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2011 DIGILAW 211 (JK)

Deccan Charters Ltd. v. CEO, SMVDSB & Anr.

2011-04-27

SUNIL HALI

body2011
1. Three appeals have been preferred against order dated 31.03.2011 passed by learned District Judge, Reasi, one being CIMA no. 189/2011 filed by Deccan Charters Ltd. another being CIMA no.194/2011 filed by Shri Mata Vaishno Devi Shrine Board and third being CIMA no.190/2011 filed by M/s Global Vectra Helicorp Ltd. The facts in brief are as under:- 2. Shri Mata Vaishno Devi Shrine Board (hereinafter referred to as 'Board") invited tenders from reputed and registered Aviation Companies having a fleet of minimum two airworthy light helicopters endorsed on its non-scheduled operators permit for flight operations in the air space of J&K, from Katra to Sanjichhat and back utilizing the heliports at Katra and Sanjichhat purely on leave and licence basis, for a period of three consecutive years i.e. from 01.04.2011 to 31.03.2014. The helicopters will carry Shri Mata Vaishno Devi Yatris to and from Katra and Sanjichhat for darshan at the Holy Cave. Tenders were invited for turn-key opera­tions in a two bid format-Technical and Financial each filled in separately and properly sealed. The technical bids were to be opened by the Tender Committee in presence of the bidders, who may choose to be present on 17.03.2011 at 3.30 p.m. The date of opening of Financial Bids would be intimated only to the eligible short listed tenderers after evaluation of Technical Bids. NIT also contains various other terms and conditions. 3. The condition no.7 of the NIT is relevant in the present controversy, which is reproduced as under:- "7. The Bidder Company must fulfill the following eligibility conditions. (a) The Bidder must have minimum flying experience of 5 years with each of the flying pilots possessing a minimum mountain flying experience of 1500 hours as on 01.03.2011; (b) The Bidder must have minimum fleet of two (2) airworthy helicopters, endorsed on its NSOP for Katra Sanjichhat sector (other than its accidental helicopter(s) which are not to be counted) and cleared/approved by DGCA for flight operations. (c)." 4. At the time of evaluation of technical bid, plaintiff-Deccan Charters Ltd. (hereinafter referred to as 'DCL') was found to be ineligible as it did not possess the requisite flying experience of five years as mentioned in clause 7(a) of the NIT. (c)." 4. At the time of evaluation of technical bid, plaintiff-Deccan Charters Ltd. (hereinafter referred to as 'DCL') was found to be ineligible as it did not possess the requisite flying experience of five years as mentioned in clause 7(a) of the NIT. Aggrieved by the order of the appellant-Board, a civil suit has been filed before the District Judge, Reasi wherein following reliefs are sough t:- "Suit for declaration declaring the decision taken by the defendants whereby the Technical bid of the plaintiff has been rejected in respect of the allotment of contract in terms of the tender Notification no.CO/ADM/662/3225 dated 23.02.2011. AND The plaintiff's financial bid declined to be not opened for the contract of providing Helicopter Service for Shri Mata Vaishno Devi Shrine w.e.f. 01.04.2011 to 31.03.2014. WITH Consequential relief of mandatory/prohibitory injunction restraining the defendants. i) to open the financial bid; ii) to allot the contract to anybody; and iii) execute agreement with anybody; Any other relief, which this Hon'ble Court in the facts and circumstances of the case deems fit and proper. 5. Along with the suit, an injunction application was also filed. In the said application, plaintiff-Deccan Charters Ltd, sought the following reliefs:- "i) The defendants/non-applicant may kindly be restrained from opening the financial bids much less allot the contract to any body. ii) Enter into any agreement in respect of the contract in question with any body on the basis of tender notice dated February 23,2011; and iii) The plaintiff may kindly be allowed to continue to operate the Helicopter service till the final disposal of the main suit. iv) Such other additional or alternative order as this Hon'ble Court deems fit and proper may also be passed in favour of the plaintiff/applicants and against the defendants/non-applicants." 6. The trial court after hearing the parties in the injunction application directed the Board to open the financial bid of the plaintiff-DCL after completing all the formalities and negotiating with it in order to finalize the contract and in case there is any difficulty in re-negotiation, then re-tender the same afresh. During the said process, which is to be completed within one month i.e. by or before 30.04.2011, the successful tenderers be allowed to operate the service as stop-gap arrangement. The Board shall, however, not enter into any agreement with any person in this behalf. During the said process, which is to be completed within one month i.e. by or before 30.04.2011, the successful tenderers be allowed to operate the service as stop-gap arrangement. The Board shall, however, not enter into any agreement with any person in this behalf. This, in nutshell, is the direction issued by the trial court. CIMA no.189/2011, CMP no.352/2011, CMP no.341/2011 and CMP no.395/2011. 