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Orissa High Court · body

2010 DIGILAW 202 (ORI)

Niroda Chandra Panda v. State of Orissa represented by its Secretary to Government, Works Department

2010-03-23

I.M.QUDDUSI, SANJU PANDA

body2010
JUDGMENT SANJU PANDA, J. : Though all these writ petitions were heard on different dates, they raise a common question of law relating to the constitutional validity of the office memorandum dated 13.2.2002 of the Government of Orissa, Works Department amending Rule 3 of the P.W.D. Contractor’s Registration Rules, 1967 and, therefore, they are disposed of by this common judg¬ment. 2. Public works are executed through registered contractors. No person shall be awarded any work except within permissible limit on job basis under any wing of the P.W.D. and unless he has been registered as a contractor and has obtained a valid certificate of registration.The registration of contractors is governed by the P.W.D. Contractor’s Registration Rules, 1967 which came into force with effect from 16th of October, 1969. Rule 3 of the aforesaid rules deals with classification of con¬tractor. According to the aforesaid rules, as amended in 1989, contractors were classified into Special Class, ‘A” Class, ‘B’ Class, ‘C’ Class and ‘D’ Class and the monetary limit of the cost of the works for the respective category of contractor was ac¬cordingly fixed. The aforesaid Rule 3 underwent an amendment in 1995 which was concurred in by the Finance Department in their U.O.R.No.446 WF-1 dated 14.9.1995. The said amendment read as under : “3. For the purpose of registration, the contractor shall be classified as follows and award of any work to any individual contractor the cost of which exceeds the amount noted against the class to which he belongs, is prohibited except with the prior approval of the C.E. or A.C.E. Class of Contractor Amount (i) Super Class Unlimited (ii) Special Class Not exceeding Rs.3.00 crores (iii) ‘A’ Class Not exceeding Rs.60.00 lakhs (iv) ‘B’ Class Not exceeding Rs.15.00 lakhs (v) ‘C’ Class Not exceeding Rs.6.00 lakhs (vi) ‘D’ Class Not exceeding of Rs.3.00 lakhs.” According to the aforesaid rules,award of work cost of which exceeds the amount noted against a particular class was prohibit¬ed meaning thereby that there was no restriction for a higher class contractor to undertake the work cost of which is below the upper limit of his class. While the matter stood thus, the oppo¬site party by office memorandum No.Codes-19/2002-2009 dated 13.2.2002 vide Annexure-2 further amended Rule 3 which reads as under : “3. While the matter stood thus, the oppo¬site party by office memorandum No.Codes-19/2002-2009 dated 13.2.2002 vide Annexure-2 further amended Rule 3 which reads as under : “3. For the purpose of Registration, the contractors shall be classified as follows and award of any work to any individual contractor the cost of which exceeds the amount noted against the Class to which he belongs, is prohibited except with the prior approval of the Engineer-in-Chief or Chief Engineer. Class of Contractors Amount (1) Super Class Unlimited (2) Special Class Not exceeding Rs.5.00 crores (3) ‘A’ Class Not exceeding Rs.1.00 crore (4) ‘B’ Class Not exceeding Rs.25.00 lakhs. (5) “C’ Class Not exceeding Rs.10.00 lakhs. (6) ‘D’ Class Not exceeding Rs.5.00 lakhs. A contractor having licence for a particular class can offer tender meant for his next below class of the contractor in addi¬tion to his own class, e.g. a Super Class can offer bidding meant for ‘Special Class’ contractor in addition to ‘Super Class’ and ‘Special Class’ Contractor can offer bidding meant for ‘A’ Class in addition to Special Class and so on.” The petitioners are contractors of different class registered under the P.W.D. Con¬tractors’s Registration Rules. It is contended by the learned counsel for the petitioners that the aforesaid amendment is arbi¬trary and unreasonable as it prohibits a contractor having li¬cence for a particular class to offer tender meant for the class¬es below his class and, therefore, the same is violative of Article 19(1)(g) of the Constitution of India. The question for consideration is that as to why the con¬tractors have been classified as Super Class Contractor, Special Class Contractor, ‘A’ Class Contractor, ‘B’ Class Contractor, ‘C’ Class Contractor and ‘D’ Class Contractor. Naturally, the answer would be that the State Government given opportunity to register as Contractor to the persons according to their financial capaci¬ty. Presumption is always in favour of the constitutionality of an enactment, since it must be assumed tha he Legislature under¬stands