Upananda Ghose and Co. v. Hindustan Paper Corporation Ltd. and Ors.
1996-05-29
J.N.SARMA
body1996
DigiLaw.ai
This writ application arises out of a contract awarded by the Hindustan Paper Corporation Ltd, respondent No.1 in favour of the responent No.4. The respondent No.4 is M/s Shalimar Tar Products. 2. The contract was regarding waterproofing treatment work of the plant of the Corporation. Notice was issued on 6.11.95 for 3 (three) items, and for covering roofs of plant building with tarfelt/tar plastic. It was specifically stated in the notice inviting tender that the tarfelt to be used must be a product of respondent No.4. Regarding Item No. 1 of the tender it was for an area of 13,000 sq. metre and tarfelt required for the purpose of was to be supplied by the Corporation free of cost. Itme No.2 was for providing tar plastic of STP make, waterproofing compound, J/L hooks bolts and nuts, etc and Itme No.3 was similar to Item No.1 of the notice. But it was for an area of 400 sq. metre and the contract was to supply all the materials. 3. On 28.11.95 the petitioner, respondent No.4 and M/s Meenakshi Enterprise submitted tenders. Petitioner's tender was the lowest at Rs.5,47,000/- respondent No.4 at Rs.8,25,000/- and M/s Meenakshi Enterprise at Rs.8,46,000/-. When the tenders were opened by the Corporation it was found that the price of tarfelt quoted by the petitioner was below the price quoted by the manufacturer. The Corporation thereafter, asked the petitioner to appear before them with the price list of the manufacturer. The petitioner appeared before the Corporation with the price list and from the price list it was found that the price of tarfelt which was quoted by the petitioner was really below the price of the manufacturer but it was stated that it was because of the fact that he quoted the earlier price of the manufacturer. 4. Thereafter, a negotiation was held between both the parties i.e. respondent Corporation and the respondent No.4 as will be evident from the record produced before me which shows that this matter received the attention of the authority and ultimately having considered/scrutinised the things the tender order was given to the respondent No.4 holding that it will be beneficial to the Corporation from the point of view of the quoted rate and materials, of the work as well as from the revenue if the work is given to the respondent at a price of Rs.5,45,000/- the rate quoted by the petitioner.
It is this allotment of tender which is challenged in this writ application. 5. The respondent Nos. 1,2 and 3 has filed an affidavit-in-opposition stating that the rate offered by the petitioner is no doubt workable. However it was not only the rate that mattered but they had to choose the best capable/competent party. The respondent No.4 is the manufacturer of the materials which is required to be used and they are professionally managed and technically skilled in carrying out the work and as such the respondent No.4 was picked up on the ground that it will protect the revenue of the Corporation and they may provide better service to the Corporation as well. 6. I have heard Mr. BC Das, learned Advocate for the petitioner and Mr. AK Phukan, learned Advocate for the respondents. The learned Advocate for the petitioner made the following submissions : (i) That the use of the material tarfelt is irrelevant, irrational and fanciful rendering the decision arbitrary and unreasonable. It is submitted that though the Item No. 1 tarfelt was to be supplied by the Corporation, the price quoted for Item I by the petitioner was not relevant but at the same time he offered three itmes i.e. I, II and III, and it was a joint tender for all three items and if a rate quoted in any one of the item is found not in conformity with the price quoted by the manufaturer, the Corporation did not have the right to reject. We will look this aspect of the mater at a later point of time. (ii) That the negotiation was held only with the respondent No.4 and as such the allotment of the work to the respondent No.4 is discriminatory and the petitioner was denied equal treatment with the respondent No.4 and as such the decision is violative of Article 14 of the Constitution. (iii) The petitioner has the legitimate expepctation and that legitimate expectation was ignored by the Corporation. Mr. Das, learned Advocate appearing for the petitioner cited a large number of cases on different point in order to decide all these question, but it is not necessary to consider all these cases.
(iii) The petitioner has the legitimate expepctation and that legitimate expectation was ignored by the Corporation. Mr. Das, learned Advocate appearing for the petitioner cited a large number of cases on different point in order to decide all these question, but it is not necessary to consider all these cases. The latest case on this point is (1995) 1 SCO 478 (New Horizons Ltd & another vs. Union of India & others) wherein an earlier case of Tata Cellular was relied on and in paragraph 18 of the judgment the scope of judicial review as decided in the entire case of Tata Cellular was quoted. For the decision of our case in hand it is necessary to have a look at clause 5 which is quoted below : "(5) The Government must have freedom of contract. In otherwords, a fair play in the joints is a necessary concomitant for an administrative body functioning in an administrative sphere or quasi administrative sphere. However, the decision must not only be tested by the application of Wednesbury principle of reasonableness (including its other facts pointed out above) but must be free from arbitrariness not affected by bias or actuated by malafides." 7. It is submitted by Shri AK Phukan, learned Advocate for the respondent Nos.1, 2 and 3 that the decision arrived at by the authority was absolutely reasonable and there was no arbitrariness and the question of bias and/or malafide do not arise in this case. What is "Wednesbury principle of reasonableness" has been quoted by the Supreme Court in paragraph 19. That is quoted below: "19. 'Wednesbury principle of reasonableness' to which reference has been made in principle (5) aforementioned is contained in Associated Provincial Picture House Ltd vs. Wednesbury Corporation. In that case Lord Greene, MR has held that a decision of a public authority will be liable to be quashed or otherwise dealt with by an appropriate order in judicial review proceedings where the Court concludes that the decision is such that no authority properly directing itself on the relevant law and acting reasonably could have reached it. In Tata Cellular this Court, has mentioned two other facets of irrationality : (1) It is open to the Court to review the decision-makers' evaluation of the facts. The Court will intervene where the facts taken as a whole could not logically warrant the conclusion of the decision-maker.
In Tata Cellular this Court, has mentioned two other facets of irrationality : (1) It is open to the Court to review the decision-makers' evaluation of the facts. The Court will intervene where the facts taken as a whole could not logically warrant the conclusion of the decision-maker. If the weight or facts pointing to one course of action is overwhelming, then a decision the other way, cannot be upheld. (2) A decision would be regarded as unreasonable if it is partial and unequal in its operation as between different classes." 8. So, the Court can interfere only when the facts taken as a whole could not logically warrant the conclusion of the decision maker. The facts must be such which lead to only one course of action otherwise the decision taken cannot be touched. The factual position in the instant case is that the authority by adopting a reasonable approach weight the pros and cons and arrived at the decision. 9. In the instant case from perusal of the record it will appear that the authority took all the aspects of the matter under consideration and that also has been highlighted in the affidavit-in-opposition of the respondent Nos.1, 2 and 3. I also do not find that this decision of the authority suffers from any arbitrariness and or bias. 10. Regarding the question of not making negotiation with the petitioner it will appear that the petitioner also was asked for negotiation and negotiation was made and thereafter the authority found that the respondent No.4 to be the proper/better candidate. 11. The question of quashing the order on the principle of legitimate expectation does not arise inasmuch as the legitimate expectation is not a right per se but gives only a locus standi. It only given certain right to a person to be considered and that has been done in the instant case. 12. Accordingly, there is no merit in this writ application and the same is dismissed. Stay order passed earlier shall stand vacated.