Computer Associated Industries of Mizoram v. Secretary to The Govt. of Mizoram
2004-04-08
BIPLAB KUMAR SHARMA
body2004
DigiLaw.ai
JUDGMENT Biplab Kumar Sharma, J. 1. Amidst the litigation in the present writ proceeding relating to the methodology adopted by the State Govt. for procurement of computers, it is the school children of the State who have been deprived of their much cherished dream of computer education. Needless to say that they are not even aware of and cannot even conceive of the present proceeding. 2. It is the legality and validity of the decision and action of the State Govt. towards procuring computers, their accessories, installation thereof and computer furniture for computer education to the school children which are under challenge in the writ proceeding initiated by the Petitioner which is an Association of 18 registered firms having their offices at Aizawl, Mizoram. According to the Petitioner, the firms under writ proceeding are dealing in computer business and its accessories. The grievance of the Petitioner is in respect of the impugned letter dated 23.10.02 by which the Respondent No. 3 was requested by the Govt. of Mizoram in the General Administration Department to take necessary action for procurement of computer system and computer furniture as per the terms and conditions laid down in Annexure-1 to the said letter. 3. The Govt. of Mizoram received an amount of Rs. 3.44 crores from the Central Govt. under the Grants of 11th Finance Commission for procurement of 400 sets of computer for providing computer education to the school children along with furniture etc. for 8 districts of Mizoram. The amount has already been received by the State Govt. and the same is to be distributed amongst the 8 districts equally which comes to Rs. 43 lakhs each. Rs. 34.75 lakhs each is to be used for procurement of computers and the balance amount of Rs. 8.25 lakhs for furniture and other goods. It is the grievance of the Petitioner that the State Govt. without any valid reasons or justification issued the impugned letter dated 23.10.02 to the Respondent No. 3 requesting it to make arrangement for supply of the computers and the furniture. According to the Petitioner such a course of action taken by the Govt. of Mizoram without recourse to tender system is arbitrary, unreasonable and lacks bonafide exercise of power.
without any valid reasons or justification issued the impugned letter dated 23.10.02 to the Respondent No. 3 requesting it to make arrangement for supply of the computers and the furniture. According to the Petitioner such a course of action taken by the Govt. of Mizoram without recourse to tender system is arbitrary, unreasonable and lacks bonafide exercise of power. The Petitioner has admitted that the Respondent No. 3 is a Public Sector Undertaking formed for development of electronics in Mizoram and that its entire share capital is owned by the State Govt. 4. The Petitioner has challenged the decision and action of the Respondents in awarding the task of procurement of the computers and its accessories to the Respondent No. 3 inter alia on the ground that the Respondent No. 3 was not a Govt. approved firm for supply of computers and its accessories on 23.10.02 when the impugned letter was issued to it by the Govt. of Mizoram. It became an approved firm only on 10.01.03. Similarly at the time of issuance of the impugned order the Respondent No. 3 was not registered with the Taxation Department and it was only on 24.01.03 the said Public Sector Undertaking was registered with the taxation Department. On the other hand, Govt. has approved many of the firms under the Petitioner's association as Govt. approved firms. It is the case of the Petitioner that the State Govt. did not follow any procedure while issuing the impugned letter to the Respondent No. 3, which is instrumentality of the State. Since the Respondent No. 3 will procure the computers and the accessories from the HCL Limited only, such entrustment of task is in violation of all norms and standards in granting the State largesse. Further stand of the Petitioner is that since its members deal with computer system and on many occasions they have supplied computers and accessories to the State Govt. they are equally eligible and competent for the job and the action of the State Govt. to deal with the Respondent No. 3 alone has deprived them of their right of competition. According to them they are authorised dealers and agents of major computer companies dealing in India. 5. The Petitioner admitted that the Respondent No. 3 is an agency of the State with its entire budget is being met by the State Govt.
to deal with the Respondent No. 3 alone has deprived them of their right of competition. According to them they are authorised dealers and agents of major computer companies dealing in India. 5. The Petitioner admitted that the Respondent No. 3 is an agency of the State with its entire budget is being met by the State Govt. and its management and policy are under the deep and pervasive control of the State Govt. The Petitioner has taken the stand that the State Govt. could not have picked up the Respondent No. 3 to the deprivation of the members of the Petitioner who are local entrepreneurs. It is on this score the Petitioner has emphasized the need in issuing of tenders/quotations for supply of the computers and accessories. According to them the Respondent No. 3 alone cannot be the recipient/beneficiaries of the State largesse in violation of all prescribed norms of laws of the land. In a nutshell, it is the case of the Petitioner that the State Govt. ought to have procured the computers and the accessories through tender system instead of giving the task to the Respondent No. 3 which would have facilitated participation of the members of the Petitioner's Association in such tender process. By filing an additional affidavit, the Petitioner's Association has made a statement that they are ready and willing to supply computers to the Govt. under the scheme in question at lesser rate than that of the Respondent No. 3. 6. The Respondents have filed their affidavit denying the contentions raised in the writ petition. Apart from justifying its action the Respondents have also taken the ground of delay and latches on the part of the Petitioner in approaching the writ court. According to them neither the Petitioner nor its members are registered under the Preferential Store Purchase Rules, 1994 as required under the provisions of Rule 6(1) of the said Rules. The stand in the affidavit is that the Respondent No. 3 was placed with the supply order as permissible under Clause 8 of the guidelines for regulating supply for public service issued by the Finance Department, Govt.