and correctly appreciates the needs of its own people, that its laws are directed to problems made manifest by experi¬ence and its discriminations are based on adequate grounds. Presumption is always in favour of the constitutionality of an enactment, since it must be assumed tha he Legislature under¬stands and correctly appreciates the needs of its own people, that its laws are directed to problems made manifest by experi¬ence and its discriminations are based on adequate grounds. Hon’ble apex Court in R.K. Garg v. Union of India, 1981 Supreme Court 2138 held that while considering the constitutional validity of a statute said to be violative of Article 14, it is necessary to bear in mind certain well established principles which have been evolved by the Courts as rules of guidance in discharge of constitutional function of judicial review. The first rules is that there is always a presumption in favour of the constitutionality of a statute and the burden is upon him who attacks it to show that there has been a clear transgression of the constitutional principles. Another rule of equal importance is that laws relating to economic activities should be viewed with greater latitude than laws touching civil rights such as freedom of speech, religion etc. 1966 Supreme Court 1044. It is the settled principle laid down by the Hon’ble apex Court in the case of Harman Singh v. R.T.A., AIR 1954 SC 190 that a legislation is not to be struck down as discriminatory if any state of facts may reasonably be conceived to justify it. To our opinion, if the Government would have allowed the super class contractor to participate intender meant for allowed class cate¬gories,then there would have been no scope for any inferior class of contractor to participate as for super class contractor who is capable to take work of unlimited value, would not be difficult to take contract up to D Class. There is a saying that big fish eats small fishes and in that case the said saying would have been befitting and the lower class contractors would have been derived of their right to livelihood guaranteed as their funda¬mental rights enshrined in the Constitution of India. Therefore, the classification in the impugned notification is rational and on the face of it the Government have made an attempt to catego¬rise the contractors to give opportunity to do their business by way of getting registration under any of the categories of con¬tractors according to their financial status. Therefore, the classification in the impugned notification is rational and on the face of it the Government have made an attempt to catego¬rise the contractors to give opportunity to do their business by way of getting registration under any of the categories of con¬tractors according to their financial status. Further the Government by the impugned amendment have taken care and allowed a contractor registered under a particular cate¬gory to participate in tender for his next below class. This very amendment was challenged by a contractor in W.P.(C) No.2140 of 2008 and did not found favour by this Court. A Division Bench of this Court presided over by the then Chief Justice held that the classification has been done in order to give some protection to A Class,B Class, C Class and D Class Contractors.Since they are small contractors, they have been given some protection in bidding against the bigger contractors. It was further held therein that such protection is given in order to give fair opportunity of participation to all classes of contractors. The Division held that without such protection, it will be difficult for A,B,C, and D Class contractors to bid with Super Class Contractors. The Court held that Article 14 does not prohibit classification and that the classification must not amount to discrimination. Considering the facts and circumstances the Division Bench came to hold at the classification made was based on the value of the contract and by making such classifica¬tion the authorities have acted in a reasonable manner and there is an object behind such classification which is sought to be achieved by giving some protection to small contractors from the big contractors in the matter of bidding. In the impugned amendment, the State Government have allowed a particular class of contractor to bid for the class to which he belongs as well as the class next below his class. We, therefore, see no discrimination or violation of funda¬mental rights in the impugned amendment. There is, therefore, no merit in these writ petitions which are accordingly dismissed. There would be no order as to costs. I.M. QUDDUSI, ACJ. I agree. Petitions dismissed.