Tractor Farm Equipment Ltd. v. Secretary, Govt. of Assam
2003-10-27
AFTAB H.SAIKIA
body2003
DigiLaw.ai
JUDGMENT A.H. Saikia, J. 1. Heard Mr. K.P. Pathak, and Mr. K.N. Choudhury, learned Sr. Counsel assisted by Mr. S.K Sarma, Mr. P.N. Goswami and Mr. G. Rahul, the learned Counsel representing the Petitioner and Mr. N. Dutta, learned Sr. Counsel assisted by Mr. I Choudhury, the learned Counsel appearing on behalf of the private Respondent No. 4. Also heard Mr. A.K. Phukan, learned Advocate General, Assam assisted by Mr. H. Roy, learned State Counsel appearing on behalf of State Respondents No. 1, 2 and 3 and Mr. C. Choudhury, learned Sr. CGSC appearing for the Respondent No. 5. 2. Considering the urgency of the matter and also on request of the learned Counsel for the parties who have, as stated, already exchanged their respective affidavits for and against the issues involved in the instant case, this Court proposes to terminate this writ petition conclusively at the admission stage itself. Accordingly, the matter is being heard and disposed of. 3. The case in hand precisely relates to award of contract for supply of 449 numbers of Tractors to the Agriculture Department, Govt. of Assam to be procured by the Govt. on credit being funded by the World Bank under a tripartite agreement to be known as Development Credit and Project Agreement between the Govt. of India, Govt. of Assam and the World Bank for the benefit of the group of small and marginal farmers of the State of Assam to whom these tractors would be distributed through Field Management Committees with farmers share therein of 50% of the cost of the tractors being procured. The writ Petitioner, Tractor and Farm Equipment Ltd. commonly known as TAFE, a leading business company of the country reputedly manufacturing a wide range of tractors and selling the same across the country and abroad and being one of the bidders in this contract, in the instant writ petition, has alleged arbitrariness, unreasonableness and malafide actions on the part of the State Respondents in unduly favouring the Respondent No. 4, Mahindra and Mahindra Ltd. (for short, "M and M") in the matter of award of contract for supply of Tractors, implements and accessories to the Assam Rural Infrastructure and Agricultural Services Project (of short", ARIASP") thereby rejecting the bid of TAFE. 4. It is averred by TAFE in the instant writ petition that the Agricultural Department, Govt.
4. It is averred by TAFE in the instant writ petition that the Agricultural Department, Govt. of Assam through ARIASP initiated an International Competitive Bidding (ICB) process originally for procurement of 898 Nos. of Pneumatic Wheeled Agricultural Tractors with accessories by notice inviting sealed tender (for short, NIT) dated 12.2.03 issued by the Respondent No. 3, the Chief Engineer, Agricultural Department, Govt. of Assam (Annexure-1 to the writ petition). The said procurement was funded by a credit received by the Govt. of India from the International Development Association (IDA) under World Bank Group towards the cost of ARIASP, part of which has to be applied towards the aforesaid procurement. The date of opening of the sealed tender was initially fixed on 26.3.03 which was subsequently extended to 8.4.03 and thereafter again up to 23.4.03 vide Bid Extension Notices dated 5.3.03 and 4.4.03 respectively issued by the Respondent No. 3 (Annexure-2 and 3 to the writ petition). The said NIT was also amended by the Corrigendum-1 (Annexure-4 to the writ petition) by which the entire bid was bifurcated in two parts i.e. Schedule I and 2 requiring the bidders to submit their bids in two separate packets for 449 sets of tractor each shown against Schedule-I and Schedule-2 instead of a single offer for 898 sets fixing the Bid Security at Rs. 2.25 million for each Schedule as the World Bank agreed, for the time being, to finance the proposed procurement of 449 Tractors only. 5. Pertinent it to notice herein some of the relevant and essential informations and the terms and conditions stipulated inter alia in the Bidding Documents (hereinafter referred to as BD) of the NIT. Clauses 1 and 3 of the NIT dated 12.2.03 specifically say that the Govt. of India having received a credit from IDA towards cost of ARIASP intends to apply a part of the proceeds of the credit payments under the contract of procurement of 898 Nos. of Tractors and Bidding will be conducted through ICB procedure specified in the World Bank's Guidelines i.e. Procurement under World Bank Credit. From Instructions to Bidders (ITB in short) of BD the following provisions may be quoted.
of Tractors and Bidding will be conducted through ICB procedure specified in the World Bank's Guidelines i.e. Procurement under World Bank Credit. From Instructions to Bidders (ITB in short) of BD the following provisions may be quoted. Clauses 24.3.24.4 and 24.5 dealing with preliminary examination of the opening and evaluation of bid read with ITB 24.4 to ITB Bid Data Sheet provide: 24.3 The purchaser may waive any minor informality, nonconformity, or irregularity in a bid which does not constitute a material deviation, provided such waiver does not prejudice or affect the relative ranking of any Bidder. 24.4 Prior to the detailed evaluation, pursuant to ITB Clause 26, the Purchaser will determine the substantial responsiveness of each bid to the bidding documents. For purposes of these Clauses, a substantially responsive bid is one which conforms to all the terms and conditions of the bidding documents without material deviations. Deviations from or objections or reservations to critical provisions, such as these concerning Bid Security (ITB Clause 15), Applicable Law (GCC Clause 31), and Taxes and Duties (GCC Clause 33), will be deemed to be a material deviation. The Purchaser's determination of a bid's responsiveness is to be based on the contents of the bid itself without recourse to extrinsic evidence. 24.5 If a bid is not substantially responsive, it will be rejected by the Purchaser and may not subsequently be made responsive by the Bidder by correction of the nonconformity. ITB 24.4 Add the following clauses as additional critical provisions deviations from or objection or reservations to which will be treated as material deviations: "Performance Security" (GCC Clause 7); "Deemed Export" [Note under 11.2(a) of ITB]; "Warranty" (GCC Clause 15 and S.C.C. Clause 10); "Force Majeure" (GCC Clause 25) and "Limitation of Liability" (GCC Clause 29)." As regards Technical Specification (Section VII), amongst others, Clause 1.10.a reads as: 1.10.a) Domestic manufacturer offering. Bid should have a qualifying test certificate from the "Central Farm Machinery Training and Testing Institute (CFMTTI). Budni (MP) for offered model. Tractor offered from abroad should have similar qualifying certification from the recognized international Testing Agencies. Documentary evidence as support of the above shall be enclosed on the Bid. Adverse remarks on the certification on important parameters will lead to rejection of Bids. 6.
