978 and on the 15th January, 1979 there was a letter from the respondent No. 1 to the petitioner No. 1 informing them that their offer was not found suitable for acceptance by the Government. The contents of the letter have been set out in paragraph 12 of the petition. On the 15th January, 1979 a letter was written by the respondent no. 1 to the petitioners informing ?your offer was not found suitable for acceptance by the Government?. On the 6th March, 1979, the petitioners filed a suit in the City Civil Court at Calcutta being Title Suit No. 395 of 1979 (Piyali Pictures v. Eastern India Motion Pictures Associatioin and Dinesh Chitram) and moved an application in the City Civil Court for a temporary injunction restraining the said Association from registering the respondent no. 4 as the distributor of the said picture Ganadevata and an ex parte order of injunction was made on that date. On the 17th March, 1979, the respondent no. 4 made an application to vacate the said Ex parte order of injunction. The petitioners state that a copy of the said application of the respondent no. 4 was received by the petitioners and, according to the petitioners, the petitioners came to know for the first time that the respondent no. 4 had been appointed as the distributor by the respondent no. 1 by private negotiations and on terms contained in the letter dated 6th November, 1978 of the respondent no. 1. The letters that were exchanged between the parties are set out in Annexure B to the present petition which red as follows: - west Benal Secretariate Department of Information and Cultural Affairs, Writers' Buildings, Calcuttad. O. NO. 23910 ICA 6th November, 1978.
1. The letters that were exchanged between the parties are set out in Annexure B to the present petition which red as follows: - west Benal Secretariate Department of Information and Cultural Affairs, Writers' Buildings, Calcuttad. O. NO. 23910 ICA 6th November, 1978. Subject : Distribution of the Film Ganadevata. Dear Sirs, i am to refer to your letter dated 28. 7. 78 on the subject mentioned above and have the pleasure to inform that it has been decided to appoint you as the distributors of the State Government's film Ganadevata in Indian territory on the terms and conditions as indicated in your aforesaid letter and also on the following other terms: 1. That the commission shall be paid at the rate of: (a)2 ?% upto Rs. 5 (five) lakhs. (b)5% from Rs. 5 (five) Lakhs to Rs. 10 (Ten) Lakhs. (c)7 ?% from Rs. 10 (Ten) Lakhs to Rs. 15 (fifteen) Lakhs. (d) 10% from Rs. 15 (fifteen) lakhs to Rs. 20 (twenty) lakhs. (e)above Rs. 20 (twenty) Lakhs may be decided on mutual discussion. 2. That the print and publicity costs shall have to be borne by you in full which may, however, be recovered from the Producer's share of receipts from the exploitation of the film. 3. Detailed scheme and budget for pre-release and post release publicity for the film indicating the number of release prints to be required by you shall have to be submitted to the Government for approval prior to taking up the programme. 4. That you will be required to execute an agreement with the Government in respect of exploitation of the film which will contain other usual terms and conditions. If you are agreeable to accept the distributionship of the film on the above mentioned terms and conditions, you are requested to communicate your acceptance, at your earliest, with detailed scheme for publicity programme and budget thereof for taking further action in the matter. To : M/s. Dinesh Chitram, 87, Dharmatolla Street, yours faithfully, calcutta. Sd : D. K. Banerjee, deputy Secretary. West Bengal Secretariate Department of Information and Cultural Affairs. 22nd December, 1978to m/s. Dinesh Chitram, 87, Lenin Sarani, calcutta-700 013.
