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2014 DIGILAW 486 (JK)

Road Master v. Union Of India

2014-12-01

ALI MOHAMMAD MAGREY, MUZAFFAR HUSSAIN ATTAR

body2014
Per A.M. Magrey, J. 1. This Letters Patent Appeal has been preferred against the judgment dated 20.08.2014 whereby the learned Writ Court has dismissed the appellant-writ-petitioner's writ petition, OWP no.496/2014, holding it to be without any merit. 2. Appellant in his writ petition challenged tender notice no. 800283/E8 dated 01.03.2014 issued by respondent no.3 inviting bids for execution of surfacing works to ND double lane specifications from Km 146.00 to Km 153.80 on stretch Kishtwar - Semthanpass, Anantnag, of NH-244 in J&K State (Km Zero reckoned from Kishtwar) and prayed for a direction to respondent no.3 to issue amendment to contract no. CE(O)BCN/09/2013-14, as solicited by respondent no.2 in terms of his letter no. 24556/DGBR/BCN/Amtt/E8 dated 20.01.2014. 3. The facts on which the aforesaid reliefs were prayed for are that the appellant was allotted contract for surfacing works between Km 139.00 to Km 146.00, Kishtwar-Semthanpass - Anantnag Road by Border Roads Organization (BRO) vide its order dated 11.08.2013. 4. During the currency of the contract, the OC Contract, 99 Road Construction Company (GREF), respondent no.5, vide his communication dated 23.12.2013 informed the appellant that it was proposed to carry out amendment to the contract to include execution of the surfacing work between Km 146.00 to Km 153.800 with same terms and conditions as set out in the existing contract and sought his consent to the proposed amendment. The appellant vide his letter dated 10.01.2014 conveyed his willingness thereto. 5. Respondent no.5, thereafter, seems to have processed the matter and it reached respondent no.2, the Director General, Border Roads Organization (DGBA), who, in turn, vide his communication dated 20.01.2014, addressed to HQ CE(P) Beacon, respondent no. 3, approved the proposed amendment to the existing contract at a cost of Rs.12.233 Crores, and requested him to confirm availability of funds and to issue amendment to the contract. 6. The case of the petitioner before the Writ Court was that respondent no.3, instead of issuing amendment to the contract, as requested by respondent no.2 in terms of letter dated 20.01.2014, got tender notice dated 01.03.2014 issued through respondent no.4 inviting bids for execution of the said work. The appellant issued legal notice to respondent no.3, inter alia, informing him that the tender notice dated 01.03.2014 was contrary to the approval accorded by respondent no.2, therefore, the same be withdrawn. The appellant issued legal notice to respondent no.3, inter alia, informing him that the tender notice dated 01.03.2014 was contrary to the approval accorded by respondent no.2, therefore, the same be withdrawn. However, that having not been done, the appellant filed the writ petition for the reliefs set out above in this judgment. 7. The respondents in their reply before the learned Writ Court took the stand that inter-departmental communications with regard to the proposal for amendment to the contract in favour of the appellant would not give any right to the appellant to get the contract, nor would the communication dated 23.12.2013 addressed by respondent no.5 to the appellant, seeking his consent to the proposed amendment, constitute a promise that the work would be allotted to him. On facts, it was averred that after respondent no.2 accorded approval to the proposed amendment, the matter was referred to the Audit Department, Deputy Controller of Defence Accounts, for opinion as per the rules. The Audit Department rejected the proposal on, inter alia, the grounds that it will lack transparency and will encourage malpractice by avoiding competition and that the proposed amendment will enhance the contract amount by 127% coming to an additional amount of Rs.12.33 Crores. Since the Chief Engineer was the competent authority to take decision in the matter, the work was put to open bidding after receiving the opinion from DCDA. 8. The learned Writ Court, in its judgment under challenge in this appeal, has held that the communication dated 23.12.2013 is to be treated as an `invitation to offer' and that, in order to conclude a contract, it is not sufficient that the offer is accepted by a party to whom offer is made; the acceptance must be communicated to the offerer. It is only when the acceptance of offer is received by the offerer that a contract comes into being. Holding so, the learned Writ Court found that there was nothing on record to show that at any point of time acceptance to offer was conveyed to the petitioner-appellant. As to the communications exchanged inter se the respondents at different levels, the learned Writ Court held that these communications did not mature into a contract and the same did not cause any obligations on respondents to amend the existing contract. The writ petition was, accordingly, dismissed as being without any merit. 9. As to the communications exchanged inter se the respondents at different levels, the learned Writ Court held that these communications did not mature into a contract and the same did not cause any obligations on respondents to amend the existing contract. The writ petition was, accordingly, dismissed as being without any merit. 