Budni (MP) for offered model. Tractor offered from abroad should have similar qualifying certification from the recognized international Testing Agencies. Documentary evidence as support of the above shall be enclosed on the Bid. Adverse remarks on the certification on important parameters will lead to rejection of Bids. 6. In pursuance of the said NIT and being aware of the terms and conditions of BD including those aforenoted, the Petitioner company, TAFE submitted its tender in conformity with the conditions and stipulations appearing in the said bid documents supplied by the authority. There were as many as 14 bidders who submitted their different bids. The sealed bid packets were opened on 23.4.03 in the presence of the representatives of all the bidders by the Superintending Engineer, Agriculture Department. Out of 14 bidders, one was summarily rejected as invalid. Taking into consideration the prices read out, the bid of M and M was found to be the lowest followed by that of TAFE being second lowest. 7. In the bid for supply of the tractors in question, TAFE offered the model named MF 1035 DI when the model offered by M and M was B-275 DI-TU. At the stage of the bid opening, the representative of the TAFE noticed certain material deviations in respect of bid offered by M and M and accordingly, TAFE by a letter dated 24.4.03 i.e., on the very next day of the bid opening, wrote to the Respondent No. 3 pointing out those material deviations. At least 3 (three) such material deviations, as was pointed out by TAFE, may be mentioned herein. 8. Firstly-it was pointed out that when clause-2 of the Corrigendum-1 provided for separate Bid Security for both Schedule 1 and 2 i.e., Bid Security of Rs. 2.25 million only to be deposited against each Schedule. M and M submitted only one Bid Security of Rs. 4.5 million for Schedule 1 against the required Bid Security of 2.25 million and no separate Bid Security was submitted with Schedule-2 of the tender.
2.25 million only to be deposited against each Schedule. M and M submitted only one Bid Security of Rs. 4.5 million for Schedule 1 against the required Bid Security of 2.25 million and no separate Bid Security was submitted with Schedule-2 of the tender. Secondly-the test report from the Respondent No. 5, the Central Farm Machinery Training and Testing Institute, Budni (CFMTTI) in short and for brevity sake, test report be referred to as 'Budni test report') being a mandatory requirement as per clause-1.10.a) of the Technical Specification (Section VII) of BD, as already quoted hereinabove, submitted by M and M, was only in respect of model B 275 DI-High Torque whereas model quoted and offered by M and M was B 275 DI-TU which did not appear to be a tested or approved model. Thirdly when Clause 2.90.a) of the Technical Specification (Section VII) of BD provides that overload capacity at rated RPM should not be less than 10% the Budni test report showed that the model offered by M and M had an overload capacity of only 9.4% which was much below the required capacity. Despite all those aforesaid material deviations, being brought to the notice of the Respondent No. 3, according to TAFE, the same was not taken into account at the time of preliminary examination of evaluation of bids in terms of Clauses 24 and0 26 of ITB prescribed in BD prior to the detailed evaluation. 9. It is stated by TAFE that as per its information, a Bid Evaluation Committee (hereinafter called as the first Committee'), was constituted by the authority to study and evaluate all the bids, both technically and commercially and to recommend the suitable bidder for placement of order. The first Committee comprised of 7 members namely: 1 Secretary (Agriculture), 2. Joint Secretary (Agriculture), 3. Senior Financial Advisor (Agricultural Department-Dispur), 4. Director (Agriculture) (officiating as Chief Engineer, Agriculture), 5. Senior Financial and Accounts Officer (Department of Agriculture. Khanapara), 6. Superintending Engineer, Agriculture Department and 7. Nodal Officer (ARIASP). The first committee evaluated the respective bids and also considered the material deviations as mentioned above in respect of the bid of M and M. Accordingly, the first Committee sought clarification by a written request to CFMTTI as to whether the Model B-275 DI-TU offered by M and M was tested and approved.
Nodal Officer (ARIASP). The first committee evaluated the respective bids and also considered the material deviations as mentioned above in respect of the bid of M and M. Accordingly, the first Committee sought clarification by a written request to CFMTTI as to whether the Model B-275 DI-TU offered by M and M was tested and approved. In reply, the CFMTTI sent a written clarification that the institution was not aware of any such model i.e., B-275 DI-TU and had not tested the same. It was also clarified that the only model B-275 DI-High Torque was tested by the CFMTTI. For this, M and M had to represent before the authority pleading that both these aforesaid models were one and the same and the model B-275 DI-High Torque was commonly known as B-275 DI-TU. On the basis of the said representation, the first Committee sought one more clarification from CFMTTI as to whether the change in model name required any separate test and approval. In response to the said query, the Respondent No. 5, CFMTTI sent a written clarification that in the event of the change in the model name, it required separate justification and approval by CFMTTI. Taking into account such clarification given by CFMTTI, the first Committee on its sitting on 31.5.03 decided that offer of M and M was technically deficient due to the above mentioned technical deviations being one of the prime requirements and eventually the first Committee rejected the offer of M and M and recommended the case of TAFE, being next lowest valid bidder, for placement of the order before it, since the offer made by TAFE fulfilled all the essential requirements of the tender including the valid test certificate from CFMTTI in respect of its offered model namely, MF 1035 DI. Thereafter, the entire matter, after such recommendation, was forwarded to the Agricultural Production Commissioner, Govt. of Assam for approval who in turn approved and forwarded the same to the Minister of the concerned Department recommending the decision of the first Committee. But for the reasons best known to the State Respondents, the recommendation so made by the first Committee in favour of TAFE, was rejected by the approving authority and instead another Committee was constituted comprising of (1) Commissioner to the Chief Minister.
But for the reasons best known to the State Respondents, the recommendation so made by the first Committee in favour of TAFE, was rejected by the approving authority and instead another Committee was constituted comprising of (1) Commissioner to the Chief Minister. (2) Agricultural Production Commissioner, (3) Project Director, ARIASP and (4) Secretary, Agriculture Department to look into the technical deficiency in the offer made by M and M despite the fact that the first Committee rejected the offer of M and M. 10. On 14.7.03 the meeting of the newly constituted Committee (for convenience sake, called as 'the second Committee') was held and TAFE has come to know that the second Committee is going to allot contract in favour of M and M inspite of the fact that it had not tested its offered model B275 DI-TU by CFMTTI. TAFE has stated that even prior to the meeting of the second Committee held on 14.7.03 abovementioned, the Respondent No. 3 was duly intimated by its letter dated 12.7.03 once again as regards the material deviations, as already noticed in the bid offered by M and M. Under such facts and circumstances, TAFE, in the writ petition has prayed for the following reliefs: (i) A writ in the nature of Certiorari setting aside and quashing the constitution of the second evaluation committee and any recommendation made by the said committee. (ii) A writ in the nature of Mandamus and/or any other appropriate writ/order/direction to the Respondent Authorities to cancel/recall/rescind/forbear from giving effect to the recommendation of the second Evaluation Committee and to act in accordance with the recommendation of the first Technical Evaluation Committee as approved by the Agricultural Production Commission; (iii) Any other appropriate writ/order/direction so as to grant full and complete relief to the Petitioner. 11. Both the State Respondents No. 1 to 3 and M and M have denied and rejected the allegations made by TAFE in its writ petition filed on 24.7.03 by filing their initial respective affidavits on 30.7.03 and 11.8.03 respectively. The State Respondents have also produced relevant records for perusal of this Court.
