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2017 DIGILAW 754 (JK)

Farooq Hussain v. State of J&K

2017-08-28

ALOK ARADHE

body2017
JUDGMENT : In this writ petition, the petitioner inter alia seeks quashment of decision taken by respondents 1 to 7 on 03.02.2016 in getting the construction work of new Government Polytechnic College in Poonch executed by respondent No. 8, namely, J&K Project Construction Corporation limited (hereinafter referred to as the Corporation). The petitioner also seeks writ of mandamus commanding respondents 1 to 7 not to allot the contract for construction of the Polytechnic College in favour of the Corporation as well as a direction to respondents 1 to 7 to handover the vacant site to the petitioner so that he can execute the contract. The petitioner also seeks suitable compensation/damages from respondents 1 to 7 for not handing over the site to him for construction of the Government Polytechnic College in Poonch. In order to appreciate the petitioner’s grievance, relevant facts are set out hereinafter. 2. By a communication dated 25.10.2011, District Development Commissioner, Poonch had requested the Managing Director of the Corporation to furnish detailed project report for construction of the Polytechnic College in Poonch. The General Manger of the Corporation by communication dated 27.10.2011 informed the District Development Commissioner that the work could not be taken up for Polytechnic College in Poonch in absence of approach road to site of construction. The District Development Commissioner, Poonch accorded administrative approval for the work of approach road vide communication dated 24.01.2012 to the tune of Rs. 79.33 lacs. The Divisional Forest Officer, Social Forestry Division, Poonch by communication dated 16.02.2012 informed the Deputy General Manager of the Corporation, that in order to start construction work of approach road at Banwat in Poonch, the case need to be processed under the Forest Conservation Act and clearance is required to obtained from the competitive authority. Thereupon, the General Manager of the Corporation informed that the Director Technical Education by communication dated 20.07.2012 that the work of construction of approach road has been stopped and the Director Technical Education was requested to take up the matter with the Forest Department. 3. The Executive Engineer, Public Works Department (R&B) Division, Poonch issued Notice Inviting Tenders dated 22.11.2012, by which bids were invited from the approved and eligible Contractors registered with the State Government, Central Public Works Department and Railway for construction of workshop sheds for Government Polytechnic in Poonch at an estimated cost of Rs. 120 lacs. 3. The Executive Engineer, Public Works Department (R&B) Division, Poonch issued Notice Inviting Tenders dated 22.11.2012, by which bids were invited from the approved and eligible Contractors registered with the State Government, Central Public Works Department and Railway for construction of workshop sheds for Government Polytechnic in Poonch at an estimated cost of Rs. 120 lacs. The time for completion of the project stipulated in the notice inviting tender was 12 months. The petitioner submitted his bid and an order of allotment dated 02.04.2013 was issued in his favour, by which the petitioner was allotted the contract for construction of workshop shed for Government Polytechnic College in Poonch. 4. In the meanwhile, the State Government by an order dated 19.02.2013 partially modified the Government order dated 07.07.2005 and directed that all civil works costing more than 700 lacs as against Rs. 100 lacs shall be allotted to the Corporation in respect of all Government departments and Government Corporations. It was further provided that in case the Corporation is not in a position to take up the work for any reason, the Public Works Department will get the works executed by following all the codal formalities. 5. The Chief Engineer, Public Works Department (R&B) Department Rajouri-Poonch Circle Rajouri issued another notice inviting tender dated 17.07.2014 inviting tenders for construction of main block (Academic G +2) including sanitary fitting for Government Polytechnic College in Poonch at an estimated cost of 910.76 lacs. The petitioner responded to the aforesaid notice inviting tender and his bid was found to be lowest and an order of allotment was issued in his favour on 18.10.2014 for construction of main block (Academic G+2) including sanitary fitting for Government Polytechnic College in Poonch. The petitioner in pursuance of the aforesaid order of allotments deposited the earnest money, which was duly accepted by the respondents. The total cost of construction of two projects awarded to the petitioner comes to the tune Rs. 8,74,77,529/- The respondents 3 to 5 made available to the petitioner necessary drawings with respect to the workshop shed as well as construction of Academic Block G+2 including sanitary fitting for Government Polytechnic College at Poonch. 