7. In this appeal, order impugned has been questioned only to the extent that the interim arrangement made by the trial court is uncalled for, more particularly, when it has found prima-facie case in favour of the plaintiff. Much stress has been laid by Mr. Johal on the issue that since the direction has been issued by the trial court asking for re-negotiation of the tender, it was not appropriate to allow the successful bidders to operate the service as the appellant had already an existing contract with the Board. Argument per se seems to be mis-placed. It is not in dispute that there was no subsisting contract between the appellant and the Board. The subsisting contract was with Deccan Aviation Private Ltd (hereinafter referred to as 'DAPL'), which was to subsist upto 31.03.2011 and after the expiry of the said period, the contract had come to an end. There existed no right in favour of M/s DAPL after the said date. In the present case, as rightly pointed out by learned counsel for the respondents that there was no subsisting contract with the present appellant, as such, seeking of such relief, is uncalled for. 8. In view of the above, I do not find any merit in this appeal, the same is, accordingly, dismissed along with connected CMP(s), if any. CIMA no.194/2011, CMP no.351/2011, CMP no.347/2011. 9. In this appeal, the order impugned has been questioned on the following grounds:- (a) That kind of direction issued by the trial court in directing the Board to consider the financial bid of the plaintiff-DCL, and re-negotiate the same, tantamount decreeing the suit without putting the parties to trial. Such a direction could not have been issued in the application seeking temporary injunction; (b) That before determining prima facie case, it was du ty of the trial court to have determined the right of the plaintiff-respondent in the suit. The trial court has not gone into this question. Such a direction could not have been issued in the application seeking temporary injunction; (b) That before determining prima facie case, it was du ty of the trial court to have determined the right of the plaintiff-respondent in the suit. The trial court has not gone into this question. The only right which the plaintiff could claim was the right of consideration which did not flow from any statute nor it violated any one of his private rights. Board admittedly is not the State within the meaning of Article 12 of the Constitution but a statutory body; (c) That the trial court after disagreeing with the opinion of the Tender Committee has recorded its opinion regarding the technical expertise of the respondents, which power he did not have; and (d) That while relying on order of the Hon'ble High Court of Karnatka, it has drawn its own conclusion by holding that Deccan Charters Ltd was erstwhile Company of the Deccan Aviation Ltd, which was not factually correct. 10. In the light of above, illegality or otherwise of the order has to be analyzed. 11. Looking to the nature of the relief claimed in the shape of declaration what was being questioned was the rejection of the technical bid by the Board based upon condition no.7 of the NIT. The trial court while dealing with the injunction appli­cation has issued the following directions:- (a) to open the financial bid of the plaintiff-DCL and negotiate with him for the allotment of the contract; (b) that in case bid could not be finalized then re-tender the same afresh. 12. The trial court has not conformed its direction in consonance with Order 39 Rules-1 and 2 CPC. What is permitted under Order 39 Rule 2 CPC is that order of temporary injunction can be issued in any suit for restraining the defendant from committing a breach of contract or other injury of like kind arising out of the same contract or relating to the same property or right. The effect of granting such an order is a restrictive process designed to compel the party against whom it is granted to maintain his status until the matter in dispute is decided by the Court. The Order 39 CPC is also couched in the same manner. The effect of granting such an order is a restrictive process designed to compel the party against whom it is granted to maintain his status until the matter in dispute is decided by the Court. The Order 39 CPC is also couched in the same manner. The direction clearly is not restrictive in nature but is in the nature of command asking the Board to reopen the financial bid of the plaintiff-DCL. This, in essence, was not the prayer sought by the plaintiff-DCL in its injunction application. No direction in the nature of command could be issued by the trial court while disposing of injunction application under Order 39 CPC. The direction has to be only restrictive and not in the nature of command. Granting of injunction should be exercised cautiously and upon clear and satisfac­tory grounds. The trial court, as a matter of fact, while issuing direction, decreed the suit without putting the parties to trial. I say so on the following reasons:- (a) That limited prayer sought in the application was to restrain the Board from finalizing the contract till the matter is heard; (b) That there was no prayer made for directing the Board to open the financial bid of the plaintiff; (c) That once such a direction has been issued nothing is left to be determined in the suit filed by the plaintiff-DCL. 13. The only relief which the plaintiff could get in the suit is whether his technical bid has been wrongly rejected or not. He could not get the relief of reopening of the financial bid in the present suit unless he is found eligible by the trial court to bid for the said contract. The order is per se bad in the eyes of law. 14. I am fortified my view with the judgment of the Apex Court reported in AIR 2005 SC 1444 titled Metro