Andhra Civil Construction Company represented by its Managing Partner, B. Hanumantha Rao v. The Government of India, represented by its Secretary, Ministry of Shipping and Transport, Transport Bhavan, New Delhi and others
1991-02-07
A.S.ANAND, RAJU
body1991
DigiLaw.ai
Judgment :- Dr.A.S.Anand, C.J.: These appeals are directed against a common judgment single Judge dated 28.3.1990 dismissing W.P.Nos.12324 of 1987; 916 of 1988 1988. 2. The appellant in all the three writ appeals is the unsuccessful writ petitioner, Civil Construction Company-a Civil Engineering Firm having its Registered Office from a perusal of the pleadings of the parties, it transpires that during 1979, the Port Trust, with a view to deepen the approach channel at Tuticorin Port from invited tenders for deepening the approach channel measuring 1400 Mts. Work to two contractors in December, 1979 with a view to have the deepening work expeditiously. The channel was divided into two portions and (i) Reach from Ch.00 525 Mts. and from Ch.1050 Mts. to 1400 Mts. was allotted to the appellant and from Ch.525 Mts. to 1050 Mts. was allotted to Dredging Corporation of (hereinafter called the D.C.I.) Work orders were accordingly issued to the appellant as D.C.I. The appellant completed the deepening of the approach channel between Mts. to 475 Mts. and from Ch.1050 Mts. to 1400 Mts. However, D.C.I, could subsequential work because of the existence of some rock in the portion for which had been allotted to them. Even the appellant could not, for the same reason execute the work from Ch.475 Mts. to 525 Mts. Efforts made by the Development (Ports) and the Chairman, Tuticorin Port Trust did not yield any constructive regard to the further progress of the work by D.C.I, and consequently, the Tuticorin Trust decided to have the balance of the work entrusted to D.C.I, carried out through agencies. 3. The Tuticorin Port Trust called for tenders on 9.12.1983 for the balance of Reach from Ch.525 Mts. to 1050 Mts. awarded to and abandoned by D.C.I, period of 12 months for the completion of the work. Pursuant to the said invitation, three contractors, (i) M/s. Asia Foundation and Construction Bombay (hereinafter referred to as M/s.AFCons. (ii) D.C.I, and (iii) the appellants their tenders which were opened on 18.2.1984. A belated tender from another party, M/s.Dredging Consortium of India B.V., Holland appears to have been received on The tenders were placed for the consideration of a Tender Committee, constituted required by the procedure for that purpose.
(ii) D.C.I, and (iii) the appellants their tenders which were opened on 18.2.1984. A belated tender from another party, M/s.Dredging Consortium of India B.V., Holland appears to have been received on The tenders were placed for the consideration of a Tender Committee, constituted required by the procedure for that purpose. The Tender Committee, after considering tenders and after getting further details and clarifications, submitted its report on with the following recommendations: “(a) Though the offer of M/s.Dredging Consortium was received later, to negotiate with as their offer was attractive both in terms of time and money subject to the availability Foreign Exchange; (b) In case the above was not possible to call for fresh tenders including foreign firms getting foreign exchange sanctioned by the Government; (c) In case Foreign Exchange was not available to get the balance work done through the Indian Contractors who have quoted for the work.” 4. So far as the three Indian Contractors who has submitted their tenders are concerned, the Tender Committee was of the opinion that the appe-lant firm, with an completion time of twenty-one months (including tolerance quantity), had an edge D.C.I. who had given 27 month3 as the completion time. The Tuticorin Port Trust, therefore, initiated proposal on the recommendation of the Tender Committee. In the meantime, transpires that the foreign firm gave a post-tender escalation of their offer and account, it lost its competitiveness. While dropping the said offer, a consolidated proposal line with the recommendation made by the Tender committee was sent to the concerned Ministry in the Government of India in September, 1984, to explore the possibility securing the required foreign exchange to enable the Port Trust to call for a global tender otherwise, to allot the work to the Indian contractors. Having somehow acquired knowledge about the recommendation of the Tender Committee, the appellant appears to have a proposal for purchase and import of a Dipper Dredger to undertake the dredging time. The appellant appears to have also thought of using the imported machinery completing the balance of the work which was already with them (Ch.475 Mts. to 525 The Port Trust appears to have, after consideration of various aspects resolved to tender to the appellant after the proposal was placed before the Board of Trustees, resolution dated 28.5.1985, based on the majority decision of the Board of Trustees.
to 525 The Port Trust appears to have, after consideration of various aspects resolved to tender to the appellant after the proposal was placed before the Board of Trustees, resolution dated 28.5.1985, based on the majority decision of the Board of Trustees. Board of Trustees appears to have taken note of the terms and con-.ditions regarding actual acceptance of the tender and the non-availability of the requisite foreign exchange calling global tenders. 5. While the Tuticorin Port Trust was taking action to implement the decision of the award the work to the appellant, a communication seems to have been received Ministry in 1985, calling for para-wise comments of the Port Trust on a representation to have been received by the Ministry. The Port authorities, while furnishing the report Government, also sought for primal clearance of the Government for implementing decision of the Board in the face of the representations received by the Ministry. further correspondence and discussions with the Ministry, the possibilities of D.C.I, commencing the work appears to have been considered in a meeting and it was found the said Corporation was reluctant to undertake the work. When the matter was correspondence with the Ministry, M/s.AFCons appears to have offered a rebate in from 20% to 30%. It was considered that the said offer could not be considered than as a fresh offer if necessary, by calling for fresh tenders and the same considered. It was at this stage that a communication dated 19.6.1986 was received the Ministry by the Port Trust, permitting it to take a decision on the merits of the to award the contract. The members of the Board were required to be informed accordingly. 6. While matters stood thus, so far as the existing contract with the appellant in respect the execution of the Balance work already given to them for dredging in the end (Ch.475 Mts. to 525 Mts.) though extension of time was granted in October, 1985 30.6.1986, no tangible action appears to have been taken by the appellant and this the Port Trust to issue a notice dated 18.8.1986 invoking the forfeiture clause of the contract.
