Assam Scientific Instrument Dealers Association v. State of Assam
2008-06-10
BIPLAB KUMAR SHARMA
body2008
DigiLaw.ai
JUDGMENT B.K. Sharma, J. 1. The challenge made in the writ petition is the manner and method in which the private respondents have been favoured with supply orders by the Government of Assam in the Education Department. The supply order pertains to supply of science kits to upper primary school under award of 12th Finance Commission 2007-2008. The amount involved is Rs. 18.16 crores. Considering such huge amount involved and the methodology adopted towards awarding the supply orders, the matter is of immense importance. It is the grievance of the petitioner's Association that the supply orders have been issued in favour of the private respondents in a hush hush manner, de hors the transparency and without following the Government norms through tender system. 2. The petitioner is the Association consisting of members dealing with scientific instruments. It is the Government registered society under the Societies Registration Act, 1860. Facts involved are narrated below. 3. By Annexure-B letter dated 6.11.2007, the Managing Director, Assam Small Industries Development Corporation (in short ASIDC), (respondent No. 3), submitted the price list of science items alongwith the price of steel Almirah. According to the letter, the samples of all the items alongwith specifications were also sent. The letter was issued in reference to the Director of Elementary Education's (Respondent No. 2) letter dated 17.10.2007. Such a process started in view of the approval of Rs. 18.16 crores by the Government of Assam for upgradation facilities to the Upper Primary Schools under the Award of 12th Finance Commission 2007-2008. 4. On receipt of the aforesaid letter from the respondent No. 3, the Director of Elementary Education, Assam (respondent No. 2), by his Annexure-C letter dated 7.11.2007 informed the Government in the Education Department (respondent No. 1) that science items and for preserving the same, steel Almirah, shall be procured through tender or supplied through the Government Agency like ASIDC/AGMC as per Government approval and be distributed through the concerned District Elementary Education Officer. Request was made to sanction the aforesaid amount of Rs. 18.16 crores for implementation of the scheme approved by the authorities. The science items were to be provided to 5016 numbers of Government and provincialised Upper Primary Schools. 5. By Annexure-D letter dated 12.11.2007 issued by the Government of Assam in the.
Request was made to sanction the aforesaid amount of Rs. 18.16 crores for implementation of the scheme approved by the authorities. The science items were to be provided to 5016 numbers of Government and provincialised Upper Primary Schools. 5. By Annexure-D letter dated 12.11.2007 issued by the Government of Assam in the. Education (Planning) Department, the Accountant General, Assam was intimated about the sanction of the Governor of Assam to an amount of Rs. 18.16 crores for purchase of science kits under the scheme "Upgradation of School facilities at Middle School level under the Directorate of Elementary Education, Assam under Award of 12th Finance Commission during 2007-2008". While endorsing the copy of the said letter to the Director of Elementary Education, Assam (respondent No. 2), he was requested to purchase the science kits by observing all financial rules and procedure. Further intimation was that upon failure to do so, same would attract the provisions of AFRBM Act, 2005. 6. Immediately after the aforesaid letter dated 12.11.2007, on the very next day the respondent No. 2 by his Annexure-E letter dated 13.11.2007 placed supply order with the AS1DC (respondent No. 3) for supply of science kits as per the list of items. Districtwise breakup of list of schools was also enclosed for distribution of items in District/Block headquarters. For receiving the items in full and good condition as per specification with sample approved by the Director of Elementary Education Assam was stated to be available in the office of the concerned Block Elementary Education Officer in rural area/Deputy Inspector of Schools in urban area/ District Elementary Education Officer at the District Headquarter and the Headmaster as well as the science teacher of the schools were to verify the items before issuing acknowledgement receipt of item. This will go to show that even before receipt of the sanction order dated 12.11.2007 for the aforesaid amount of Rs. 18.16 crores, the Director of Elementary Education, Assam had finalized the matter with the respondent No. 3 Corporation. One of the terms and conditions was that all the terms will be as per The Assam Preferential Stores Purchase Act, 1989. The payment as per the said terms and condition was to be made by the Director on receipt of bills in Triplicate. 7.
One of the terms and conditions was that all the terms will be as per The Assam Preferential Stores Purchase Act, 1989. The payment as per the said terms and condition was to be made by the Director on receipt of bills in Triplicate. 7. Since the terms and conditions of the supply order placed with the respondent No. 3 Corporation itself mentioned that all terms and conditions will be as per The Assam Preferential Stores Purchase Act, 1989, it will be pertinent to indicate here that the petitioner has alleged violation of the provisions of the said Act by the respondents. The Act was introduced to encourage the growth of the industries in the State of Assam specially the Small Scale and Cottage Industries by patronizing their products on preferential basis and to rationalize and the procedure of stores required by the State Government, Government Institution, Government Companies and the Government Undertaking. Section 7(b) and (c) of Assam Preferential Stores Purchase Act, 1989 provide that : (b) Items of stores mentioned in Schedule-II known as 'Reserved Items' shall be purchased by all requiring authorities from registered Industries. (c) Items of stores mentioned in Schedule-III shall be purchased by requiring authorities from ASIDC. ASIDC shall follow the guidelines regarding fixation of price, commission etc. as laid down in office memorandum issued by Notification No. EE-61/88/1 dated 28th March, 1988 as in Schedule-IV. 8. Annexure-A to Schedule-IV of the Act provides for steps to be taken by the Corporation to ensure reasonable and fair price of the items in the following manner. (II) Tenders will be invited by the Corporation by advertisement in three or four local news papers in the three consecutive issues giving one month time to the SSI unties. Tender papers will be issued by the corporation by realizing the cost of papers from the intending tenderers. (III) The rates quoted will show the break up of cost of each items. (IV) A Technical Committee will be formed by the corporation with its own personnel and representatives, of the Directorate of Industries, Small Industries, Services Institutes, Bureau of Indian State Public Analyst and any other agencies that the corporation deem proper. (V) The committee shall sit and examine the rate and fix most reasonable at a certain date. (VI) As the market price of every items of raw materials, labour, rent etc.
