W. E. B. E. L. Informatics Limited v. Embee Software Private Limited
2011-07-08
DIPANKAR DATTA
body2011
DigiLaw.ai
JUDGMENT 1. THIS revisional application under Article 227 of the Constitution of India is directed against Order No. 3 dated May 12, 2011 passed by the learned District Judge-in-Charge, 24-Parganas (South) at Alipore in Misc. Appeal No.219 of 2011, filed at the instance of the plaintiff in T.S. No.1214 of 2011 and pending on the file of the learned Civil Judge (Junior Division), 2nd Court, Alipore. 2. BY the impugned order, while issuing notice requiring the respondent No. 1 to show-cause within 10 days of service as to why it shall not be restrained as prayed for, ex-parte ad-interim injunction was granted till June 9, 2011 restraining the respondent No. 1 in the appeal and/or its officers/agents "from opening tender dated 25.02.2011 and/or giving its effect/further effect without incorporating LCD Multimedia Projector along with DLP Branch." The appellant was directed to comply with provisions of clauses (a) and (b) of the proviso to Rule 3 of Order 39 of the Code of Civil Procedure. The decisions the Supreme Court reported in 1993 (3) SCC 161 (Shiv Kumar Chadha v. Municipal Corporation of Delhi and Ors.) and 1994 (4) SCC 225 (Morgan Stanley Mutual Fund v. Kartick Das) are authorities delineating the principles for grant of ex-parte ad-interim injunction, yet, the learned Judge of the appellate Court proceeded to grant ex-parte ad-interim injunction by recording as follows:- "On perusal of the petition and annexed documents, I am of the view that a strong prima facie case has been made out and that there is urgency in the matter and that delay is likely to defeat the object for which the injunction has been prayed for". 3. THIS is nothing but reproduction of the words of the statute and may be used as a rubber stamp whenever and wherever the learned Judge considers it necessary to grant ex parte ad-interim injunction. The order impugned is in the teeth of the decisions referred to above and warrants to be set aside without much argument. I was inclined to set aside the order impugned and direct the learned Judge of the appellate Court to hear the application for injunction filed by the plaintiff/appellant afresh without expressing any opinion on the merits of its claim. However, Mr.
I was inclined to set aside the order impugned and direct the learned Judge of the appellate Court to hear the application for injunction filed by the plaintiff/appellant afresh without expressing any opinion on the merits of its claim. However, Mr. Chatterjee, learned Advocate for the plaintiff/appellant (opposite party No. 1 herein) submitted that for the failure of the learned Judge to record reasons and to conduct himself properly, the plaintiff ought not to suffer and that it ought to be considered whether on the facts pleaded in the plaint as well as the application for temporary injunction, any case for grant of the prayers made in the application had been set up or not. 4. ACCEPTING Mr. Chatterjee's submission, the parties were heard at length. I propose to consider whether the order of injunction granted by the learned Judge of the appellate Court ought to be continued or not. I may place on record that the injunction granted by the impugned order was operative till June 9, 2011 and it was extended on that date for a further period of a month. Mr. Chatterjee had contended that since the impugned order merged in the order dated June 9, 2011 and there being no challenge to the subsequent order, the application is not maintainable. 5. IT has, however, been conceded that the limited interim order of injunction was extended on June 9, 2011 not on contest but suo motu; on that day, the members of the local bar did not attend Court in support of a call for cease work. 6. THE objection raised by Mr. Chatterjee regarding maintainability of this application is plainly not acceptable. Power under Article 227 may be exercised by the High Court, in an appropriate case, suo motu. THE impugned order is such that it satisfies all the ingredients for which an order could be termed to have been passed 'without jurisdiction'. Irrespective of whether or not the subsequent order has been challenged, nothing prevents the High Court to exercise its power of judicial superintendence to ensure that the subordinate Courts function within the bounds of its authority. As noticed above, the impugned order leaves a lot to be desired and warrants setting aside without entering into the merits of the controversy. THE objection regarding maintainability is misconceived and, accordingly, stands overruled.
As noticed above, the impugned order leaves a lot to be desired and warrants setting aside without entering into the merits of the controversy. THE objection regarding maintainability is misconceived and, accordingly, stands overruled. The petitioner is the first defendant in the suit while the Central Vigilance Commission (hereafter the Commission), Epson India Pvt. Limited and the State of West Bengal are the three pro forma defendants, viz. defendant Nos.2, 3 and 4 respectively. 7.