to 525 Mts.) though extension of time was granted in October, 1985 30.6.1986, no tangible action appears to have been taken by the appellant and this the Port Trust to issue a notice dated 18.8.1986 invoking the forfeiture clause of the contract. In the meanwhile, the Directorate Surface Transport brought to the notice of the Chairman, Tuticorin Port Trust that a been registered by the Central Bureau of Investigation against the appellant and others in connection with the construction work entrusted to and being executed time, by the appellant, relating to the deepening of Bharathi Dock in Madras Port Madras Port Trust. On an enquiry from the Madras Port Trust, it came to be known C.B.I. investigation was under progress at that point of time. The appellant submitted explanation on 21.8.1986, to the forfeiture notice and they also dealt with the which had given rise to the complaint by the Madras Port Trust to the C.B.I. as regard to the report submitted by the Madras Port to the Ministry of Shipping alleged irregularities and the efforts made by the appellant till then, to sort out problems. The appellant requested the Port Trust that those alleged irregularities by certain employees of the appellant need not stand as an impediment in their being awarded the work of balance work left out by D.C.I. in the approach channel appellant also informed the Tuticorin Port Trust that they propose to complete balance of work from Ch.475 Mts. to 525 Mts. as well as the work left undone by which tenders had been called for within 10 months from the date of the award of them. 7. The subject-matter relating to the award of contract for the dredging work in channel from Ch.525 Mts. to 1050 Mts. upto 10-98 Mts. level was placed before the Trustees of Tuticorin Port Trust for its consideration on 30.8.1986. There seems been certain representation both against and for the grant of the contract to the and the C.B.I, investigation which was then pending also figured during the consideration. The Board ultimately resolved by a majority to award the contract for the above work appellant subject however, to the condition that they agree, categorically in writing, delete the clause relating to arbitration from the contract M/s.AFCons filed W.P.No.9648 1986 while one of the trustees of the Board of Trustees, Mr.T.M.Stephen, filed W.P.No.9823 of 1986.
The Board ultimately resolved by a majority to award the contract for the above work appellant subject however, to the condition that they agree, categorically in writing, delete the clause relating to arbitration from the contract M/s.AFCons filed W.P.No.9648 1986 while one of the trustees of the Board of Trustees, Mr.T.M.Stephen, filed W.P.No.9823 of 1986. The precise prayer in the writ petitions, shorn of unnecessary details, was contract in question be allotted in favour of M/s.AFCons. The prayer was based allegedly low offer of M/s.AFCons even though the so-called lower offer had admittedly made by M/s.AFCons only after the tenders had been closed. M/s.AFCons had appeared before the Tender Committee meeting. The pendency of the C.B.I. enquiry the appellant was also put as a ground to seek the award of the contract M/s.AFCons in preference to that of the appellant. Both the writ petitions were dismissed a learned single Judge, by a common order dated 24.12.1986. Writ appeals were against the judgment of the learned single Judge and both the writ appeals also failed further appeal before the Supreme Court in Special Leave Petition No.2578 of failed on 14.4.1987. 8. The Central Bureau of Investigation, in the meantime, it seems, concluded investigation and sent a lengthy report to the Vigilance Officer. Ministry of Shipping, Delhi. In the concluding portion of the report, it advised. “ While no action is recommended against A.17 firm, the Ministry of Shipping may be to recommend banning of business dealings with the firm by the Ports. Madras should take action to recover Rs.1,01,220.50 from A.17 firm. ” On coming to know about the advice and recommendation of the C.B.I, and apprehending prejudice and detriment to their business interests and prospects, the appellant W.P.No.13234 of 1987 alleging violation of the principles of natural justice and Art.19(1)(g) of the Constitution of India. It prayed for a writ of certiorari seeking to recommendation referred to supra in the report dated 30.11.1986.
It prayed for a writ of certiorari seeking to recommendation referred to supra in the report dated 30.11.1986. It was averred affidavit filed in support of the writ petition that because of the advice of the C.B.I, qualification application dated 24.12.1986 submitted by the appellant to the Chief Port Trust, at Madras for consideration in respect of tenders for the Extension Terminal at Bharathi Dock of Madras Port had not been approved and even the tender were denied, thus preventing the appellant to submit its tender for the said work the appellant apprehended similar treatment even in respect of the work of construction Naval Berth which was under contemplation of the Madras Port Trust. That appellant averred that it had entertained an apprehension that the delay in awarding the dredging work by the Tuticorin Port under consideration, was also due to the advice of the C.B.I. The writ petition was resisted. 9. The first respondent, Government of India, in their counter affidavit filed in miscellaneous petitions in W.P.No.13234 of 1987, set out in detail the manipulations to have been made by the appellant and highlighted the materials gathered by Investigating Authority (C.B.I.). It was, however, maintained that no instructions had issued by the Government of India to the Madras Port Trust and the Tuticorin Port forbidding them from issuing tender forms to any company, including the appellant It was asserted that the C.B.I. report was a confidential inter-departmental document, could not be furnished to the appellant, that they were alive to the decision of the Supreme Court and the situation that banning business dealings involved certain procedure followed. It was stated that the appellant had not been served with any notice to business with them and that the prayer in the writ petition could not be entertained at juncture. 10. The second respondent also filed a counter affidavit stating that the said respondent discharged its statutory duties imposed by the Delhi Special Establishment Act and that action of the authorities could not be stifled by instituting proceedings under Art.226 of Constitution of India. It was maintained that the report of the C.B.I, submitted to another Government department regarding the result of its investigation was not a proceeding against which writ can be issued.