(V) The committee shall sit and examine the rate and fix most reasonable at a certain date. (VI) As the market price of every items of raw materials, labour, rent etc. are increasing every day, there shall be an increase factor of each items fixed by the Technical committee. 9. As per the scheme of preferential purchase, all SSI Units with valid stores purchase registration with the Directorate of Industries are eligible to the enrolled under the scheme, if its products fall under the enlisted items. 10. Schedule-IV of the Act deals with purchase of products manufactured by local SSI units, ASIDC Ltd. and by Small Industries Development Corporation Ltd. The price of such SSI products will be fixed by the Technical Committee constituted by ASIDC Ltd., i.e. the respondent No. 3. The purchasing authority shall pay to the Corporation upto 5% as commission over the price of the Corporation. The reserved items are mentioned in Schedules-II and III. None of the science items except the steel Almirah is included in Schedules-II and III. This is precisely the reason as to why the petitioner has contended that the purchase of science items in the garb of applying the provisions of the Act is an eyewash and consequently illegal. 11. When the petitioner could come to know about the aforesaid developments, by Annexure-F letter dated 20.12.2007 under the Right to Information Act, it submitted Annexure-F letter dated 20.12.2007 under the Right to Information Act to the Director of Elementary Education, Assam, (respondent No. 2), specifically asking for information relating to purchase of scientific instrument including the mode of purchase with details of tender, fixation of rate and the names of the contractors with whom the supply orders have been placed. Such information was also sought for from the respondent No. 3 Corporation by Annexure-G letter of the same date, i.e. 20.12.2007. 12. When no information was furnished, the petitioner by its letter dated 21.1.2008 (Annexure-H) addressed to the Commissioner, Assam Information Commission, requested for intervention in the matter. Thereafter by Annexure-I letter dated 25.1.2008, the respondent No. 3 Corporation intimated the petitioner that the price of science items was quoted by it as per the request of the Education Department and thereafter, it was placed with supply order dated 13.11.2007 (Annexure-E about which mention has been made above.
Thereafter by Annexure-I letter dated 25.1.2008, the respondent No. 3 Corporation intimated the petitioner that the price of science items was quoted by it as per the request of the Education Department and thereafter, it was placed with supply order dated 13.11.2007 (Annexure-E about which mention has been made above. As regards the information relating to list of names of contractors to whom the supply orders had been awarded and the status of procurement, it was indicated as follows : Against the department's order as above, ASIDC placed its order for supply of the required items amongst 35 Nos. of local firms, and the same are in the process of execution. Under Section 11 of the Right to Information Act, 2005, it is decided not to disclose the names of contractors (third party) to whom supply orders have been placed, as they have submitted representations against such disclosures. 13. By Annexure-J letter dated 18.1.2008, the respondent No. 2 also furnished the information to the respondent No. 1, in reference to the aforesaid letter dated 20.12.2007. A copy of the letter was also furnished to the petitioner. As against the column, procedure of utilization of funds and status of unutilized of funds, it was intimated that the work was allotted to the respondent No. 3 Corporation for implementation of the scheme and utilization of fund. As regards the mode of purchase with details of tender notice etc., it was informed that the same was ''as per approved quotation" received from ASIDC Ltd vide letter dated 6.11.2007. As regards the list of names of the contractors to whom the supply orders had been awarded, same was indicated as Managing Director; ASIDC. 14. According to the petitioner, the price quoted by the respondent No. 3 for the science items is much higher than the present market rate. The grievance of the petitioner is that the respondent No. 2 without first fixing the price and inviting tenders could not have placed the order with the respondent No. 3 for such huge amount of Rs. 18.16 crores. The petitioner has annexed Annexure-K comparative statement of item wise, rate supply and the present market rate. According to the petitioner, on an earlier occasion the respondent No. 2 allotted such work orders through tender system and following due procedure.
18.16 crores. The petitioner has annexed Annexure-K comparative statement of item wise, rate supply and the present market rate. According to the petitioner, on an earlier occasion the respondent No. 2 allotted such work orders through tender system and following due procedure. Further plea of the petitioner is that the items being not within the purview of the aforesaid Act of 1989, the respondent No. 2 was not authorized to place the work order with the respondent No. 3 and even if the said items are said to be within the purview of the Act, the laid down procedure having not been followed, the impugned action on the part of the respondents is liable to be interfered with. It is on record that the respondent No. 3 Corporation has placed the orders for supplying the items with 35 numbers of firms, some of whom according to the petitioner, are not even registered SSI Units. 15. In the aforesaid comparative statement, the petitioner has indicated the present market rate vis-a-vis the approved rate quoted by the respondent Corporation. By furnishing such comparative statement, it has been contended that there is huge variation in the price and in the process public money has been siphoned. Annexure-K finds mention in paragraph-21 of the writ petition which is quoted below : 21. That, the petitioner begs to state vide letter dated 6.11.2007 the respondent No. 3 submitted their rate of science items for middle school at higher prices than the present market rate and without fixation of price and tender the contract for supply of scientific instrument amounting to Rs. 18.16 crores was allotted to the respondent No. 3. The comparative statement of present market rate for scientific items for middle school and the rate of ASIDC Ltd. is huge difference. 16. In reply to the aforesaid paragraph-21, the reply furnished by the Director of Elementary Education in his affidavit is as follow : 16. That with regard to the statement made in paragraph 21 of the writ petition, the deponent offers no comment. 17. In the affidavit filed by the respondent No. 3 Corporation also there is no denial of the aforesaid specific allegation made by the petitioner. Except a simple denial.