To : M/s. Dinesh Chitram, 87, Dharmatolla Street, yours faithfully, calcutta. Sd : D. K. Banerjee, deputy Secretary. West Bengal Secretariate Department of Information and Cultural Affairs. 22nd December, 1978to m/s. Dinesh Chitram, 87, Lenin Sarani, calcutta-700 013. Dear Sirs, i have the pleasure to inform you the decision of the Government to appoint you as the distributor of the State Government's colour feature Film 'ganadevata' on the terms and conditions as expressed in the agreement already submitted by you to this Department A copy of the said agreement, is returned herewith duly executed at Government level. You are requested to please acknowledge receipt of the document and to undertake immediately the work for adequate exploitation of the film observing the terms and conditions as aforesaid with due advice from this department where necessary. It will be appreciated much, if you would please consult this Department further in the matter of maintaining records of the business and submission of statements thereof to this Government. Yours faithfully, sd : D. K. Banerjee, deputy Secretary. West Bengal Secretariate department of Information and Cultural Affairs writers' Buildings. D. O. No. 3790-ICA dated 2nd March, 1979 to the Manager, film Finance Corporation Ltd. , 13-16, Regent Chamber, First Floor, Plot No. 208, Nariman Point, bombay-400 021. Dear Sir, i am desired to say that the State Government's feature film 'ganadevata' is scheduled for release in commercial circuit on April 13, 1979. As you know, the film was produced in Eastman Colour under direction of Sri Tarun Majumdar. The release prints are therefore proposed to be prepared with Eastman Colour stock in the interest of quality of the prints with due colour effect for proper representation of the original one. I am therefore to request you kindly to issue necessary permit for Eastman colour raw stock for eighteen release prints, which are the minimum requirement for the release chain allotted for the film. Considering censored length of the film which is 4710. 38 metre and allowing usual wastage for the prints, the requirement for the stock for eighteen prints would be 324 rolls only. The permit may kindly be sent direct to us at your earliest to enable us to maintain the time schedule for release of the film. Yours faithfully, sd : R. Sen assistant Secretary. Those letters were enclosed to the said application of the respondent no.
The permit may kindly be sent direct to us at your earliest to enable us to maintain the time schedule for release of the film. Yours faithfully, sd : R. Sen assistant Secretary. Those letters were enclosed to the said application of the respondent no. 4 for vacating the order of interim stay before the City Civil Court. According to the petitioners, the petitioners came to know of the said letters for the first time from the disclosures made in the application in the City Civil Court. Thereupon the petitioners wrote on the 26th March, 1979 a letter by the Advocate to the respondent no. 1 demanding justice and moved this Court on the 29th March, 1979 and obtained a Rule Nisi. A prayer for grant of interim order of stay was made which was refused by me. Subsequently, there was an appeal preferred from that order and certain orders were passed by the Division Bench of the Court to which it is not necessary to refer in detail because it dealt with the rights of the parties pending the final disposal of the matter. It may incidentally be also mentioned that the petitioners moved the Eastern India Motion Pictures Association and the appeal before the Committee is also pending. It is in this background, the petitioner have challenged the grant of the said distribution right of the Government produced film Ganadevata to the respondent no. 4. ( 5 ) VARIOUS points have been taken in support of this challenge. But the main contention urged on behalf of the petitioners was that the grant was made in an arbitrary manner and was actuated by malafide consideration and not for the bonafide purpose and though the tender of the petitioners no. 1 was the lowest, the said tender, according to the petitioners, was rejected arbitrarily without any proper reason. In these circumstances, the petitioners have challenged the grant of the distribution right to the respondent no. 4. The petitioners have complained that Article 14 as well as Article 16 of the Constitution have been violated and furthermore the order rejecting the petitioner's tender and granting the distribution right in favour of the respondent no. 4 was without reason and equality of treatment had been denied. In any case, the petitioners contended, the contract was given in favour of the respondent no.