It was maintained that the report of the C.B.I, submitted to another Government department regarding the result of its investigation was not a proceeding against which writ can be issued. It was further stated that the investigation revealed the appellant along with several Madras Port Trust Officials, had fabricated documents made false claims and received payments in the name of the appellant and appropriated them and asserted that during the investigation it was revealed that the particulars vehicles which were said to be “ lorries ” used for the transport of stones etc., were in registered as two-wheelers. It was stated that the actions and activities of the appellant found to be highly objectionable and, therefore, a recommendation had been made consider the question of banning business apart from recovering the financial loss caused the Madras Port Trust and that having regard to the recommendatory and advisory nature the report, the same could not be questioned through a writ petition filed under Art.226 the Constitution of India. 11. The third respondent also filed a counter-affidavit explaining the circumstances which the complaint had been made to the C.B.I, regarding the alleged malpractices on part of the appellant. It referred to the substance of the C.B.I. report though maintaining confidential nature of the same. As regards the plea that based upon the report of the they are sought to be black-listed and screened, the third respondent stated in paragraph of its counter affidavit as under: “ Regarding Paragraph 9, it is stated that during October, 1986 the Madras Port Trust invited a major tender for extension of Container Terminal at Bharathi Dock for which qualification applications were received from reputed firms/joint ventures. The qualification document was issued to the petitioner and the firm applied for the qualification as joint venture with M/s. Amsterdam Ballast Dredging. However, they were pre-qualified based on merits and hence the tender documents for civil works were issued to the petitioner. Therefore it is incorrect to state that the Port Trust did not tender documents to the petitioner in view of the C.B.I, findings. They have been treated par with other tenderers.” 12.
However, they were pre-qualified based on merits and hence the tender documents for civil works were issued to the petitioner. Therefore it is incorrect to state that the Port Trust did not tender documents to the petitioner in view of the C.B.I, findings. They have been treated par with other tenderers.” 12. So far as the Tuticorin Port Trust, the fourth respondent, is concerned, in its counter, was contended that the Board had since decided to scrap all tenders and had chosen to for fresh tenders, that in view of W.P.No.916 of 1988 filed by the appellant, its W.P.No.13234 of 1987 had become infructuous. It asserted that the mere fact that the tender of appellant had been kept valid periodically did not confer any vested right on the appellant be granted the contract in their favour. It was maintained that this Court, in exercise jurisdiction under Art.226 of the Constitution of India could not exercise “supervisory jurisdiction in respect of the affairs of the Tuticorin Port Trust and that since none of fundamental rights of the appellant had been violated no writ petition was maintainable against the recommendations of the C.B.I. It was then stated that if the appellant aggrieved against the order of rejection, they could resort to other remedies open to them in law. 13. The appellant filed a common reply in which, while reiterating the stand in the affidavit and traversing some of the claims of the respondents also expressed their willingness make further modification in the terms and conditions of their tender so as to benefit the Trust in what the appellant claims to be with a view not to make profit but to show their fides. Before we deal with the merits of W.P.No.13234 of 1987, it would be relevant to to certain other developments. 14. While the proceedings in W.P.No.13234 of 1987 were pending on the file of this Court, the Tuticorin Port Trust, by its communication dated 30.1.1988, informed the appellant the tender submitted by them pursuant to the notice inviting tenders dated 9.12.1983 and other tenders received from other parties stood discharged by the resolution of the Board, made by its meeting held on 29.1.1988 and consequently all tenders had been rejected pending the proposal to invite fresh tenders.
The appellant, thereupon, filed W.P.No.916 1988 praying for a writ of certiorarified mandamus to quash the said proceedings, dated 30.1.1988, and for a direction to the respondents (Government of India and the Tuticorin Port Trust) to issue the work orders to the appellant-company for the balance dredging approach channel between Ch.525 Mts. and 1050 Mts. minus 10.98 Mts. in the Tuticorin Trust. The appellant, after reiterating the averments in the earlier writ petition, further submitted in their affidavit filed in W.P.No.916 of 1988 that it was due to pressure M/s.AFCons that the appellant were being subjected to such unwanted hostile treatment. That having regard to the earlier decisions of the Board resolving to grant the work to appellants and the stand of the Tuticorin Port Trust in the Supreme Court of India, the action of the Tuticorin Port Trust was unsustainable in law. That the cancellation order has issued on extraneous considerations and in bad faith. That there was no application of by the Tuticorin Port Trust and consequently the proceedings dated 30.1.1988 were be quashed. 15. The Tuticorin Port Trust, the second respondent, filed a detailed counter traversing the allegations of the appellant and submitted that the appellant misconceived their remedy. 16. In the meantime, it transpires that vide a communication dated 5.2.1988, the appellant was informed that in view of the forfeiture notice issued on 18.8.1986, the site had taken over on 4.2.1988, thereby the appellant stood expelled and that the remaining under the agreement would be got done as per Clause 43 and other terms of the agreement. The appellant thereupon filed W.P.No.4174 of 1988 seeking to quash the proceedings 5th February, 1988. The appellant, while reiterating the allegations in the earlier petitions, further contended in the affidavit filed in support of W.P.No.4174 of 1988 that Port Trust was estopped from cancelling the contract; that there was no proper application mind inasmuch as the Port Trust had only obeyed the instructions of the Government, are the subject matter of challenge in W.P.No.13234 of 1987 and W.P.No.916 of 1988. traversing the averments raised by the appellants in their counter affidavit, the Tuticorin Port Trust contended that the only remedy open, if at all, to the appellant was recourse to the arbitration and other civil proceedings and that the filing of the writ was not appropriate. 17.