THE objection regarding maintainability is misconceived and, accordingly, stands overruled. The petitioner is the first defendant in the suit while the Central Vigilance Commission (hereafter the Commission), Epson India Pvt. Limited and the State of West Bengal are the three pro forma defendants, viz. defendant Nos.2, 3 and 4 respectively. 7. A meaningful reading of the plaint in T.S. No. 1214 of 2011 reveals as follows:- Paras 1 and 7-the credentials of the plaintiff reflecting that it is a reputed distributor of LCD Multimedia Projector, manufactured by Epson India Pvt. Ltd. and has been providing services without any blemish; Para 2-incorporation of the first defendant and its particulars; Para 3-the assertion that no relief is solicited against the proforma defendants; Para 4-the first defendant intends to implement Integrated Computerised Education (hereafter ICE) using Information and Communication Technology (hereafter ICT) in various schools in the state; Para 5-the first defendant is a nodal agency, functioning under the guidance of the State of West Bengal being appointed by it as Bid Inviting Authority; Para 6-to implement ICE using ICT, the first defendant issued request for proposal dated 25.2.2011 vide Tender Reference No. WIL/TNDR/ 2010-11/SED/ 001; Para 7-Annexure to the Tender Documents, titled 'detailed bill of material and services required' referred to Multimedia Projector as one of several equipment that would be procured; Para 8-the State of West Bengal in the year 2010 under same scheme of school projects had issued tenders mentioning requirement for procurement of LCD and DLP Multimedia Projectors; Para 9-the terms of the tender dated 25.2.2011 surprised the plaintiff since LCD Multimedia Projector was excluded, thereby ousting it from taking part in the process and the specifications mentioned were also erroneous; Paras 10 and 17-circular letter dated February 11, 2011 issued by the Commission is referred to, which details the manner in which equipment of complex nature is to be procured; Para 11-contains averments regarding the steps taken by the plaintiff and the third defendant objecting to the limited scope of the tender whereby LCD Multimedia Projectors were excluded; Paras 12 and 27-discusses the technical differences between LCD and DLP Multimedia Projectors and refers to the merits of LCD Multimedia Projector and demerits of DLP Multimedia Projector; Para 13-expresses that the first defendant is interested to procure DLP Multimedia Projector; Paras 14 and 20-refers to issuance of a corrigendum dated March 26, 2011 by the first defendant without changing the requirement of DLP Multimedia Projector, thereby keeping the scope of the tender narrow; Paras 15 and 18-alleges that the first defendant is short of full knowledge of the various technical solutions available in the market and that it had acted hurriedly with a corrupt motive to favour a chosen few who are associated with promoting DLP Multimedia Projectors; Para 16-refers to mala fide intention of the first defendant who abused its dominant position by breaching the circular letter issued by the Commission; Para 19-says that Multimedia Projector is an audio-video product in respect whereof the members of the Tender Committee of the first defendant or its consultants have no expertise; Para 21-asserts that the circular letter dated February 11, 2011 issued by the Commission is binding on the first defendant; Paras 22 and 26-alleges favouritism in specifying DLP Multimedia Projector as the required equipment and that the first defendant is hand in gloves with those associated with promoters of DLP Multimedia Projectors; Para 23-other states of the country while implementing ICE using ICT have been issuing tenders for procuring both LCD and DLP Multimedia Projectors; Para 24-asserts that the requirement is of a projector and not of DLP Projector alone and that the first defendant had committed a wrong in narrowing the scope of the tender; Para 25-expresses that the first defendant ought to have ensured freedom of trade, being a limb of the Government; Para 28-the plaintiff's claim that it is entitled to participate in the tender and that the first defendant ought to be directed to cancel the tender dated 25.2.2011 and to procure, inter alia, LCD Multimedia Projector after issuing fresh tender according to the guidelines of the Commission; Paras 29-32-formal statements as to why the plaintiff is entitled to relief, accrual of cause of action, Court fees etc.
