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2014 DIGILAW 1077 (GUJ)

Shabbir Ali Mohammed Khalifa v. Union of India

2014-10-13

R.P.DHOLARIA, V.M.SAHAI

body2014
JUDGMENT PER : MR. R. P. DHOLARIA, J. :- 1. The present Writ Petition in the nature of Public Interest Litigation (PIL) has been filed by the petitioner seeking direction to quash and set-aside the agreement/contract executed between the Respondent No.3 and 4, by holding the same to be ultravires to Article 299 of the Constitution of India and against the provisions of the Indian Contract Act, 1872, as the above Respondent No.3 and 4, in collusion, tried to misuse the public fund for personal gain. 2. The facts leading to filing of this petition, briefly stated, are as under :- 2.1. In this Writ Petition, the petitioner has asserted that he has filed the present petition in public interest as he is a social as well as RTI activist and he is always active in safeguarding and vindicating the rights of the villagers of Mundra Taluka. Earlier, the petitioner has filed Writ Petition (PIL) Nos. 152 of 2011, 54 of 2012, 108 of 2012 and 17 of 2013 against the present respondents espousing various causes. He has also filed Writ Petition bearing Special Civil Application No.17520 of 2012 challenging the vires of the Gujarat Special Economic Zones Act, 2004. 2.2. Upon considering the proposal made by the Respondent No.4, Adani Port & Special Economic Zone Limited, Mundra, to widen the existing road connecting the Mundra Port with the National Highway-8 to ease the traffic problems, the State Government vide Notification dated 02.08.2008 decided to implement the project under Critical Infrastructure Scheme and ASIDE (Assistance to State for Infrastructure Development of Export) Scheme floated by the Union of India and also laid down certain guidelines qua the project. The said project was approved in principle under ASIDE Scheme by the Union of India vide letter dated 01.09.2008 with an estimated cost of Rs.26 crores, with cost sharing approval of 50% from ASIDE fund, 25% from Gujarat Maritime Board and 25% from Mundra Port & Special Economic Zone Limited. Thereafter, for the purpose of acquiring land, necessary Notifications under Section 4 and 6 of the Land Acquisition Act were issued on 16.12.2008 and 24.08.2009, respectively and award was declared on 21.05.2011. 2.3. An agreement was executed between the Respondent No.3-Executive Engineer, Roads & Buildings Department and Respondent No.4 to entrust the project work to Respondent No.4 as Developer and the Respondent No.3 as Supervisor. 2.3. An agreement was executed between the Respondent No.3-Executive Engineer, Roads & Buildings Department and Respondent No.4 to entrust the project work to Respondent No.4 as Developer and the Respondent No.3 as Supervisor. It is this agreement/contract, which the petitioner has sought to quash and set-aside in this Writ Petition in the nature of Public Interest Litigation (PIL) by holding the same ultravires the Article 299 of the Constitution of India and against the provisions of the Indian Contract Act, 1872. It is alleged by the petitioner that the agreement is executed in very informal manner without mentioning any date and it does not reflects any standard format or phrases and is non-est in the eyes of Law. It is executed against the concept of Article 299 of the Constitution of India and against the provisions of the Indian Contract Act, 1872. 2.4. Thereafter, the State Government has entered into a further agreement with the Respondent No.4 on 26.11.2013. The Respondent No.4 has been given the responsibility to maintain the road for 5 years and bear the additional expenditure over and above approved project cost in completing the project, if any. 2.5. The petitioner has, therefore, prayed for the following reliefs :- "(A) to issue a writ of mandamus or writ in the nature of mandamus or any direction for quashing and setting-aside the Agreement/Contract (without date) executed between the Respondent Nos.3 and 4 at Annexure-O to this petition, by holding the same ultravires the Article 299 of the Constitution of India and against the provisions of the Contract Act; (B) to hold that the Scheme known as ASIDE (Assistance to State for Infrastructure Development of Export) floated by Government of India is being misused to favour the private party and as such the act on the part of the Respondents is unconstitutional and shows the favouritism, hence hit by the doctrine of Public Trust and accountability; (C) to direct the Respondent Nos. 1 to 3 .not to entrust the second phase of the Project to any person without following due process of law and without following a transparent competitive bidding process/Tender; (D) to entrust the investigation either to specially appointed Investigating Team or any other Investigating Agency to inquire into the matter under what circumstances and under whose influence the work was allotted in such a partition manner in favour of the Respondent No.4 and further the team may be directed to investigate into the account and expenditure of the Project and place the report before this Court; (E) During the pendency and final disposal of this petition, the Respondent No.1 may be directed to withhold the further fund (remaining part of the contribution) sanctioned under ASIDE Scheme vide letter dated 01.09.2008; (F) During the pendency and final disposal of this Petition, the Respondent Nos. 2 and 3 may be directed not to discharge/disburse any amount in favour of the Respondent No.4 towards the expenses of the Project in question; (G) During the pendency and final disposal of this Petition, the respondent No.4 may be restrained from carrying out the further construction of the project in question or to carry out the construction qua doubling of the said road line; (H) Any other and further reliefs in the interest of justice may kindly be granted." 