That with regard to the statement made in paragraph 21 of the writ petition, the deponent offers no comment. 17. In the affidavit filed by the respondent No. 3 Corporation also there is no denial of the aforesaid specific allegation made by the petitioner. Except a simple denial. Dealing with the said allegation, the respondent Corporation has only referred to the procedure adopted without highlighting anything regarding specific allegation made by the petitioner that there is huge variation of price accepted by the respondent Corporation towards placing the supply orders with that of the market price. 18. In the pleadings of the private respondents also, there is no denial of the aforesaid stand of the petitioner. 19. It is in the aforesaid backdrop of the case, the grievance of the petitioner is that the respondents have acted illegally towards placing the supply orders and in not taking recourse to the laid down procedure in such matter, which according to the petitioner, resulted in their deprivation in participation in the tender process. Their prayer is for setting aside and quashing of Annexure-E order dated 13.11.2007 and for a direction to the respondents to initiate the entire process afresh following the due procedure required to be followed in such matter. 20. In the affidavit filed by the respondent No. 2, i.e. the Director of Elementary Education Assam, has justified his action. According to him, keeping in mind the priorities on academic and administrative aspects of the school system, he has to allot works to ASIDC, Assam Government Marketing Corporation, Co-operative Societies etc. All such activities, if are to be directly undertaken by him, the Directorate will have to have a separate marketing division or technical division under its control, he contends. According to him, the allotment of works to the respondent No. 3 Corporation is a better choice. In the affidavit he has also emphasized on the need and objectives of the scheme and as to how the aforesaid process was undertaken. As regards the quality check of the items, he has mentioned about the committee constituted of which he was the Chairman and Deputy Director of Elementary Education, Assam was the Member Secretary. Other two members are the Senior Finance and Accounts Officer and Finance and Accounts Officer of the Directorate. According to him, the committee was also represented by some experts. 21.
Other two members are the Senior Finance and Accounts Officer and Finance and Accounts Officer of the Directorate. According to him, the committee was also represented by some experts. 21. As regards the procedure adopted by the respondent No. 3 Corporation, the Director has contended that the said Corporation made local advertisement for supply of science items and received price quotations from six firms. Thereafter, the Corporation made a comparative statement and offered lowest price to the registered firms having registration. It has been contended that as per the provisions of the APSP Act, steel Almirah alone is the reserve item. However, according to him the other items although not covered by the Act, may also be purchased through the ASIDC. 22. As regard the price of items, it has been stated that the rate quoted by the respondent No. 3 Corporation maybe slightly higher than the Guwahati market rate because of inclusion of transportation cost, delivery cost etc. According to the Director, the rates quoted by the petitioner is not correct and that there may be great variation in price for items with different specification and quality. 23. The Director has mentioned about Annexure-R/2 letter dated 31.12.2002 issued by the Chief Vigilance Commissioner on the subject of purchase of articles by the Government from the private parties by which it was emphasized that purchase could be made from the Government agencies to avoid corruption. The whole emphasis of the Director in his affidavit is on the steel Almirah included as one of the items under the Act, 1989, but as regards the other items, he has contended that such small items in fragment could not be allotted to multiple firms. According to him in case of allotting the works to multiple firms, the cost of transportation would have multiplied causing loss to the State Exchequer. 24. Upon reference to Annexure-R/3 dated 7.10.2006, the Director has contended that for some other items/chemicals/crafts etc., another Directorate namely, the Directorate of Secondary Education, has placed the order to another Government Corporation, namely Assam Government Marketing Corporation Ltd. (AGMC). He has justified his action by stating that it was necessary to allot the whole works to a Government Marketing Association so that normal activities of the Directorate relating to priority programmes like implementation of universalisation of elementary education, mid-day meal, rationalization of teachers and text book distribution, school development, inspection, monitoring etc.
He has justified his action by stating that it was necessary to allot the whole works to a Government Marketing Association so that normal activities of the Directorate relating to priority programmes like implementation of universalisation of elementary education, mid-day meal, rationalization of teachers and text book distribution, school development, inspection, monitoring etc. are not hampered. According to him the procedure adopted was transparent and it did not involve any illegality. 25. In response to the Statements made in paragraph 26 of the Writ petition that even if it is held that the scientific items are within the purview of the APSP Act, the respondents are bound to follow the procedure envisaged in the Act, the Director has made the following statement in paragraph 21 of the affidavit. 21. That with regard to the statements made in paragraph 26 of the writ petition, the deponent while reiterating and reaffirming the statements stated above, begs to state that in case of choice of firms, the Government marketing agency having mandatory preferential store and purchase right is the most prudent choice. The whole process is transparent and the choice was judicious. 26. In the affidavit in opposition filed by the respondent No. 3 Corporation, the above stand of the Director has been reiterated. In paragraph-5 of the affidavit, it has been stated that the Director of Elementary Education, Assam by his letter dated 17.10.2007 re quested the Corporation and the Assam Government Marketing Corporation to submit the price of different science items on urgent basis as required for upgradation facilities to Up per Primary Schools under the 12th Finance Commission 2007-2008. On receipt of the said letter, the Corporation invited tenders from Entrepreneurs/Suppliers through short tender notice published in the notice board of the Corporation. Against the tender notice, altogether 8 (eight) Entrepreneurs/Suppliers collected tender documents and altogether 6 (six) tenderers alongwith samples of the articles submitted their papers. 27. Although in the affidavit mention has been made about publication of short tender notice in the notice board inviting tenders from the Entrepreneurs/Suppliers giving an impression that such invitation was open to all, but on perusal of the purported short tender notice, it appears that same was confined only to the registered S.S.I, units/suppliers with the Corporation. Further, by the said notice, only the rates were invited and not for supply order.
