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2005 DIGILAW 1185 (SC)

State Of U. P. v. CYBER INFOTEC

2005-07-27

D.M.DHARMADHIKARI, P.VENKATARAMA REDDI

body2005
JUDGMENT P. VENKATARAMA REDDI, J.- Leave granted. 2. The first respondent Cyber Infotec (hereinafter referred to as writ petitioner) filed writ petition under Article 226 of the Constitution in the High Court of Allahabad, seeking issuance of a writ directing the State of U.P. and the Transport Department of the State, not to enforce the condition referred to in clause 4.2.2(i) of the tender document for the preparation of vehicular smart cards insofar as it requires the insertion of optical strip in the smart card. The provision for issuing the smart card at the time of registration for storing the details set out in the pro forma of the registration certificate (Form 23-A of the Central Motor Vehicles Rules, 1989) was prescribed under the said Rules by way of amendments brought out on 31-5-2002. A definition of "smart card" was introduced in Rule 2(s), which reads as follows: "2. (s) Smart card means a device capable of storing data and executing commands, which is a single chip microprocessor, mounted on a plastic card and the dimensions of the card and chip are as specified in ISO 7816 specifications, as may be amended from time to time." 3. A few days prior to the promulgation of these amending Rules, the State Government (Transport Department) issued a tender notice on 3-52002, inviting sealed tenders for preparation of vehicular smart cards which have to include details of registration of the vehicle, permits, fitness, tax and additional tax, status of pollution checks, insurance, challans, status of surrender and other relevant details relating to the motor vehicles, to be issued at all the regional and sub-regional transport offices spread over the State, which are 71 in number. It is stated in the tender notice that the project for issue of vehicular smart card will be implemented on "build, own and operate" basis and all the necessary investment on the project, including site preparation, project implementation and networking will have to be done by the "vendor". The contract is "liable to be reviewed" after five years. It is also stated that the tender and its implementation will be according to the guidelines issued by the Ministry of Road Transport and Highways, Government of India, which by that time had issued certain guidelines in relation to the smart card. The contract is "liable to be reviewed" after five years. It is also stated that the tender and its implementation will be according to the guidelines issued by the Ministry of Road Transport and Highways, Government of India, which by that time had issued certain guidelines in relation to the smart card. According to the schedule of requirement appended to the tender, the vendor shall improvise the sites at the transport offices at its cost in order to undertake the work of preparing vehicular smart cards for the issue of RC books. The vendor is also required to install networking and necessary hardware equipment on its own investment and deploy the necessary manpower at sites for operating the system. Clause 4.2.2 of the tender notice sets out the essential features of the proposed system. The relevant part of clause 4.2.2 reads as under: "4.2.2. Proposed system.-(i) The VSC will have two zones: VIZ i.e. visual inspection zone. This relates to the printed information in respect of the vehicle. MRZ i.e. memory readable zone. This will contain 4 KB microprocessor chip and 1.5 MB optical strip. The information printed on the card Le. VIZ shall be as per the form prescribed by the Department. In the MRZ part certain information has to be kept in the chip part and certain additional information are to be kept in optical strip part. (ii) For additional security, the information shall be on microprocessor chip and optical strip media with scanned signature of the owner, scanned chassis number and engine number of the vehicle and biometrics security measures. (iii) The proposed vehicular smart card will store the current data in its microprocessor chip media containing the complete details of the permits and offences, if any. The complete history of the vehicle would be available on this optical strip, including all the records of the previous owner of the vehicle. Optical strip will also be used for keeping the status of surrender and challans." (emphasis supplied) 4. The complaint of the writ petitioner was against the requirement to provide 1.5 MB optical strip in addition to 4 KB microprocessor chip. It is not in dispute that the optical strip, which is a product of latest technology, is b capable of storing much more information and data than what the microprocessor chip could. The complaint of the writ petitioner was against the requirement to provide 1.5 MB optical strip in addition to 4 KB microprocessor chip. It is not in dispute that the optical strip, which is a product of latest technology, is b capable of storing much more information and data than what the microprocessor chip could. As seen from clause (iii) quoted above, the complete history of the vehicle would be available on this optical strip including the record of all the previous owners of the vehicle, the status of surrender and the challans. This is in addition to the current data and the details of the vehicle, etc. which can be incorporated into the microprocessor chip. 5. The contention of the writ petitioner was that even the amended Rules brought into effect from 31-5-2002, wherein the smart card was defined, did not require the provision of optical strip in the smart card and in the absence of specific provisions made in the Central Motor Vehicles Rules, the State Government had no competence to call for tenders in the manner in which they have done. This contention has found acceptance by the High Court. The Division Bench of the High Court was of the view that in view of the third amendment of the Rules published on 31-5-2002, "no State Government can insist that a certificate of registration must be issued on a card which has both microprocessor chip as well as an optical strip" because such certificate of e registration would be in contravention of the Third Amendment Rules and would not be a valid certificate. The High Court also observed that the State Government cannot call for a tender for the supply of smart cards different from those contemplated by the Rules and charge a fee higher than what is prescribed under the Rules in force. It further observed that the tender cannot be justified on the touchstone of the MORTH Guidelines which are in the nature of executive instructions. The High Court then observed that "if the Central Government wishes to permit larger capacity card or use other technology in addition to the microprocessor chip, then, the Motor Vehicles Rules have to be amended. No such amendment has been made in the Motor Vehicles Rules". The High Court then observed that "if the Central Government wishes to permit larger capacity card or use other technology in addition to the microprocessor chip, then, the Motor