traversing the averments raised by the appellants in their counter affidavit, the Tuticorin Port Trust contended that the only remedy open, if at all, to the appellant was recourse to the arbitration and other civil proceedings and that the filing of the writ was not appropriate. 17. The learned single Judge, after an elaborate consideration of the respective contentions of the parties raised before him, by his order dated 28.3.1990, dismissed all the three petitions filed by the appellant, holding inter alia, that, (a) W.P.No.13234 of 1987 premature and the C.B.I, report being an inter-departmental communication, the appellant could not be heard to build up an argument as if it had been side-lined on account report; (b) that there is no question of quashing an inter-departmental ‘ letter ’ and as W.P.No.13234 of 1987 was not maintainable, particularly in view of the fact that no had been passed, based on that letter; (c) that the respondents had maintained the even in their counter affidavits that the appellant was not black-listed and that would that the case of the appellant for allotment of other works in future would be considered, they took part in other tenders; (d) that no person had a right to get a contract and that Court cannot compel anybody to enter into a contract between one person and another; that even though the Tuticorin Port Trust is an autonomous body and is entitled to decision, the Port Trust is bound to obey the directions of the Central Government under Sec.111 of the Major Port Trusts Act, 1963; (f) that even assuming that this Court test the reasoning for rejection of the tenders, the reasons given by the respondent Trust could not be said to be arbitrary; (g) that Clause 43(3) of the contract confers power forfeiture and the right to take over the balance work in terms of the said provision contract to the Port Trust; (h) that if the appellant felt aggrieved by the rejection tender or forfeiture of the work already entrusted to it, the appellant had to work its either in a civil court or through arbitration, as the case may be, but not by way proceeding under Art.226 of the Constitution of India, as resorted to by the appellant through W.P.No.4174 of 1988 and .P.No.916 of 1988; (i) that the Tuticorin Port Trust not acted arbitrarily or unreasonably or on extraneous considerations; (j) that on the basis the stand taken as defence in the earlier proceedings before this Court or the Supreme Court, it could not be said that the contract or tender had been awarded to the appellant (k) that factually there was no basis or proof to hold that the appellant had been black.
18. Aggrieved, the appellant filed the above three appeals. W.ANo.423 of 1990 has filed against the judgment in W.P.No.13234 of 1987; W.ANo.422 of 1990 against judgment in W.P.No.4174 of 1988 and W.A.No.421 of 1990 has been filed against judgment in W.P.No.916 of 1988. 19. The first submission of Mr.Govindaswaminathan the learned senior counsel on behalf the appellant was that the C.B.I. though as a statutory investigating authority is entitled tender advice on the investigation carried out by it but unless the same is followed up concerned department of the Central Government in the manner prescribed by law conformity with the principles of natural justice and fair play, on effect could be given recommendations of the C.B.I. According to the learned counsel for the appellant, the Government, by its inaction and deliberate indifference, had brought about a situation wherein the port authorities in the country were avoiding any business connections contractual dealings with the appellant without formally ‘ black-listing it. It was argued the appellant had been actually black-listed, but since no procedure had been followed black-list it, no ‘ formal order of black-listing had been passed but the court could draw inference from the attitude of the Port authorities, that, without following the prescribed procedure the appellant had in fact been ‘black-listed ’ and granted appropriate relief appellant. Reliance was placed by the learned counsel upon the decision of the Supreme Court reported in Erustan Equipment and Chemicals Ltd. v. State of West Bengal, A.I.R. S.C. 266: (1975)1 S.C.C. 70 , to urge that since black-listing had the effect of creating disability by preventing a person from the privilege and advantage of entering into relationship with the Government for purposes of gain principles of fair-play require that person concerned should be given an opportunity to represent his case before being listed. This judgment, however, for what follows, has no application to the present case. matter of fact, though the three writ appeals relate to three different writ petitions different prayers in each one of them, the basic and general submission made, covering the three writ appeals, was that the C.B.I, report and the advice or recommendation therein loomed large with the Ministry and influenced by that recommendation, the impugned in the writ petitions from which W.A.Nos.421 and 422 of 1990 arise, came passed by the Port Trust.
The learned single Judge, while considering this issue took account the specific stand and the averment on behalf of the respondents that assumption and apprehension of the appellant in this regard were baseless and that was no material on the basis of which such an assumption could be raised. It that the apprehensions of the appellant were unjustified and without any basis. 20. The counsel on either side, apart from referring in detail to the respective took us through the correspondence which had passed between the appellant Trust as well as between the Port Trust and the concerned Ministry of the Government India. After going through the same and giving our thoughtful consideration to material, we are of the view that the learned single judge was well justified coming to the conclusion that the appellant had not been “ black-listed ” and that sought for in the writ petition, giving rise to W.A.No.423 of 1990, was premature the appellant cannot have any legally justiciable grievance, particularly respondents in their counter affidavits had categorically maintained that the appellant was not black-listed and that its case will be considered by the respondents future if the appellant took part in any tender. 21. So far as the first respondent concerned, it has been stated in paragraphs 7 and 9 of the counter affidavit filed before learned single Judge in the writ petition as follows: "7. In the above circumstances and facts stated therein, it is not true that the petitioners Company was to be absolved of the charges against them in the report filed by the was on the basis of charges which were established beyond any doubt, against petitioners, that the C.B.I. had recommended to the Government to consider the advisability for banning future dealings with the petitioners ’ firm. However no instructions have issued by the Government to the Madras Port Trust and Tuticorin Port Trust forbidding to issue tender forms to any company including the petitioners ’ company. [Emphasis supplied], "9. With regard to the 4th paragraph of the affidavit, It is submitted respectfully that the petitioners are trying to create sympathy from this Hon’ble Court, though they very well that the Government would not straightway implement the recommendations C.B.I., ignoring the principles of natural justice.