The stand in the affidavit is that the Respondent No. 3 was placed with the supply order as permissible under Clause 8 of the guidelines for regulating supply for public service issued by the Finance Department, Govt. of Mizoram vide Office Memorandum dated 18.8.94 which is quoted below: Purchase can, however, be made without call of Tender Quotation in DGS and D rate contract and in respect of proprietary items for which there is only one Manufacturer in the Country and as such other items listed in Schedule-I of the Preferential Store Purchase Rules, 1986 including those manufactured/produced by Government undertakings such as MAHCO, MIFCO, MHHDC, ZENICS etc. 7. The Respondents in their affidavit have stated that the State Govt. decided to assign the job to the Respondent No. 3 in order to ensure the procurement of quality products. The project in question has been sanctioned by the 11 Finance Commission for the benefit of school children to make them computer literate. Apart from taking the process for procurement of computer and accessories of its own through the Respondent No. 3 towards utilization of the fund sanctioned by the Central Govt., other infrastructure such as construction of building for computer centres in all 8 districts headquarters have been completed. Further stand in the affidavit is that its action plan in this regard has been duly approved by the State Level Empowered Committee (SLEC). According to the Respondents there is nothing wrong in procuring the computers and their accessories for the purpose in question through the Respondent No. 3 which is wholly owned by the State having certain objectives as a business origination. It has its own memorandum of Undertaking with a well reputed computer manufacturer of the nation vide HCL Ltd. and as such there is no illegality in procuring the same through Respondent No. 3. According to them the HCL has various qualities and comparative advantages over the local computer dealers. The further stand in the affidavit is that the members of the Petitioner's Association are only traders sailing assembled computers and in some cases having no authority about copyright of hardware and software. On the other hand, in respect of those areas the Respondent No. 3 is bound by the aforesaid MOU.
The further stand in the affidavit is that the members of the Petitioner's Association are only traders sailing assembled computers and in some cases having no authority about copyright of hardware and software. On the other hand, in respect of those areas the Respondent No. 3 is bound by the aforesaid MOU. As regards the sentiment expressed by the Petitioner that the local entrepreneurs have been deprived of their right of competition, the Respondents have stated in their affidavit that the Respondent No. 3 is in the equal footing, rather is in the advantageous position being the State Govt. owned corporation and bound to fulfill the aspiration of the State. In a nutshell, the stand of the Govt. in their affidavit is that the impugned action has been taken in public interest and there is no question of privation of the right of the Petitioner. 8. The Respondents in their affidavit have further stated that pursuant to the impugned letter dated 23.10.02, the Respondent No. 3 has placed its orders to HCL vide their supply order dated 24.10.02 with strict terms for ensuring the inauguration of the 8 district centres on 26.01.03. Pursuant to such order, the entire consignment has been made ready for dispatch at the courier end by mid November, 2003 itself. Since the entire process of shipment of the materials being at the verge of completion, the interference of this Court is uncalled for. 9. I have heard Mr. Michael Zothankhuma, learned Counsel for the Petitioner. I have also heard Mr. P. Pathak, learned Senior Counsel and Advocate General, Govt. of Mizoram assisted by Mr. A. Dasgupta, leaned State Counsel. Mr. Dasgupta has produced the relevant file in which the discussion, deliberation and final decision towards awarding the task to the Respondent No. 3 were initiated and completed. 10. Mr. Michael, learned Counsel for the Petitioner submitted that the State Respondents ought to have floated tenders in such a matter giving equal opportunity to all eligible contenders instead of confining the deal only with the Respondent No. 3. He submitted that the Respondent No. 3 at the time of issuance of the impugned letter dated 23.10.02 was not in the Govt. approved list and was also not registered with taxation Department. He further submitted that the Respondent No. 3 although is a Govt.
He submitted that the Respondent No. 3 at the time of issuance of the impugned letter dated 23.10.02 was not in the Govt. approved list and was also not registered with taxation Department. He further submitted that the Respondent No. 3 although is a Govt. Corporation, it does not have the infrastructure and adequate modalities towards procurement of the computers and their accessories. He further submitted that the State Govt. ought not have decided to go for only the HCL products but should have gone for competitive bidding keeping open the choice on other products as well With such a state of affair the action on the part of the Govt. lacks transparency, reasonableness and fair play on the part of the State Govt. Finally, he submitted that the members of the Petitioner's association are ready to supply computers and their accessories at a lesser rate than the Respondent No. 3. He placed reliance on the following decisions: (a) (1975) 1 SCC 70 (M/s. Erusian Equipment v. State of W.B.) (b) (1979) 3 SCC 489 (Ramana Dayaram Shetty v. International Airport) (c) (1980) 4 SCC 1 (M/s. Kasturilal v. State of J and K) (d) (1993) 1 SCC 71 (F.C.I. v. Kamdhenu Cattle Feed Industries) (e) (1994) 6 SCC 651 (Tata Cellular v. Union of India) (f) (2000) 2 SCC 617 (Air India Ltd. v. Cochin International Airport) (g) AIR 1996 J & K 57 (M/s. ABC Enterprises v. M/s. Bodhraj Charan Singh) 11. Mr. P. Pathak, learned Advocate General, Govt. of Mizoram, on the other hand, supported the State action. According to him the Respondent No. 3 being a wholly owned Govt. Corporation which position has also been admitted by the Petitioner, there is no wrong in entrusting the job to it. He submitted that it is not a case of preferring a private individual to other private individuals or parties. Placing reliance on record produced on behalf of the State Respondents, Mr. Pathak submitted that there is no arbitrariness, unreasonableness or any malafide exercise of power in the impugned action. He submitted that the fund was allocated by the Central Govt. for a definite purpose and the State Govt. utilised the same for the benefit of the school children by way of entrusting the job to its own corporation, i.e. the Respondent No. 3. He submitted that the entire action of the State Govt.