Further, by the said notice, only the rates were invited and not for supply order. It has been admitted that except steel Almirah all other items are not reserved and governed under APSP Act, 1989 and that the said Act is not applicable to the items involved. 28. In paragraph-11 of the affidavit, it has been stated that upon acceptance of the rate of science kits, orders were placed with 35 local firms and the same are in process of execution. It has been admitted that names of those firms were not disclosed as the said contractors submitted representation against such disclosures apprehending danger to life and properties. 29. The private respondents have filed Miscallenous Case No. 760/2008 for vacating the interim order passed in the writ petition. In the application they have justified the action of the respondents towards issuance of the supply orders. Annexure-A series annexed to the Miscellaneous case are their registration certificates. In the Miscellaneous case they have reiterated the stand of the official respondents in their affidavits. They have stated that work orders have been issued to them and they started the process of manufacturing and procurement of the goods for execution of the supply orders. However, because of the interim order passed, they could not do so. 30. According to them, the official respondents have placed work orders with them following due procedure. Their stand is that the Government of Assam in the Education Department collected the rates of the science items from the Assam Government Marketing Corporation and Assam Small Industries Development Corporation with a view to encourage the said Government undertakings as well as to make them financially viable in the public interest. Their further stand is that such a course of action was adopted to steer clear the fake and bogus firms inasmuch as the said two public sector Corporations have their own registered firms. According to them the respondents Corporation after public tender collected the rates of various items and forwarded the same to the Education Department. Thereafter, the Education Department allotted work order to the respondent Corporation which in turn placed the supply orders with 35 firms including the private respondents which are the registered S.S.I, units. 31. According to the private respondents, the aforesaid Corporation, to encourage the growth of industries of Assam specially the small and cottage, industries, took measures ancillary thereto.
Thereafter, the Education Department allotted work order to the respondent Corporation which in turn placed the supply orders with 35 firms including the private respondents which are the registered S.S.I, units. 31. According to the private respondents, the aforesaid Corporation, to encourage the growth of industries of Assam specially the small and cottage, industries, took measures ancillary thereto. They have termed the action of the Corporation as beneficial measures. Their stand is that in the competitive market, the S.S.I. units like them cannot survive only with the supply of goods/articles reserved in the aforesaid Act. 32. It has been contended by the private respondents that they being the S.S.I, units, are entitled to preferential treatment and that the members of the petitioner's Association being not so, they have no locus standi to file the writ petition so as to challenge the supply orders, In paragraph-15 of the application, it has been stated that the private respondents should not be made to suffer for any minor and/or technical irregularity in the process of awarding the contract to them. According to them, some of the members of the petitioner's Association are also the beneficiaries of similar procedure in the past. 33. The private respondents have filed an additional affidavit to highlight the above aspects of the matter relating to the contention that some of the members of the petitioner's Association are the beneficiaries of the same procedure adopted in the past. Upon a reference to the present budgetary provision for supply of science kit under the Award of 12th Finance Commission, the private respondents have contended that the supply order was awarded to the Assam Government Marketing Corporation Ltd. by the Director of Secondary Education, Assam following the same procedure as in the instant case. The Corporation allotted the work orders to various firms including some of the members of the writ petitioner's Association. In this connection, they have mentioned M/s. Brite Way Stores and M/s. Multi Science who are the members of the petitioner's Association. Thus, according to the private respondents, some of the members of the petitioner's Association being the beneficiaries of the same procedure adopted as in the instant case, maybe in respect of another Directorate of the Education Department, the petitioner is precluded from making a challenge to the same very procedure adopted by another Directorate under the same department.
Thus, according to the private respondents, some of the members of the petitioner's Association being the beneficiaries of the same procedure adopted as in the instant case, maybe in respect of another Directorate of the Education Department, the petitioner is precluded from making a challenge to the same very procedure adopted by another Directorate under the same department. Further stand of the private respondents is that the petitioner's Association deliberately concealed the said aspect of the matter. 34. The petitioner has filed an affidavit-in-opposition in the aforesaid Miscellaneous case filed by the private respondents denying the contentions raised therein. They have denied that the private respondents have started manufacturing and procuring the science items. Referring to Annexure-B science items, they have contended that those items can be procured only from the market and thus there is no question of manufacturing the same. The whole basis of the case of the petitioner's Association is that the respondents ought to have taken recourse to tender process, but instead they took recourse to awarding the contract and/or supply orders with the private parties who are not the manufacturers of science items and thus they will have to procure the same from the market. The petitioner has reiterated that except the steel Almirah, other items involved, are not the included items in the Assam Preferential Stores Purchase Act, 1989 (in short APSP Act) and thus, the respondents are bound to follow the tender process in consonance to Article 299 of the Constitution of India. 35. In paragraph-13 of the affidavit, it has been stated that the petitioner's Association is ready to supply the items with better quality at a total price of Rs. 6.26 crores as against the amount of Rs. 18.16 crores being spent by the respondents. 36. I have gone through the entire materials on record and the respective pleadings. Mr. C.K. Sarma Baruah and Mr. R.P. Sharma, both the learned Senior counsel appearing for the petitioner in their arguments referring to the above facts, submitted that the entire action on the part of the respondents being opposed to transparency and fair play in the matter of awarding the Government contract is liable to be interfered with.