4 was without reason and equality of treatment had been denied. In any case, the petitioners contended, the contract was given in favour of the respondent no. 4 by following an unfair procedure and there were no materials, according to the petitioners, upon which an objective satisfaction could be entertained into by any reasonable person for grant in favour of the respondent no. 4. In this context it was urged that the grant of distributorship in favour of the respondent no. 4 should be set aside. It was, further, alleged that the respondents were actuated by malice. In support of this contention, the allegations of the petitioners were to the following effect:the Respondent no. 4 has been boasting of his personal relationship with the Minister concerned, the Respondent no. 2 and the petitioners have reasonable grounds for believing that the grant of distributorship to the Respondent no. 4 in preference to the petitioner no. 1's tender is based on collateral and extraneous considerations to serve the private interests of a class of persons and not for public benefit and against public interests. ( 6 ) AS I have mentioned before, it was urged that the petitioners were entitled to complain of violation of equal opportunity and right to equal treatment both under Article 14 as well as Article 16 of the Constitution. On behalf of the State Government, it was contended Article 16 had no application in the facts and circumstances of this case. It was, further, urged that the procedure followed was not unfair was not unfair. It was submitted that there were reasons to support the grant of distribution right to the respondent no. 4 in the facts and circumstances of this case. In answer to Rule Nisi, it was stated on behalf of the State Government that the question or granting distributorship was considered by a Committee which dealt with this matter, namely Film Development Board. This Committee or Board, though non statutory consisted both the Official and non official members, which advised the Government in the subject matter relating to film industry in general and according to the respondent Government of the 16 members of the working Group, 11 members were present in the meeting held on the 7th, August, 1978, when this working Group examined and scrutinised all the tenders received and decided to appoint the respondent no. 4 as the distributor.
4 as the distributor. It appears that at that meeting, as mentioned hereinbefore, 11 members were present apart from the Minister-in-chcarge of the department concerned, who is respondent no. 2 to this application and those were, one Sri Ashoke Kumar Bose Sri Bejoy Kr. Chatterjee, Sri Niranjan Roy, Sri Sudhir Pradhan, Sri Ajoy Kar, Sri Chinmoy Chatterjee, Sm. Sita Mukherjee, Sri Saroj Dey, Dr. N. K. Sen Gupta, who is secretary of the department concerned, Sri D. K. Banerjee, Dy. Secretary and Shri S. K. Sen Gupta, Director of Information and Public Relations. The decision arrived at the said meeting reads as follows: -1. Selection of Distributor for the film Ganadevata. All the tenders received for distribution right of the film Ganadevata were examined by the members of the Working Group along with the letter received from M/s. Dinesh Chitram clarifying their tender. Although certain parties offered better terms and commission the Committee did not consider their other terms and conditions and dependability suitable for exploitation of the film. The Committee recommended that the offer of Dinesh Chitram was more advantageious to the Government in comparison to the other offers. It was accordingly resolved that the distribution right of the film Ganadevata be given to Dinesh Chitram on their fulfilment of the other terms and conditions. Incidentally, the deponent of the affidavit, who has affirmed the affidavit on 12th day of June, 1979, as Deputy Secretary in answer to Rule Nisi has denied the allegations made in paragraph 22 that the respondent 2 has any personal relationship with the respondent no. 4 or the grant of distributorship right to the respondent no. 4 was based on the collateral and extraneous consideration, as alleged or at all in paragraph 22 of the petition. ( 7 ) THE question, therefore, that arises in a matter of this nature is, whether the Government has acted arbitrarily and without reason or by following any unfair procedure.
4 was based on the collateral and extraneous consideration, as alleged or at all in paragraph 22 of the petition. ( 7 ) THE question, therefore, that arises in a matter of this nature is, whether the Government has acted arbitrarily and without reason or by following any unfair procedure. At one point of time it was the view of the Supreme Court as was expressed in the decision in the case of (1) C. K. Achutan v. State of Kerala, AIR 1959 SC 490 that when a person was chosen rather than another in respect of granting a contract the provisions of Article 14, Article 16 and Article 31 could not be made applicable because the aggrieved party could not claim the protection because the choice of the person to fulfil a particular contract must be left to the Government. Similarly, a contract which was held from the Government stood on no different footing from a contract held by a private party. The breach of the contract, if any, might entitle the person aggrieved to sue for damages or in appropriate cases even specific performance but he could not complain that there had been a deprivation of the right to carry on any trade or practise any profession or any business or of equality of opportunity or that Article 19 (1) (g) had been breached. It was similarly held that the contract for supply of goods was not a contract of employment in the sense in which that expression has been used in Article 16 (1) of the Constitution. The Supreme Court was of the view that the petitioner who was to fetch milk on behalf of the institution could not be said to be employed as servant and as such Article 16 was not involved. ( 8 ) BUT this point was again considered by the Supreme Court in some other cases from a different angle i. e. in the case of (2) State of Assam v. Kanak Chandra, AIR 1967 SC 884 in connection with the employment of Mouzadar who was employed to collect revenue on behalf of the Government.