He submitted that the fund was allocated by the Central Govt. for a definite purpose and the State Govt. utilised the same for the benefit of the school children by way of entrusting the job to its own corporation, i.e. the Respondent No. 3. He submitted that the entire action of the State Govt. being founded on sound public policy, no interference is called for in exercise of power of judicial review under Article 226 of the Constitution of India. He placed reliance on the following decisions to buttress his argument: (a) (1980) 4 SCC 1 (M/s. Kasturilal v. State of J and K) (b) (1986) 4 SCC 566 (State of M.P. v. Nandlal Jaiswal) (c) (1987) 2 SCC 295 (Sachdanand Pandey v. State of W.B.) (d) (1993) 1 SCC 71 (F.C.I. v. M/s. Kamdhenu Cattle Feed Industries) (e) (1997) 9 SCC 495 (Krisnan Kakanth v. Govt. of Kerala) (f) (2000) 8 SCC 262 (Netai Bag v. State of W.B.) (g) AIR 1988 SC 157 (Haji TM Hassan v. Kerala Finance Corporation) 12. Before considering the rival submissions made on behalf of the parties which needless to say will have to be scrutinized and understood on the basis of records produced on behalf of the State, I would like to deal with the records as contained in the file produced on behalf of the State Respondents in support of their impugned action, there is no dispute rather admitted by the writ Petitioner by making categorical statement in the writ petition that the Respondent No. 3 is an agency of the State with its entire budget being met by the State Govt. and that it is under deep and pervasive control of the State. The writ Petitioner has admitted that their Respondent No. 3 is a public sector undertaking which has been formed for development of electronics in Mizoram and its share capital is borne by the State Govt. Thus, the Respondent No. 3 is not a private individual or an ordinary independent organization. It is the instrumentality of the State through which the State Govt. wants to procure the computers on the basis of the Central fund allocated for a special purpose. On perusal of the records, the following revelations are found. 13.
Thus, the Respondent No. 3 is not a private individual or an ordinary independent organization. It is the instrumentality of the State through which the State Govt. wants to procure the computers on the basis of the Central fund allocated for a special purpose. On perusal of the records, the following revelations are found. 13. A meeting was held on 10.05.02 under the Chairmanship of Chief Secretary of the State to review the progress of various schemes pertaining to General Administration Department (GAD) such as upgradation of standards of District administration in the 5 new Districts and setting up of computer education for school children in all the district headquarters under the 11th Finance Commission. Dealing with the agenda of setting up of Computer Education Centres for school children, the minutes of the meeting recorded the status of construction of building for setting up of centres as reported by the respective Deputy Commissioners, A conscientious decision was taken to speed up the process and rationalization of the centres and a decision was arrived at that the Respondent No. 3 being a Govt. owned Corporation should be considered for supply of all computer hardware and peripherals including computer chairs in the centres. Further decision was taken that the GAD would work out the detailed terms and conditions for the same and the procurement should start latest by 30th June, 2002. This was follows by a letter dated 20.06.02 addressed to the Managing Director of the Respondent No. 3 conveying the decision of the SLEC under the chairmanship of the Chief Secretary to procure the computer items and he was requested to attend the office chamber of the Additional Secretary GAD on 30.07.02. 14. Further discussion was held in the office chamber of the Additional Secretary, GAD on 11.07.02 to consider the modes of supply of computer and its peripherals by the Respondent No. 3 to various District headquarters. The meeting recorded that the quality of computers have considerable improved while the prices have decreased, thus the estimate of the computer system prepared in the initial stage of the scheme might not be accurate. Recording the other aspects of the matter the meeting felt the necessity to constitute two study groups to be headed by the officers of the State and their Respondent No. 3 with a direction to submit their report positively by 10.08.02. 15.
Recording the other aspects of the matter the meeting felt the necessity to constitute two study groups to be headed by the officers of the State and their Respondent No. 3 with a direction to submit their report positively by 10.08.02. 15. After the aforesaid action had been taken, a further meeting was held on 12.09.02 in the office chamber of the Chief Secretary with the officers of the Finance, GAD, SCERT, Respondent No. 3 etc. on the agenda of revision of computer configuration and teaching/school curriculum for computer centres (8 Districts), In the said meeting the decision of SLEC under the aegis of Chief Secretary to hand over the task of procurement of computer hardware and software to the Respondent No. 3 was recorded. After a threadbare discussion of the matter it was proposed that the Respondent No. 3 should be given a green signal to go ahead with the procurement setting specific terms and conditions as enumerated in the minutes of the meeting which are as follows: i) All branded and legal software should be supplied. ii) All supplies should F.O.R. District Headquarters. No transport cost should be added iii) Fixing/fitting/commissioning/Trial run should be done by the supplier/ZENICS at no additional cost. iv) Cost of hardware and software per centre should also cover the service charges that may occur during the installation by the ZENICS. v) ZENICS should provide/obtain dependable AMC, free of cost, for a minimum period of 12 months from the date of commissioning of the Centre. vi) All equipments should be covered by dependable voltage stabilizing systems/UPS vii) ZENICS should obtain adequate security depositor from vendors/supplier before supply of equipments. General Administration Department may even consider obtaining a set of agreement covering all the above terms and conditions. 16. The aforesaid meeting dated 12.09.02 was preceded by yet another meeting held on 03.09.02 (Annexure IV to the affidavit-in-opposition) under the chairmanship of Chief Secretary in the presence of the concerned officers. In the said meeting it was noticed that due to revision of rates in respect of computer configuration/peripherals in view of rapid advances in information technology and falling prices of computers a substantial amount of savings from funds already allocated was foreseen and it was indicated that such savings might be utilised to meet other contingent expenditure. In the said meeting the proposed terms and conditions for procurement of computers were accepted in principle.