[Emphasis supplied], "9. With regard to the 4th paragraph of the affidavit, It is submitted respectfully that the petitioners are trying to create sympathy from this Hon’ble Court, though they very well that the Government would not straightway implement the recommendations C.B.I., ignoring the principles of natural justice. Banning business dealings petitioners ’ firm would require compliance with the principles of natural justice and have to be covered by the instructions of the Government of India regarding the banning business dealings with firms which are contained in paragraph 16 of the judgment Supreme Court in the case of Erusian Equipment and Chemicals Ltd. v. State of West A.I.R. 1975 S.C. 266: (1975)1 S.C.C. 70 . Hence any action leading of banning business dealings with any firm in question would require sufficient opportunity to be to the concerned company and also after proper enquiry if it is found to be guilty punishment to be imposed would depend on the gravity of the charges, and then only action could be taken against the company. The petitioners at present have not yet sewed with the show cause notice, and no action has been taken against the company Government for banning business dealings with the petitioners’ company. Therefore, prayer of the petitioners’ Company to restrain the respondents from taking into consideration the advice of the C.B.I, is not entitled to be considered. I submit that at this juncture petitioners ’ company cannot invoke the jurisdiction of this Hon’ble Court under Art.226 Constitution of India." [Emphasis supplied] 22. So far as the third respondent is concerned, it has been stated in paragraph 7 counter affidavit filed in the writ petition before the learned single Judge as follows: "7. Regarding paragraph 9, it is stated that during October, 1986, the Madras Port Trust invited a major tender for Extension of Container Terminal at Bharathi Dock for which qualification applications were received from reputed firms/joint ventures. The qualification document was issued to the petitioner and the firm applied for the qualification as joint venture with M/s.Amsterdam Ballast Dredging. However, they were pre-qualified based on merits and hence the tender documents for civil works were issued to the petitioner. Therefore, it is incorrect to state that the Port Trust did tender documents to the petitioner in view of the C.B.I. Findings. They have been treated par with other tenderers. " [Emphasis ours] 23.
However, they were pre-qualified based on merits and hence the tender documents for civil works were issued to the petitioner. Therefore, it is incorrect to state that the Port Trust did tender documents to the petitioner in view of the C.B.I. Findings. They have been treated par with other tenderers. " [Emphasis ours] 23. So far as the Tuticorin Port Trust is concerned Mr.R.Krishnamoorthy, its learned counsel pointed out that it was not the specific or definite case of the appellant that of the advice of the C.B.I, they were prevented from participating or offering themselves tenderer. On behalf of the fourth respondent, it was represented that it may also be that the appellant will not be so prevented from participating in the contracts with authority in future, unless and until any of the competent authorities passes specific to that extent, which as on date had not been so far passed. 24. After a careful consideration of the stand taken by the respondents, as hereinabove, we are of the view that indisputably, as on date, there are no specific passed by the second respondent or by any other competent authority, black appellant or directing the banning of business dealings with them and it is only a apprehension, without any basis, on the part of the appellant to presume that on the the advice of the C.B.I., the Government of India as well as the other Port Authorities are avoiding having any business dealings them or are not allowing the appellant to participate in tenders floated by the various Authorities. No specific grievance with reference to even one particular instance has brought to our notice, let alone substantiated and the instance pleaded with reference third respondent (Madras Port Trust) has been explained in detail and it has demonstrated that the apprehension of the appellant was without any basis and unreasonable.
No specific grievance with reference to even one particular instance has brought to our notice, let alone substantiated and the instance pleaded with reference third respondent (Madras Port Trust) has been explained in detail and it has demonstrated that the apprehension of the appellant was without any basis and unreasonable. This being the fact situation while we agree with the learned counsel appellant that merely on the advice of the C.B.I, and without passing any order by the prescribed procedure for black-listing, the appellant cannot be black-listed, but since respondents have categorically asserted that the appellant has neither in fact, law been blacklisted, all that it requires at our hands is to clarify that in view categorical stand taken by the respondents that the appellant has not been blacklisted therefore, they will not prevent the appellant from participating in any of the tenders floated or invited by them in future and that consideration of the tenders shall be on merits, uninfluenced by the impugned advice/recommendation of the C.B.I. 25. In the light of our above discussion and having regard to the fact that the advice was sought to be quashed in the writ petition is nothing but a mere recommendation investigating agency, made in an inter-departmental correspondence, which proprio has no operative force or lawful effect or binding impact to the detriment or prejudice appellant, we see no reason to interfere with the conclusion of the learned single Judge W.P.No.13234 of 1987 is premature and cannot be sustained at all at this stage consequently W.A.No.423 of 1990 shall stand dismissing, subject, however, observations made by us in paragraph 22 above. 26. Coming now to W.A.No.421 of 1990, which is concerned with the refusal of the Port Trust to award the contract for balance dredging in approach channel from Ch.525 to 1050 Mts. to the appellant. The learned counsel for the appellant submitted Tuticorin Port Trust denied the contract to the appellant on extraneous grounds only directions of the Government of India and that the said action of the Government was vitiated by mala fides also.
to the appellant. The learned counsel for the appellant submitted Tuticorin Port Trust denied the contract to the appellant on extraneous grounds only directions of the Government of India and that the said action of the Government was vitiated by mala fides also. It was further argued that since the Board had passed two resolutions, resolving to award the contract to the appellant and had taken very stand in the earlier proceedings before this Court as well as in the Supreme (referred to supra), the Port Trust was estopped from going back from the positive stand in that view of the matter, the appellant is entitled to be awarded the work and the in question. 27. Whether the appellant is entitled to claim that a right to the grant contract had accrued in its favour on the Board merely passing the resolutions without communicating the acceptance of the tender or issuing any work order thereafter appellant requires now to be considered. This will also necessitate consideration of aspect as to the extent to which the appellant can take advantage of the disclosure proceedings of the Board, in the Court in a pending litigation, where such proceedings not been admittedly, communicated in due course officially to the appellant. In our for what follows, such resolutions or disclosure in the court cannot be construed to order formally communicated to the party which may create any right in that party. The Court in Bachhittar Singh v. State of Punjab, A.I.R. 1963 S.C. 395, held that merely something on a file does not amount to an order. They opined that unless a communication of the same is made to the person concerned, the authority concerned bound by the minutes on the file. Again, in State of Bihar v. Kripalu Shankar, A.I.R. S.C. 1554: 1987 Crl.L.J. 1860: (1987)3 S.C.C. 34 : (1987) S.C.C. (Crl.) 442: (1987)2 656 though arising under the Contempt of Courts Act, 1971, the question as to the effect disclosure of certain proceedings and communications in the course of a proceeding Court came up for consideration and the Apex Court opined thus: "27. We would like to outline the general principle on which confidentiality of documents should be protected. The general principle is that if a person is involved litigation, the Courts can order him to produce all the documents he has which relate issues in the case.