9. We have heard learned counsel for the parties, perused the record and considered the matter. 10. At the very outset, having minutely been taken through the judgment of the learned Writ Court, we have no doubt in our mind about the correctness of the views expressed therein. 11. In this appeal, the appellant has taken the very same grounds as have elaborately been dealt with by the learned Writ Court in its judgment. Learned counsel for the appellant has taken us through the correspondence that had exchanged inter se the respondents at different levels to canvass that respondent no.2 having approved the proposal to amend the contract, respondents 3 and 4 could not have put the work in question to tender. Specific reference in this connection was made to letter dated 24.02.2014 from Director Contracts in the office of respondent no.2 to respondent no.3 stating that as per BR Regulation para 710/MES Regulation an officer competent to accept a contract is empowered to amend the contract so long as the amended amount falls within the powers of acceptance of an officer, in the instant case the DGBR (respondent no.2). It is contended that respondent nos. 3 and 4, without considering the aforesaid letter, proceeded to issue the tender notice and that the learned Writ Court has not considered this aspect of the matter. 12. It appears that the aforesaid letter dated 24.02.2014 had emanated from respondent no.2 in response to letter dated 17.02.2014 of respondent no.3 expressing certain reservations about the proposed amendment and the approval accorded thereto by respondent no.2 which had also requested respondent no.2 to withdraw its earlier letter. In the letter dated 24.02.2014, the Director (Contracts) in respondent no.2's office, in turn, has only sought to make clarifications on the reservations sounded by respondent no.3, but at the end of the letter has recorded the following remarks of ADGBR: "Project may go for re-tender. In the letter dated 24.02.2014, the Director (Contracts) in respondent no.2's office, in turn, has only sought to make clarifications on the reservations sounded by respondent no.3, but at the end of the letter has recorded the following remarks of ADGBR: "Project may go for re-tender. There is no need to cancel the DGBR." Above being the factual position, the appellant cannot harp on the approval that had been accorded by respondent no.2 to the proposed amendment to the contract. Even otherwise, the learned Writ Court has rightly concluded that the communications exchanged inter se the respondents at different levels did not cause an obligation on respondents to amend the existing contract, for there was no acceptance conveyed to the appellant at any stage. We may add thereto that the approval, even if it had been initially accorded by respondent no.2, stood withdrawn as becomes axiomatic from the concluding paragraph of the letter in question quoted above, and, in any case, the same would not clothe the appellant with a right to seek amendment in the existing contract to include the said works therein. 13. Learned counsel for the respondents has argued that the decision to put the work to tender was taken in larger pubic interest to maintain transparency in distribution of public largesse and to prevent arbitrariness, irrationality and unreasonableness. He submitted that, as a matter of fact, the writ petition was not maintainable as the action of the respondents in putting the work to open tender would not attract judicial review. He further submitted that even if respondent no.5 had sought the consent from the appellant and respondent no.2 had approved the same, it would not preclude the respondents to bring their action within the four corners of fairness and non-arbitrariness, especially so when the contract between the parties had not come into existence. To buttress his submissions, the learned counsel cited the decision of the Supreme Court in Michigan Rubber (India) Ltd. v. State of Karnataka, 2012 STPL(LE) 46723 SC. 14. Mr. To buttress his submissions, the learned counsel cited the decision of the Supreme Court in Michigan Rubber (India) Ltd. v. State of Karnataka, 2012 STPL(LE) 46723 SC. 14. Mr. Qayoom, learned counsel for the appellant, on the other hand, cited and relied upon decisions of the Supreme Court in some cases, including the case of Noble Resources Ltd. v. State of Orissa, AIR 2007 SC 119 , and Food Corporation of India v. Seil Ltd., AIR 2008 SC 1101 , to contend that if the action on the part of the State is violative of the equality clause contained in Article 14 of the Constitution of India, the writ petition would be maintainable even in the contractual field. 15. There can be no dispute about the proposition that the jurisdiction of the Court under Article 226 of the Constitution is not barred, but such jurisdiction has to be exercised keeping in view certain principles of law established over the years, such as enumerated in Michigan Rubber (India) Ltd. v. State of Karnatka (Supra). 