11. Both the State Respondents No. 1 to 3 and M and M have denied and rejected the allegations made by TAFE in its writ petition filed on 24.7.03 by filing their initial respective affidavits on 30.7.03 and 11.8.03 respectively. The State Respondents have also produced relevant records for perusal of this Court. In their affidavit, the State Respondents have raised their preliminary objection as regards the maintainability of this writ petition on the ground that the present writ petition itself is premature one as the award of contract for supply of Tractors in question is yet to be finalized on the date of filing the writ petition and the allegations of arbitrariness, unreasonableness and malafide are absolutely baseless, fabricated and concocted. According to the Government, the process of award of contract in question has been affected in consonance with the terms and conditions of the tripartite agreement signed between the Govt. of India, State of Assam and the World Bank. The World Bank, being a lending institution, has its own terms and conditions for granting loans/credits provided by it for the proposed project. Though the project was initially for purchasing 898 Nos. of Tractor, the World Bank has only agreed to grant credit for purchasing 449 Nos. of Schedule I. The project is Scheduled to close on 31.12.03. As the fund comes from the World Bank, the entire procurement process through such ICB is monitored very closely by the World Bank. Starting from the bidding documents, to the bid evaluation report as well as contract agreement, all have to be shown before hand at every stage to the procurement experts of the World Bank. TAFE, being aware of such authority of the World Bank in this project, already raised all the issues being subject matter in this writ petition, before the State Respondents as well as the World Bank and when the World Bank has yet to approve any recommendation made by the State-Respondents at the time of moving the Court by TAFE, the writ petition itself is not only premature by the act of TAFE itself is intended to delay the entire process to the detrimental of the interest of the farmers of the State who would be the prime beneficiaries of this project.
If the matter of allotment of such contract is delayed further, the same may also lead to the cancellation of the procurement process by the World Bank thereby affecting the development of the State and that too severely jeopardizing the public interest for which the writ petition deserves dismissal in limine. 12. Apart from questioning the maintainability of the writ petition, the Government has also contended that since the procurement is primarily for the benefit of the farmers of the State, the State Govt. naturally would wish to purchase the tractors at the lowest price without compromising with the quality and specification of the tractor as laid down by BD and Procurement Guidelines of the World Bank. Bearing the public interest in mind, when the State Govt. after considering all aspects of the matter including the issues raised by TAFE, found M and M as being the lowest bidder with a bid price at Rs. 10,25,90,803/- for 449 Nos. of tractors with all accessories including 2% Sales Tax against Form 'C or 'D' and 4% entry tax on the tractor only and the price quoted by M and M works out to Rs. 9,67,83,776/- without tax against the bid money of Rs. 10,42,70,372/-offered by TAFE for 449 tractors and accessories. Accordingly, the price difference between the two bidders for 449 Nos. of tractors works out to be at Rs. 74,86,596/-. Considering this aspect of low price offered by M and M, the State Govt. felt that it would definitely satisfy the public interest if the case of M and M, being the lowest bidder, is recommended. 13. As regards the question of the material deviations, the State Respondents have contended that the allegations of those three material deviations as mentioned above, are absolutely absurd and without any basis. What would constitute the material deviation, has been explicitly prescribed in BD itself in Clause 24.4 and ITB 24.4 of ITB. As a whole, eight areas have been demarcated in order to call as 'material deviation'. Those are: 1. Deviation concerning Bid Security, (2) Applicable Law, (3) Taxes and Duties, (4) Performance Security, (5) Deemed Export, (6) Warranty, (7) Force Majeure and (8) Limitation of Liability. In view of the above explicit factors constituting the material deviations, the alleged material deviations do not fall within the said clauses under ITB.
Those are: 1. Deviation concerning Bid Security, (2) Applicable Law, (3) Taxes and Duties, (4) Performance Security, (5) Deemed Export, (6) Warranty, (7) Force Majeure and (8) Limitation of Liability. In view of the above explicit factors constituting the material deviations, the alleged material deviations do not fall within the said clauses under ITB. Besides, Clause 24.3 of ITB provides for waiving power by which the purchaser may waive any minor informality, nonconformity or irregularity in a bid which does not constitute a material deviation, provided such waiver does not prejudice or affect the related rank of any bidder and as such in view of the same, the Govt. can waive minor informality or irregularity in a bid if it is not a material deviation. According to the State Respondents, the deposit of Bid Security of Rs. 4.5 million against the requirement of Rs. 2.25 million for 449 Nos. of tractors cannot be said to be a material deviation because they have considered such Bid Security as adequate for the Schedule being evaluated. Insofar as the submission of test report for the model of B-275 DI (High Torque) instead of Model B-275 DI TU offered by the M and M is concerned, the State Respondents have stated that having been pointed out by TAFE by their letter on 24.4.03 as to whether the quoted model B-275 DI-TU was a tested model when the enclosed Budni test report showed the tested model to be B-275 DI (High Torque), the Government requested for clarification from CFMTTI, as to whether the Budni test report model was the same as B-275 DI-TU. In reply to such request, the Director, CFMTTI by his letter dated 19.5.03 informed that they were not aware at what stage the word "High Torque" was replaced by TU and that for all official purpose, the Budni test report represent the model as mentioned in the test report only. Thereafter, the Govt. again sought for clarification from the CFMTTI, and the Director again by his letter date 21.5.03 informed that the once a test report was released it remained valid till updated the tractor model was re submitted for test under batch test or initial commercial test. During such evaluation process and exchange of correspondences above mentioned, M and M by letter dated 27.5.03 informed the State Govt.
During such evaluation process and exchange of correspondences above mentioned, M and M by letter dated 27.5.03 informed the State Govt. i.e., Chief Engineer (Agriculture) Guwahati that Budni test report clearly indicated that the SI. No. of Tractor offered bore the TU series i.e. Tractor SI. No. TU 7436 IV and the serial No. of the first prototype of this series was TU 1001 and also the SI. No. of the Engine was TU 7436. Therefore the product that they would supply was 275 DI (High Torque) belonging to TU series and that all the technical specification supplied in the literature referred to as "275 DI (high Torque) were the same. According to M and M, for all purposes, the Model B-275 DI TU and Model B-275 DI (High Torque) were same and one belonged to the TU series. It was also asserted that in case of any further doubt, the model offered would be placed for further test for compliance with the Budni test report at their own costs. But thereafter, when the first Committee had its meeting on 31.5.03, the aforesaid letter of M and M dated 27.5.03 was not formally placed before the said committee for which without the benefit of said information, as revealed by letter dated 27.5.03 the first committee opined that the model offered by M and M was not acceptable. But since there was a substantial price difference involved between TAFE and M and M and both being reputed companies, it was felt that there would be considerable loss to the public exchequer and the poor farmers would also suffer substantially if the bid of TAFE was accepted and accordingly the second Committee was constituted by the Govt. to re-examine the matter in order to safeguard the public money and public interest without having any ulterior or extraneous motive in the matter. 14. The second Committee was required only to look into the basic issue whether non-consideration of the bid of M and M was on valid grounds and since the entire issue hinged on the two communications written by the CFMTTI, it was felt that it would be better to have the Director of CFMTTI present before the second Committee to give his views and accordingly, the Govt. of India was requested to approve the participation of the Director, CFMTTI in the meeting on 14.7.03.
of India was requested to approve the participation of the Director, CFMTTI in the meeting on 14.7.03. The said Director on his appearance before the Committee submitted his written opinion on 14.7.03 stating inter alia that though M and M had applied for a change of model name on 26.3.99 from B-275 DI (High Torque) to B-275 DI TU, however, the said change of name could not be affected, but he confirmed that so far as the technical specifications were concerned, there was no change in the specification of B-275DI TU and B-275 DI (High Torque) other than the model name. Considering the opinion of the Director that there being a definite link between Budni test report of B-275 DI (High Torque) and B-275 DI TU, and the specification of both of them being exactly same, the second Committee opined that offering of model name as B-275 DI TU could not be considered a material deviation as alleged and the second Committee after going through the materials on records was of the considered opinion that M and M committed a minor irregularity in not quoting the official name by which the model was tested by CFMTTI and the same could be waived in terms of Clause 24.3. ITB, as already noted, and the second Committee, accordingly, opined that the bid of M and M should not have been rejected on the ground of such minor irregularity in the nomenclature of model of tractor offered and the model offered by M and M may be correctly read as B 275 DI (High Torque) for the purpose of the present bid. 15. As regards the issue of overloading capacity in terms of Clause 2.90 a) of the Technical Specification under Section (VII) of BD relating the overloading capacity at rated RPM should not be less than 10%, raised by TAFE, the same was not gone into by the second Committee for bonafide reason. According to the Government, the overloading capacity of only 9.4% as shown in the Budni test report submitted by M and M, being not as per requirement of Clause 2.90 (a) could be waived considering the same to be a minor non-conformity in terms of 24.3 ITB.
