Iqbal Motors Transport Services, Gund Kangan, Ganderbal v. Union Territory of J&K
2020-12-29
ALI MOHAMMAD MAGREY, VINOD CHATTERJI KOUL
body2020
DigiLaw.ai
Judgment (Oral) Ali Mohammad Magrey, J.—This intra Court appeal is directed against the judgment dated 28th of October, 2020 passed by the learned Single Judge in Writ petition, being WP(C) No.1463/2020, filed by the Writ petitioner/ appellant herein, in terms whereof the learned Single Judge has dismissed the petition as being without any merit. 2. The background facts leading to the filing of this appeal, as emerge from the perusal of the pleadings on record, are that in the year 2018, the Food, Civil Supplies and Consumer Affairs Department (hereinafter referred to as ‘the respondent Department’) had invited bids from eligible transporters for supply of requisite number of Trucks, wherein the appellant/ Writ petitioner had also participated and was declared successful (L-1) in the process. Accordingly, the contract of transportation was allotted to the petitioner and the period of the contract was two years commencing from the date of issuance of allotment order. Thereafter, the contract period of two years ended on 11th of April, 2020, but the respondent Department gave the appellant/ Writ petitioner an extension for a period of three months in the first instance which was further extended for another spell of three months, thereby amounting to six months in total as extension. The appellant/ Writ petitioner, again claims to have approached the respondent Department for giving it further extension till the due process was initiated and fresh contract allotted. The respondent Department, thereafter, initiated process for concluding fresh contract and, accordingly, floated e-NIT No. 01 of 2020-21 dated 11th of July, 2020. While the fresh tendering process was underway and was likely to be concluded, two orders dated 14th of August, 2020 and 17th of August, 2020 came to be issued by the Director FCS&CAD, Kashmir. By order dated 14th of August, 2020, the e-NIT issued on 11th of July, 2020 for hiring of Trucks for transportation of food grains in Kashmir Valley was cancelled purportedly owing to some administrative and technical reasons. The order dated 17th of August, 2020 is a communication whereby the Director FCS&CAD, Kashmir called upon respondent No.4 to intimate the consent of its organization for arrangement of 200-300 Trucks needed for meeting requirement of making civil supplies to various destinations in Kashmir valley.
The order dated 17th of August, 2020 is a communication whereby the Director FCS&CAD, Kashmir called upon respondent No.4 to intimate the consent of its organization for arrangement of 200-300 Trucks needed for meeting requirement of making civil supplies to various destinations in Kashmir valley. The appellant/ Writ petitioner, who was expecting further extension and had participated in the fresh tenders floated by the respondent-Department, accordingly challenged both the aforesaid orders, i.e., order dated 14th of August, 2020 and 17th of August, 2020, in a suit filed before the learned Munisff, Ganderbal. In the said suit, the appellant/ Writ petitioner had claimed that he was entitled to the benefit of extension under Clause 34 of the contract agreement and also that the tendering process could not have been arbitrarily cancelled by the respondent Department for paving way to enter into arrangement with respondent No.4 (JKRTC). The learned Munsiff directed the respondent Department to act upon the agreement entered with the appellant/ Writ petitioner and allow him to ply his vehicles. The respondent No.4 went ahead with the process and, while the suit of the appellant/ Writ petitioner was pending, concluded the contract with respondents 6 to 8 and issued the order of allotment in their favour on 17th of September, 2020. Feeling aggrieved by the finalization of the contract with respondents 6 to 8, the appellant/ Writ petitioner filed the petition before the Writ Court, being WP(C) No.1463/2020, seeking, inter alia, the quashing of the aforesaid e-NIT as also the Government order dated 9th of September, 2020 and formal order of allotment dated 17th of September, 2020 issued by respondent No.4 in favour of respondents 6 to 8. The learned Single Bench, in terms of the impugned judgment dated 28th of October, 2020, after hearing the counsel for the parties, dismissed the petition of the appellant/ Writ petitioner. 3. Mr Mohsin S. Qadri, the learned Senior Counsel, representing the appellant/ Writ petitioner, submits that the controversy involved and agitated before the learned Single Bench was altogether distinct to the one understood by the learned Single Bench while dealing with the Writ petition of the appellant/ Writ petition, resulting in passing of the judgment impugned and dismissal of the Writ petition.