6. The total cost of construction of two projects awarded to the petitioner comes to the tune Rs. 8,74,77,529/- The respondents 3 to 5 made available to the petitioner necessary drawings with respect to the workshop shed as well as construction of Academic Block G+2 including sanitary fitting for Government Polytechnic College at Poonch. 6. The petitioner in paragraph 10 of the writ petition has stated that he, as per the drawings issued to him by respondents 3 to 5, got the sal wood window panes and door panes prepared and kept the same ready to be installed in the process of construction of workshop shed and academic block. It is also averred that the petitioner got prepared colour coated sheets for roof worth Rs. 20 lacs as per the drawings. The petitioner also procured specialized shuttering material as per the drawings. However, the construction site was not made available to the petitioner. The Executive Engineer issued a certificate on 19.7.2014 that work for construction of contract in question allotted to the petitioner could not be started by the petitioner due to land dispute as the land owner did not allow the department to start the work. In the aforesaid certificate, it has been further stated that land acquisition proceeding is at final stage and award is likely to be passed in near future. Another certificate dated 28.05.2015 was issued to the petitioner by the Assistant Executive Engineer Public Works Department (R&B) Sub Division, Poonch certifying that the petitioner could not start the work due to non-availability of the site. 7. The Executive Engineer, Public Works Department (R&B) Division Poonch by communication dated 25.02.2014 addressed to the Deputy Commissioner, Poonch informed him about the allotment of work in question in Banpat Poonch and requested him to take steps for providing land to the department at the earliest so that the construction work can proceed. The petitioner also submitted representations for handing over the construction site to him vide representations dated 06.03.2015, 18.04.2015, 28.10.2015 and 05.03.2016. 8. The Joint Director (P&S), informed the Commissioner/Secretary to the Government PW (R&B) Department that in the meeting of high level committee held under the Chairmanship of the Chief Secretary on 03.02.2016, it has been decided that cost estimates for construction for newly sanctioned Polytechnic Colleges should be framed within Rs. 8. The Joint Director (P&S), informed the Commissioner/Secretary to the Government PW (R&B) Department that in the meeting of high level committee held under the Chairmanship of the Chief Secretary on 03.02.2016, it has been decided that cost estimates for construction for newly sanctioned Polytechnic Colleges should be framed within Rs. 13.00 crores, a cap fixed by the Cabinet, in respect of five district, namely, Shopian Udhampur, Doda, Kishtwar and Poonch and the Corporation has prepared type design for establishment of aforesaid five new Polytechnic Colleges. In the aforesaid factual background, the petitioner has approached this Court, seeking the reliefs stated supra. 9. Learned Senior Counsel for the petitioner submitted that the contracts in question have already been allotted in favour of the petitioner and therefore, the contract in respect of Government Polytechnic College in Poonch cannot be awarded in favour of the Corporation without cancelling the contract awarded to the petitioner. It is further submitted that admittedly respondents 1 to 7 have failed to handover the site to the petitioner. It is further submitted that from the project report prepared by the Corporation it is evident that the cost of construction of the contract in question has been quantified at Rs. 13 crores, whereas the petitioner is ready to complete the contracts in question for an amount of Rs. 8,74,77,529/- Thus, loss to the public exchequer is being caused to the tune of approximately Rs. 5 crores without any reason. It is further submitted that even through this Court by an ad interim order dated 10.05.2016 had stayed the operation of the decision dated 09.03.2016 yet in violation of the interim order, the contract for construction of Polytechnic College in Poonch has been awarded in favour of the Corporation. It is further submitted that respondents 1 to 7 have neither filed the reply to the writ petition nor have produced the record. Attention of this Court has been invited to order dated 05.06.2017, by which it was directed that in case record is not produced, an adverse inference shall be drawn against respondents 1 to 7. In support of his submissions, learned Senior Counsel for the petitioner has referred to the decision of the Supreme Court in the case of Reliance Energy Limited and Anr. vs. Maharashtra State Road Development Corporation ltd. In support of his submissions, learned Senior Counsel for the petitioner has referred to the decision of the Supreme Court in the case of Reliance Energy Limited and Anr. vs. Maharashtra State Road Development Corporation ltd. & Ors., (2007) 8 SCC 1 and Division Bench decision of Delhi High Court in the case of Man Industries (India) ltd. Vs. Union of India and Ors. 2009 (162) DLT 489 . 