According to the Government, the overloading capacity of only 9.4% as shown in the Budni test report submitted by M and M, being not as per requirement of Clause 2.90 (a) could be waived considering the same to be a minor non-conformity in terms of 24.3 ITB. The same waiver power was also exercised in favour of FAFE because when Clause 2.60 of Technical Specification prescribes that tractor should be "Piston type/gear type hydraulic pump with a lifting capacity of 1000 kg minimum horizontally," as per Budni test report the model offered by TAFE had the lifting capacity of 883 kg only against the required 1000 kg. Considering the same not being a material deviation, those bids were not declared as non responsive for minor technical deviation. 16. M and M has mainly submitted 2 (two) affidavits-in-opposition- one on 31.7.03 and the other on 11.8.03 (sworn on 7.8.03). In affidavit-in-opposition filed on 31.7.03, M and M has specifically raised preliminary objection as regards the maintainability of the present writ petition basically on 2 (two) ground (1) the writ petition is premature and (2) World Bank, being the lending institution and approving authority of the recommendation of the award of contract, was not arrayed as a party Respondent, being a necessary party. That apart, dismissing the contentions made in the writ petition, M and M in its counter affidavit dated 11.8.03 has alleged that TAFE had not only sought to mislead this Court, it had also suppressed the relevant and material facts. It is stated that as regards the allegation of violation of instruction relating to the deposit of Bid Security of Rs. 2.25 million separately against each Schedule, though they had not submitted said Bid Security separately, the Bid Security of Rs. 4.5 million was submitted in substantial requirement as stipulated in the NIT. In so far as the model B-275 DI TU offered by M and M is concerned, the model B-275 DI TU and B-275 DI (High Torque) are one and the same. In fact, the models so offered by the Respondent No. 4 B-275 DI (High Torque) has been commonly known as B-275 DI TU.
In so far as the model B-275 DI TU offered by M and M is concerned, the model B-275 DI TU and B-275 DI (High Torque) are one and the same. In fact, the models so offered by the Respondent No. 4 B-275 DI (High Torque) has been commonly known as B-275 DI TU. M and M have made effective communication to the State Respondents clarifying such position of the model and Annexure-B to the affidavit, being a letter dated 27.5.03 made by M and M to the Chief Engineer, Agriculture, Khanapara, Guwahati was one of such communications. By the said communication, M and M tried to remove all the doubts as regards the model so tested in CFMTTI, and the model offered by them for procurement by the Govt. Considering all these aspects and keeping in view the public interest, M and M, being the lowest bidder, was found to be suitable by the second Committee for award of the contract in question and there was no illegality or arbitrariness in considering the case of M and M. Further, it is contended that since the bid in question involved the finance from the World Bank and the constitution of Bid Evaluation Committee being prerogative of the State Respondents, the second Committee was fully justified in recommending the offer of M and M for approval to the World Bank. 17. CFMTTI though its Director Shri S.C. Jain has also filed an affidavit clarifying the position of the Budni test report. In its affidavit, the communications dated 19.5.03,21.5.03 and the opinion of the Director dated 14.7.03 alongwith other documents have been annexed as Annexure R-2, R-3, R-4 and R-7 respectively. By the communications dated 19.5.03 and 21.5.03, the CFMTTI informed the Govt. that CFMTTI tested the model Mahindra B-275 DI (High Torque) in October, 1999 and the institution was not aware of such word "High Torque" so replaced by "TU" and whenever any modification was done, re-testing either under variant of base model or as a new model was necessary. But by communication dated 30.5.03, the Director of CFMTTI intimated the Govt.
that CFMTTI tested the model Mahindra B-275 DI (High Torque) in October, 1999 and the institution was not aware of such word "High Torque" so replaced by "TU" and whenever any modification was done, re-testing either under variant of base model or as a new model was necessary. But by communication dated 30.5.03, the Director of CFMTTI intimated the Govt. Additional information by giving datas recorded in the test report No. T-387/799 which reflected that the tractor was manufactured in 1998 and Serial No. was TU 7436IV with Serial No. of the first prototype of this Series: TU 1001 when Engine Serial No. was also TU 7436 and confirmed that in column 18.15 (c) at Page 36 of Budni Test Report, the recommendations with regard to further updating of engine/transmission of TU Series existed. As per Annexure R-7, the Director, Mr. SC Jain, personally appeared on 14.7.03 before the second Committee and confirmed that both model B-275 DI TU and B-275 DI (High Torque) were same in technical specifications except the model name. 18. Assailing the proposed action of intendment of placement of order of purchase of tractors in question, initially Mr. Pathak, learned Sr. Counsel opening arguments on behalf of TAFE, has vehemently contended that since material deviations are writ large in the instant case, as already noticed hereinabove, the State Respondents are acting illegally and arbitrarily in proposing/deciding to allot the impugned procurement of the Tractors in question in favour of M and M. The entire action on the part of the State Respondents is unjust, unfair and unreasonable and smacks of favoritism and nepotism inasmuch as the first Committee which was constituted by the senior officers being experts, recommended the case of TAFE rejecting the offer of M and M, being the bid non-responsive but the said Committee was done away with without recording any reasons whatsoever and the second committee of four members was constituted with the sole purpose to accommodate M and M. According to Mr. Pathak, the said authorities, in dealing with the contractual matters, are duty bound to act fairly and justly and with all reasonableness. But in the instant case it appears that State Respondents No. 1, 2 and 3 have acted contrary to the established standards or norms in distribution of State largesse.
Pathak, the said authorities, in dealing with the contractual matters, are duty bound to act fairly and justly and with all reasonableness. But in the instant case it appears that State Respondents No. 1, 2 and 3 have acted contrary to the established standards or norms in distribution of State largesse. According to him, besides irrationality committed by the Government by blatantly ignoring the apparent material deviations with regard to deposit of Bid Security and the submission of test report of one non-offered model, the impugned State action has also demonstrated procedural impropriety by constituting the second Committee after replacing the duly constituted first committee without rhyme or reason. 19. Endorsing the arguments advanced by Mr. Pathak, Mr. K.N. Choudhury, learned Sr. Counsel who is also representing TAFE, has strenuously argued that the Govt. and/or the other authorities, though vested with the discretionary power, do not enjoy unbridled and unfettered discretion. According to him, the public authority must act reasonably and in good faith and also upon lawful and relevant grounds of public interest. Applying this fundamental principles of administrative law, Mr. Choudhury has tried to impress upon this Court that by the impugned proposed action the State Respondents have established their high handedness and absoluteness in exercising administrative discretion. Mr. Choudhury has confined his arguments primarily to four areas a) material deviations, b) vitiated decision making process, c) legitimate expectation and d) violation of principle of natural justice. To substantiate his submission on material deviations, he has essentially referred to (i) the deposit of Bid Security of Rs. 4.50 million by M and M instead of Rs. 2.25 million against the Scheduled 1 for 449 Nos. of Tractors which was glaringly contrary to the prescribed requirement of the rescheduled NIT and (ii) the submission of Budni test report regarding Model B-275 DI (High Torque) when offered Model was being B-275 DI TU, not being a tested one as per the mandatory requirement of Clause 1.10 a) of Technical Specification of BD itself. According to the learned Counsel, such offer of non tested model was rightly and judiciously rejected by the first committee but the Govt. arbitrarily and discriminatorily brushed aside such rejection and reconstituted the second Committee which recommended the case of M and M taking into consideration extrinsic evidence, though prohibited by Clause 24.4. ITB, of one Mr.