3. We have heard Mr. Hasim Qureshi, learned Advocate for the petitioner, Mr. Abhishek Mehta, learned Advocate for M/s. Trivedi & Gupta, for the Respondent No.4 and Mr. Devang Vyas, learned Assistant Solicitor General, for the Respondent No.1. 4. The question which arises for our consideration in this petition is whether the agreement/contract for widening the existing road connecting the Mundra Port with the National Highway-8, executed between the respondent No.3 and 4 is ultra vires the Article 299 of the Constitution of India and against the provisions of the Indian Contract Act, 1872. If so, remedial measures thereof in the interest of justice. 5. For the purpose of determining the above question, we will have to examine the agreement/contract entered between the respondent No.3 and 4 on the anvil of the Article 299 of the Constitution of India in the backdrop of the provisions of the Indian Contract Act, 1872. Article 299 of the Constitution of India reads as under :- "299. 5. For the purpose of determining the above question, we will have to examine the agreement/contract entered between the respondent No.3 and 4 on the anvil of the Article 299 of the Constitution of India in the backdrop of the provisions of the Indian Contract Act, 1872. Article 299 of the Constitution of India reads as under :- "299. Contracts.- (1) All contracts made in the exercise of the executive power of the Union or of a State shall be expressed to be made by the President, or by the Governor of the State, as the case may be, and all such contracts and all assurances of property made in the exercise of that power shall be executed on behalf of the President or the Governor by such persons and in such manner as he may direct or authorise. (2) Neither the President nor the Governor shall be personally liable in respect of any contract or assurance made or executed for the purposes of this Constitution, or for the purposes of any enactment relating to the Government of India heretofore in force, nor shall any person making or executing any such contract or assurance on behalf of any of them be personally liable in respect thereof." 6. Indisputably, the construction and execution of road leading from National Highway-8 to Mundra Port is the result a contract between respondent No.3 and 4. The validity of contract is challenged by the petitioner as the contract executed by the Executive Engineer, Road and Building Division, Bhuj is not in the name of Governor of the State of Gujarat. 6.1. A State, when it enters into a contract, must do so fairly without discrimination and without unfair procedure; and its action is subject to judicial review under Article 14 of the Constitution of India. The judicial power of review is exercised to rein any unbridled executive functioning. The restraint has contemporary significances, one is the ambit of judicial intervention and other covers the scope of the Court's ability to quash an administrative decision on its merits. These restraints bear the hallmark of judicial control over administrative action and therefore, judicial review can be a sufficient tool to decide the ambit of contractual liability of the State. The restraint has contemporary significances, one is the ambit of judicial intervention and other covers the scope of the Court's ability to quash an administrative decision on its merits. These restraints bear the hallmark of judicial control over administrative action and therefore, judicial review can be a sufficient tool to decide the ambit of contractual liability of the State. However, Judicial quest in administrative matters has to find the right balance between the administrative discretion to decide the matters contractual in nature and the need to remedy any unfairness. 7. Mr. Hashim Qureshi, learned Advocate for the petitioner vehemently argued that the act of considering the proposal of a private entity for constructing the road connecting Mundra Port to the National Highway-8, approving the said proposal under the Critical Infrastructure Project ASIDE Scheme and asking the said private entity to contribute and simultaneously also award the contract to execute the work that too without inviting any tender goes to show that the State Authorities have given unnecessary largesse to the private entity in order to give unnecessary and illegal benefit out of the public exchequer. 7.1. Mr. Qureshi, learned Advocate further argued that when the Government enters into a contract with private person/private party, it is mandatory to follow Article 299 of the Constitution of India in its strictest. Article 299 is a mandatory provision, non- compliance of which makes the contract null and void. This is a gross case of misuse of public fund and Government largesse in favour of a private party-respondent No.4 at the cost of hardship of the public at large. Therefore, this is the fit case where inquiry should be awarded by Special Investigating Team based on the principle of Public Trust and Accountability and Vigilance. 