Vishwas Steel Industry v. Zilla Parishad, Beed & others
1986-03-21
V.P.SALVE, V.V.VAZE
body1986
DigiLaw.ai
JUDGMENT- V.V. VAZE, J.:---Beed Zilla Parishad issued by publication in newspapers a short tender notice inviting tenders for supply of certain items of furniture such as dual desk, floor desk, steel tables, teak tables etc., with teak or novapan tops for use in the schools run by the Parishad. The Zilla Parishad in the notice gave an estimated cost of the goods, the earnest money to be deposited by the tenderers and made it known to the tenderers that time is essence of the contract and that after the contract is concluded, the supply should be made within 15 days, failing which the contractor will be liable to pay Rs. 100/- per day as penalty. In all 17 tenderers submitted their quotations and a comparative table was prepared giving their quotations item-wise. The table alongwith the tender documents was placed before the General Body of the Parishad in its meeting dated 5-2-1986 in which a discussion ensued above the modus operandi of choosing the contractor in view of the fact that the contract amount was a large one. It was pointed out to the General Body that under paragraph (5) of Clause (a) of sub-section (1) of section 125 of the Maharashtra Zilla Parishads and Panchayat Samitis Act, 1961 ("the Act"), a resolution of the General Body is a sine quay non before incurring expenditure of the contract amount. The General Body resolved to meet again on 20-2-1986 and the Chief Executive Officer promised that details of the proposals would be sent to the Councillors by registered post. 2. As decided, the General Body meeting was held on 20-2-1986 in which the subject became an appeal of discord. The Chief Executive Officer pointed out that the samples of the items of furniture have been kept in the Zilla Parishad High School and the members may visit the School and inspect the samples upon which a member, Mr. Swami, suggested that a committee may be appointed for that purpose. The Chief Executive Officer again reiterated that the samples have been kept for inspection and may be so inspected by all the members, but submitted that whether all should inspect the same or a few should do so was a matter of decision of the General Body. Another member, Mr.
The Chief Executive Officer again reiterated that the samples have been kept for inspection and may be so inspected by all the members, but submitted that whether all should inspect the same or a few should do so was a matter of decision of the General Body. Another member, Mr. Khedkar, was of the view that if all the members inspect the samples, they would not be able to arrive at a decision to purchase the items of furniture and hence a committee should be constituted and that committee should be given all the powers to effect the purchases. Ultimately, the General Body passed a resolution constituting a committee of seven members to a assisted by four officers to "effect purchase of items of furniture for use in the Education Department after inspecting the samples thereof." 3. The seven-member committee so constituted met on 28-2-1986 and discussed the issue. They took into account the technical advice given by various experts like the General Manager of District Industries Centre; Vice-Principal, Industrial Training Institute, and resolved that keeping durability of the items in view it would be better to effect purchase of item having teak wood top rather than a novapan one. The Committee then considered the tenders item-wise and took decision likewise about placement of the contract. It so happened that as the rates of respondent No. 3, Mahavir Audogic Sahakari Sanstha were the lowest, most of the contracts were placed with it except the item of 'S' type steel tube chairs, where the Maharashtra Small Scale Industries Development Corporation emerged the winner as they had quoted the lowest rate. 4. During the discussion of the committee, Mr. Khedkar, who had himself suggested the appointment of the committee, pointed out that most of the item orders were being placed with respondent No. 3- Mahavir Audogic Sahakari Sanstha- and was apprehensive that the Sanstha may not be able to supply the goods by March end. Mr. Khedkar suggested that the contract may be split up and placed item-wise with more than one tenderer in decided proportions, but could not carry the house. Mr. Khedkar and Mr. Panhale had also raised certain objections, but the remaining members overruled them and found that even though there was not much difference in the quality of samples, there was a vast difference between the quoted rates.
Mr. Khedkar and Mr. Panhale had also raised certain objections, but the remaining members overruled them and found that even though there was not much difference in the quality of samples, there was a vast difference between the quoted rates. After taking into consideration the technical advice, the committee decided to place the orders with the tenderer who had quoted the lowest rates. Consequently an order was placed by the Zilla Parishad by its letter dated 2-3-1986 signed by its Chief Executive Officer with Mahavir Audogic Sahakari Sanstha, Beed, which order is being challenged by the present writ petition by Vishwas Steel Industry, one of the tenderers. 5. Mr. Chapalgaonkar, learned Counsel for the petitioner, challenges the placement of the order on the ground that the Zilla Parishad did not have an authority to delegate the power to effecting the purchase and entering into the contract to its sub-committee, as has been done, in view of the provisions of section 126 of the Act. According to section 126(1)(f), no tender or contract for executing any work shall be accepted or made except with the previous sanction of the Zilla Parishad as the expenditure involved exceeds 1 lac. 6. Mr. Chapalgaonkar places reliance on (Mulamchand v. State of Madhya Pradesh)1, A.I.R. 1968 S.C. 1218, which was been reiterated in (The State of U.P. and another v. Murarilal Brothers Ltd.)2, A.I.R. 1971 S.C. 2210, for the proposition that a contract which is in contravention of the statutory provisions cannot be ratified. In view thereof, argues Mr. Chapalgaonkar, even if the Zilla Parishad had not objected to the placement of the order with respondent No. 3. Sanstha, such inaction will not cure the defect as there could be no ratification. 7. Under Clause (35) of section 2 of the Act, Zilla Parishad means a Zilla Parishad constituted under section 9, section 8 is the standard provision describing Zilla Parishad as a body corporate having perpetual succession, competence to contract and to acquire and hold property and enables in its corporate name to sue and be sued. Section 9, which has a cross reference to Clause (35) of section 2, described a Zilla Parishad as consisting of elected councillors, Chairman of all Panchayat Samitis, certain associate councillors and co-opted members.