( 8 ) BUT this point was again considered by the Supreme Court in some other cases from a different angle i. e. in the case of (2) State of Assam v. Kanak Chandra, AIR 1967 SC 884 in connection with the employment of Mouzadar who was employed to collect revenue on behalf of the Government. In the case of (3) State of Madhya Pradesh v. Lakshmi Sankar Misra, AIR 1979 SC 979 the Supreme Court had to deal with this aspect so far as employment in certain Government institutions was concerned and there explaining the provisions and decisions referred to hereinbefore the Supreme Court observed that the holder of a post designated Mouzadar was holding a civil post in the context of Article 311 of the Constitutions. Basing his submission on this approach of the Supreme Court, learned advocate for the petitioners, drew my attention to the observations of the Supreme Court in the case of (4) Krishan Chander v. Central Director Organisation, AIR 1962 SC 602 in aid of his submission that Article 16 would be applicable and unless there was consideration of the claim of all the parties on respective merits there would be denial of equality of opportunity. In this connection reliance was also placed on the observations of the Supreme Court in the case of (5) Borium Chemicals Ltd. v. Company Law Board, AIR 1967 SC 295 where the Supreme Court emphasised that even in respect of a matter which required the subjective satisfaction of the Government it should be based on objective materials and the learned advocate for the petitioners stressed that the materials disclosed in this case did not indicate that the materials were sufficient for any reasonable person to hold that there was any valid reason for acceptance of the claim of the respondent no. 4 for the right to distribute the Government produced picture 'ganadevata'. In this connection he tried to draw support from the observations of the House of Lords of England in the case of (6) Minister of National Revenue v. Wrights Canadian Ropes Ltd. I. R. 1947 SC 109 at page 123. ( 9 ) HOW the Government contracts should be viewed was examined by the Supreme Court in the case of (7) E and C Ltd. v. State of West Bengal, AIR 1975 SC 266 .
( 9 ) HOW the Government contracts should be viewed was examined by the Supreme Court in the case of (7) E and C Ltd. v. State of West Bengal, AIR 1975 SC 266 . There the Supreme Court was concerned really with the question of black listing of certain contractors which disentitled them from being considered in respect of grant of Government contract. The Supreme Court was of the view that the black listing had serious consequences of eliminating some body from consideration and therefore had to be done in consonance with the principles of natural justice after giving the person concerned reasonable opportunity. The Supreme Court also observed at page 268 of the report that under Article 298 of the Constitution the executive power of the Union of India and the State should extend the carrying on of other trade and to the acquisition holding and disposal of property and the making of contracts for any performance and the State could carry on executive function by making a law. Article 14 speaks of equality of law and equal protection to all. Equality of opportunity should apply, according to the Supreme Court, to the matters of contract and the right of trade with the State and the Government could not choose to exclude persons by discrimination. The Supreme Court had also observed that the State could enter into contract with any person but then no person, however, had a fundamental right to insist that the Government must enter into a contract with him. A citizen had a right to claim, however, equal treatment to enter into a contract which may be proper, necessary and essential to his lawful trading and the Supreme Court reiterated that in a society, governed by rule of law, there must be reasons to support any action and in some cases the exclusion of lowest tender, unless explained, indicated the arbitrariness on the part of the Government. There should be, according to the Supreme Court objective satisfaction. This position was examined by the Supreme Court in the case of (8) Radhakrishna Agarwal v. State of Bihar, AIR 1977 SC 1496 . There also the Supreme Court reiterated that in matters of contract the government expected to act reasonably and in a proper manner. Reviewing some of these decisions in the case of (9) H. S. Kohli v. Chittaranjan Locomotive Works, AIR 1979 Cal.