Mr. C.K. Sarma Baruah and Mr. R.P. Sharma, both the learned Senior counsel appearing for the petitioner in their arguments referring to the above facts, submitted that the entire action on the part of the respondents being opposed to transparency and fair play in the matter of awarding the Government contract is liable to be interfered with. Referring to the provisions of APSP Act, they submitted that since all the science items with the exception of steel Almirah are not included in the Act, the respondents were duty bound to float tenders giving equal opportunity to all eligible tenderers/parties. According to them the deal has been struck with the private parties in hush hush matter. The amount being substantial and made available for purchase of science items for the Upper Primary Schools, the respondents ought to have taken recourse to the tender system for proper competition and procurement of quality items, they submitted. 37. As against the aforesaid submission, Mr. N. Dutta, learned Senior counsel appearing for the private respondents strenuously argued that the procedure adopted by the Government in the Education Department was fair. According to him the procedure adopted was to encourage the local Entrepreneurs/S.S.I. units. He submitted that the rates having been obtained from the aforesaid two Corporations and upon finalization of the same, the supply orders having been placed with the private respondents, there was nothing wrong in the procedure. He strenuously argued that since at least two members of the petitioner's Association are the beneficiaries of the same procedure in respect of other items pertaining to another Directorate of the Education Department, the petitioner's Association, have not disclosed the said fact in filing the writ petition, are not entitled to any indulgence of this Court and the writ petition is liable to be dismissed on that score alone. 38. Mr. M.K. Choudhury, learned Senior counsel and Standing counsel, Education Department, upon a reference to the procedure adopted towards procuring the rates and placing the supply orders submitted that the action of the respondents is immuned from arbitrary and illegal exercise of power and required to be sustained. Same is the argument of Mr. H.K. Deka, learned Senior counsel appearing for the respondent Corporation. He submitted that there was nothing wrong in the procedure adopted by the Corporation on the basis of the rates obtained by it. 39.
Same is the argument of Mr. H.K. Deka, learned Senior counsel appearing for the respondent Corporation. He submitted that there was nothing wrong in the procedure adopted by the Corporation on the basis of the rates obtained by it. 39. The principles which have to be applied in judicial review of administrative decisions, especially those relating to acceptance of tender and award of contract, have been considered in great detail by a three-Judge Bench in Tata Cellular v. Union of India reported in (1994) 6 SCC 651 . It was observed that the principles of judicial review would apply to the exercise of contractual powers by government bodies in order to prevent arbitrariness or favouritism. Government is the guardian of the finances of the State. It is expected to protect the financial interest of the State. The right to refuse the lowest or any other tender is always available to the Government, but while doing so, the principles laid down in Article 14 of the Constitution have to be kept in view. There can be no question of infringement of Article 14 if the Government tries to get the best person or the best quotation. At the same time, the right to choose cannot be considered to be an arbitrary power. If the said power is exercised for any collateral purpose, the exercise of that power will have to be struck down. 40. After an exhaustive consideration of a large number of decisions and standard books on administrative law, the Court enunciated the principle that the modern trend points to judicial restraint in administrative action. The court does not sit as a court of appeal but merely reviews the manner in which the decision was made. The Government must have freedom of contract, but fair play in the joints is necessary concomitant for an administrative body functioning in an administrative sphere or quasi-administrative sphere. However, the decision must not only be tested by the application of Wednesbury principles of reasonableness but also must be free from arbitrariness not affected by bias or actuated by mala fides. 41. Keeping in mind the aforesaid principles, the question to be answered in this case is to whether the decision making process of the respondents in awarding the contract/supply order can withstand the test of arbitrariness, unreasonableness and favouritism, 42.
41. Keeping in mind the aforesaid principles, the question to be answered in this case is to whether the decision making process of the respondents in awarding the contract/supply order can withstand the test of arbitrariness, unreasonableness and favouritism, 42. It is an admitted position that the supply orders have been placed with private parties without taking recourse to well established procedure offender system. The Education Department placed its requisition with the respondent Corporation which in turn indicated the rates of the science items and upon acceptance of the same, supply orders have been placed with the private parties who claim to be S.S.I, units under APSP Act, 1989 and the Rules framed thereunder. Upon a reference to their registration certificates annexed to the Miscellaneous case No. 760/2008, it appears that none of them is dealer in science kits/items required to be supplied except steel Almirah. In some cases they are not even the registered dealers for steel Almirah. It is with such kind of registration and capacity with the Directorate of Industries, Government of Assam, the respondents have favoured them with the supply orders for supply of science items and that too without invitation offenders. 43. The APSP Act, 1989 was enacted to encourage the growth of industries in the State of Assam specially the small scale and cottage industries by patronizing their products and on preferential basis and to rationalize the procedure for purchase of stores required by the State Government, Government Institution, Government Companies and State Government undertakings. Thus, the whole emphasis is for patronizing the products of the registered S.S.I, units. 44. Section 7 of the Act dealing with the preference of items of stores mentioned in Schedule II known as "reserved items" provides that the same shall be purchased by all requiring authorities from registered industries. Items of stores mentioned in Schedule-Dl shall be purchased by requiring authorities from ASIDC and ASIDC shall follow the guidelines regarding fixation of price, commission etc. as laid down in Schedule IV by notification dated 28.3.1988. The State Government shall from time to time, publish a list of stores which shall be purchased by requiring authorities only from industrial units, having valid store purchase registration and in accordance with the policy laid down by the State Board.