It is contended that the important aspect relating to withdrawing/ cancellation of the tendering process flouted by the respondent department by way of e-tenders on the ground of technical issues was completely unwarranted and that this aspect, though specifically urged, has not been considered by the learned Single Judge while deciding the Writ petition of the appellant/ Writ petitioner. 4. The learned counsel appearing on behalf of the respondents have, in unison, vehemently resisted and controverted the arguments raised by the learned counsel for the appellant/ Writ petitioner. It is pleaded that when the appellant/ Writ petitioner filed the suit before the Court of learned Munsiff, Ganderbal, the respondent No.4, pursuant to requisition received from the respondent Department, had already floated tenders and the appellant/ Writ petitioner, for reasons best known to it, did not throw challenge to the e-tender notification. It is averred that the respondent No.4 not only concluded the process of tenders floated by it, but also allotted the contract to the successful bidder, i.e., respondents 6 to 8 and, therefore, Order 2 Rule 2 of the Code of Civil Procedure would be attracted in the case and the appellant/ Writ petitioner could not have been permitted to challenge the whole process commencing from the issuance of e-tender to its conclusion by issuing a formal order of allotment. It is the further submitted that by issuance of e-NIT by the respondent No.4, the appellant/ Writ petitioner has not been prejudiced in any manner, in that, he was well within its rights to participate in the said process for supply of its Trucks to respondent No.4, but, it chose not to participate and, therefore, was estopped to challenge the same. 5. We have heard the learned counsel for the parties, perused the pleadings on record and considered the matter. 6.
5. We have heard the learned counsel for the parties, perused the pleadings on record and considered the matter. 6. At the very outset, what requires to be stated herein this case is that there is no dispute to the fact that the relationship between the appellant/ Writ petitioner and the respondent Department was governed by an Agreement and, in that Agreement, Clause 34 specifically provided that the period of contract was only for two years commencing from the date of issuance of the allotment order and that the respondent Department, at its discretion, may further consider extension of the contract initially for a period of six months and followed by another six months in case need arises and subject to satisfactory performance by the contractor during the period of contract, but it shall not entitle the contractor with any right to claim any further extension. Accordingly, the respondent Department, in exercise of its discretion and taking note of the performance of the appellant/ Writ petitioner, gave it extension for a period of three months or till the contract is concluded, whichever was earlier and, thereafter, further extension of three months was also granted to the appellant/ Writ petitioner, thereby making the total extension period to six months. Merely because the performance of the appellant/ Writ petitioner remained satisfactory cannot confer upon it any right to claim further extension, more particularly when Clause 34 of the Agreement nowhere suggests that on the expiry of the period of contract, the contractor is entitled to extension as a matter of right. In this context, the conclusion of the learned Single Judge that the Writ petition was only an attempt to perpetuate the contract allotted to the petitioner in the year 2018, which has expired since 11th of April, 2020, cannot be said to be an erroneous one. Besides, the learned Single Bench has rightly observed that the petitioner/ appellant herein cannot be permitted to question the issuance of e-NIT only for the reason that when it filed the suit before the Court of learned Munsiff, it chose not to challenge the e-tender and thus, abandoned its right to challenge the same.