We would like to outline the general principle on which confidentiality of documents should be protected. The general principle is that if a person is involved litigation, the Courts can order him to produce all the documents he has which relate issues in the case. Even if they are confidential, the Court can direct them to be produced when the party in possession does not produce them, for the other side to see or at any for the Court to see. When the Court directs production of those documents there is an understanding that they will not be used for any other purpose. The production of documents in ordinary cases is imposed with a limitation that the side for whose purpose documents are summoned by the Court cannot use them for any purpose other than the relating to the case involved." Thus, we hold that the stand of the respondents in the court proceedings does not confer justiciable right. 28. What in law then is the consequence of the mere passing of the resolutions 28.5.1985 and 30.8.1986 and do such resolutions by themselves have the effect of bringing into existence a contractual relationship between the appellant on the one hand and Tuticorin Port Trust on the other in respect of the work of balance dredg-ing in approach channel from Ch.525 Mts. to 1050 Mts.? In law, in a matter like this, a contract is formed making of an offer and the acceptance of the offer for consideration. Acceptance, to into existence a contractual relationship, cannot be said to be complete unless and until same has been communicated to the offeror. In other words, the formation of the not enough and external manifestation of the same by an explicit act of communication the other party is an essential ingredient to make the contract complete and irrevocable, since before that it shall always be within the rights of the offeree to go back or withdraw from the contractual commitment.
In other words, the formation of the not enough and external manifestation of the same by an explicit act of communication the other party is an essential ingredient to make the contract complete and irrevocable, since before that it shall always be within the rights of the offeree to go back or withdraw from the contractual commitment. A reading of Secs.3 to 6 of the Indian Contract Act, will substantiate the above indisputable position of law and Illustration (c) to Sec.4 as well as Sec.5 and the Illustrations contained thereunder make it amply clear that the acceptor entitled to revoke his acceptance at any time before the communication of the acceptance becomes complete as against him and communication of an acceptance can be said to have been made only when the acceptor intends by an act of the acceptor to communicate the acceptance to the other party in the normal course and such communication comes to the knowledge of the proposer through such communication. In this case, we find that in law, firm contract could not be said to have come into existence merely on the passing of the resolution or as already held on account of their disclosure in the Court proceedings on an earlier occasion. The fact that periodically the appellant was admittedly extending the period of validity of the tender even thereafter will also go to show that the parties never proceeded as though a contract had come into existence. 29. We are also of the view that the Port Trust was not bound to accept the tender of the person who offered to highest amount and if the Government rejected all the bids made the auction, it cannot involve any violation of Art.14 or Art.19(1)(g) of the Constitution India. Unless the conditions of the tender contained any stipulation that the highest tender would be or shall be accepted, a person who gave a higher tender has, in law, no right have the said tender accepted only on that account. It cannot be disputed having regard the peculiar tender conditions etc., that the Board of Trustees alone was entitled to decide whether the highest tender should be accepted or whether fresh tenders should be invited. Unless the decision can be considered to be so unreasonable or perverse that no reasonable person could arrive at such decision, the same could not be called ‘arbitrary’ .
Unless the decision can be considered to be so unreasonable or perverse that no reasonable person could arrive at such decision, the same could not be called ‘arbitrary’ . Indeed, judicial scrutiny of the decision taken either not to give a contract or to reject all tenders, is not completely ruled out and a person aggrieved is entitled to invoke the writ jurisdiction question a decision if it is arbitrary, perverse or suffers from any other similar vice. course, there is an initial presumption (even though rebuttable) that the action of a public authority is reasonable and in public interest and it is for the person challenging its validity to show that the action is unreasonable, arbitrary or contrary to the professed norms and the burden is rather a heavy one. The same will be the position even when a challenge made on the ground that the action taken was for a collateral purpose or mala fide. do not, in the course of judicial review of action of the competent constituted authority, substitute its own decision on the ground that the decision which appealed to the authority not the best or that the decision of the authority is not a feasible means of achieving the objectives or that it could have adopted a different course which may have been better and the like reasons. Judicial review, as has often been held, is not ordinarily concerned with the decision but only with the decision making process. On account merely of the fact that two reasonable conclusions are possible, the Courts do not discard the one view taken by duly constituted competent authority -bona fide, and substitute the other view. The reasonableness or otherwise decision has to be judged having regard to the totality of the circumstances, the subject matter in question and the peculiar needs or necessity depending upon the exigencies of situation. The view that we have taken is fortified by a Division Bench of this Court.
The reasonableness or otherwise decision has to be judged having regard to the totality of the circumstances, the subject matter in question and the peculiar needs or necessity depending upon the exigencies of situation. The view that we have taken is fortified by a Division Bench of this Court. In decision reported in Chokhant International Ltd. v. Board of Trustees of the Port of Madras, 1987 Writ L.R. 529, in circumstances which were almost similar as in the present case, Bench opined: “ We must, therefore, bear in mind the fact that unless we are satisfied that the Board Trustees had not been acted like a body are (sic.) reasonable men or that the decision which they have taken was not such that a reasonable person in the circumstances of the would not have taken, or that they had taken into account any extraneous consideration which affect their decision, the decision to call for fresh tenders will not be open to challenge. In view of the undoubted legal position that if one of the tenderers increases his bid other tenderers must also be given an opportunity to give higher bids, the Board of Trustees, in our view, were quite justified in closing all the tenders and calling for fresh tenders. 30. So far as the instant case is concerned, it is not in dispute that neither the resolutions the Port Trust dated 28.5.1985 and 30.8.1986 had been duly communicated to the appellant for even any intimation of such resolutions had been sent to it with the object of or intention of communicating the so called acceptance at any time. Admittedly, no work order has issued to the appellant on the basis of the said resolutions. The copies of those resolutions apparently came to be known when the same were produced in the earlier proceedings before this Court and the Supreme Court as well as in the course of the current proceedings. They were never communicated to the appellant with the intention of communicating acceptance of the Port Trust of the tender submitted by the appellant.