Marins and another v. Bonus watch Co.Pvt. and others, wherein it is held as under :- "In the instant case the issue whether the plaintiff is entitled for possession was yet to be decided by the trial court hence granting of any interim order directing handing over of possession to plaintiff would only mean decree­ing the suit even before trial. Once the possession of the defendant either directly or though his agent (caretaker) is admitted then the fact that he was not using the said property for commercial purpose or not using the same for any beneficial purpose or he had to pay huge amount by way of damages in the even of he losing the case or the fact that the litigation between the parties was a luxury litigation are all facts which are irrelevant for changing the status quo in regard to possession during the pendency of the suit. 15. It is stated that the court while determining the prima facie case in favour of the plaintiff, was required to determine the specific plea raised in this behalf by the defendants regarding maintainability of the suit. 16. What is being contended is that there is no concluded contract between the parties to the suit because inviting tender is merely an invitation to make offer and submission of tender is simply an offer, which does not confer any enforceable right in favour of the tenderer. It is not in dispute that there is no concluded contract as offer was rejected on technical bid. The only right, which the plaintiff-DCL could claim was the right of consideration. It is specifically stated that tender has been arbitrarily rejected without disclosing cogent reasons in this behalf. The right of consideration does not flow from any statute or from any private right. It is a right in the realm of fundamental rights as guaranteed under Article 14 of the Constitu­tion of India. Board is not State but a statutory body, cannot be bounded in this behalf to consider the case of the petitioner for seeking enforcement of the funda­mental rights. This obligation is cast upon the State to accord consideration to all the eligible candidates in the matter of allotment of the contract. Even though, the Board is involved in the public activities but is not a State within the meaning of Article 12 of the Constitution of India, as such, right of this nature could not be enforced. The trial court was required to address itself on this issue before deter­mining prima facie case in favour of the plaintiff-DCL. 17. In reply to grounds 3 and 4, which are taken up together, it is stated that the dispute in the suit relates to interpretation of condition no. The trial court was required to address itself on this issue before deter­mining prima facie case in favour of the plaintiff-DCL. 17. In reply to grounds 3 and 4, which are taken up together, it is stated that the dispute in the suit relates to interpretation of condition no. 7 of the NIT which provides that bidder must have flying experience of five years with each of the flying pilots possessing a minimum mountain flying experience of 1500 hours as on 01.03.2011. While entering into this arena of determining the eligibility, the trial court found that present appellant-company had merged from the erstwhile company called as Deccan Aviation Pvt. Ltd. and had flying experience of 5 years as per the requirements of tender notice. Trial court has construed the direction issued by the Hon'ble High Court of Karnataka that the process of amalgamation intended was for the welfare of the company and its shareholders. What, in essence, he has stated is that Deccan Aviation Ltd. had been merged with Deccan Charters Ltd. and all its assets and liability along with infrastructure stood transferred in the name of the plaintiff-company. By implication, it has been assumed that the company has requisite flying experience. 18. While analyzing this, it be seen that from the judgment of the Karnataka High Court passed in petition filed by Kingfisher Airlines Limited under Sections 391 to 394 of the Companies Act, 1956, preamble of the order itself reveals that the petitioner- company Kingfisher Airlines Ltd. was incorporated in 21.05.2007 with the Registrar of Companies, Karnataka, as Kingfisher Aviation Training Ltd. The name of Kingfisher Aviation framing Ltd. was changed to Deccan Charters Limited and a certificate consequent to change of name was obtained on 07.02.2008, which was issued by the Registrar of Companies, Karnataka, Bangalore. 19. The Deccan Company was incorporated on 15.06.1995 in the name of Deccan Aviation Private Ltd. with the Registrar of Companies, Karnataka. The name of the company was changed to Deccan Aviation Limited and certificate of incorporation consequent upon the change of name was issued on 14.03.2005 by the Registrar of Companies, Karnataka. 19. The Deccan Company was incorporated on 15.06.1995 in the name of Deccan Aviation Private Ltd. with the Registrar of Companies, Karnataka. The name of the company was changed to Deccan Aviation Limited and certificate of incorporation consequent upon the change of name was issued on 14.03.2005 by the Registrar of Companies, Karnataka. The Board of Directors of the company ap­proved the scheme in its meeting held on 31.01.2008, by virtue of which, the Charter Service Operations Undertaking of the petitioner-company was proposed to be transferred to DCL and the Scheduled Airlines Division Undertaking of Kingfisher was proposed to be de-merged and transferred into the petitioner-company on a going concern basis. 