16. In the aforesaid case, the Karnataka State Road Transport Corporation floated a tender for supply of some items specifying certain pre-qualification criteria. The appellant before the Supreme Court filed a writ petition challenging the pre-qualification criteria. After filing of the writ petition, the Corporation withdrew the said criterion and issued a tender wherein a new pre-qualification criterion was specified. The appellant being aggrieved by the said pre-qualification criteria, filed writ petition challenging the same. The writ petition was dismissed. The letters patent appeal that was filed by the appellant, too, was dismissed. The matter finally landed in the Supreme Court in an appeal filed by the writ-petitioner-appellant. On the ambit of judicial review, the Supreme Court observed that the scope and the approach to be adopted in the process of such review have been settled by a long line of decisions of the Court. Referring to some of its earlier decisions, the Supreme Court enumerated the principles laid down therein. It would be advantageous to reproduce paragraph 23 of the judgment hereunder: "23. From the above decisions, the following principles emerge: a) the basic requirement of Article 14 is fairness in action by the State, and non-arbitrariness in essence and substance is the heartbeat of fair play. It would be advantageous to reproduce paragraph 23 of the judgment hereunder: "23. From the above decisions, the following principles emerge: a) the basic requirement of Article 14 is fairness in action by the State, and non-arbitrariness in essence and substance is the heartbeat of fair play. These actions are amenable to the judicial review only to the extent that the State must act validly for a discernible reason and not whimsically for any ulterior purpose. If the State acts within the bounds of reasonableness, it would be legitimate to take into consideration the national priorities; b) fixation of value of the tender is entirely within the purview of the executive and courts hardly have any role to play in this process except for striking down such action of the executive as is proved to be arbitrary or unreasonable. If the Government acts in conformity with certain healthy standards and norms such as awarding of contracts by inviting tenders, in those circumstances, the interference by Courts is very limited; c) in the matter of formulating conditions of a tender document and awarding a contract, greater latitude is required to be conceded to the State authorities unless the action of tendering authority is found to be malicious and a misuse of its statutory powers, interference by Courts is not warranted; d) certain preconditions or qualifications for tenders have to be laid down to ensure that the contractor has the capacity and the resources to successfully execute the work; and e) if the State or its instrumentalities act reasonably, fairly and in public interest in awarding contract, here again, interference by Court is very restrictive since no person can claim fundamental right to carry on business with the Government." (Underlining supplied) 17. Applying the aforesaid principles to the present case, apart from the fact that no contract had come into existence between the parties, it is seen that the intendment of the concerned respondent(s) behind putting the work in question to tender was to act in the matter fairly, reasonably, in public interest and to have the works allotted in a transparent manner. It by no stretch of imagination can be said that the process adopted by the respondents was, in any manner, mala fide or was intended to favour someone or that the decision to tender the work was arbitrary and irrational in any definition of the words. It by no stretch of imagination can be said that the process adopted by the respondents was, in any manner, mala fide or was intended to favour someone or that the decision to tender the work was arbitrary and irrational in any definition of the words. That being the factual position attendant to the case, no interference was or is called for by the Court in the matter under Article 226 of the Constitution. This is the law laid down by the Supreme Court in Michigan Rubber (India) Ltd. v. State of Karnatka (supra) in paragraph 24 of the judgment, which is quoted hereunder: "24. Therefore, a Court before interfering in tender or contractual matters, in exercise of power of judicial review, should be to itself the following questions: (i) Whether the process adopted or decision made by the authority is mala fide or intended to favour someone; or whether the process adopted or decision made is so arbitrary and irrational that the court can say: `the decision is such that no responsible authority acting reasonably and in accordance with relevant law could have reached'; and (ii) Whether the public interest is affected. If the answers to the above questions are in negative, then there should be no interference under Article 226." 18. In the instant case, the decision taken to put the work in question to tender is such that any responsible authority acting reasonably and in accordance with law would have reached. 19. In light of the above, we find no illegality in the judgment rendered by the learned Writ Court and, accordingly, no interference is called for therein in this appeal. 20. Upholding the judgment under challenge, this appeal is dismissed together with the connected CMP. Interim direction dated 05.09.2014, continued from time to time by the Court, shall stand vacated. Respondents shall be free to proceed ahead with the tendering process and complete the same. 21. No order as to costs.