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Madhya Pradesh High Court · body

2016 DIGILAW 801 (MP)

Manish Chaudhary v. Municipal Corporation Dewas

2016-09-12

P.K.JAISWAL, VIVEK RUSIA

body2016
ORDER : Vivek Rusia, J. 1. With the consent of parties, petition is heard finally at admission stage itself. 2. The petitioner being a Social Activist and the President of Youth Congress approached this High Court by way of present Public Interest Litigation challenging the action of respondent No.1 by which the work of Sewerage System or Sewerage Treatment Plant under the JNNURM in Dewas city has been awarded to the respondent Nos.4 and 5 and also alleging the diversion of the funds to some other work. 3. The Government of India, Ministry of Urban Development has framed the guidelines for Urban Infrastructure Development Scheme for Small and Medium Town (UIDSMMT) with the object to improve infrastructure facility and help create durable public assets and quality oriented services in cities and towns. This scheme will apply to all cities and towns as per 2001 census covered under the Jawaharlal Nehru National Urban Rural Mission (JNNURM). In light of the above scheme/guidelines, the Central Government, vide letter dated 19.02.2014, sanctioned additional central assistance for new project in which the sewerage project was sent for Ujjain city. The Central Government Assistance Committee of the Central Government has sanctioned Rs.11250.02 lac, out of which, the first instalment of Rs.5625.01 lac was sanctioned and received by the State Government. Under the aforesaid head, after receiving the instalment by the nodal agency i.e. the Department of Urban Administration and Development, State of M.P. vide letter dated 04.03.2014 and 19.06.2014 released the sanctioned amount to the Municipal Corporation, Dewas for implementing the same in the sewerage project. 4. That for the work of design, construction, commissioning and performance of sewerage system of Dewas, 1st NIT was issued on 29.10.2014 by the Municipal Corporation, Dewas. Since, the single tender was received therefore, the said NIT was cancelled by the Municipal Corporation. Thereafter, on 07.03.2015, 2nd NIT was issued which was also rejected by the State Government vide order dated 17.06.2015, as a negotiation has failed between the successful bidders and Government for rate. Thereafter, the 3rd NIT was issued on 08.08.2015 and in pursuant to the said NIT four tenders were received. DMC sent all the documents to the State Government for technical evaluation on 02.112015. Vide resolution dated 28.11.2015 Mayor in Council, Municipal Corporation, Dewas passed the resolution No.71 accepting the bid of respondent No.4 and 5. 5. Thereafter, the 3rd NIT was issued on 08.08.2015 and in pursuant to the said NIT four tenders were received. DMC sent all the documents to the State Government for technical evaluation on 02.112015. Vide resolution dated 28.11.2015 Mayor in Council, Municipal Corporation, Dewas passed the resolution No.71 accepting the bid of respondent No.4 and 5. 5. That, Work Order was issued on 28.12.2015 to the respondent No.4 and 5 being a successful bidder. They furnished the bank guarantees on 08.01.2016 and thereafter, agreement was executed on 14.01.2016. 6. The petitioner obtained information under the Right to Information Act, 2005 that the Municipal Corporation, Dewas has received amount of Rs.61,18,13,000/- for sewerage scheme, but out of which Rs.47,41,77,021/- has been spent on UIDDSMT, payment of compensation to the farmers, repayment of loan to the HUDCO etc. The petitioner has also obtained all information that respondent No.4, who is a partner of Joint Venture with respondent No.5 has been black listed by Bihar Urban Infrastructure Development Company (BUIDCO) vide order dated 27.05.2015. Hence, the petitioner has approached this Court by way of Public Interest Litigation alleging that the contract has been illegally awarded to the black listed company and the fund allocated to sewerage system has been misused by the Municipal Corporation, Dewas and due to which, the sewerage system of Dewas will collapse. The petitioner prayed the relief that the contract awarded to the respondent No.4 and 5 be cancelled with an order to reinitiate the whole tender process and responsible officer be punished. The petitioner issued the notice and respondent No.1 filed the reply. 7. In reply, respondent No.1 submitted that there was no condition in the NIT that the work cannot be alloted to a black listed company and the order of black listing has been stayed by the High Court of Delhi, vide order dated 03.02.2016. The work was awarded to the joint venture of respondent Nos.4 and 5 in which only respondent No.4 has been black listed. It is further submitted that the answering respondents were required to pay the instalment of the loan taken from the HUDCO for the improvement of various beneficiary schemes of Co - Operation and to do so, payment of penalties have been avoided. It is further submitted that the answering respondents were required to pay the instalment of the loan taken from the HUDCO for the improvement of various beneficiary schemes of Co - Operation and to do so, payment of penalties have been avoided. It is further submitted that work has been started and running bill has not been submitted so far and answering respondent has made arrangement of Rs.35.93 Crores in various accounts of the Corporation for the requisite payments and running bills to be made to the Contractor and work of sewerage project would not suffer. 8. The respondent No.2/Commissioner, Directorate of Urban Administration & Development, Madhya Pradesh has filed the return, in which it is stated that Clause 6 and 7 of the Scheme provides for financing pattern and release of Central Assistance and further submitted that the funds released for sewerage can only be used in accordance with the guidelines of 2005 and sanction letter dated 04.03.2014 and 19.06.2014 clearly provides that fund can only be utilized for sewerage project only. 9. The respondent No.5 filed the return, in which, it is stated that the order of black listing issued by the BUIDCO has been stayed by the High Court of Delhi vide order dated 03.02.2016 and the order of black listing is applicable only in the Bihar State as it was passed under the provisions of "Bihar Thekedari Nibandhan Niyamawali, 2007" and same would not be applicable in the State of Madhya Pradesh. Even after black listing, respondent No.4 has been awarded the contract by RUIDP Bundi and UP Jal Nigam, Jhansi. The respondent No.5, who is a lead member of joint venture has not been black listed, therefore, there is no illegality in awarding the contract to them by Municipal Corporation and prayed for dismissal of the writ petition. 