20. So what emerges from the above is that Kingfisher Company was changed to Deccan Charters Ltd. As to whether the assets and liability of the Deccan Aviation Private Ltd. stood transferred in favour of Deccan Charters, is an issue of fact, which was required to be proved during trial. It is further required to find out as to whether the pilot engaged by the said company has requisite experience as provided in the NIT. As a matter of fact, nothing is discernable from the order of the trial court in this behalf. This is an issue which was required to be proved by the plaintiff. The trial court should have addressed on this issue. 21. What prima facie appears is that the DCL come into being as per the certificate of incorporation by the Government of India-Ministry of Corporate Affairs, Registrar of Companies, Karnataka under No. U63033KA2007PLCO42858, on 07.02.2008 and was issued NSOP no.26/2C08 on 07.10.2008 by the DGCA, New Delhi. The Tender Evaluation Committee while analyzing import of the condition 7(a) found that company had no requisite flying experience which was based upon the fact that company came into existence in 2008 which did not have five years flying experience. The second ground is that the Company named Kingfisher Aviation Training Limited had been originally incorporated on 21.05.2007 under the Companies Act, 1956, which has further been named as M/s Deccan Charters Ltd. dated 07.02.2008. In its tender, it is mentioned that M/s Deccan Charters limited was formerly known as M/s Deccan Aviation Limited and has been renamed as Kingfisher Airlines Limited w.e.f. 05.09.2008 and not as M/s Deccan Charters Limited. M/s DCL is the changed name of M/s Kingfisher Aviation Training Limited. In its tender, it is mentioned that M/s Deccan Charters limited was formerly known as M/s Deccan Aviation Limited and has been renamed as Kingfisher Airlines Limited w.e.f. 05.09.2008 and not as M/s Deccan Charters Limited. M/s DCL is the changed name of M/s Kingfisher Aviation Training Limited. This means that M/s DCL and M/s DAPL have nothing in common and are two separate entities. Order further reveals that M/s Deccan Charters Ltd. submitted its Annual Turnover as per audited Balance Sheet only for the years 2007-08, 2008-09 and 2009-10 against the requirement of 5 years as per the NIT, which also renders it ineligible. The Tender Evaluation Committee after examining has come to the conclusion that M/s Deccan Charters Ltd. is a company, which was incorporated on 07.02.2008 and there is nothing common with M/s Deccan Aviation Private Ltd. 22. In the face of this decision taken by the Tender Evaluation Committee, the trial court concluded that M/s Deccan Charters Ltd. and M/s Deccan Aviation Private Limited have requisite flying experience. This was an area where the trial court should not have treaded as it could not substitute its own view in the face of the decision taken by the Tender Committee. 23. All these issues are required to be considered during the course of the trial. The terms and conditions set out cannot be gone into by the Court unless they appear perverse. None of the conditions imposed in the NIT are stated to be unreasonable. It may also be pointed out that tender stood already allotted in favour of the two companies, namely, M/s Global Vectra Helicorp. Ltd. and M/s Pawan Hans Helicopters Ltd. which was not subject matter of challenge in the suit filed before the trial court. 24. Viewed thus, I, allow this appeal and set aside the order dated 31.03.2011 passed by the trial court and direct the trial court to hear the injunction application afresh after considering all the issues discussed herein supra. It is further provided that two companies, namely, M/s Global Vectra Helicorp. Ltd. and M/s Pawan Hans Helicopters Ltd., shall be permitted to operate the service in pursuance to their allotment, it shall, however, be subject to the outcome of the directions, which may be passed by the trial court after hearing the parties in the injunction application. It is further provided that two companies, namely, M/s Global Vectra Helicorp. Ltd. and M/s Pawan Hans Helicopters Ltd., shall be permitted to operate the service in pursuance to their allotment, it shall, however, be subject to the outcome of the directions, which may be passed by the trial court after hearing the parties in the injunction application. It is further provided that the trial court will proceed in the matter uninfluenced by any observations made herein above. 25. The parties are directed to appear before the trial court on 05.05.2011. Disposed of along with connected CMP(s). APCV no.89/2011 in CIMA no.190/2011. 26. This is an application seeking leave of the Court to file an appeal against the order dated 31.03.2011 passed by learned District Judge, Reasi, by virtue of which allotment order issued in favour of the applicant has been put at naught. The petitioner is directly affected by the order impugned dated 31.03.2011. 27. Mr. Johal has filed objections to the application. However, looking to the nature of order passed and the contents raised in the application, it is found that the applicant is an aggrieved party and intends to file an appeal against the order impugned. 28. For the reasons detailed in the application, it is allowed. Petitioner is permitted to file the appeal. APCIV no.89/2011 is disposed of. CIMA no. 190/2011, CMP no.342/2011. 29. In view of the order passed in CIMA no. 194/2011, this appeal shall also stand disposed of along with connected CMP(s). Caveat no.381/2011. Heard. Discharged.