Vehicles Rules have to be amended. No such amendment has been made in the Motor Vehicles Rules". The High Court also held that the condition in the tender that smart card has to be given for Rs 440 is contrary to the proviso to the 9 note to Rule 81, which prescribes an additional fee of Rs 200 only for the smart card and not Rs 440. The contention of the State that Rule 2(s) introduced on 31-5-2002 did not lay down a minimum requirement, was not accepted by the High Court. The High Court also made certain adverse observations touching on the propriety of the tender conditions. It felt that the tender conditions were prepared by the U.P. Government "to benefit a predetermined party" i.e. Respondent 3 which has got patent right for the optical technology worldwide from an American company. The High Court observed that a monopoly right was sought to be created thereby. With these observations and findings, the High Court allowed the writ petitions including the writ petition out of which the present appeals arise and quashed the tender document and the acceptance of the bid of Respondent 3. 6. It is against this judgment in the writ petition, the SLPs were filed by the State of U.P. and Respondent 3. The learned Senior Counsel appearing for the appellants and the learned Solicitor General appearing for the Government of India have assailed the correctness of the judgment of the High Court mainly on the ground that the High Court was not justified in interpreting the definition of "smart card" so as to exclude the insertion of optical strip or other device in addition to the microprocessor chip. The learned counsel have reiterated the arguments advanced before the High Court that Rule 2(s) is not exhaustive of the ingredients of smart card that can be prescribed. The microprocessor chip with the capacity of 4 KB and with the dimension set out in ISO-7816 is the minimum indispensable requirement and the State Government is not powerless to have the smart card prepared in order to ensure the storage of more comprehensive data and information relating to the vehicle. The microprocessor chip with the capacity of 4 KB and with the dimension set out in ISO-7816 is the minimum indispensable requirement and the State Government is not powerless to have the smart card prepared in order to ensure the storage of more comprehensive data and information relating to the vehicle. It is also pointed out that the tender is not confined only to the supply of smart card but it also contemplates many other services to be provided at the various regional and sub-regional transport offices in the State and the service provider has to develop its own network. It is then pointed out that the State Government in consequence of acceptance of tender will frame necessary rules empowering the prescribed authority or agency to collect additional fee and it is only after the evaluation of the bids that such exercise is feasible. Reliance is placed on Section 211 of the Motor Vehicles Act, 1988, in support of the submission that such additional fee can be charged for the services. The locus standi of the writ petitioner who had not even participated in the bid has also been questioned. As regards the observations of the High Court that the State Government was determined to create a monopoly by awarding the contract to Respondent 3, it is submitted by the learned counsel for the appellants that as many as 3 bids out of 7 had the necessary technology to supply the smart card with the component of optical strip and therefore, the High Courts observations in regard to creation of monopoly are wholly unjustified. 7. It seems to us that with the introduction of the Central Motor Vehicles Rules, Third Amendment Rules of 2004 (which came into force on 10-8-2004) amending the definition of "smart card" and laying down the specifications of smart card as per Annexure XI, the whole complexion of the case has changed and it would be almost an academic exercise now to test the validity of the tender in the light of the pre-existing Rules, that is to say, the Third Amendment Rules of 2002. It is not in dispute that the scope and salient features of tender notice are perfectly in accordance with the new Rules. The Rules of 2004 were not there at the time the impugned judgment of the High Court was rendered. It is not in dispute that the scope and salient features of tender notice are perfectly in accordance with the new Rules. The Rules of 2004 were not there at the time the impugned judgment of the High Court was rendered. There is a debate on the question whether the new Rules are clarificatory in nature and whether they shall be deemed to operate even at the time when the tenders were opened. When once we find that the validity of the tender notice cannot be disputed in the light of the new Rules which have come into force, it would be wholly inappropriate at this a stage to decide whether the tender conditions could be justified in the light of the old Rules also. Viewed from the point of view of the petitioner, no practical purpose will be served by setting aside the tender on the footing that it is against the Rules of 2002. It is not the case of the writ petitioner that he has since acquired the capacity to supply the optical strip and will be able to participate in the bid in case fresh tender is issued. The writ petitioner will b not in any way be benefited if the tender is now set aside. Viewed from the point of view of larger public interest, the tender which is yet to be implemented is undoubtedly meant to serve a public purpose by facilitating the storage of comprehensive details relating to the vehicle and the tender being in conformity with the Rules now in force, no interference with the tender process is called for, especially at the instance of the writ petitioner. 8. As regards the charging of additional fee, as already noticed, the learned counsel appearing for the State has stated that the State Government before implementing the tender, will frame the necessary rules in exercise of the power under Section 211 read with Section 65 of the Motor Vehicles Act. The competence of the State Government to exercise the power to charge additional fee at the time of registration of the vehicle is however controverted by the learned Senior Counsel Mr Manoj Goel, appearing for the writ petitioner. The competence of the State Government to exercise the power to charge additional fee at the time of registration of the vehicle is however controverted by the learned Senior Counsel Mr Manoj Goel, appearing for the writ petitioner. It is not necessary for us to express any opinion on this issue because the rules are yet to be made and if at all it is for the aggrieved persons to challenge the rules framed in this behalf. Whether or not the power can be exercised by the State under Section 211 is a point left open, irrespective of the observations of the High Court in this regard. 9. In the result, the judgment of the High Court is set aside and the appeals are allowed without costs. 10. The IA for impleadment and the unregistered IA for modification/clarification are dismissed as unnecessary.