10. We have heard learned counsel for the parties at length. 11. The petitioner has filed the present petition mainly on two grounds; Firstly, the contract has been illegally awarded to the company which is black listed by Bihar Urban Infrastructure Development Company and Secondly, the fund allocated to sewerage system has been misused by the Municipal Corporation, Dewas. 12. 10. We have heard learned counsel for the parties at length. 11. The petitioner has filed the present petition mainly on two grounds; Firstly, the contract has been illegally awarded to the company which is black listed by Bihar Urban Infrastructure Development Company and Secondly, the fund allocated to sewerage system has been misused by the Municipal Corporation, Dewas. 12. So far as the allegation of awarding the contract to the black listed company is concerned, the order of black listing was passed on 27.05.2015 and the same was stayed by the High Court of Delhi on 03.02.2016. The order of black listing was passed under the provisions of Bihar Thekedari Nibandhan Niyamawali 2007 which is applicable within the State of Bihar only. Even after blacklisting, the respondent No.4 has been awarded the contract by the U.P. Jal Nigam. The Municipal Corporation, Dewas has taken categorical stand that there was no bar in NIT that the company black listed in other state cannot submit the tender, hence, the objection taken by the petitioner is rejected. 13. Even otherwise scope of writ petition under Article 226 of the Constitution of India in contractual matters is very limited. The Apex Court in the case of Jagdish Mandal v. State of Orissa & Others, reported in 2007(14) SCC 517 has held as under: "Judicial review of administrative action is intended to prevent arbitrariness, irrationality, unreasonableness, bias and mala fides. Its purpose is to check whether choice or decision is made "lawfully" and not to check whether choice or decision is "sound". When the power of judicial review is invoked in matters relating to tenders or award of contracts, certain special features should be borne in mind. A contract is a commercial transaction. Evaluating tenders and awarding contracts are essentially commercial functions. Principles of equity and natural justice stay at a distance. If the decision relating to award of contract is bona fide and is in public interest, courts will not, in exercise of power of judicial review, interfere even if a procedural aberration or error in assessment or prejudice to a tenderer, is made out. The power of judicial review will not be permitted to be invoked to protect private interest at the cost of public interest, or to decide contractual disputes. The tenderer or contractor with a grievance can always seek damages in a civil court. The power of judicial review will not be permitted to be invoked to protect private interest at the cost of public interest, or to decide contractual disputes. The tenderer or contractor with a grievance can always seek damages in a civil court. Attempts by unsuccessful tenderers with imaginary grievances, wounded pride and business rivalry, to make mountains out o f molehills of some technical/procedural violation or some prejudice to self, and persuade courts to interfere by exercising power of judicial review, should be resisted. Such interferences, either interim or final, may hold up public works for years, or delay relief and succour to thousands and millions and may increase the project cost manifold." 14. That, now the question of diversion of the funds by the Municipal Corporation, Dewas is required to be considered in view of the stand taken by the respondent No.2/The Commissioner, Directorate of Urban Administration & Development, Madhya Pradesh that the fund alloted to the sewerage project can only be utilized by the project as per the guidelines and the condition of the allotment letter. The condition No.19.2 is reproduced as under: "19.2 The implementing agencies at the ULB/Para-statal level will be required to open and maintain separate bank account for each project in a commercial bank for receipt and expenditure of all money to be received and spent. ULBs/Parastatal/implementing agencies should maintain registers for utilization of funds separately for Central and State share and loan from financial institutions." 15. To justify this action, Shri Vivek Patwa, learned counsel on behalf of respondent No.5/Municipal Corporation, Dewas submits that Municipal Corporation has a power to alter the budget grant under Section 100 of the Municipal Corporation Act. Section 100 of the Municipal Corporation Act is reproduced below: "100. Power of Corporation to alter budget grants.- The Corporation may, from time to time during the financial year, transfer the amount or a portion of the amount of one budget grant from one major head to another in the budget estimate, or increase the amount of any budget grant, or make an additional budget grant for the purpose of meeting any special or unforeseen requirement arising during the said year but not in such a way as to bring the estimated cash balance at the close of the year below the amount fixed under the sub-clause (III) of clause (a) of sub-section (1) of section 97." 16. Under this section, the Municipal Corporation is entitled to transfer the budget grant or portion one project to another project. The Municipal Corporation is free to allocate transfer its own funds which is available under Section 86 of the Madhya Pradesh Municipal Corporation Act, 1956. All payment would be made by the Municipal Corporation out of Municipal fund under Section 94 which is covered by the current budget grants and balance amount. Under Section 100, the Municipal Corporation can transfer the amount allocated under the budget grants. But, the grant which is received by the Central Government for specific purpose specially sewerage plant are required to be kept in separate bank account and which is not part of Municipal fund or the budget estimate, hence, the Municipal Corporation has wrongly utilized the amount received for sewerage project for other work, therefore, the Municipal Corporation is directed to return the amount of Rs.47,41,77,021/- to the account opened for sewerage project and spent the same only for the said project. 17. With the aforesaid, the writ petition is partly allowed, 18. Since, the work has been alloted to the respondent No.4 and 5 and according to the Municipal Corporation, the work is in progress, therefore, we are not inclined to interfere but direct the Municipal Corporation, Dewas to submit a quarterly report before this Court about the progress of work in the interest of implementation of the project. 19. Office is directed to list this petition in separate head of "Compliance" in daily cause-list. List on 19th of December, 2016. 20. The petition stands disposed of.