In the said meeting the proposed terms and conditions for procurement of computers were accepted in principle. The meeting authorised the drafting of the detailed agreement between GAD and the Respondent No. 3 with modification whenever necessary. The Respondent No. 3 was authorised to contact with HCL Ltd. to procure branded and good quality products. 17. It was upon such threadbare discussion, deliberation and consensus the impugned letter dated 23.10.02 was issued based on which much progress has already been made towards procurement of the computers. Pursuant to the said letter dated 24.10.02, the entire consignment has been made ready for dispatch at the courier end by mid November, 2003 itself. The entire consignment has been warehoused for over three months with the courier company and thus the entire process of shipment of the materials is at the verge of completion. However, the interim order passed has stalled the entire process. 18. I have gone through the notings in the official file through which the step by step process was initiated and completed towards procurement of the computers through the Respondent No. 3. A decision was taken through the SLEC and the Finance Department was also involved. The records revealed that the construction of District Centres have already been completed. Now the stage has come to procure the computers for setting up in different centres allocated in different District Headquarters. However, because of the ongoing writ proceeding everything is in standstill. It is on the basis of these materials available on record the action of the Govt. in entrusting the job to the Respondent No. 3 towards procurement of the computers and their accessories will have to be judged and the decisions relied upon by the learned Counsel for respective parties will have to be understood and their applicability to be decided. 19. It has been said long time ago that a case is only an authority for what it actually decides, and not what logically follows from it. The ratio of any decision must be understood in the back ground of the facts of that case. Keeping in mind this principle and following and applying the decision in a given case, I now proceed to examine the case laws relied on by the learned Counsel for the parties in respect of their respective cases. Cases relied upon on behalf of the Petitioners 20.
Keeping in mind this principle and following and applying the decision in a given case, I now proceed to examine the case laws relied on by the learned Counsel for the parties in respect of their respective cases. Cases relied upon on behalf of the Petitioners 20. In all the cases on which the learned Counsel for the Petitioner placed reliance, the Apex Court has emphasized the need for transparency in the matter of awarding Govt. contract. It has been emphasised that the executive power under Article 298 of the Constitution, the executive power of the Union and the State vests right to carry on any trade and acquire and hold property or to make contract for any purpose subject to Part-III of the Constitution. The Apex Court in the case of M/s. Erusian Equipment (supra) held that equality of opportunity in the matter of public contracts should be there and the Govt. cannot choose to exclude by discrimination. That was the case of blacklisting a contractor without issuing any notice and affording the opportunity of being heard. It was in that context the Apex Court found violation of equality clause and right of business under Article 14 and19(1)(g) of the Constitution of India. 21. In the case of Ramana Dayaram Shetty (supra) the Apex Court held that the administrative authority is equally bound by the norms and standards and procedures laid down by it for others and any violation in this regard would invalidate its action unless based on some valid principle which is neither irrational or unreasonable nor discriminatory. In that case the main contention on behalf of the Appellant was that the Respondent being a State was not entitled to depart from the conditions of eligibility of registered second class Hotelier having at least 5 years experience. The Apex Court emphasized that the State need not enter into any contract with anyone, but if it does so, it must do so fairly without discrimination and without unfair procedure. It emphasised that the proposition would hold good in all cases of dealing by the Govt. with the public where the interest sought to be protected is a privilege. It must therefore, be taken to be the law that whether the Govt.
It emphasised that the proposition would hold good in all cases of dealing by the Govt. with the public where the interest sought to be protected is a privilege. It must therefore, be taken to be the law that whether the Govt. is dealing with the public, whether by way of giving jobs or entering into contracts or issuing quotas or licences or granting other forms of largesse, the Govt. cannot act arbitrarily at its sweet will and like a private individual, deals with any person it pleases, but its action must be in conformity with the standards or norms which are not arbitrary, irrational or irrelevant, the Apex Court emphasized. 22. In the case of M/s. Kasturilal (supra) which is also relied on by the learned Counsel for the Respondents, the Apex Court held that the administrative action must be reasonable and in public interest and not arbitrary, capricious and malafide. It was observed that the concept of public interest must as far as possible receive its orientation from the Directive Principle. If, therefore, any Governmental action is calculated to implement or give effect to directive principle, it would ordinarily, subject to any other over riding consideration, be informed with public interest. The Govt. cannot act in a manner which would benefit the private party at the cost of the State; such an action would be both unreasonable and contrary to public interest. Dealing with the test of reasonableness, public interest and discretion of the Govt. in grant of largesse, the Apex Court observed as follows: There may be an infinite variety of consideration which may have to be taken into account by the Government in formulating its policies and it is on a total evaluation of various considerations which have weighed with the government in taking a particular action, that the court would have to decide whether the action of the government is reasonable and in public interest. However, there is always a presumption that the government action is reasonable and in public interest and it is for the party challenging its validity to show that it is wanting in reasonableness or is not informed with public interest. This burden is a heavy one and it has to be discharged to the satisfaction of the court by proper and adequate material.