According to the learned Counsel, such offer of non tested model was rightly and judiciously rejected by the first committee but the Govt. arbitrarily and discriminatorily brushed aside such rejection and reconstituted the second Committee which recommended the case of M and M taking into consideration extrinsic evidence, though prohibited by Clause 24.4. ITB, of one Mr. SC Jain, Director CFMTTI who appeared personally before the second Committee on 14.7.03 and opined of his own that both the Models referred above were one and the same which was absolutely contrary to the initial Budni test report and the communications on clarification dated 19.5.03 and 21.5.03 (Annexures R-2 and R-3 to the Affidavit filed by CFMTTI as already referred). Therefore, these being the material deviations, the offer of M and M was correctly treated as non-responsive in terms Clause 24.4. ITB by the first committee but astoundingly the second Committee deliberately lost sight of those material deviations. In his second limb of argument, Mr. Choudhury has submitted that the entire decision making process has been vitiated by reconstitution of the second Committee itself and that too without recording any valid reason whatsoever. Such action itself depicted arbitrariness and favoritism and was against the public interest. Claiming legitimate expectation, it is contended that since the first Committee recommended the case of TAFE, a bonafide expectation has come to TAFE and accordingly it has locus standi to make a claim of legitimate expectation. But in this present case, such right has been arbitrarily and unfairly denied to TAFE. Lastly, it is argued on behalf of TAFE that the second Committee ought to have been considered the offer of TAFE also, being the only left out bidder, along with in case of M and M and such non consideration of its case has directly hit the concept of natural justice. 20. Defending the action of State Respondents Mr. A.K Phukan, learned Advocate General, Assam along with Mr.
20. Defending the action of State Respondents Mr. A.K Phukan, learned Advocate General, Assam along with Mr. H. Roy, learned State Counsel, relying on the materials available on records so placed, has apprised the Court that during the pendency of the writ petition where no interim order has been passed, the World Bank, being the approving authority, on 19.8.03 has already provided no objection to recommendations for award of the contract in question to the lowest evaluated responsive bidder M and M and in pursuance of such no objection of World Bank, the Government has also issued Notification of award for procurement of 449 Tractors of Schedule I with due information to the World Bank in New-Delhi vide Govt. Communication dated 1.9.03. The learned Advocate General has also informed that by the same communication, the World Bank has also been requested to approve the procurement of balance of 449 Nos. of Tractors of Scheduled 2 as desired by this Court but the World Bank vide Fax message of even date has regretted the request stating that the Bank will not be in a position to finance the additional Tractors proposed under Scheduled 2 as the procurement of 449 Nos of Tractors in Schedule I will fully cover the sanctioned amount. In view of such changed circumstances after the filing of the writ petition wherein TAFE has prayed for assurance of a Writ of Mandamus the Govt. to cancel/rescind from giving effect to the recommendation of the second Committee, as already quoted above, and the approval and subsequent Notification of award in favour of M and M having not been challenged by amending the writ petition by TAFE, the writ petition in the present form has stood infructuous. Apart from that, the learned Advocate General, entering into the merit of the case, has argued that the entire project of procurement of the Tractors in question has been taken by the Govt. under its policy decision as per tripartite agreement between the Government of India, Government of Assam and the World Bank for the benefit of the small farmers of the State and in the decision making process which is precisely under challenge there are different stages but what can be assailed is the final decision.
under its policy decision as per tripartite agreement between the Government of India, Government of Assam and the World Bank for the benefit of the small farmers of the State and in the decision making process which is precisely under challenge there are different stages but what can be assailed is the final decision. The recommendation of both the Committee in the instant case, are a part of decision making process and not final decision which has ultimately to be taken by the World Bank being the lending financial institution and hence TAFE cannot put its claim on the basis of the first Committee's recommendation attracting the principle of legitimate expectation. On behalf of Govt., Mr. H. Roy has submitted that the power of judicial review in contractual matters is well settled. In Government contract, when its action must be in conformity with the standards or norms without being arbitrary, irrational or irrelevant, certain measure of free play in the joints is always necessary for its functioning and the Committee so constituted while recommending the award of such contract should have some sort of latitude to select the best offer on terms and conditions prescribed taking into consideration the economic and social interest of the Nation. In the instant case, since the first committee's report dated 31.5.03 did not mention about the clarification made by the M and M vide its letter dated 27.5.03 and reply of CFMTTI dated 30.5.03 and also taking into account low price quoted by M and M so that the poor farmers of the States are not adversely affected, the second Committee, being comprised of equally experienced persons, was constituted to review the matter. The said committee did not take any decision on recommendation independently and decide to invite the Director,. CFMTTI in its first meeting on 7.7.03 and accordingly, the Jt. Secretary to the Govt. of India was requested to approved the presence of Mr. Jain, Director as a special invitee. His opinion dated 14.7.03 cannot, therefore, be said to be extrinsic evidence as alleged by learned Counsel for TAFE. More so, at all stage, all development in this regard have been duly intimated to the World Bank which has approved such action of the State and therefore, there is total transparency in the entire process which is apparent on the face of the record.
More so, at all stage, all development in this regard have been duly intimated to the World Bank which has approved such action of the State and therefore, there is total transparency in the entire process which is apparent on the face of the record. The Budni test report of CFMTTI and the subsequent opinion of its Director, being the sole expert in this field of testing of models, on the basis of which the recommendation has been made by the second Committee in favour of M and M, cannot be questioned because neither the Court nor any party is competent to examine the authenticity. It is further contended on behalf of the State Respondents that TAFE has already approached the Government as well as the World Bank raising all these allegations made in this writ petition and same has been duly considered by the World Bank and thereafter only the impugned proposal of the Govt. has been approved by the World Bank having considered all the aspects of the matter. Therefore, in the facts and circumstances of the case, if the Hon'ble Court interferes with the impugned action of the State as well as the World Bank, it would not only deprive the farmers of the State of the benefit of mechanization but also deprive the State of getting interest free loan from the agency of the World Bank on mere baseless allegation of an adversary. 21. On behalf of CFMTTI, Mr. C. Choudhury learned Sr. CGSC placing reliance on its counter affidavit, has stated that though earlier by two communications dated 19.5.03 and 21.5.03 (Annexures R-2 and R-3 in the affidavit respectively), the Institute informed the Government against its queries that it tested only B-275 DI (High Torque) and was not being aware of the replacement of the word "High Torque" by 'TU' but vide communication dated 30.5.03 as well as the opinion dated 14.7.03 rendered by its Director (Annexure-R-4 and R-7 to its affidavit) clarified the position removing the doubt as regards the models in question claiming that it was the same machine which undergone test at CFMTTI. 22. Supporting the recommendation for award of the contract in question in its favour and its subsequent approval by the World Bank, Mr. Dutta learned Sr.