as laid down in Schedule IV by notification dated 28.3.1988. The State Government shall from time to time, publish a list of stores which shall be purchased by requiring authorities only from industrial units, having valid store purchase registration and in accordance with the policy laid down by the State Board. 45, None of the items involved in the supply orders except steel Almirah/furniture, is included in the Schedules to APSP Act, 1989 and thus are not within the purview of preferential purchase as envisaged under the Act. Schedule IV office memorandum dated 28.03.1988 deals with the purchase of products manufactured by local S.S.I, units, ASIDC Ltd. etc. As per guidelines laid down in the office memorandum, the State Government departments, their subordinate authorities, Government organization and public sector undertakings shall invariably make purchases of all their requirements for such items/ materials/products from the ASIDC Ltd., which the Corporation deals in, or manufactures, quality requirement and reasonable delivery schedules should, of course, be enforced. A list of items of materials/products to be dealt in or manufactured by the ASIDC Limited is included in the schedule. The price of such S.S.I, products will be fixed by the technical committee constituted by Assam Small Industries Development Corporation Ltd. with members from neutral organizations and concerned departments. None of the science items except steel Almirah is included in Annexure-I list. 46. Annexure-A to Schedule-IV is marketing assistance scheme under which steps for pricing have been indicated. The tenders should be invited by the Corporation by advertisement in three or four local newspapers in three consecutive issues giving one month time to S S.I. units. Tender papers will be issued by the Corporation by realizing the cost of the papers from the intending tenderers. The rates quoted will show the break up of cost of each item. The formalities of the technical committee is also indicated. The committee shall sit and examine the rate and fix the most reasonable one at a certain date. 47. Apart from the fact that none of the science items except steel Almirah comes within the purview of the preferential purchase under the Act, even the procedure envisaged under the Act was not followed in the instant case.
The committee shall sit and examine the rate and fix the most reasonable one at a certain date. 47. Apart from the fact that none of the science items except steel Almirah comes within the purview of the preferential purchase under the Act, even the procedure envisaged under the Act was not followed in the instant case. What the Directorate of Elementary Education, Assam did was to ask for price of science items from the respondent Corporation which in turn furnished the price list by their letter dated 6.11.2007. The matter moved in quick succession followed by letter dated 7.11.2007 issued by the Director of Elementary Education to the Commissioner and Secretary to the Government of Assam in the Education (E) Department. By the said letter upon a reference to the letters dated 6.11.2007 and 7.11.2007 issued by the respondent Corporation and the Assam Government Marketing Corporation respectively, the Government was requested to sanction the amount of Rs. 18.16 crores for implementation of the scheme. Thereafter the Government by its letter dated 12.11.2007 intimated the Accountant General of Assam about the sanction of the amount. While endorsing the copy of the said letter to the Director of Elementary Education, Assam, are-quest was made to purchase the science kits by observing all financial rules and procedure in force. It was indicated that upon failure to do so, same will attract AFRBM Act, 2005. Just on the following day, i.e. 13.11.2007, the Director of Elementary Education, Assam by his Annexure-E letter placed the order for supply of science kits for the amount of Rs. 18.16 crores with the respondent Corporation which in turn placed the supply orders with 35 numbers of firms. On the request being made by the petitioner under the Right to Information Act, 2005 to disclose the names of the firms, the petitioner was intimated by the respondents that under Section 11 of the said Act decision was taken not to disclose the names of the contractors (third party) to whom the supply orders had been placed, as they had submitted representations against such disclosure. 48. From the above, it is seen that the contractual orders have been placed with third party after approving the rates furnished by the respondent Corporation.
48. From the above, it is seen that the contractual orders have been placed with third party after approving the rates furnished by the respondent Corporation. Such rates were obtained not through any advertisement and/or public notice, but simply by purported notice in the notice board of the Corporation confining the same only to the registered S.S.I, units/suppliers of the respondent No. 3 Corporation. As noted above, the notice was issued only for getting the rates and not for supply orders. According to the respondents, altogether six firms responded to the said notice and submitted rates. Thereafter rates were finalized upon a reference to the respondent Corporation and the orders were placed with the Corporation which in turn awarded the supply orders to the third party. Thus, here is a case in which third party is the beneficiary of the entire process without any active participation in the said process involving an amount of Rs 18.16 crores. 49. A total reading of the facts said circumstances of the case, it appears that the respondents were in hurry and in the process they flouted all the norms and principles relating to distribution of State largesse. Instead of acting as a guardian of the finance of the State and the protector of the financial interest of the State, all the respondents acted in collision towards defrauding the public money. 50. The Director of Elementary Education, Assam himself has placed reliance on Annexure R/2 letter dated 31.12.2002 addressed to all the Government departments by the Chief Vigilance Commissioner, Assam. The letter has been pressed into service to justify the action in not taking recourse to tender process. By the said letter, prevention of corruption in the Government department was emphasized. In paragraph-G of the letter, it was emphasised that the prescribed procedure should be strictly adhered to in awarding any contract for the execution of any work or supply of any article for Government use. The need for wider publicity of tender notice was emphasized. The Director has annexed the copy of the said letter only to put emphasis to the observation made in paragraph-H of the letter in which it has been stated that if the purchase are made from Government agencies lesser will be the scope of corruption.
The need for wider publicity of tender notice was emphasized. The Director has annexed the copy of the said letter only to put emphasis to the observation made in paragraph-H of the letter in which it has been stated that if the purchase are made from Government agencies lesser will be the scope of corruption. The observation was made keeping in mind the products of the Government agencies and the names of the Government agencies were indicated in the letter. 51. Contrary to the above direction of the Vigilance Commissioner, the respondents took recourse to purchase of science products from the private parties in the name of purchasing the same from the Government agencies, i.e. the respondent Corporation. In the process, the respondents have defied the direction of the Government in its Annexure-D letter dated 12.11.2007 directing the Director of Elementary Education, Assam to purchase the science kits by observing all financial rules and procedure in force. It was indicated that upon failure to do so, same would attract the provisions of AFRBM Act, 2005. There is also nothing to indicate that the finance department of the Government of Assam was actively associated in the decision making process which was necessary considering the fact that the scheme was under the Award of 12 Finance Commission involving a huge amount of Rs. 18.16 crores. The entire process towards allotment of works was completed in no time. 52. It was a case of conferment of power together with a discretion which went to the authority to enable appropriate exercise of power and therefore, it was coupled with a duty to shun arbitrariness in its exercise and to promote the object for which the power was conferred which undoubtedly was public interest and not individual or private gain, whims or caprices of any individual. It is well settled that every State action, in order to survive must not be susceptible to the vice of arbitrariness which is the crux of Article 14 of the Constitution and basic to the rule of law, the system which governs us. Arbitrariness being opposed to reasonableness is an anti thesis to law. In the instant case, the action of the respondents towards issuance of supply orders in favour of the third party is wholly unreasonable, unfair and not in accordance with the declared principles. 53. Mr.