10. On the other hand, learned Senior Counsel for respondent No. 8 submitted that petitioner’s claim pertains to construction of Polytechnic College at Banpat Poonch, whereas the contract for construction of Polytechnic College has been awarded to the Corporation in respect of a new site namely, Sartha in Poonch, which is situated at a distance of 2 to 3 Kms. It is further submitted that 13 crores is a cap put by the Government and is not the actual price. It is also submitted that the work in question was allotted to the Corporation on 16.03.2017, pursuant to which it floated tenders. It is also submitted petitioner has no fundamental right to carry on the business with the State Government and in case there is breach of contract, the remedy of the petitioner is to approach the Civil Court for damages. It is also argued that purely civil contractual matters are referable to the provision of Contract Act and the decision to award the contract to the Corporation has been taken on the basis of a policy decision. In support of his submissions, learned Senior Counsel for the Corporation has relied on the decision of the Supreme Court in the case of Montecarlo ltd. Vs. NTPC ltd. AIR 2016 SC 4946 . 11. I have considered the submissions made by learned counsel for the parties and have perused the record. It is pertinent to note that unfortunately despite service of notice, none had appeared on behalf of respondents 1 to 7. On 29.05.2017 Mr. Faraz Iqbal, Dy. Advocate General appeared, who sought time to produce the record and the case was directed to be listed on 05.06.2017. However, on 05.06.2017, the following order was passed: “Despite order dated 29.05.2017, the record has not been produced. By way of indulgence, a day’s further time is granted to the learned Deputy Advocate General to produce the record, failing which an adverse inference against the official respondents shall be drawn. However, on 05.06.2017, the following order was passed: “Despite order dated 29.05.2017, the record has not been produced. By way of indulgence, a day’s further time is granted to the learned Deputy Advocate General to produce the record, failing which an adverse inference against the official respondents shall be drawn. Learned counsel for the petitioner prays for a short adjournment on the ground that the arguing counsel, Mr. Sunil Sethi, learned senior Advocate is not available. As prayed, list on 07.06.2017.” On 07.06.2017 in the presence of the Deputy Advocate General the case was directed to be listed on 08.06.2017. However, the case was not listed on 08.06.2017 and the same was listed on 25.08.2017. However, on the aforesaid date, none appeared on behalf of respondents 1 to 7 and records as directed vide order dated 29.05.2017 were also not produced. It is also pertinent to mention that respondents 1 to 7 have not chosen to file the response. Since the matter pertains to public project in which ad interim order dated 10.05.2016 which was later on modified on 9.3.2017 is operating, on account of which, work of constriction of Polytechnic College in Poonch is stayed, at the insistence of learned senior counsel for respondent No. 8, and with the consent of learned senior counsel for the petitioner, matter was heard finally. It is unfortunate that this Court while deciding the writ petition did not have the assistance of any counsel representing the State Government. 12. It is well settled in law that if an averment of fact is made in the writ petition and the same is not controverted by filing the return, it is taken to be admitted. See Kumari Naseem Banoo vs. State of UP, 1993 Suppl. 4 SCC 46. The scope of judicial review in contractual matters is well delineated by catena of decisions of the Supreme Court. In case of Sanjay Kumar Shukla vs. Bharat Petroleum Corpn. Ltd (2014) 3 SCC 493 it has been held that Court should be vigilant against agitation of private disputes under the writ jurisdiction when there is no improper exercise of power on the part of public authority. It has further been held that power of judicial review has to be exercised only when justified by public interest having due regard to the fact situation of the case. It has further been held that power of judicial review has to be exercised only when justified by public interest having due regard to the fact situation of the case. In Bakshi Security and Personnel Services (P) Ltd. vs. Dev Kishan Computed (P) ltd. (2016) 8 SCC 446 , the Supreme Court summarized the principles with regard to interference in contractual matters and it was held that power of judicial review cannot be invoked to protect the private interest over the public interest or to decide contractual disputes. It has been further held that before exercising the power of judicial review, the court must pose to itself the questions, namely, whether process adopted or decision made is mala fide or intended to favour someone, whether process adopted or decision made is so arbitrary and irrational that no responsible authority acting reasonably in accordance with law could have reached such a decision and whether public interest is affected. In case of JSW infrastructure Ltd. vs. Kakinada Seaports Ltd (2017) 4 SCC 170 , the Supreme Court once again reiterated the principles of judicial review/ interference in contractual matters and held that if decision of the authority suffers from arbitrariness or perversity, then constitutional Court can interfere with the decision making process. 