This burden is a heavy one and it has to be discharged to the satisfaction of the court by proper and adequate material. The court cannot lightly assume that the action taken by the government is unreasonable or without public interest, but where it is clearly satisfied in that regard, it would be its plainest duty under the Constitution to invalidate the governmental action. This ground of invalidity, namely, that the governmental action is unreasonable or lacking in the quality of public interest, is different from that of malafides though it may, in a given case, furnish evidence of malafides. 23. In the case of M/s. Kamdhenu Cattle Feed Industries (supra) which has also been riled on by the learned Counsel for both the parties, the Apex Court emphasised on non-arbitrariness, fairness in action and due consideration of legitimate expectation of affected party as initial requisites for a valid State action. The Apex Court held on the test of "legitimate expectation" that consideration forms part of the principle of non-arbitrariness under Article 14 as well as under the rule of law. Whether the expectation is legitimate is a question of fact which has to be determined not according to the claimant's perception in the larger public interest. The Apex Court held that bonafide decision would satisfy the requirement of non-arbitrariness. It is in this context, the learned Advocate General, Mizoram placed reliance on those decisions to bring home his point of argument that the State action towards procurement of computers is based on bonafide decision and in public interest based on public policy. In the case of Tata Cellular (supra) the Apex Court held that the principles of judicial review would apply to the exercise of contractual powers of Govt. bodies in order to prevent arbitrariness or favouritism. At the same time, the Apex Court indicted inherent limitations in exercise of that power of judicial review. The Apex Court held that the right to choose cannot be considered to be an arbitrary power. It is only the decision making process and not the merits of the decision itself is reviewable as the Court does not sit as appellate Court while exercising the power of judicial review. It also held that the court does not have the expertise to correct the administrative decision.
It is only the decision making process and not the merits of the decision itself is reviewable as the Court does not sit as appellate Court while exercising the power of judicial review. It also held that the court does not have the expertise to correct the administrative decision. In paragraph 70 of the judgment the Apex Court observed as follows: It cannot be denied that the principles of judicial review would apply to the exercise of contractual powers by Government bodies in order to prevent arbitrariness or favouritism. However, it must be clearly stated that there are inherent limitations in exercise of that power of judicial review. Government is the guardian of the finances of the State. The right to refuse the lowest or any other tender is always available to the Government. But, the principles laid down in Article 14 of the Constitution have to be kept in view while accepting or refusing a tender. There can be no question of infringement of Article 14 if the Government tries to get the best person or the best quotation. The right to choose cannot be considered to be an arbitrary power. Of course, it the said power is exercised for any collateral purpose the exercise of that power will be struck down. 24. In the case of Air India Ltd. (supra) the Apex Court while recognizing that in the matter of awarding of contract by State or it instrumentality the State can choose its own method emphasized the need to comply with the norms, standard and procedure. The Apex Court also emphasized that the Court should exercise its discretionary power with great caution and only in furtherance of overwhelming public interest. It is the decision making process and not the decision itself which is amenable to judicial review. The Apex Court cautioned that the Court always keeps the larger public interest in mind in order to decide whether its intervention is called for or not. Only when it comes to a conclusion that overwhelming public interest requires interference, Court should interfere. In the last case relied on by the learned Counsel for the Petitioner is M/s. ABC Enterprises (supra), the Jammu and Kashmir High Court in the fact situation of that case found the contract awarded without floating public tender and at higher rates causing loss to public exchequer to be arbitrary and discriminatory.
In the last case relied on by the learned Counsel for the Petitioner is M/s. ABC Enterprises (supra), the Jammu and Kashmir High Court in the fact situation of that case found the contract awarded without floating public tender and at higher rates causing loss to public exchequer to be arbitrary and discriminatory. Cases relied on behalf the Respondents 25. The learned Advocate General appearing for the State pressed into service the above referred cases in support of his argument that the action of the State Govt. for awarding the task to the Respondent No. 3 towards procurement of the computers was in the larger public interest and it satisfies the test of reasonableness, public interest and discretion of the Govt. In the case of Kosturilal (supra) as has been noticed above, the State is not altogether debarred from taking action as in the instant case weighing the consideration like public interest etc. In that case the Apex Court held that there may be an infinite variety of considerations which may have to be taken into consideration by the Govt. in formulating its policies and it is on the total evaluation of various considerations which have weighed with the Govt. in taking a particular action, that the court would have to decide whether the action of the Govt. is reasonable and in public interest. It further emphasised that the court cannot lightly assume that the action taken by the Govt. is unreasonable or without public interest because there are large number of policy considerations which must necessarily weigh with the Govt. in taking action and therefore, the Court would not strike down governmental action as invalid unless it clearly satisfies that the action is unreasonable or not in public interest. The Apex Court further held that presumption in respect of such State action lies in favour of validity of the same unless it is shown to be arbitrary, capricious or malafide. 26. In the case of Nadlal Jaiswal (supra) the Apex Court did not find any fault that the State action for granting licences for putting up a new industry without there being any advertisement and invitation of offers. In that case it was held that the State Govt. was entitled to negotiate with those who had come up with an offer to set up such industry.