Arbitrariness being opposed to reasonableness is an anti thesis to law. In the instant case, the action of the respondents towards issuance of supply orders in favour of the third party is wholly unreasonable, unfair and not in accordance with the declared principles. 53. Mr. Dutta, learned Senior Counsel for the private respondent possibly realizing the fallacy in placing the supply orders with the private respondents and/or third party, during the course of his argument hammered on maintainability of the writ petition on ground of suppression of material fact by the petitioner. According to him at least two of the members of the petitioner's Association out of 27 members, namely M/s. Brite Way Stores and M/s. Multi Science, Guwahati being the beneficiaries of the same procedure in respect of some other items pertaining to another Directorate, namely Directorate of Secondary Education, Assam in the Education Department. The petitioner is estopped from making grievance against the procedure adopted. 54. The writ has been filed by the Association of 27 members and the same is registered under the Societies Registration Act and it has got its own legal entity. Apart from the fact that the transaction about which much emphasis has been put, pertains to another Directorate, details of which have also not been disclosed, the Us in the instant case pertains to transaction between the Directorate of Elementary Education and ASIDC (respondents Nos. 2 and 3 respectively), the real beneficiaries of which are the third party. If two of the members of the Association are the beneficiaries of the same procedure adopted in respect of another Directorate, same by itself cannot be a ground disentitling the Association from the relief it has sought for by inviting the writ jurisdiction of this Court. 55. The question is as to whether the discretionary power vested in the High Court under Article 226 of the Constitution of India should not be exercised in view of the said aspect of the matter. The powers conferred upon the High Court under Article 226 of the Constitution of India are discretionary in nature which can be invoked for the enforcement of any fundamental or legal right. 56. Article 226 of the Constitution confers extraordinary jurisdiction on the High Court to issue high prerogative writs for enforcement of the fundamental rights or for any other purpose. It is wide and expansive.
56. Article 226 of the Constitution confers extraordinary jurisdiction on the High Court to issue high prerogative writs for enforcement of the fundamental rights or for any other purpose. It is wide and expansive. The Constitution does not place any fetter on exercise of the extraordinary jurisdiction. It is left to the discretion of the High Court. Therefore, it cannot be laid down as a general proposition of law that in the kind of the situation about which learned Counsel for the private respondents has emphasized, the High Court cannot entertain the writ petition under Article 226 of the Constitution, more particularly when arbitrariness, unreasonableness and favouritism in the entire transaction is writ large on the face of it. Even otherwise also, the determination of the question depends on consideration of several factors like whether a writ petition is merely attempting to enforce his/her contractual rights or the case raises important questions of law and constitutional issues, the nature of the dispute raised; nature of inquiry necessary for determination of the dispute etc. The matter is to be considered in the facts and circumstances of the each case. 57. The illegality committed by the respondents having brought to the notice of this Court, the writ Court cannot remain silent spectator even if it is accepted that two members of the petitioner's Association are the beneficiaries of another transaction adopting the same procedure. As stated above, the details of the said transaction are not before this Court and the allegation is not against the petitioner's Association itself, but two of its members. Further, the said transaction was in another Directorate and not pertaining to the instant case. 58. If the contention of the private respondent is to be accepted, same will lead to rejection of the writ petition at a time when the Court finds that gross illegality has been committed in a matter of transaction involving crores of rupees. Time and again the Apex Court has held that the power conferred on the High Court under Article 226 of the Constitution is to advance justice and not thwart it. In the case of Rosan Deen v. Preeti Lal reported in (2002) ILLJ 465 SC, the Apex Court held that : 12....The very purpose of such constitutional powers being conferred on the High Courts is that no man should be subjected to injustice by violating the law.
In the case of Rosan Deen v. Preeti Lal reported in (2002) ILLJ 465 SC, the Apex Court held that : 12....The very purpose of such constitutional powers being conferred on the High Courts is that no man should be subjected to injustice by violating the law. The look out of the High Court is, therefore, not merely to pick out any error of law through an academic angle but to see whether injustice has resulted on account of any erroneous interpretation of law. If justice became the by product of any erroneous view of law the High Court is not expected to erase such justice in die name of correcting the error of law. 59. It is well settled that the jurisdiction of the High Court under Article 226 of the Constitution is equitable and discretionary. The power under that article can be exercised by the High Court "to reach injustice wherever it is found". More than fifty years before, in Verrappa Pillai v. Raman & Raman Ltd. reported in, the Constitution Bench of the Apex Court observed that writs referred to in Article 226 of the Constitution are obviously intended to enable the High Court to issue them. 60. There is another aspect of the matter. If the aforesaid plea of the learned Counsel for the respondents is to be accepted, same will lead to perpetuating another wrong. Even if the plea is accepted, though not acceptable in the present fact situation, but the same cannot confer any right to the private respondents. Two wrongs do not make one right. The private respondents cannot claim that since something wrong has been done in another case, permission should be granted for doing another wrong. It would not be setting a wrong right, but would be perpetuating another wrong. In such matter, there is no discretion involved. As has been observed by the Apex Court in Kastha Niwarak G.S.S. Maryadit v. Indoor Development Authority reported, the concept of equal treatment on the logic of Article 14 of the Constitution cannot be pressed into service in such cases. What the concept of equal treatment presupposes, is the existence of similar legal foothold. It does not countenance of repetition of wrong action to bring both the wrongs at per.