The copies of those resolutions apparently came to be known when the same were produced in the earlier proceedings before this Court and the Supreme Court as well as in the course of the current proceedings. They were never communicated to the appellant with the intention of communicating acceptance of the Port Trust of the tender submitted by the appellant. (The learned counsel for the appellant, on instructions from the appellant obtained in Court, also had to affirm position of noncommunication.) In view of the above fact situation, we are unable to agree that the appellant acquired any right, much less a vested right, to the award of the contract in question in their favour only on the basis of the non-communicated resolutions referred supra. On the other hand, the appellant had been only communicated an order of rejection, pursuant to the resolution of the Board of Trustees, dated 29.1.1988. Consequently, appellant cannot claim any rights based on the earlier resolutions of the Board. disclosure of the resolutions in the course of the Court proceedings cannot be equated the communication of an acceptance of the offer so as to constitute a contract or bring existence any contractual relationship for sustaining a claim, justiciable in law. As already noticed, the fact that admittedly even after the resolutions dated 28.5.1985 and 30.8.1986 the Port Trust had been seeking for extension of the period of validity of tender and tenderers, including the appellant, had been conveying their willingness periodically extending the period of the validity of the tender, by itself shows that no concluded contract came into existence between the parties, which the appellant can get enforced. Equally, position does not change or get altered by the stand taken in the counter affidavit filed in Court and the Supreme Court in the earlier proceedings in defending its action questioned those proceedings. There can be no prohibition against the Tuticorin Port Trust or its Board Trustees in exercising their discretion or undoubted powers either way in rejecting any one all of the tenders received and thereafter, calling for fresh tenders with the same or additional terms and conditions. Consequently, we are not persuaded to agree with submission on behalf of the appellant that a legally enforceable contract can be spelt either on the basis of the stand taken in the counter affidavits in the earlier proceedings or on the basis of the non-communicated resolutions.
Consequently, we are not persuaded to agree with submission on behalf of the appellant that a legally enforceable contract can be spelt either on the basis of the stand taken in the counter affidavits in the earlier proceedings or on the basis of the non-communicated resolutions. 31. Whether the decision of the Board of Trustees of the Port Trust to reject all the tenders can be said to be so unreasonable that no reasonable person or body of persons could have arrived at such a decision or that the decision was vitiated on the ground that any extraneous considerations had been taken into account, now falls for our consideration. We have been taken through the note dated 28.1.1988 put up by the Chairman as Agenda Item No.19, seeking approval of the Board for the rejection of all the tenders received for the balance dredging work in the approach channel from Ch.525 Mts. to 1050 Mts. Upto M. level as also resolution No.185 passed on the basis thereof on 29.1.1988. Those records disclose a meticulous consideration and analysis of the matter in the proper perspective, taking into account only what could be considered to be relevant. This becomes apparent from a bare perusal of the minutes of the discussion and the resolution. The note submitted to the Board, no doubt, seems to have taken into account the communication 12.1.1988 received from the Government of India, the relevant portion whereof reads thus: "The entire matter has been considered in the Ministry. The tenders for this work were for some time in 1983 and it would be against normal principles of project formulation management to award a contract in 1988 based upon 1983 tenders and rates. It therefore, been decided that the Tuticorin Port Trust may be advised to discharge all existing tenders and to invite fresh tenders for the entire balance dredging to be done in Port to achieve the design draft of 30 ’ .
It therefore, been decided that the Tuticorin Port Trust may be advised to discharge all existing tenders and to invite fresh tenders for the entire balance dredging to be done in Port to achieve the design draft of 30 ’ . While calling for fresh tenders, you may also ask tenderers to indicate the availability of foreign assistance, if any, and the quantum of foreign exchange if needed, for the work." Even if it be assumed that it was after taking into consideration the above advice of Government of India that the Board rejected all the tenders, no exception can be taken the decision of the Board, as the reasons which really weighed with the Board cannot be to be either arbitrary or so unreasonable that no reasonable person or body of persons have arrived at. The reasons were relevant and not extraneous at all. We are of the opinion that having regard to the stakes and the public interest involved, the powers of Government of India, as the Supervising and Controlling Authority of the Port Trusts India, the nature of the powers exercised by the Port Trust and the peculiar facts circumstances of the case, no objection in law can be taken to the competency Government of India to give the said advice to the Tuticorin Port Trust. The reasons weighed with the Board of Trustees have relevance and sufficient nexus to the object ultimate decision taken by the Board. 32. In The State of U.P. v. Vijay Bahadur Singh, A.I.R. 1982 S.C. 1234: (1982)2 S.C.C. the apex Court while considering the question of rejecting a highest offer, declared position of law thus: "It appears to us that the High Court had clearly misdirected itself. The conditions of made it perfectly clear that the Government was under no obligation to accept the bid and that no rights accrued to the bidder merely because his bid happened to highest. Under condition No.10 it was expressly provided that the acceptance of bid time of auction was entirely provisional and was subject to ratification by the competent authority namely the State Government.
Under condition No.10 it was expressly provided that the acceptance of bid time of auction was entirely provisional and was subject to ratification by the competent authority namely the State Government. Therefore, the Government had the right, and sufficient reason, we may say not to accept the highest bid but even to prefer a other than the highest bidder, the High Court was clearly in error in holding Government could not refuse to accept the highest bid except on the ground of inadequacy the bid. Condition No.10 does not so restrict the power of the Government not to accept bid. There is no reason why the power vested in the Government to refuse to accept highest bid should be confined to inadequacy of bid only. There may be a variety of good sufficient reasons, apart from inadequacy of bids, which may impel the Government accept the highest bid. In fact, to give an antithetic illustration, the very enormity may make it suspect. It may lead the Government to realise that no bona fide bidder possibly offer such a bid if he meant to do honest business. Again the Government change or refuse its policy from time to time and we see no reason why change of the Government, subsequent to the auction but before its confirmation, may not sufficient justification for the refusal to accept the highest bid. It cannot be disputed Government has the right to change its policy from time to time, according to the of the time and situation and in the public interest. If the Government has the accept or not to accept the highest bid and if the Government has also the power to its policy from time to time, it must follow that a change or revision of policy subsequent the provisional acceptance of the bid but before its final acceptance is a sound enough reason for the Government ’ s refusal to the highest bid at an auction. That is precisely what has happened here." 33. On a careful consideration of the material placed before us and the reasons weighed with the Board of Trustees in resolving to reject all the tenders, in our opinion, decision of the Board cannot be considered or condemned to be so unreasonable as to called ‘arbitrary’ or mala fide.