7.2. In support of his contention, Mr. Qureshi, learned Advocate for the petitioner has placed reliance on following decisions : i) Noida Entrepreneurs Association v. Noida and others (2011) 6 SCC 508 ii) Dipak Baburia and others v. State of Gujarat (2014) 3 SCC 502 iii) State of M.P. v. Firm Gopichand Surju Prasad AIR 1972 MP 43 iv) State of Punjab and others v. Om Prakash Baldev Krishan AIR 1988 SC 2149 . 8. On the other hand, Mr. Abhishek Mehta, learned Advocate for the respondent No.4 vehemently opposed the contention raised by Mr. 8. On the other hand, Mr. Abhishek Mehta, learned Advocate for the respondent No.4 vehemently opposed the contention raised by Mr. Qureshi, learned Advocate for the petitioner and submitted that the present petition is filed to gain personal interest and to harass the respondents in one way or the other by filing successive petitions in one form or the other for different and/or similar causes. The petitioner has filed five public interest litigation against the respondents. Mr. Mehta, learned Advocate further submitted that the present petition is filed only with view to create impediments in the extension of the newly constructed public road connecting Mundra Port with National Highway-8. This Court vide order dated 19.12.2013 dismissed two Public Interest Litigations i.e. WP(PIL) No.105 of 2013 and WP (PIL) No. 42 of 2013, challenging the construction of a public road, thereafter the present petitioner has filed these public interest litigation for the said cause which shows that the conduct of the petitioner does not inspire any confidence. A perusal of the said orders make it amply clear that there is no fallacy in the acquisition proceedings. Mr. Mehta, learned Advocate further contended that the State Government and its Authorities are supervising the project and therefore, there is no question of appointing any committee or commission as requested by the petitioner. 9. We have been informed by Mr. Abhishek Mehta, learned Counsel for respondent No.4 that the construction of two lane road has already been finished and the said road has been made functional. He has also showed us photographs of the actual site. 10. We have heard learned Counsel for the parties at length and perused the material made available to us on record. 11. From bare perusal of the records, it appears that the contract for construction of four lane road was entrusted to the respondent No.4 as Public Private Partnership Project in common parlance, which means a project based on contract or concession agreement between a Government or statutory entity on one side and a private sector Company on the other side, for delivering an infrastructure service. Thus, it is a business relationship between a private sector Company and a Government agency for the purpose of completing project that will serve the public at large. 12. Thus, it is a business relationship between a private sector Company and a Government agency for the purpose of completing project that will serve the public at large. 12. We have minutely perused the agreement entered by the respondent No.3 and 4 pursuant to the administrative approval received vide Government letter dated 28.07.2010, which is under challenge in this petition and compared with the agreement entered by the above respondent pursuant to the administrative approval received vide Government letter dated 06.05.2013. We have noticed that the agreement entered pursuant to the administrative approval received vide Government letter dated 28.07.2010 was between the Government R&B Division, Gandhinagar and/or its local representative-Executive Engineer, Road and Building Division, Bhuj as first party and Adani Port & and Special Economic Zone Limited, Mundra as second party. Whereas, the agreement entered pursuant to the administrative approval received vide Government letter dated 06.05.2013 was executed for and on behalf of the Governor of Gujarat, by the Executive Engineer, Road and Building Division, Bhuj as first party and Adani Port & and Special Economic Zone Limited, Mundra as second party. Thus, the later agreement between the respondent No.3 and 4 is an improved one of the earlier agreement. 13. We have also perused one Government Resolution dated 02.08.2008, made available to us by the petitioner in his paper book at page No. 57, detailing the policy adopted by the Government while approving the ASIDE Scheme for joining the roads to the industrial area. In the aforesaid Government Resolution, it is mentioned that the work approval in principle shall be given by the Road and Buildings Department and the procedure for obtaining the approval of "Critical infrastructure" ASIDE before the competent committee shall be done by the office of Industrial Commissioner and thereafter, the relevant amount shall be under the control of concerned Executive Engineer of Road & Buildings Department. It is in view of the aforesaid authorization, the Executive Engineer, Road and Buildings Department, Bhuj has entered the agreement/contract with the respondent No.4. 14. In the case of Beharilal v. Bhuri Devi (1997) 2 SCC 279 , the Hon'ble Apex Court observed in para 7 as under :- ".. ........In D.G. Factory case, the Inspector General of Police, Rajasthan had executed an agreement on 22.3.1960 with the appellant therein. The said agreement was not in conformity with Article 299(1) of the Constitution. 