8. ON the basis of the aforesaid pleadings in the plaint, the plaintiff claimed the following relief:- "(a) Leave under Order 2 Rule 2 of the C.P.C. (b) Declaration that the defendant No. 1 have failed to fulfil the guidelines endorsed in the circular dated 11.2.2011 issued by the Pro forma defendant No.2 and therefore the tender process is illegal, mala fide and null and void; (c) Declaration that the plaintiff is entitled to participate in the tender under the said integrated scheme for Computer Education (CE) and information and Communication Technology ICT in 2010-2011. (d) Permanent injunction restraining the defendant No. 1 and/or its agents from giving effect the said tender dated 25.2.2011 issued by the defendant under the said integrated scheme for computer Education and information Communication Technology ICT in 2010-11 in School (Secondary and Higher Secondary) to the State with effect from Academic year 2010-2011. (e) Injunction; (f) Receiver; (g) Costs of the proceedings and incidentals; (h) Any further relief or reliefs to which the plaintiff is entitled in law or in equity." Mr. Chatterjee argued that mala fide is writ large, if one could appreciate the factual position that the process has been initiated to confine selection amongst only three suppliers of DLP Multimedia Projectors. According to him, the project for which procurement of Multimedia Projectors is intended and for which expression of interest has been invited, there is no stipulation that DLP Multimedia Projectors should only be obtained and not LCD Multimedia Projectors. The process, he contended, is clearly intended to favour only a particular group of DLP Multimedia Projector suppliers and the same amounts to gross discrimination. 9. IT was next contended that the plaintiff had been participating in other processes of similar nature where no such restriction has been imposed and it is a clear case of imposition of unreasonable restriction on the suppliers of LCD Multimedia Projectors, which again fouls the equality clause enshrined in the Constitution. 10. FINALLY, it was urged that there has been clear violation of the guidelines issued by the Commission vide circular letter dated February 11, 2011.
10. FINALLY, it was urged that there has been clear violation of the guidelines issued by the Commission vide circular letter dated February 11, 2011. The said guidelines, he submitted, were issued to ensure transparency and the first defendant having honoured the said guidelines in the breach, the process ought not to continue till such time the first defendant sets up a committee of experts whose services could be utilised for judging the acceptability of LCD Multimedia Projectors in preference to DLP Multimedia Projectors. In support of his submission that the guidelines of the Commission would give rise to an enforceable right, Mr. Chatterjee relied on the decision of the Supreme Court reported in AIR 1984 SC 363 , B.S. Minhas v. Indian Statistical Institute. 11. HE concluded by submitting that a strong prima facie case for grant of ex parte ad-interim injunction had indeed been set up by the plaintiff and, therefore, the learned Judge of the appellate Court did not ultimately commit any error in granting the plaintiff's prayer. 12. NONE of the contentions urged by Mr. Chatterjee have impressed me. The first defendant/petitioner is acting as a nodal agent of the fourth defendant, i.e. the State. The plaintiff has not set up a claim that the first defendant deviated from and/or acted contrary to the terms of entrustment made by the State by inviting offers only in respect of DLP Multimedia Projectors. It would be reasonable to presume that had the first defendant invited expression of interest for procuring DLP Multimedia Projectors contrary to and/or in deviation of the terms of entrustment, the State would obviously have taken exception thereto. There is nothing on record to suggest that the State has taken exception. On the contrary, Mr. Kar, learned Advocate appearing for the State, did not oppose the actions taken by the first defendant/petitioner. I shall, therefore, proceed on the basis that the process initiated by the first defendant/petitioner has the tacit consent of the State. It is immaterial as to whether in course of implementation of the project at an earlier point of time the State had invited offers for supplying both LCD and DLP Multimedia Projectors.
I shall, therefore, proceed on the basis that the process initiated by the first defendant/petitioner has the tacit consent of the State. It is immaterial as to whether in course of implementation of the project at an earlier point of time the State had invited offers for supplying both LCD and DLP Multimedia Projectors. What is of importance, in so far as the present case is concerned, is that as a matter of policy DLP Multimedia Projectors have been sought to be procured and it is those bidders satisfying the requirement of the process who would be considered. Question is, whether it is for the Court to determine whether a particular policy or particular decision taken in the fulfillment of that policy is fair? The Courts are not concerned with the merits of the decision but the manner in which the decision has been taken. It is only on limited grounds i.e. illegality, irrationality and procedural impropriety that an administrative action could be subject to control by judicial review. That the action falls within any of the three categories has to be established and a mere assertion in that regard would not be sufficient. The Courts will not interfere as if it were sitting in appeal over the decision. 13. ASSUMING arguendo that the State has acted contrary to the object for which the project has been envisioned and, therefore, is to be faulted, the plaintiff would not be entitled to any injunction for the simple reason that it has explicitly made it clear in the plaint that it is not seeking any relief against the State. An injunction is granted in aid of the final relief and since no relief is being prayed against the State, there cannot be any injunction thereby stalling the process of procuring the DLP Multimedia Projectors much to the prejudice and detriment of the State. 14. ONE must not lose sight of the settled principle of law that a tender is nothing but an offer. It is something which invites and is communicated to notify acceptance. By its very nature, it is a commercial transaction. It is not open to a party desirous of responding to a tender notice to insist the tender issuing authority to set terms so as to suit its convenience.