13. On the touch stone of aforesaid well settled legal principles, the facts of the case in hand may be examined. Admittedly, the respondents 1 to 7 have neither chosen to file the return nor have produced the record. Therefore, adverse inference has to be drawn against them for non-production of the record. In the fact situation of the case, the burden was on the respondents 1 to 7 to explain as to and in what circumstances, without cancellation of the contracts awarded to the petitioner, the decision was taken to award the contract for construction of Polytechnic College in Poonch in favour of the Corporation. However, the respondents have failed to offer any explanation. However, the respondents have failed to offer any explanation. It pertinent to note that the contracts in question allotted in favour of the petitioner have not been cancelled till today and admittedly, the petitioner could not commence the construction work as the respondents 1 to 7 failed to handover the site of construction to him, which is evident from communication dated 22.05.2014 sent by the Executive Engineer, Public Works (R&B) Poonch as well as certificates dated 19.07.2014 and 28.05.2015 issued by Executive Engineer and Assistant Executive Engineer Public Works Department (R&B) respectively. It is incomprehensible as to how contracts which are subsisting in favour of petitioner can be allotted to Corporation without cancelling the same. From perusal of communication dated 09.03.2016 in pursuance of which contract in question has been allotted to the Corporation, it is evident that in the meeting held under the Chairmanship of the Chief Secretary, J&K the fact that contract in question has already been allotted to the petitioner and is subsisting in his favour was not considered. Thus, the decision taken by the high level committee suffers from the vice of non-application of mind and is arbitrary. 14. It is also pertinent to mention here that there is an element of public interest involved in this writ petition as the contracts in question have already been awarded to the petitioner for a sum of Rs. 8,74,77,529/- in the year, 2014, whereas, if the Corporation is permitted to go ahead with the project, it would invite tenders and in the year, 2017 it is likely to receive bids, which would be higher in amount. Thus, loss to the public exchequer would be caused. The decision of the respondents 1 to 7 to award the contract in question to the Corporation is arbitrary and is irrational and no reasonable person would have taken a decision to allot the contract to the Corporation specially when the contract in question has already been allotted to the petitioner, which till today has not been cancelled. Therefore, decision of respondents 1 to 7 to award the contract in question to the Corporation is clearly arbitrary, irrational and is contrary to public interest inasmuch as it would adversely affect the public exchequer. 15. Therefore, decision of respondents 1 to 7 to award the contract in question to the Corporation is clearly arbitrary, irrational and is contrary to public interest inasmuch as it would adversely affect the public exchequer. 15. Reverting to submissions made by learned senior counsel for respondent No. 8, that contract to Corporation has been allotted for a different location in Poonch, it is worth mentioning that there is no material on record to hold that respondents 1 to 7 want to open two polytechnic Colleges in Poonch. The contention that the petitioner should be relegated to remedy of Civil suit does not deserve acceptance, as this Court has already held that decision to award contract in question to Corporation is arbitrary, irrational and would affect public exchequer. The decision in the case of Montecarlo Ltd. (supra) is of no assistance to the Corporation in the fact situation of the case as in the aforesaid decision, it is held that technical evaluation or comparison by the Court would be impermissible which is not the case in hand. 16. In view of the preceding analysis, the decision taken by the respondents 1 to 7 for awarding the contract for construction of Polytechnic College in Poonch is hereby quashed. The high level committee headed by Chief Secretary, Jammu and Kashmir is directed to take well considered decision with regard to the allotment of the contract in question awarded to the petitioner by a speaking order within a period of one month from today. Needless to say that the aforesaid high level committee shall hear the petitioner as well the representative of the Corporation and shall bear in mind the concept of public interest including the public exchequer as well as the observations made by this Court in preceding paragraphs. It is expected that aforesaid high level committee shall bestow its consideration with utmost seriousness and shall have due regard to the fact that the matter pertains to completion of public project, which cannot brook any delay. 17. With the aforesaid directions, the petition is disposed of.