22. Supporting the recommendation for award of the contract in question in its favour and its subsequent approval by the World Bank, Mr. Dutta learned Sr. Counsel appearing on behalf of M and M, has vehemently contended that since the preliminary objection as regard the maintainability of the writ petition in its present form has been raised in its affidavit in opposition dated 31.7.03, it is necessary and essential to decide the same first before delving upon the other points on merit as argued in this case. In the instant case, the World Bank, being the approving authority having its final say in the contract, has not been made a party and as TAFE has failed to make the World Bank a party in this writ petition, no relief can be given to the Writ Petitioner and on this score alone, this writ petition is liable to be dismissed at the threshold. Even if on consideration of the preliminary objection so raised, this Court holds this writ petition maintainable, according to Mr. Dutta, on merit also this writ petition deserves to be dismissed. The learned Sr. Counsel reiterating the statements and averments made in the counter affidavit dated 11.8.03, has outrightly rejected the four issues so advanced by Mr. Choudhury, learned Sr. Counsel on behalf of TAFE and also denied that there was any arbitrariness, favoritism or malafide on the part of the State Respondents in recommending the case of M and M. Arguing in tune with the submission of the learned Advocate General, Mr. Dutta has emphasized that as the contract in question has already been approved by the World Bank and also awarded in favour of M and M during the pendency of the writ proceeding, the instant writ petition has become meritless inasmuch as once the contract is awarded the judicial review is in such contractual matter is not available to the Writ Petitioner. 23. Following judicial authorities have been relied upon by the counsel of the rival parties: 1. AIR 1963 SC 786 (Udit Narain Singh Malpaharia v. Additional Member Board of Revenue and Anr.) 2. (1975) 1 SCC 559 (Ramchandra Keshav Adke (Dead) by L.Rs. and Ors. v. Govind Joti Chavare and Ors.) 3. AIR 1978 SC 851 (Mohinder Singh Gill and Anr. v. The Chief Election Commissioner, New Delhi and Ors.) 4. AIR 1985 SC 167 (Prabodh Verma and Ors. etc. etc.
(1975) 1 SCC 559 (Ramchandra Keshav Adke (Dead) by L.Rs. and Ors. v. Govind Joti Chavare and Ors.) 3. AIR 1978 SC 851 (Mohinder Singh Gill and Anr. v. The Chief Election Commissioner, New Delhi and Ors.) 4. AIR 1985 SC 167 (Prabodh Verma and Ors. etc. etc. v. State of Uttar Pradesh and Ors.) 5. AIR 1989 SC 1607 (Shri Anadi Mukta Sadguru Shree Muktajee Vandasjiswami Suvarna Jayanti Mahotsav Smarak Trust and Ors. v. V.R. Rudani and Ors.) 6. AIR 1990 SC 1031 (Mahabir Auto Stores and Ors. v. Indian Oil Corporation and Ors.) 7. (1990) 2 SCC 488 (G.J. Fernandez v. State of Karnataka and Ors.) 8. (1991) 4 SCC 578 (Chander Mohan Khanna v. National Council of Educational Research and Training and Ors.) 9. (1993) 3 SCC 71 (Food Corporation of India v. M/s. Kamdhenu Cattlefeed Industries) 10. (1993) 3 SCC 499 (Union of India and Ors. v. Hindustan Development Corporation and Ors.) 11. (1994) 6 SCC 651 (Tata Cellular v. Union of India) 12. (1995) 1 SCC 478 (New Horizons Limited and Anr. v. Union of India and Ors. 13. (1996) 2 SCC 405 (Delhi Science Forum and Ors. v. Union of India and Anr.) 14. (1997) 1 SCC 738 (Asia Foundation and Construction Ltd. v. Trafalgar House Construction (I) Ltd. and Ors.) 15. (1999) 1 SCC 492 (Raunaq International Ltd. v. I.V.R. Construction Ltd. and Ors.) 16. (1999) 2 SCC 672 (Union of India and Ors. v. Diljeet Singh and Anr.) 17. AIR 1999 Delhi 232 (Vikramaditya Jain (Minor) v. Union of India and Ors.) 18. (2000) 2 SCC 617 (Air India Ltd. v. Cochin International Airport Ltd. v. Cambatta Aviation Ltd. and Ors.) 19. (2000) 8 SCC 606 (Centre for Public Interest Litigation and Anr. v. Union of India and Ors.) 20. AIR 2001 3471 (State of West Bengal v. M.R. Mandal) 21. (2001) 2 SCC 451 (W.B. State Electricity Board v. Patel Engineering Co. Ltd. and Ors.) and 22. (2002) 8 SCC 177 (Continental Construction Ltd. v. Tehri Hydro Development Corporation Ltd. and Anr.) 24. Law pertaining to award of a contract by the State, its undertakings, corporations and bodies acting as instrumentalities and agencies of the Government has been already settled. In granting contract the State, its undertakings, corporations, instrumentalities and agencies are bound to adhere to the norms, standards and procedure laid down by them and cannot depart from them arbitrarily.
Law pertaining to award of a contract by the State, its undertakings, corporations and bodies acting as instrumentalities and agencies of the Government has been already settled. In granting contract the State, its undertakings, corporations, instrumentalities and agencies are bound to adhere to the norms, standards and procedure laid down by them and cannot depart from them arbitrarily. They can choose their own method to arrive at a decision. But the power so vested upon such administrative authorities should be exercised in such a manner which can satisfy the test of Article14 of the Constitution. If necessary for the purpose of satisfying as to whether the grant of Government contract has been made strictly in terms of standards and norms prescribed, which can be held not only reasonable, rational but also in the public interest, it can be exercised by the Courts. In exercising the power of judicial review, the Court should always keep the larger public interest in mind in order to decide whether its intervention is called for or not. The administrative decision relating to awarding of contract taken by the statutory authority or a body constituted under an administrative order can be questioned preliminarily on the grounds: (i) decision has been taken in bad faith, (ii) decision is based on irrational and irrelevant considerations, (iii) decision has been taken without following the prescribed procedure which is imperative in nature. However, there are inherent limitations in the exercise of the power of judicial review. It should be restricted to whether (i) a decision making authority exceeded its power, (ii) committed an error of law, (iii) committed a breach of the rules of natural justice, (iv) reached a decision which not reasonable authority would have reached or and (v) abused its power. Interference of a Court of law has been prohibited particularly when there has been no allegation of malice or ulterior motive and especially when the Court has not found any malafide or favoritism in granting such contract. The Court has no jurisdiction to determine whether a particular policy or particular decision taken in the fulfilment of that policy/decision is fair. It is only intended to prevent arbitrariness or favouritism and it is exercised in the larger public interest.