It is something which invites and is communicated to notify acceptance. By its very nature, it is a commercial transaction. It is not open to a party desirous of responding to a tender notice to insist the tender issuing authority to set terms so as to suit its convenience. If it were to be so, that would amount to dictation of terms by an interested party, which is impermissible in law. Howsoever vociferously Mr. Chatterjee might contend that the plaintiff did not attempt to set terms for the first defendant to adhere to and/or did not challenge the tender conditions, I accept the submission of Mr. Basu, learned Senior Advocate for the first defendant and Mr. Kar that the plaintiff has in fact attempted to dictate terms. The attempt of the plaintiff, in view of the decisions of the Supreme Court reported in 2005 (4) SCC 435 : Global Energy Ltd. and Anr. v. Adani Exports Ltd. and Ors., 2004 (4) SCC 19 : Directorate of Education v. Educomp Datamatics Ltd. and 2000 (2) SCC 617 : Air India Ltd. v. Cochin International Airport Ltd., cannot be countenanced. Next, it is clear from a reading of the plaint as well as the arguments advanced on behalf of the plaintiff that an effort has been made to demonstrate the operational utility of LCD Multimedia Projectors and the corresponding disadvantages of user, of DLP Multimedia Projectors and that confining the selection only to a meagre number of DLP Multimedia Projector suppliers is mala fide. 15. ALLEGATIONS of mala fide are serious in nature and they essentially raise a question of fact. It is, therefore, necessary for the person making the allegation to supply full particulars in the pleading. If sufficient averments and requisite particulars are not on record, the Court would not make a 'fishing' or 'roving' enquiry [see 2007 (8) SCC 418 : Dhampur Sugar (Kashipur) Ltd. v State of Uttaranchal]. Mala fides must be discernible from the action that is impugned and must be shown from the established surrounding factors, which preceded the action. The burden of establishing mala fides is very heavy on the person who alleges it. The allegations of mala fides are often more easily made than proved. The very seriousness of such allegations demands proof of a high order of credibility.
The burden of establishing mala fides is very heavy on the person who alleges it. The allegations of mala fides are often more easily made than proved. The very seriousness of such allegations demands proof of a high order of credibility. Reference in this connection may be made to the decision of the Supreme Court reported in 2004 (11) SCC 213 (Delhi Development Authority v. UEE Electricals Engineering (P) Ltd.). 16. LET me now consider the contention in the light of the above principles laid down by the Supreme Court. If at all by excluding suppliers of LCD Multimedia Projectors from the zone of consideration a chosen few have been sought to be favoured, that is because the State intended it to be so. Why the State adopted the policy decision of not procuring LCD Multimedia Projectors, thereby keeping the suppliers of LCD Multimedia Projectors out of the zone of consideration, need not be investigated at this stage since the State's action is not challenged in the plaint filed by the plaintiff. Having considered the pleadings on record, I am unable to hold that adequate foundation has been laid for proving mala fide. I have no hesitation to hold that the plaintiff's contention that the impugned action of the first defendant is motivated cannot be examined for reasons stated above and is bound to be overruled as being without merit. Now, the final contention may be examined. 17. THE attempt on the part of the plaintiff to obtain relief from the trial Court based on the guidelines of the circular letter dated February 11, 2011 must be held to be an exercise in futility. It has been issued on the subject of transparency in tendering system, in advisory capacity. It has no statutory force and does not bind the first defendant. THE contents thereof cannot be enforced in a Court of law even if any terms thereof were ignored by any person/authority sought to be governed thereby. I hold so on the authority of the decision of the Supreme Court reported in 2007 (8) SCC 212 , Chief Commercial Manager, South Central Rly. v. G. Ratnam, where in Paragraphs 19 and 20 it has been ruled as follows:- "19. We have carefully gone through the contents of various chapters of the Vigilance Manual.