In that case it was held that the State Govt. was entitled to negotiate with those who had come up with an offer to set up such industry. Noticing the predominant purpose of the policy decision, the Apex Court held that the State Govt. could not be said to have acted arbitrarily or capriciously in violation of Article 14 of the Constitution of India. Likewise, in the case of Sachdanand Pandey (supra) the Apex Court after noticing the Cabinet decision with due application of mind after a process of protected discussion, consultation, negotiation and consideration of various aspects towards leasing out a part of the zoo land did not find any illegality in the State action. In the same vein the Apex Court in the case of Haji T.M. Hassan (supra) reiterated that the State cannot act arbitrarily in the matter of awarding contract but its action must be in conformity with the same principle which meets the test of reason and relevance. However, it emphasized that though the same is an ordinary rule, it is not invariable rule. In the case of M/s. Kamdhenu (supra) as noticed above, the Apex Court held that whether expectation is legitimate is a question of fact which has to be determined not according to the claimant's perception, but in the larger public interest. This has been pressed into service to argue that the "legitimate expectation" emphasised on behalf of the Petitioner is misplaced. 27. In the case of Krishnan Kakanth (supra) the Apex Court held that unless Govt. policy in a particular matter is demonstrably arbitrary, capricious, irrational, discriminatory or violative of constitutional or statutory provisions, it cannot be struck down by the Court. Dealing with Article 14and 298 of the Constitution of India, the Apex Court held that the State Govt. can depart from the said norms in favour of a particular group of persons in the sphere of distribution of State largesse provided the same is not irrational, unreasonable, discriminatory or arbitrary. 28. Lastly Mr. Pathak, learned Advocate General relied on the decision in Netai Bag case (supra) wherein the Apex Court held that non-floating of tenders or not holding a public auction would not in all cases be deemed to be the result of the exercise of executive power in an literary manner.
28. Lastly Mr. Pathak, learned Advocate General relied on the decision in Netai Bag case (supra) wherein the Apex Court held that non-floating of tenders or not holding a public auction would not in all cases be deemed to be the result of the exercise of executive power in an literary manner. Making an exception to the general rule could be justified by the State executive, if changed in appropriate proceeding. It held that constitutional Courts cannot be expected to presume the alleged irregularities, illegalities or unconstitutionality nor the Courts can substitute there opinion for the boanfide opinion of the State executive. The courts are not concerned with the ultimate decision, but only entitled to make pragmatic adjustments and policy decision which may be necessary or called for under the prevalent peculiar circumstances. The court cannot strike down the policy decision taken by the Govt. merely because it feels that another decision would have been fairer or wiser or more scientific or logical. 29. It is now in the aforesaid back drop of fact situation and the revelation made by the records the applicability or otherwise of the aforesaid decisions will have to be understood and a decision will have to be arrived at as to whether the State action in entrusting the job of procurement of computers and their accessories to its own corporation, i.e., the Respondent No. 3 which has been formed for development of electronics in the State of Mizoram is arbitrary or unreasonable. 30. There is no dispute and it is obvious that having regard to the constitutional mandate of Article 14and rule of administrative law, the State Govt. is not entitled to act arbitrarily, unreasonably in a manner which is opposed to public policy and interest. It is obvious and natural that the Govt. which represents executive authority of the State may act through its instrumentality or agency to carry out its functions. The Respondent No. 3 is an instrumentality of the State and is a corporation wholly owned by the Govt. which has been admitted by the writ Petitioner as noticed above. It is a public sector undertaking which has been incorporated with the object of development of electronics in Mizoram and its entire share capital is owned by the State Govt. 31. When the State was provided with the Central Govt.
which has been admitted by the writ Petitioner as noticed above. It is a public sector undertaking which has been incorporated with the object of development of electronics in Mizoram and its entire share capital is owned by the State Govt. 31. When the State was provided with the Central Govt. fund under 11th Finance Commission Grants for providing computer education to the school children in 8 districts of Mizoram, the State Govt. processed the matter and took a decision to entrust the job to the Respondent No. 3 for procuring the computers and the accessories. It is not a case of carrying out any secret negotiation with a private individual for the purpose. The revelations made by the records have already been noticed above. The Respondent No. 3 was not given the task overnight. The SLEC under the Chairmanship of the Chief Secretary of the State after a threadbare and elaborate discussions decided to entrust the task to its own corporation, i.e. to the Respondent No. 3. Thereafter a series of meeting were held with the representatives of the State and the Respondent No. 3 and modalities towards procurement of computers and their accessories from the HCL Ltd. were finalised. It is the stand of the State Govt. that they took a policy decision to achieve the goal in the field of computer literacy among the children. Various attending factors and circumstances were also noticed in the said meeting and it is only upon such relevant consideration the impugned enter was issued to the Respondent No. 3. The records do not reveal any extraneous consideration rather they reveal relevant considerations of public interest. No arbitrariness in the methodology adopted is discernible. The State Govt. in order to effect the economy with reliable quality took the decision to opt for the comparative rate by way of procuring the materials through its own Corporation, i.e. the Respondent No. 3. Such a course of action has been taken in public interest which was preceded by policy decision after threadbare discussion and deliberation with the approval of SLEC etc. The State Respondents have also placed reliance on the Office Memorandum dated 10.08.94, more particularly, Clause 8 of the guidelines which permits to purchase without call of lenders or quotidians in DGS and D rate contract and in respect of proprietary items.