There also the Supreme Court reiterated that in matters of contract the government expected to act reasonably and in a proper manner. Reviewing some of these decisions in the case of (9) H. S. Kohli v. Chittaranjan Locomotive Works, AIR 1979 Cal. 75 , I had held that no one has any fundamental or legal right to obtain a particular contract. No person or citizen has even a legal right to obtain a contract merely because his tender was the lowest and the government was not bound legally to accept the lowest tender. But the Government being a public body dealing with public funds, in rejecting a tender must act reasonably, bonafide and not arbitrarily. If in a particular context a challenge is thrown that the government has acted malafide or arbitrarily, then, it is upon the respondents to satisfy the Court that the Government has acted bonafide as well as reasonably and not arbitrarily and on relevant materials. Previously I had also to consider some of these aspects in the case of (10) H. S. Kohli v. Union of India, AIR 1978 Cal 513 where I had held that a right to carry on business of a contractor was affected by a list of banning or blacklisting and if the said list was published in violation of the principles of natural justice and fair play, the same was liable to be struck down. ( 10 ) LEARNED advocate for the respondent no. 4 submitted that the impugned order was an administrative order and it being an administrative action, need not be a speaking order. In support of this submission learned advocate appearing for the respondent No. 4 relied on certain observations in the case of (11) Mahabir Jute Mills v. Shibban Lal, AIR 1975 SC 2075. In this connection reliance was also are placed on certain observations in the case of (12) J. Vilanganden v. Executive Engineer P. W. D. Ernakulam, AIR 1978 SC 930 . It is not necessary, in my opinion, to go into the question whether Article 14 of Article 16 would in the specific terms apply in judging the validity of an action of this type in this case.
It is not necessary, in my opinion, to go into the question whether Article 14 of Article 16 would in the specific terms apply in judging the validity of an action of this type in this case. It is also not necessary in my opinion, to decide whether the order of the government rejecting the tender of a party and accepting the tender of another is an administrative action and an administrative order as such. In my opinion, when tenders are invited and Government moneys are involved, the government must act, as I have mentioned earlier in the previous judgment referred to herein before, fairly, reasonably, bonafide and on relevant materials, that is to say, materials relevant for determination of acceptance of one tender and rejection of another and in an appropriate case, if a challenge is thrown about the action of the government then the government is bound to disclose such materials from which it would be apparent that the government had acted in fairness and having relevant materials in mind. This, in my opinion, is the ratio of the Supreme Court decision and the recent trend of the decisions, and the emphasis on avoidance of arbitrariness in executive action has reached a new urgency in our society to-day. ( 11 ) KEEPING the aforesaid principles in mind in this case I have to judge the validity of the acceptance of the tender in favour of the respondent no. 4. Learned advocate for the respondent no. 4 submitted and, in my opinion, with good deal of justification, that the theory that rejection of lowest tender in all cases would be arbitrary may not be a correct and absolute rule to be applied in all cases. In cases of sales or purchases of commodity where the prices are fixed on the quantity and quality of the goods, naturally the rejection of the lowest tender itself would be a factor, though not the decisive or the conclusive factor, in determining whether there has been arbitrariness on the part of the Government. But where government contracts are entered into not in respect of sale or purchase of commodities but in respect of certain transactions where certain personal action or conduct of the parties who will carry out the transaction are involved, the rejection prima facie as such of a lowest tender would not raise any presumption of arbitrariness.
But where government contracts are entered into not in respect of sale or purchase of commodities but in respect of certain transactions where certain personal action or conduct of the parties who will carry out the transaction are involved, the rejection prima facie as such of a lowest tender would not raise any presumption of arbitrariness. Acceptance of a tender where personal conduct or personal performance of a person or certain nature of the job to be performed is involved depends upon many variables and there is no one common denominator to determine who are equally placed or not. Exploitation of a film sometimes makes or mars a film. Therefore, in granting the contract for exploitation of a film various factors have to be taken into consideration. In this case, the government has indicated that there was a Committee consisting of several persons who are supposed to be familiar with the film trade. Of this committee about 11 of the members were present. There is in the petition or in the affidavit in-reply no averment on oath against any member of this committee of any personal malice, malafide or any partnership in favour of the respondent no. 4. But during the course of the submissions before this Court learned advocate for the petitioner drew my attention to certain publication in a newspaper from which he tried to urge that one Niranjan Roy, who was a member of the committee, was also involved in some trade union activities with the respondent no. 4. It is doubtful whether the petitioners could be allowed to agitate this point without taking such a point in the petition. But even if I take into consideration this submission on behalf of the petitioners, it goes this far and no further than that one of the eleven persons who were in the committee, was in some field concerned connected with the respondent no. 4. From this it would, in my opinion, be improper to judge that there was any malafide motive on the part of the respondent government in granting the contract in favour of the respondent no. 4. As I have said before, there is no allegation against any other member.