I hold so on the authority of the decision of the Supreme Court reported in 2007 (8) SCC 212 , Chief Commercial Manager, South Central Rly. v. G. Ratnam, where in Paragraphs 19 and 20 it has been ruled as follows:- "19. We have carefully gone through the contents of various chapters of the Vigilance Manual. Chapters II, III, VIII, IX and Chapter XIII deal with Railway Vigilance Organisation and its role, Central Vigilance Commission, Central Bureau of Investigation, investigation of complaints by Railway Vigilance, processing of vigilance cases in Railway Board, suspension and relevant aspects of Railway Servants (Discipline and Appeal) Rules, 1968 as relevant to vigilance work, etc. Paras 704 and 705, as noticed earlier, cover the procedures and guidelines to be followed by the investigating officers, who are entrusted with the task of investigation of trap cases and departmental trap cases against the railway officials. Broadly speaking, the administrative rules, regulations and instructions, which have no statutory force, do not give rise to any legal right in favour of the aggrieved party and cannot be enforced in a Court of law against the administration. THE executive orders appropriately so-called do not confer any legally enforceable rights on any persons and impose no legal obligation on the subordinate authorities for whose guidance they are issued. Such an order would confer no legal and enforceable rights on the delinquent even if any of the directions is ignored, no right would lie. Their breach may expose the subordinate authorities to disciplinary or other appropriate action, but they cannot be said to be in the nature of statutory rules having the force of law, subject to the jurisdiction of certiorari. 20. It is well settled that the Central Government or the State Government can give administrative instructions to its servants how to act in certain circumstances; but that will not make such instructions statutory rules which are justiciable in certain circumstances. In order that such executive instructions have the force of statutory rules, it must be shown that they have been issued either under the authority conferred on the Central Government or the State Government by some statute or under some provision of the Constitution providing therefor.
In order that such executive instructions have the force of statutory rules, it must be shown that they have been issued either under the authority conferred on the Central Government or the State Government by some statute or under some provision of the Constitution providing therefor. Therefore, even if there has been any breach of such executive instructions that does not confer any right on any member of the public to ask for a writ against the Government by a petition under Article 226 of the Constitution of India." 18. TO the same effect is the decision of the Supreme Court reported in 2007 (13) SCC 154 : Poonam Verma v. Delhi Development Authority. The decision in B. S. Minhas (supra), cited by Mr. Chatterjee, has been noted. An appointment on the post of Director of the Institute was challenged on the ground that wide publicity of the vacancy was not made, as required by the bye laws of the Institute. The Supreme Court observed therein that though the bye laws of the Institute had no statutory force, the same had been framed for the conduct of its affairs to avoid arbitrariness and that the Institute was bound to adhere to the same in the name of fair-play. However, the fact situation is completely different here in the sense that the circular letter issued by the Commission is merely advisory and the first defendant/petitioner has not been shown to have acted contrary to any binding provision, either statutory or executive instruction having the force of law. 19. READING the plaint as it is, it is difficult to conclude that the first defendant/petitioner has committed any error of law or exceeded its powers or reached a decision of the Wednesbury variety and, therefore, a prima facie case for grant of injunction was set up. 20. FOR the reasons aforesaid, I do not find any reason to direct continuance of the injunction granted by the learned Judge of the Appellate Court. The impugned order dated May 12, 2011 stands set aside. The revisional application stands allowed, without order for costs. 21. IN view of the aforesaid discussion that the plaintiff is not entitled to any injunction pending disposal of its suit, the applications for injunction filed by it in the trial Court as well as in the Appellate Court together with the Misc. Appeal shall stand dismissed. 22.
The revisional application stands allowed, without order for costs. 21. IN view of the aforesaid discussion that the plaintiff is not entitled to any injunction pending disposal of its suit, the applications for injunction filed by it in the trial Court as well as in the Appellate Court together with the Misc. Appeal shall stand dismissed. 22. OPINIONS expressed or findings arrived at hereinabove are only for the purpose of disposal of the application for injunction and the trial Court, while deciding the suit, shall proceed in accordance with law uninfluenced by such opinions/findings. Urgent photostat certified copy of this judgment and order, if applied, may be furnished to the applicant at an early date.