Section 9, which has a cross reference to Clause (35) of section 2, described a Zilla Parishad as consisting of elected councillors, Chairman of all Panchayat Samitis, certain associate councillors and co-opted members. The range between which number of Zilla Parishad councillors will vary has been specified in Clause (a) of sub-section (1) of section 9 of the Act to be between 40 to 60 and we have been informed that the strength of the present Zilla Parishad at Beed is around 50. 8. Section 94 of the Act makes it obligatory that every Zilla Parishad shall have a Chief Executive Officer to be appointed by the State Government under section 116 the Chief Executive Officer, subject to the provisions of the Act, is empowered on behalf of the Zilla Parishad to enter into any contract of agreement, which contract or agreement has to be signed by the Chief Executive Officer and sealed with the common seal if the subject-matter thereof exceeds 5,000 rupees. This is analogous to Article 299 of the Constitution under which all contracts made in exercise of the executive power of the Union or of a State have to be executed by such persons and in such manner as directed or authorised. Section 281 authorises the Zilla Parishad to delegate any of its powers or functions under sections 100, 102 or 106, but section 126 does not appear in the catena of sections the powers under which can be delegated. This absence gives an added edge to the argument of Counsel that the Zilla Parishad could not have delegated its function to choose a contractor for supply of items of furniture to a sub-committee as has been done. 9. Section 126 which deals with contracts for works and development schemes lays down a graduated system of checks on the placement of contracts. For works or schemes involving expenditure not exceeding Rs. 5,000/- previous sanction has to be of a junior officer like the Deputy Engineer. A tier system is then introduced starting from the Deputy Engineer which moves upto the Executive Engineer, Chief Executive Officer, Chairman of the Standing Committee, the Standing Committee itself. Finally, in case of contracts which involve an expenditure of more than a lac of rupees, the sanction has to be that of the Zilla Parishad. 10. If discretion is vested in a certain person, it must be exercised by that person.
Finally, in case of contracts which involve an expenditure of more than a lac of rupees, the sanction has to be that of the Zilla Parishad. 10. If discretion is vested in a certain person, it must be exercised by that person. This principle finds its expression in the maxim "delegatus non protest delegare". This maxim like other Latin maxims expresses a principle and not a rigid rule. Whether there was been an infraction of the principle expressed by the maxim will depend on the surrounding circumstances, such as, the type of person or body to whom the power is delegated, the entire statutory context and the nature of the such subject-matter. 11. The case of (Allingham and another v. Minister of Agriculture and Fisheries)3, (1948)1 All.L.R. 780, apply illustrates the circumstances in which the principle of delegatus non protest delegare would apply. Under Regulation 62(1) of the defence (General) Regulations, 1939, the Minister of Agriculture was given power to "give such directions with respect to the cultivation management or use of land for agricultural purposes as he thinks necessary." The direction was to be given by notice relating to the land specified there in served on the person by whom the direction had to be complied with. Regulation 66(1) empowered the Minister by order to delegate to any person or body of persons appointed or approved by him all or any of his functions under the Regulations. 12. In exercise of this power the Minister delegated his functions to the War Agricultural Executive Committee. This Committee decided that 8 acres of sugar beed should be grown by the occupiers of a certain land and had they also selected the field, which was required by the Regulations to be specified in the notice, the matter would have presented no difficulty. However, the Committee left to the Executive Officer the selection of the field. That officer consulted a local sub-committee and after obtaining the recommendations of that sub-committee served a notice on the occupiers specifying the field to be cultivated. It was held on the principle of delegatus non protest delegare that the Committee could not delegate the power to determine the land to be cultivated to its officer.