4. From this it would, in my opinion, be improper to judge that there was any malafide motive on the part of the respondent government in granting the contract in favour of the respondent no. 4. As I have said before, there is no allegation against any other member. The government was advised by this committee and they have indicated that considering all factors the offer of the petitioner, which was lowest and which was noted by the committee to be the lowest or apparently looked more conducive or more in favour of the petitioner no. 1 even then this committee advised the government to accept the contract of the respondent no. 4. In a matter of this nature, in my opinion, it is true that the government action is subject to judicial review but it is subject to judicial review to a very limited extent, that is to say only to examine whether the Government has acted in a manner which can be called arbitrary or without any proper materials. Whether on the materials this Court would have thought the petitioner no. 1 be a more desirable or a more reliable contractor or not or whether the decision of the government is just and proper on the materials or not this Court in my opinion, is not competent to substitute that evaluation within the scope of judicial review of the executive action of granting government contracts. It was submitted during the course of the argument for example that the advertisement or the publicity that was proposed to be done by the petitioners were wholly inadequate even in respect of a picture of such a well known novel. In modern days publicity does count to a large extent and the publicity offered was inadequate. On the other hand, it was submitted on behalf of the petitioners that there was no indication as to the credit or the credibility of the business achievement of the respondent no. 4. As I have said before, it is not possible for this Court to examine in detail whether these were the proper variables or the factors which should be taken into consideration. If the government has borne in mind that the petitioner's offer was lower or the lowest, has borne in mind the terms that the petitioners offered and has also taken into consideration the terms offered by the respondent no.
If the government has borne in mind that the petitioner's offer was lower or the lowest, has borne in mind the terms that the petitioners offered and has also taken into consideration the terms offered by the respondent no. 4, in my opinion, it could not be said that the government had acted without materials or by an unfair procedure if the government was advised by a body familiar with these types of jobs and against the members of which body there is no allegation or cogent evidence of any malafide or improper motive. From the very letters that I have set out on behalf of the respondent no. 4 it appears that the respondent no. 4 really, so far as its terms of commission and so far as its publicity and other materials were concerned, was not making any pre-condition. It was leaving it to be done as dictated by the government. Its motive, as it professes in its letter, is loyalty to give support to a working class government' which seemed to it to have come to power. Whether its loyalty is genuine or not is not for me to determine but its willingness to conform to any condition so far as publicity, so far as terms of commission are concerned are factors which the government can certainly, having regard to its association with the film industry, which, I presume, the members who were present had knowledge of, take into consideration and if the government has taken these into consideration, the government has not acted wholly without material. It was, then, submitted that the procedure was unfair because the respondent no. 4 was invited to explain certain lacunas in the submission of the original tender. There was not lacunas as such. The respondent no. 4 had indicated that it would aide by such terms as would be imposed by the government. But even then the respondent No. 4 later on when called upon by the government, suggested certain terms, for example, 7 ? years' period of exploitation, certain rates of commission etc. Having regard to these factors, in my opinion, the procedure adopted was not unfair and it cannot be said on the materials that there was not consideration of the application of the petitioner or the petitioner no. 1 was excluded from proper consideration.