What the concept of equal treatment presupposes, is the existence of similar legal foothold. It does not countenance of repetition of wrong action to bring both the wrongs at per. Even if hypothetically it is accepted that a wrong has been committed in some other cases, by introducing a concept of negative equality the private respondents cannot strength their case. They have to establish the strength of its case on some other basis and not by claiming negative equality. 61. From the aforesaid narration of facts what has emerged is that the respondents in a hush hush manner and in quick succession materialized the allotment of contractual works with the third party in respect of science items of which the said third party is neither the manufacturers nor the suppliers. Their registration certificates clearly indicated the same. Obviously they will procure the items from the market, may be at the rate quoted by the respondent Corporation. Such rates have been fixed confining the rates quoted by the six parties who purportedly responded to the notice displayed in the notice board of the respondent Corporation. There is no competition whatsoever in awarding the contract. 62. The manner and method in which the entire exercise has been carried out can be visualized only in the domain of private contract and not in the realm of public contract. There is nothing on record to show that scientific items to be supplied by the third party is under any verification process except the direction in Annexure-E letter dated 13.11.2007 that the Headmaster as well as the Science Teacher of the school shall verify the items and ensure that the items are in foil and good condition and as per the specification approved by the Director of Element Education, Assam stated to be available in the office of the concerning Block Elementary Education Officer/D.I, of Schools. Thus the verification of the science items are left to the school Headmaster and the Science Teacher. They are also entered with the task to see as to whether the items conform to the specification with the sample approved by the Director. For such verification etc., the Headmaster and/or Science Teacher will have to go to the office of the Block Elementary Education Officer/D.I, of Schools. 63. From the above discussions what is glaring on the face of the record is that with the sanction of Rs.
For such verification etc., the Headmaster and/or Science Teacher will have to go to the office of the Block Elementary Education Officer/D.I, of Schools. 63. From the above discussions what is glaring on the face of the record is that with the sanction of Rs. 18.16 crores by the Government of Assam in the Education Department with a direction to the Director to purchase the science items by observing all financial rules and procedure in force, the Director placed the order with the respondent Corporation which in turn placed the supply orders with the third party. As noted above, things moved in quick succession and completed in no time. The Government sanction came on 12.11.2007 and on the next day, i.e. on 13.11.2007, the Director placed the order. 64. When the petitioner's Association wanted to know the procedure adopted and the names of the beneficiaries, same was partially revealed by the respondents. They refused to reveal the names of the beneficiaries on the ground that the said beneficiaries had requested them not to disclose their names. The reason is obvious. With such illegality in the matter and the same having come to the notice of the Court exercising the writ jurisdiction, this Court cannot remain a silent spectator so as to accept the submission made by the learned Counsel for the private respondents that since two of the members of the petitioner's Association are the beneficiaries of the same procedure although not pertaining to the impugned supply order, writ petition of the Association is not maintainable. This cannot be said to be the case of suppression of material fact disentitling the petitioner's Association from adjudicating the matter on its merit. Even if the fact is accepted, same cannot distract the Writ Court from adjudicating the matter. It also does not come within the purview of suppression of material fact which may be a ground disentitling the party approaching the writ Court of its right of adjudication of the matter. 65. For the forgoing reasons, the writ petition deserves to be allowed which I accordingly do. Entire action on the part of the respondents towards placing the supply orders firstly to the respondent Corporation and then to the third party being the result of arbitrariness, unreasonableness and favouritism, is set aside and quashed.
65. For the forgoing reasons, the writ petition deserves to be allowed which I accordingly do. Entire action on the part of the respondents towards placing the supply orders firstly to the respondent Corporation and then to the third party being the result of arbitrariness, unreasonableness and favouritism, is set aside and quashed. The respondents shall now proceed with the matter afresh in association with the Finance Department and by following due procedure maintaining fair play, transparency and reasonableness. 66. The writ petition is allowed leaving the parties to bear their own costs. 67. Before parting with the case records I feel it appropriate to make a recommendation to the Vigilance Commission/Department of the State Government as well as Finance Department to bring the erring officials to book for their illegal exercise of power and jurisdiction discussed above. This recommendation is made having regard to the. facts and circumstances involved in the case and the guidelines of the Vigilance Commission on the basis of which the Director of Elementary Education, Assam wanted to derive the source of his illegal activities. In the said letter, the Vigilance Commissioner emphasized on minimizing corruption, but the Director made use of the same as a tool to indulge in the illegal action. This is not to say that the Director alone is responsible. The recommendation is to bring to book all the officials involved in and whosoever is behind the entire episode in which in the name of benefits of local entrepreneurs/S.S.I. units, the respondents violated all the settled norms by way of gross illegality noted above. The, institutions for whose benefits the amount of Rs. 18.16 crores was sanctioned are only left with the task of verification of the items taking into account the-samples purportedly available in the office of the Block Elementary Education Officer/D.I, of Schools. It is not known as to what benefit the students community would have derived from such a transaction. 68. Let the copies of this judgment and order be forwarded to the Chief Vigilance Commission/Vigilance Commission of the Sate and so also to the Commissioner and Secretary, Finance Department, Government of Assam for their necessary follow up action. Petition allowed.