The State Respondents have also placed reliance on the Office Memorandum dated 10.08.94, more particularly, Clause 8 of the guidelines which permits to purchase without call of lenders or quotidians in DGS and D rate contract and in respect of proprietary items. The State Respondents could have directly placed the orders with the HCL Ltd. due to their rates approved under the DGS and D rate and under the said provisions of the notification but instead, decided to assign the job to the Respondent No. 3 its own corporation in order to ensure the procurement of quality products. 32. There is no quarrel with the general proposition as reflected and laid down in the aforesaid various decisions of the Apex Court that the Govt. while entering into a contract it cannot act arbitrarily and enter into relationship with any person it likes at its sweet will, but its action must be in conformity with the set principle which meets the test of reason and relevance. The Respondent No. 3 is not a private person with whom the contract was made. It is under the deep and pervasive control of the State Govt. it being a wholly owned corporation of the Govt. Had it been a case of falling choice of the State on a private individual or private body to the exclusion of others towards procurement of the computers and the accessories, the matter would have bene different. But the same is not the case in hand. The Respondent No. 3, a wholly owned corporations of the State Govt. was established with the avowed object of upliftment of the State in the field of electronics is not a private individual. Apart from the policy decision for the procurement of the materials in question though the Respondent No. 3, a decision was also taken by the State to look after the interest and development of the State Corporation. It is in such circumstances a departure from the ordinary rule of open tenders will have to be judged. 33. The Apex Court have recognised that there may be situation necessitating departure from the rule on the basis of rational reasons. There is no denial that appearance of public justice is as important as doing justice. The records and for that matter the decision of the State does not reflect any biasness, jobbery or nepotism. If the State Govt.
33. The Apex Court have recognised that there may be situation necessitating departure from the rule on the basis of rational reasons. There is no denial that appearance of public justice is as important as doing justice. The records and for that matter the decision of the State does not reflect any biasness, jobbery or nepotism. If the State Govt. favors its own corporation towards dispensation of tender or public auction it cannot be said to be violative of the three tests of reasonableness, public interest and discretion of the Govt. It is in this context the Apex Court has permitted a departure from the normal rule. In the case of Sachdanand Pandey (supra) the Apex Court applying these tests found it impossible to hold that the Govt. of West Bengal did not act with probity in not inviting tenders or not holding a public auction but negotiating straightway at arm's length with the Taj Group of Hoteliers. In the case of Netai Bag (supra) the Apex Court has recognised the principle that non-floating of tenders or not holding public auction would not ipso facto deemed to the result of exercise of executive power in an arbitrary manner. 34. In the instant case the Govt. of Mizoram made pragmatic adjustments and policy decision having regard to the special feature of allocation of funds of the Central Govt. towards establishment of computer centres for the benefit of the children. This Court cannot strike down such a policy decision at the behest of the Petitioner which feels that the process of tenders towards procurement of the computers would have been fairer or wiser or more scientific or logical. In the case of Krishart Kakanth (supra) the Apex Court dealing with the scope of judicial review in the realm of Article 14and 298 of the Constitution of India held that unless the Govt. policy is demonstratively arbitrary, capricious, irrational, discriminator or violative of constitutional or statutory provisions, it cannot be struck down by the court. There is no such demonstration in the instant case so as to interfere with the decision making process of the State in exercise of power of judicial review under Article 226 of the Constitution of India. 35.
policy is demonstratively arbitrary, capricious, irrational, discriminator or violative of constitutional or statutory provisions, it cannot be struck down by the court. There is no such demonstration in the instant case so as to interfere with the decision making process of the State in exercise of power of judicial review under Article 226 of the Constitution of India. 35. It has already been noticed that the Apex Court in the case of Nandlal Jaiswal (supra) that the Apex Court did not did any fault with the State action in deciding to grant licences without any advertisement and invitation of offers for putting up industries in question. In that case recommendations were made by the Cabinet Sub-committee and on that basis it was held that the State Govt. could not be said to have acted arbitrarily or capriciously in violation of Article 14 of the Constitution of India. In the instant case also it has been noticed that the decision to anestrus the responsibility of procuring good quality computers and their accessories was taken pursuant to series of meeting and threadbare discussion under the Chairmanship of the Chief Secretary of the State with active participation of the officials of the concerned departments and the Respondent No. 3. No arbitrariness or unreasonableness cold be found in the decision making process which was initiated and finalised in the file which has been produced before this Court. 36. The Apex Court way back in 1980 in the case of M/s. Kasturilal (supra) held that there is always a presumption that the Govt. action is reasonable and in public interest and it is for the party challenging its validity to show that it is wanting in reasonableness or there is no public interest. This burden is a heavy one and it is to be discharged to the satisfaction of the court by proper and adequate manner. The court cannot lightly assume that the action taken by the Govt. is unreasonable or without any public interest. In the instant case apart from the general submissions which are always made in case of non-floating of tenders in respect of any Govt. contract, no concrete materials could be brought to the notice of the court warranting interference with the State action. It is true that certain assertions have been made to the effect that the Respondent No. 3 was not in the approved list of the Govt.