The Court has no jurisdiction to determine whether a particular policy or particular decision taken in the fulfilment of that policy/decision is fair. It is only intended to prevent arbitrariness or favouritism and it is exercised in the larger public interest. Since a contract would either involve expenditure from the State exchequer or augmentation of public revenue, consequently the discretion in the matter of selection of the person for award of the contract has to be exercised keeping in view the public interest involved in such selection. Ultimately the extent of judicial review to see whether the administrative authority has acted fairly shall vary from case to case. Nonetheless, for an administrative authority exercising its administrative function, certain measure of free play in the joints is necessary. It is also recognized that while granting contract, a statutory authority or the body so constituted, should have latitude to select the best offers on the terms and conditions prescribed, taking into account the economic and social interest of the nation. Unless any authority aggrieved, satisfies the Court that ultimate decision in respect of the selection has been vitiated, normally the Courts should be reluctant to interfere with the same. 25. I have given my anxious consideration to the submissions of the learned Counsel for the rival parties and also meticulously perused the materials available on record so produced before this Court by the State Counsel. This Court fully agrees with the submission made by Mr. Dutta as regards taking up the preliminary issue of maintainability first before going to consider the other submissions on merit. The Apex Court in a recent decision reported in (2003) 7 SCC 410 (National Highways Authority of India v. Ganga Enterprises and Anr.) held that in a contractual dispute before the High Court under Article 226 when question of maintainability of the petition has also been raised, such question of maintainability has to be considered foremost. Therefore, in view of the above decision, this Court does proceed to take up the question of the maintainability first as it would go to the root of the matter. 26. It is admitted that the project in question has been financed by the World Bank rendering interest free credit to the Government of Assam.
Therefore, in view of the above decision, this Court does proceed to take up the question of the maintainability first as it would go to the root of the matter. 26. It is admitted that the project in question has been financed by the World Bank rendering interest free credit to the Government of Assam. Since the project is mainly aimed for the benefit of small and marginal farmers of the State of Assam and involves high cost for procurement of the Tractors in question, the Government has to fall back upon the financial institution like World Bank for grant of loan or subsidy. When such financial Institution like World Bank grants such huge loan or credit, it is well known that they always insist that any project for which credit has been sanctioned must be carried out within the specifications and guidelines and also according to the procedure prescribed by it. 27. In the instant case Clauses 1 and 2 of the NIT dated 12.2.03 specifically mentioned that the Govt. of India received a credit from IDA towards the cost of ARIASP and it intended to apply the part of the proceed to this credit payment under the contract for procurement of the Tractors in question and bidding would be conducted through ICB procedures specified in World Bank's guidelines i.e. procurement under International Bank for Reconstruction and Development (IBRD) loans and IDA credits and was open to all the bidders for eligible countries as defined in the guidelines. From NIT itself, therefore, it is clear that credit will be financed by the IDA, generally known as World Bank, the name that has come to be used for the IRDB and IDA. These organizations under World Bank Group provide low interest loans, interest free credit and grants to developing countries. The World Bank is having its Headquarters in Washington, D.C., U.S.A. with its Branches in the member countries including India in New-Delhi. The World Bank is not a 'Bank' in the common sense. It is one of the United Nations' specialized agencies and is made up of 184 member countries. These countries are jointly responsible for how the institution is financed and its money is spent. It is well known that the World's low income countries generally cannot borrow money in international markets or can only do so at high interest rate.
It is one of the United Nations' specialized agencies and is made up of 184 member countries. These countries are jointly responsible for how the institution is financed and its money is spent. It is well known that the World's low income countries generally cannot borrow money in international markets or can only do so at high interest rate. Therefore, in addition to direct contributions and loans from developed countries, these low income countries receive grants, interest free loans and technical assistance from the World Bank to enable them to provide basic services. Interest free credit, grant and finances come from IDA, the World's largest source of concessional assistance. Hence it is seen that World Bank is not only the funding institution but also a privy in the action of granting the contract. The award of contract depends on the financial approval of the World Bank. The World Bank has the prerogative not to sanction the credit if contract is not awarded adhering to its own guidelines and specifications. 28. In Asia Foundation's case (supra) commonly called as AFCONS case, an issue similar to the present case as regards the grant of loan by Asian Development Bank came up before the Apex Court. It would be useful to notice the concise factual position of AFCONS case herein. For creation of mechanized handling facility of coal at Paradip Port, the Asian Development Bank (for short "ADB") at Manila agreed to give loan to the extent 134.85 million US dollars. For the purpose of completion of the said project, a pre qualification notice was issued inviting offers and on receipt of the pre-qualification documents for evaluation, the consultants submitted their evaluation recommending six firms including Asia Foundation and Construction Ltd. and Trafalgar House Construction (I) Ltd. for the construction of the wharf deck which was intended to be constructed from a part of the amount of loan agreed to be given by ADB. The tender Committee of the Port Trust reviewed the evaluation made by the consultant and recommended all those six firms. The Board of Trustees of Paradip Port Trust also approved the said six firms and then invited bids. Out of those six firms, only three firms including AFCONS and Trafalgar submitted their bids. As per prescribed procedure the bids were open and reprocessed. The consultant found the Trafalgar's bid being the lowest.
The Board of Trustees of Paradip Port Trust also approved the said six firms and then invited bids. Out of those six firms, only three firms including AFCONS and Trafalgar submitted their bids. As per prescribed procedure the bids were open and reprocessed. The consultant found the Trafalgar's bid being the lowest. The Tender Committee of the Paradip Port Trust accepted the recommendation of the consultants and submitted the same for approval to the ADB. The Bank refused to support the views of the Bid Evaluation Report and recommended the award of contract to AFCONS which according to it was the lowest evaluated substantive responsive bidder. Since substantial amount of loan was given by the Bank, the Port Trust again asked their consultants about the earlier bid amount. The Special Tender Committee again met and communicated its views to the Bank and the Bank this time wrote back that the contract be awarded to the Appellant and that in case of the award of contract to any one else other than AFCONS or resort to rebidding, no loan would be financed by it. Thereafter, the Tender Committee again reconsidered the matter and the contract was awarded to AFCONS. Trafalgar approached the High Court for quashing the award and the High Court quashed its decision to award the contract to AFCONS directing Port Trust to effect negotiations with AFCONS alongwith Trafalgar giving them opportunity to make fresh offers and then to award the contract to the lowest bidder. Being aggrieved by the quashment of such award given by the authority. AFCONS approached the Apex Court. It was observed by the Apex Court that the larger public interest has to be kept in view in cases where high cost Govt. projects based on loan from international financial institutions such as ADB or the World Bank and therefore, acceptance of tender by the government in accordance with the specifications or opinion of such Institution would not be arbitrary or illegal and in absence of exercise of power for collateral purpose, ulterior motive, favouritism, malice or malafides Court's interference with the award of contract was not called for, and accordingly, it was directed that contract awarded in favour of AFCONS be affirmed. In the case in hand, it is found that the World Bank is the funding and approving authority agreed to give credit.