That officer consulted a local sub-committee and after obtaining the recommendations of that sub-committee served a notice on the occupiers specifying the field to be cultivated. It was held on the principle of delegatus non protest delegare that the Committee could not delegate the power to determine the land to be cultivated to its officer. Humphreys, J., observed :- "...............It seems to me that where the Executive Committee went wrong was in their original decision to issue a direction requiring the appellants to grow eight acres of sugarbeet on a field to be named by their Executive Officer. If the direction had been: 'On a field, selected by us, the location of which we shall in due course direct the executive officer to convey to you", there would have been no objection. It is clear, however, that what they were saying was: 'We shall leave to the executive officer the decision as to what land you are to cultivate in a particular way.' They had no power to do that, and I am not surprised that the executive officer, perhaps appreciating that he had no power to give any direction as to be use of the land, proceeded to take the views of the Biggleswade district committee on the matter. Instead of (as I think they might probably have done without objection) recommending to the executive committee that this particular field should be cultivated, the Biggleswade district committee seen to have arranged with the executive officer that he should convey their decision to the farmers, and that was done, the executive officer acting, not on behalf of the executive committee, but as the agent of the Biggleswade committee. In my opinion, that procedure was wrong..................." (emphasis supplied). 13. In the facts of our case, if the sub-committee, which was authorised to make the selection of the tenderer after examining the samples had again delegated its functions to a third party or authority, the maxim would have been attracted. But such was not the case here. 14. At this stage it would be helpful to appreciate that what the Zilla Parishad in its General Body meeting has done is not to delegate its function (which delegation it could not lawfully do in view of the absence of section 126 in section 281 of the Act), but to appoint an agent to perform the function of selecting a proper contractor.
Whenever a collective body like the Zilla Parishad consisting of 50 elected councillors and other staffers has to make a selection of a contractor for supply of items of furniture, or, for that matter, any other utility goods for their large establishment of schools like microphones, typewriters, duplicators, television and radio sets, or other sophisticated office equipments, it would be idle to suppose that the selection should be a result of process of rationalisation in which the minds of each and every councillor has been applied. The question to ask, as was done by the Privy Council in (Attorney-General for Ceylon v. A.D. Silva)4, (1953) A.C. 461, is, whether the sub-committee had "actual authority" or "ostensible authority" to make the selection of the contractor? The question of 'ostensible' authority which involves a representation by the principle as to the extent of agent's authority or 'holding out" does not arise in this case. Here, it is a straight case of "actual authority" stemming from the resolution passed by the General Body on 20-2-1986 constituting the seven-member committee. Thus, it is not a case of delegation made by the Zilla Parishad to the sub-committee, but a case of agency arising out of the actual authority granted by the Zilla Parishad to the sub-committee. The action of the Zilla Parishad falls within the realm of the law of agency and in the absence of any provision prohibiting such an agency (nor could such provision exist as making of such provision would stultify the very functioning of the Zilla Parishad), the selection by the sub-committee of respondent No. 3. as the successful tenderer is lawful. 15. In the mechanics of the placement of the contract in the present case, it would be seen that it was the plenary meeting of the Zilla Parishad which had discussed the issue of entering into contract after the tenders were received. It appears that though suggestions were made that each and every Councillor of the Zilla Parishad should inspect the samples of the tenderers, the Parishad found it inexpedient so to do and decided that the work of inspection of samples and taking decision regarding the tenderer with whom the contract should be concluded should be entrusted to a smaller committee.
It appears that though suggestions were made that each and every Councillor of the Zilla Parishad should inspect the samples of the tenderers, the Parishad found it inexpedient so to do and decided that the work of inspection of samples and taking decision regarding the tenderer with whom the contract should be concluded should be entrusted to a smaller committee. This, to our mind, is not an abdication of the duties by the Councillors, because the modalities of inspection of the samples given by a large number of tenderers could not have been done by a large body like the Zilla Parishad. As observed by the Supreme Court in (State of Uttar Pradesh v. Batuk Deo Patil Tripathi and another)5, (1978)2 S.C.C. 102 , at 110, the power to do a thing necessarily carries with it the power to regulate the manner in which the thing may be done. We find that constituting a committee to inspect the samples was an incident of the power of the Zilla Parishad itself and indeed without such constitution of a committee, the exercise of the power by the Zilla Parishad would have in practice be fraught with difficulty which could have frustrated, rather than further, the object of the exercise of the power. 16. In view of thereof, we find that the Zilla Parishad acted in conformity with the provisions of section 125 as well as section 126(1)(f) of the Act in entering into the present contract. 17. We may observe that the practical difficulties which were being faced by the Zilla Parishad in working the graduated scale of previous sanction contained in sections 125 and 126(1) have been overcome by amendment of these two sections by Maharashtra Act 11 of 1985, which came into force on 3rd March, 1986. However, as the contract in question was entered into prior to 3rd March, 1986, we have not delved into the amended section 126. 18. The petition fails and is dismissed. Rule is discharged, but with no order as to costs. Petition dismissed. -----