That is precisely what has happened here." 33. On a careful consideration of the material placed before us and the reasons weighed with the Board of Trustees in resolving to reject all the tenders, in our opinion, decision of the Board cannot be considered or condemned to be so unreasonable as to called ‘arbitrary’ or mala fide. The factors, such as the long lapse of time, the impact changed conditions and situation pointed out by the Government of India, the prevailing governing economic factors, viz., the rates as well as the revised offers made subsequent the tenders in question were all relevant for the purpose of considering the rejection existing tenders. The offer of the appellant itself during the course of the proceedings before the learned single Judge as well as before us to further reduce their rates and even willingness expressed to waive the provision for escalated rates is not a matter which can considered by this Court in exercise of its jurisdiction under Art.226 of the Constitution India. The learned single Judge was, therefore, right in rejecting the claim of the appellant that the balance dredging work ought to have been awarded to them. Despite lengthy arguments, we have not been persuaded to take a view different than the one taken by learned single judge, consequently, W.A.No.421 of 1990 shall stand dismissed. 34. Now, the only question that remains for our consideration is the validity of the action the Port Authorities in invoking Clause 43 of the Contract, which is the forfeiture clause, the agreement in respect of the non-completion of the work already given to them Agreement No.12-CE/1979-80, as communicated to the appellant on 5.2.1988. That is subject matter of challenge before us in W.A.No.422 of 1990. 35. The right to execute the work and receive remuneration therefor arises from the and conditions of the contract duly executed between the parties and the writ jurisdiction under Art.226 of the Constitution of India is not intended to facilitate avoidance of obligations voluntarily incurred. The question as to the extent a termination of a contract the Government or a State undertaking can be challenged before a Court in proceedings under Art.226 or Art.32 of the Constitution of India, has been the subject matter consideration in a catena of cases before the apex Court as well as this Court.
The question as to the extent a termination of a contract the Government or a State undertaking can be challenged before a Court in proceedings under Art.226 or Art.32 of the Constitution of India, has been the subject matter consideration in a catena of cases before the apex Court as well as this Court. We find the case law on the subject has been extensively reviewed by a Division Bench of this reported in Shaikh Mohammed Rowther and Co. (P) Ltd. v. K.P.V.V. The Shipping Corporation of India, 1987 Writ L.R. 638. The Division Bench came to the conclusion that question of unreasonableness of the exercise of rights conferred under a contract cannot raised or allowed to be agitated through a writ petition under Art.226 of the Constitution lndia, irrespective even of the plea that exercise of the contractual powers to terminate contract was a mala fide one. The Apex Court in the decision reported in Mahabir Auto Stores v. Indian Oil Corporation, (1990)3 S.C.C. 752 , took the view that though the rights of citizen are in the nature of contractual rights and the manner, the method and motive of a decision of entering or not entering into a contract could be subject to judicial review, Art.14 of Constitution of India cannot be and has not been construed as a charter for judicial review the State action after the Contract has been entered into to call upon the authority account for its actions. Even if it be assumed for the sake of argument, though we make such assumption that the appellant has suffered some financial loss due to the invoking the forfeiture clause even arbitrarily, it is for the appellant to work out its remedies before the ordinary civil courts or by means of an Arbitration proceedings, as contemplated the contract, but resort to the proceedings under Art.226 of the Constitution of India inappropriate and ill-conceived. In our view, the learned single Judge was right in rejecting the challenge to the action of the Port Authorities invoking the forfeiture clause in the case the writ proceedings and we are unable to take a view different than the one taken by learned single Judge. 36. On behalf of the appellant, it was also submitted, though for the first time before us that there is no Board resolution authorising the allotment of work left incomplete appellant.
36. On behalf of the appellant, it was also submitted, though for the first time before us that there is no Board resolution authorising the allotment of work left incomplete appellant. This involves factual verification and even otherwise we see no relevance submission at all to the issues before us. Since this aspect was not put in issue before learned single Judge or even in the memorandum of grounds of appeal before us, we do not consider it proper to embark upon an enquiry into those aspects late stage. In the grounds of appeal, the only challenge to the impugned action of the Trust was that the Port Trust had cancelled the contract influenced by the instructions Government of India and not on the basis of any relevant consideration and that instruction had been given in view of the report of the C.B.I. The learned single Judge on the basis of the material on record that there was no basis for such a plea. Our attention has not been invited to any specific material to substantiate the stand taken to the contra the appellant, except the general claim that the C.B.I. report was the basis of all the of the respondents. Such a general submission, by itself, did not appeal to us and we not countenanced the same while dealing with W.A.No.423 of 1990. The Port Authorities issued a notice proposing to invoke the powers under Clause 43 of the Agreement as n 18.8.1986 and it gives valid and convincing reasons in justification for their There have been subsequent deliberations also as could be seen from the correspondence that was exchanged between the parties whereafter the impugned communication issued. Therefore, raising of the cry of wolf merely on the basis of the report of the C.B.I., having influenced the course of every action, is in our view, overplaying the game based apprehensions rather than realities. In our view, the learned single Judge was perfectly justified in rejecting W.P.No.4174 of 1988 also and we see no reason to interfere with said decision in this appeal. Consequently, W.ANo.422 of 1990 shall also stand dismissed. 37. In view of the above discussion, the writ appeals fails and shall stand dismissed, the circumstances there will be no order as to costs. B.S. -- Appeals dismissed.