14. In the case of Beharilal v. Bhuri Devi (1997) 2 SCC 279 , the Hon'ble Apex Court observed in para 7 as under :- ".. ........In D.G. Factory case, the Inspector General of Police, Rajasthan had executed an agreement on 22.3.1960 with the appellant therein. The said agreement was not in conformity with Article 299(1) of the Constitution. The Inspector General had duly been authorized to execute the agreement on behalf of the State. But he did not express that he had executed it on behalf of the Governor but he signed in his capacity as Inspector General of Police, Rajasthan. On those facts, this Court had held that the Inspector General, having duly executed the contract, though it was not expressed to be on behalf of the Governor and though it was not in full compliance with the requirement of Article 299(12), it was in substance an agreement executed by the Rajpramukh. In Union of India v. A.L. Rallia Ram the tenders were accepted by the Chief Director of Purchases on behalf of the Government. The question arose whether it was in compliance with Section 175(3) of the Government of India Act, 1935 which is analogous to Article 299(1). He has signed in his official designation, though he did not state that he had executed it on behalf of the Governor General. The Court read into it and found that in the light of the applications undertaken, it would be reasonable to hold that the contract was executed on behalf of the Governor General.." 15. Further in the case of State of Haryana v. Lal Chand (1984) 3 SCC 634 and in the case of Lalji Khimji v. State of Gujarat 1993 Supp. (3) SCC 567, the Hon'ble Apex Court has held that Article 299 of the Constitution of India applies only to contracts to be executed in exercise of "executive power" and not to those executed by virtue of statutory power". This principle was also reiterated in the case of Steel Authority of India Limited v. State of M.P. (1999)4 SCC 76 . 16. This principle was also reiterated in the case of Steel Authority of India Limited v. State of M.P. (1999)4 SCC 76 . 16. In view of the above settled legal position, we are of the opinion that the agreement entered by the respondent No.3 pursuant to the administrative approval received vide Government letter dated 28.07.2010 was executed by virtue of statutory power vested under the Government Resolution dated 02.08.2008 and it would be reasonable to hold that the said contract was executed on behalf of the Governor of Gujarat. We find no fallacy on the agreement/contract executed by the respondent No.3 and 4. The resolution/circular issued on 02.08.2008 upon concurrence and direction of the Governor authorizing execution of such nature of contract arising under the ASIDE Scheme in the State of Gujarat. Even though, the subsequent contract is also executed by the Executive Engineer under the authorization of Governor of Gujarat. 17. In the case of Pathan Mohammed Suleman Rehmatkhan v. State of Gujarat (2014) 4 SCC 156 , the Hon'ble Supreme Court has observed that if every decision taken by the State is tested by a microscopic and a suspicious eye, the administration will come to stand still and the decision-makers will lose all their initiative and enthusiasm. At hindsight, it is easy to comment upon or criticize the action of the decision maker. Sometimes, decisions taken by the State or its administrative Authorities may go wrong and sometimes it may achieve the desired results. Criticisms are always welcomed in a parliamentary democracy, but a decision taken in good faith, with good intentions, without any extraneous considerations, cannot belittled, even if that decision was ultimately proved to be wrong. 18. In the said case, the Hon'ble Supreme Court further observed that these are purely policy decisions taken by the State Government and while doing so, it has examined the benefits of the project for the State, which would bring into the State. It is well settled that non-flowing of tenders or absence of public auction or invitation alone is not a sufficient reason to characterize the action of a public Authority as either arbitrary or unreasonable or amounting to mala fide or improper exercise of power. It is well settled that non-flowing of tenders or absence of public auction or invitation alone is not a sufficient reason to characterize the action of a public Authority as either arbitrary or unreasonable or amounting to mala fide or improper exercise of power. The Courts have always taken a view that it is open to the State and the Authorities to take economic and management decision depending upon the exigencies of a situation guided by appropriate financial policy notified in public interest. 19. In view of the aforesaid factual aspect, as well as factual position, this writ petition fails and is, accordingly, stands dismissed. However, no order as to costs. 20. However, before parting it would be appropriate to mention herein the antecedent of the present petitioner. He has filed following four Public Interest Litigations exposing various causes in the present subject matter :- 1. Writ Petition (PIL) No.152 of 2011 which is disposed of by this Court on 07.08.2014. 2. Writ Petition (PIL) No.54 of 2012 which is disposed of by this Court on 08.10.2014. 3. Writ Petition (PIL) No. 108 of 2012 which is disposed of by this Court on 11.10.2012. 4. Writ Petition (PIL) No.17 of 2013 is pending before this Court. 20.1. Moreover, he has also filed one writ petition challenging the vires of the Gujarat Special Economic Zones Act, 2004, which is pending before this Court. 21. We are of the opinion that filing of successive writ petition on the same subject matter amounts to abuse of process of the Court. It would be a sage advise if one heeds to and restrain from filing vexatious public interest litigation as it consumes lot of time of the Courts and its administrative machinery. Petition dismissed.