In the case in hand, it is found that the World Bank is the funding and approving authority agreed to give credit. Once the World Bank approves the recommendation so placed before it by the second Committee, TAFE is not entitled to get any relief as claimed in this writ petition unless such approval/no objection of the World Bank is challenged but concededly the same has not been done in the instant case. 29. In Prabodh Verma and Ors. v. State of Uttar Pradesh and Ors. reported in AIR 1985 SC 167 the Supreme Court in paragraphs 28 and 50 held that the High Court ought not to hear and dispose of a writ petition under Article 226 praying for a Writ of Certiorari or Mandamus without the persons being necessary parties who would be vitally affected by its judgment and if the Writ Petitioners refused to array them as party the High Court ought to dismiss the petition for non joinder of necessary parties. 30. In view of the above factual position of AFCONS case as well as the decisions of the Apex Court above noticed, it appears that the World Bank, being the approving financial Institution, is a necessary party in this writ proceeding. Mr. Choudhury, learned Counsel for TAFE has forcefully contended that TAFE has not prayed for any relief against the World Bank because its entire grievance is against the State-Respondents' action of constitution of the second Committee that has acted arbitrarily and malafide and with bias in recommending the case of M and M. Furthermore, the World Bank, not being a State under Article 226 of the Constitution, is not amenable to the writ jurisdiction and therefore, the World Bank has not been arrayed as party Respondents. This Court is disinclined to approve such submission of Mr. Choudhury as it does not find any substance therein.
This Court is disinclined to approve such submission of Mr. Choudhury as it does not find any substance therein. It is apparent on the face of the record that TAFE being aware of the World Bank's importance in this project, wrote to World Bank on 16.7.03 and 19.7.03 after recommendation of award of contract in favour of M and M by the second Committee on 14.7.03 in terms of Clauses 11, 12 and 13 of Guidance to the Bidders under Procurement Guidelines which provides that the bidders are free to send their communications on issues and questions either to the Borrower or to the Banker write to the Bank directly. It is clearly provided therein that the communication received from the bidders after opening of the bid will be handled as follows: (i) in case of contract not subject to prior review of the Bank, the communication will be sent to the borrower for due consideration and proper action if any and his will be reviewed during subsequent supervision of the project by the Bank staff and (ii) in case of contract subject to prior review process, the communication will be examined by the Bank in consultation with the Borrower and the Bank's review will not be completed until communication is fully examined and considered. Herein it appears from the record that after such communication made by TAFE, the World Bank by its letter dated 22.7.03 asked the Government to forward parawise comments on the issue raised in the complaint made by TAFE in reply to which the Government vide its communication dated 2.8.03 sent the parawise comments against letter dated July 16 and 17/03 regarding the issue raised by TAFE and the World Bank vide its communication dated 19.8.03 on consideration of the parawise comments dated 2.8.03 granted no objection to the recommendation for award in favour of M and M after reviewing Government evaluation report based on the opinion. That being the position, there cannot be any second opinion that the World Bank is a necessary party and TAFE ought to have arrayed them as party Respondent. 31. Even as, in view of the Court, it is not imperative to embark upon the question of amenability of the World Bank to the writ jurisdiction as referred by Mr.
That being the position, there cannot be any second opinion that the World Bank is a necessary party and TAFE ought to have arrayed them as party Respondent. 31. Even as, in view of the Court, it is not imperative to embark upon the question of amenability of the World Bank to the writ jurisdiction as referred by Mr. Choudhury relying on a decision of Delhi High Court, reported in AIR 1999 Del 232 (Vikramaditya Jain (Minor) v. Union of India and Ors.) after holding the World Bank being a necessary party in the writ proceeding, it is felt that the issue deserves consideration in view of the expansion of the area of the term "authority" under Article 226of the Constitution by judicial activism. In Anandi Mukta Sadguru Shree Muktajee Vandasjiswami Suvarna Jayanti Mahotsav Smarak Trust and Ors. v. V.R. Rudani and Ors. reported in AIR 1989 SC 1607 , the Supreme Court widening the meaning of 'authority' under Article 226 via-a-vis Article 12 in paragraphs 19 and 21 observed as follows: (19) The term "authority" used in Article 226, in the context, must receive a liberal meaning unlike the term in Article 12. Article 12 is relevant only for the purpose of enforcement of fundamental rights under Article 32. Article226 confers power on the High Courts to issue writs for enforcement of the fundamental rights as well as non-fundamental rights. The words "any person or authority" used in Article 226 are, therefore, not to be confined only to statutory authorities and instrumentalities of the State. They may cover any other person or body performing public duty. The form of the body concerned is not very much relevant. What is relevant is the nature of the duty imposed on the body. The duty must be judged in the light of positive obligation owed by the person or authority to the affected party. No matter by what means the duty is imposed. If a positive obligation exists mandamus cannot be denied. 21. Here again we may point out that mandamus cannot be denied on the ground that the duty to be enforced is not imposed by the statute. Commenting on the development of this law, professor De Smith States: "To be enforceable by mandamus a public duty does not necessarily have to be one imposed by statute.
21. Here again we may point out that mandamus cannot be denied on the ground that the duty to be enforced is not imposed by the statute. Commenting on the development of this law, professor De Smith States: "To be enforceable by mandamus a public duty does not necessarily have to be one imposed by statute. It may be sufficient for the duty to have been imposed by charter, common law, custom or even contract", (Judicial Review of Administrative Act 4th Ed. P. 540). We share this view. The judicial control over the fast expanding maze of bodies affecting the rights of the people should not be put into water-tight compartment. It should remain flexible to meet the requirements of variable circumstances. Mandamus is a very wide remedy which must be easily available 'to reach injustice wherever it is found'. Technicalities should not come in the way of granting that relief under Article 226.... Following the views expressed by the Apex Court in the above quoted paragraphs, this Court has no hesitation to hold that the World Bank being a financial Institution and one of the united Nation specialized agencies made up of 184 member countries including India has been performing a public duty and as such, is an authority within the meaning of Article 226 of the Constitution. The World Bank works to bridge the divide between the rich and poor countries in the globe and turns those countries resources in the poor countries growth. Being one of the World's largest sources of development assistance, the World Bank supports the efforts of developing country governments to build schools and health centres, provide water and electricity and fight disease including HIV/AIDS epidemic, protect the environment and promote other welfare programme for the poors. In fact, it aims to carry out measures of public benefit. 32. Since the World Bank is a necessary party and the Writ Petitioner has refused to join it in this writ proceeding as party Respondent, this writ petition is liable to be dismissed for non joinder of necessary parties. More so, during the pendency of the writ petition, the recommendation of the award of contract in question in favour of M and M has been finalized by the grant of approval and no objection on the part of World Bank and its subsequent Notifications of the award has also been issued by the Government.
More so, during the pendency of the writ petition, the recommendation of the award of contract in question in favour of M and M has been finalized by the grant of approval and no objection on the part of World Bank and its subsequent Notifications of the award has also been issued by the Government. But TAFE has not yet challenged such approval/no objection of the World Bank and subsequent Notification awarding the contract in favour of M and M by the State Respondents. In view of the same, no relief can be granted to the Writ Petitioner and it has been rightly argued by the learned Advocate General, Assam as well as Mr. Dutta, learned Sr. Counsel for M and M that the matter has become infructuous. 33. In view of what has been discussed and observed above, in deciding the preliminary issue, this Court is of the firm view that the writ petition in its present form is not maintainable. Since the writ petition is being held to be not maintainable, it would be otiose to proceed to decide the issues on merit raised by the learned Counsel for the parties. Reliance has been placed on a precedent in Sheo Nath Singh v. The Appellate Assistant Commissioner of Income Tax (Central), Calcutta and Ors. reported in AIR 1971 SC 2451 wherein it was observed that in a writ petition under Article 226, the correct course for High Court after sustaining the preliminary objection of the Respondent is not to proceed to decide the question on merit but to dismiss writ petition. 34. In the result, this writ petition fails and stands dismissed. There shall no order as to costs. Petition dismissed