years' period of exploitation, certain rates of commission etc. Having regard to these factors, in my opinion, the procedure adopted was not unfair and it cannot be said on the materials that there was not consideration of the application of the petitioner or the petitioner no. 1 was excluded from proper consideration. ( 12 ) THE second aspect was that there was an allegation of malafide. Now, the allegation of mala fide was in the baldest terms as I have indicated before. Learned advocate for the petitioners relied on the well known decision in the case of (13) Pratap singh v. State of Punjab, AIR 1964 SC 72 at page 75 stating that the Minister had not denied this allegation. There is no allegation as such against the Minister. There is only an allegation against the respondent No. 4 to the affect that he had boasted of his association with the Minister. The respondent No. 4 has denied any such association. If that is the position, in my opinion, the context in which the Supreme Court's observations were made were entirely different. Here there was no allegation which the Minister was called upon really to deny. There was no overt act alleged from which any malafide conduct could be inferred. Learned Advocate for the respondents drew may attention to several decisions viz. , in the case of (14) S. R. Venkataraman v. Union of India, AIR 1979 SC 49 ; in the case of (15) Tara Chand v. Delhi Municipality, AIR 1977 SC 567 and in the case of (16) Kedar Nath v. State of Punjab, AIR 1979 SC 220 in support of the proposition that there must be sufficient particulars of malafide allegations. In the view I have taken it is not necessary for me to examine in detail these decisions. It is well settled that malafide must be alleged with sufficient particulars and the onus is on the persons who allege such malafide conduct. Having regard to these factors, in my opinion, it cannot, therefore, be said that the action of the government was arbitrary or malafide or there was no material upon which the government could take the decision it took. The view which I am taking is in consonance with the observations of a Division Bench of this Court in the case of (17) Kanchanoor Bhaskar Shetty v. State of West Bengal 1978 (2) CLJ 166.
The view which I am taking is in consonance with the observations of a Division Bench of this Court in the case of (17) Kanchanoor Bhaskar Shetty v. State of West Bengal 1978 (2) CLJ 166. ( 13 ) THERE is another aspect of the matter. The petitioner had moved this Court, as I have indicated before, on the 29th March, 1979. There was rejection of the petitioner's offer at least the petitioner was aware of the same on the 8th December, 1978. The petitioners chose not to seek any information from the government as to under what terms and conditions such rejection was made. The petitioners, on the other hand, moved the Association of the Eastern India Motion Pictures and also instituted a suit in the City Civil Court claiming more or less the same relief which is pending, where he sought and obtained an exparte interim order which was later on vacated. The petitioner states that the petitioner really came to know the background of the affairs from the application made for vacating the interim order on the 17th March, 1979. The background was not necessary to base the cause of action of unfair conduct. The petitioners' grievance was that the petitioner no. 1 was the lowest tenderer and he was unfairly rejected and for that whatever materials the petitioners obtained on the 17th March, 1979, in my opinion were not relevant. It is not a question whether there should be any universal rule as to what period of delay should disentitle a person from seeking relief under Article 226 of the Constitution. It is true, as the learned Advocate for the petitioners has rightly emphasised, that in some cases it was emphasised that three years period should be the period. In some cases even six months period has been indicated. There cannot be any fixed rule. It is also one of the principles that having entertained an application under Article 226 it is not proper to throw away as not maintainable an application on the ground of delay. But in a matter of this nature where because of the lapse of time the respondent no.
There cannot be any fixed rule. It is also one of the principles that having entertained an application under Article 226 it is not proper to throw away as not maintainable an application on the ground of delay. But in a matter of this nature where because of the lapse of time the respondent no. 4 had proceeded to make certain investments and to proceed with the distribution of the film, it is appropriate to take into consideration the time that has been taken and the time lag, not for considering whether the petitioner is disentitled to relief or not but in exercise of the discretion as to what relief even if the petitioner was otherwise entitled to that the petitioner should be granted, in view of that and in view of the time lag that the petitioners took and also in view of the fact that the petitioners had already chosen to seek their remedy in another forum in my opinion, it would have been improper to grant relief stopping the distribution by the respondent No. 4 in exercise of my discretion under Article 226 of the Constitution, even if they were otherwise entitled to. ( 14 ) IN the aforesaid view of the matter, this application fails and is accordingly dismissed. The Rule Nisi is discharged. Interim order, if any, is vacated. There will however, be no order as to costs. Application dismissed.