contract, no concrete materials could be brought to the notice of the court warranting interference with the State action. It is true that certain assertions have been made to the effect that the Respondent No. 3 was not in the approved list of the Govt. and it was not registered with the taxation Department before that impugned letter was issued to it. It is on record that their Respondent No. 3 is now in the approved list and is also registered with the taxation Department. Both the requirements are independent requirements of the corporation which may be necessary for their dealings in individual capacity. However, one cannot loose sight of the fact that it is an sentimentality of the State and fully owned by the Govt. of Mizoram. It has already entered into MOU with the HCL Ltd. It has been established with the primary object of all round growth of the electronic held in the State of Mizoram. If such a State controlled authority is entrusted with the job of procurement of the computers in question, the Petitioners cannot find fault with the same. The Petitioner's association is a conglomerating of 18 registered Firms having their own individual self interest. They have understood into the matter purely on their busies perspective. On the other hand, the State Govt. in its minutes of discussion has emphasized the need for procurement of quality items through the Respondent No. 3. Even if it makes some profit, such profit would go to the Respondent No. 3 and for that matter to the State Govt. Thus profit will remain with the State unlike the striking the deal with the members of the Petitioner and for that matter with any other private party in which eventuality the profit will go to them only. 37. In the case of G.D. Zalani v. Union of India and Ors. as reported in 1995 Supp (2) SCC 512 the Apex Court while agreeing that selling of public property or granting its lease, the normal method is auction or calling for tenders, recognised that there may be situation where adopting such a course may not be insisted upon. In the instant case the State Govt. wanted to procure the best quality products and for that purpose entrusted the job to the Respondent No. 3. In such a case, all that need to be ensured is that the State govt.
In the instant case the State Govt. wanted to procure the best quality products and for that purpose entrusted the job to the Respondent No. 3. In such a case, all that need to be ensured is that the State govt. Has acted fairly and has arrived at the best availably arrangement in the circumstances Nothing is distrainable that the State Govt. has not acted fairly, reasonably and kept in mind the public interest towards procurement of the materials in question. 38. The concept of "legitimate expectation" was pressed into service to buttress the case of the Petitioner. It is in this context the learned Advocate General placed reliance on the decision in M/s. Kamdhenu (supra). Whether the expectation of a claimant is reasonable or legitimate in the context is a question of fact in each case. The bonafide decision of the public authority reached in the manner as in the instant case which satisfies the requirement of non arbitrariness and withstand judicial scrutiny. Doctrine of legitimate expectation gets assimilated in the rule of law and operates in our legal system to this extent. I may painfully refer to the decision of the Apex Court in State of West Bengal v. Niranjan Singha as reported in (2001) 2 SCC 326 pressing into service the principle involved in "legitimate expectation". The Respondent in that case before the Apex Court found fault in the State action in not granting extension of the existing agreement relating to collection of toll/tax form the vehicles. The Apex Court while setting side the order made by the Division Bench observed that the doctrine of "legitimate expectation" is only an aspect of Article 14 of the Constitution in dealing with the citizens in a non-arbitrary manner and thus by itself, does not give rise to an enforceable right. But in testing the action taken by the Govt. Authority whether it is arbitrary or otherwise, it would be relevant. In the instant case as noticed and discussed above, the action of the Govt. cannot be said to be arbitrary. 39. It is clear from the above back drop of the facts and circumstances in which the impugned decision came to be made and the impugned letter was issued that there is no infirmity in the same.
In the instant case as noticed and discussed above, the action of the Govt. cannot be said to be arbitrary. 39. It is clear from the above back drop of the facts and circumstances in which the impugned decision came to be made and the impugned letter was issued that there is no infirmity in the same. It is difficult to appreciate as to how the impugned decision and the order cold be assaulted on the ground that it created monopoly in favour of their Respondent No. 3 or imposed unreasonable restrictions under Article 19(1)(g) of the Constitution of India and for that matter violated Article 14of the Constitution. The decision of the State Govt. cannot be said to be arbitrary or unreasonable. Upon a consideration of the fact situation involved in the case and applying the test in such matters as have been formulated by the highest Court of land, I find it impossible to hold that the Govt. of Mizoram did not act with probity in not inviting tenders, but entrusting the job to its own corporation, i.e. the Respondent No. 3. Even when some defect is found in the decision making process, the Court must exercise its discretionary power under Article 226 with great caution and should exercise it only in furtherance of public interest and not merely making out of a legal point. It is the duty of the Court to keep the larger interest in mind and to arrive at a decision whether its intervention is called for or not. It is the decision making process, not the decision which is amenable to judicial review. It has already been held that there is no infirmity in the diction making process. 40. As regards the plea of the petiteness that they are ready to supply the computers and their accessories at a lesser price than that of the Respondent No. 3, the leaned Advocate General, Mizoram fairly submitted that with afflux of time due to the pending litigation there might be lowering of prices on computers by now and the State Govt. and for that mater the Respondent No. 3 will have to procure the computers and their accessories at lower rate than what was agreed earlier.
and for that mater the Respondent No. 3 will have to procure the computers and their accessories at lower rate than what was agreed earlier. In this context the minutes of discussion of the meeting held on 03.09.02 under the Chairmanship of the Chief Secretary may also be referred to in which it was noticed that due to revision of rates in respect of computer configuration/peripherals due to rapid advance in information technology and falling prices of computers, a significant amount of savings from the fund already allocated could be foreseen and such savings might be utlised to meet other contingent expenditures. Keeping in tune with such a decision of the State Govt. and also having regard the fact that the present market price of the computers and their accessories might have been considerably reduced, it will be in the fitness of the things for the State Govt. and for that matter the Respondent No. 3 to procure the materials in the lowest possible rate which will give further benefits to them. 41. For the foregoing reasons I do not find any merit in the writ petition. Accordingly the writ petition stands dismissed leaving the parties to bear heir own cost. 42. Before parting with the case records, I feel to put an emphasis on the State Govt. to procure the computers and their accessories and to make the computer education centres fully operational within the shortest possible time. I have said so because it is the children of the State who are the beneficiaries of the proposed computer education scheme which is funded by the Central Govt. to develop and expand the computer education amongst the children of the State. The State should not leave any stone unturned to achieve that goal and thrive for enriching the children of the State with computer education which has became very essential in this computer age. Petition dismissed