Besides, the learned Single Bench has rightly observed that the petitioner/ appellant herein cannot be permitted to question the issuance of e-NIT only for the reason that when it filed the suit before the Court of learned Munsiff, it chose not to challenge the e-tender and thus, abandoned its right to challenge the same. From a perusal of the records made available before this Court, it is clearly discernible that the cancellation of the earlier tendering process had only occasioned owing to numerous complaints received by the respondent Department as regards the various aspects of the tendering process and, based on those complaints, the competent authority in the respondent Department was well within its domain to cancel the said tendering process and requisition fleet of Trucks from the respondent No.4 strictly in terms of the mandate of Government order dated 9th of September, 2020 and SRO 157 of 2001. 7. Apart from the above, it is well settled legal position that undoubtedly the principles of judicial review would apply to the exercise of contractual powers by Government bodies in order to prevent arbitrariness or favoritism, however, it must be clearly stated that there are inherent limitations in exercise of that power of judicial review. Government is the guardian of the finances of the State and it is expected to protect the financial interests of the State. The ‘right to choose’ in the matters of contract is always available to the Government, but, the principles laid down in Article 14 of the Constitution of India have to be kept in view while taking such a decision. There can be no question of infringement of Article 14, if the Government tries to get the best person or the best quotation. The right to choose cannot be considered to be an arbitrary power. Of course, if the said power is exercised for any collateral purpose, the exercise of that power will be struck down. Judicial quest in administrative matters has been to find the right balance between the administrative discretion to decide matters whether contractual or political in nature or issues of social policy; thus, they are not essentially justifiable and the need to remedy any unfairness. Such an unfairness is set right by judicial review. The judicial power of review is exercised to rein in any unbridled executive functioning.
Such an unfairness is set right by judicial review. The judicial power of review is exercised to rein in any unbridled executive functioning. The restraint has two contemporary manifestations; one is the ambit of judicial intervention and the other covers the scope of the Court’s ability to quash an administrative decision on its merits. These restraints bear the hallmarks of judicial control over administrative action. Judicial review is concerned with reviewing not the merits of the decision in support of which the application for judicial review is made, but the decision-making process itself. Judicial review is concerned, not with the decision, but with the decision-making process and, unless that restriction on the power of the Court is observed, the Court will, under the guise of preventing the abuse of power, be itself guilty of usurping power. It is not intended to take away from those authorities the powers and discretions properly vested in them by law and to substitute the Courts as the bodies making the decisions. It is intended to see that the relevant authorities use their powers in a proper manner. 8. Law on the subject is no more res integra as this issue has been, repeatedly, coming up for consideration before the various Courts of the country, including the Apex Court of the country. In case titled ‘Tata Cellular v. Union of India’, reported as ‘(1994) 6 Supreme Court Cases 651’, at paragraph No.94, the Hon’ble Supreme Court, while dealing with this issue, evolved the following principles: 1. “The modern trend points to judicial restraint in administrative action; 2. The Court does not sit as a court of appeal but merely reviews the manner in which the decision was made; 3. The Court does not have the expertise to correct the administrative decision. If a review of the administrative decision is permitted it will be substituting its own decision, without the necessary expe4rtise which itself may be fallible; 4. The terms of the invitation to tender cannot be open to judicial scrutiny because the invitation to tender is in the realm of contract. Normally speaking, the decision to accept the tender or award the contract is reached by process of negotiations through several tiers. More often than not, such decisions are made qualitatively by experts; 5. The Government must have freedom of contract.
Normally speaking, the decision to accept the tender or award the contract is reached by process of negotiations through several tiers. More often than not, such decisions are made qualitatively by experts; 5. The Government must have freedom of contract. In other words, a fair play in the joints is a necessary concomitant for an administrative body functioning in an administrative sphere or quasi-administrative sphere. However, the decision must not only be tested by the application of Wednesbury principle of reasonableness (including its other facts pointed out above) but must be free from arbitrariness not affected by bias or actuated by mala fides; and 6. Quashing decisions may impose heavy administrative burden on the administration and lead to increased and unbudgeted expenditure.” 9. In case titled ‘Sterling Computers Limited v. M&N Publications Ltd.’, reported as ‘ (1993) 1 SCC 445 ’, the Hon’ble Supreme Court, at Paragraph No.12, laid down as under: “In contracts having commercial element, some more discretion has to be conceded to the authorities so that they may enter into contracts with persons, keeping an eye on the augmentation of the revenue. But even in such matters they have to follow the norms recognized by courts while dealing with public property. It is not possible for courts to question and adjudicate every decision taken by an authority, because many of the Government Undertakings which in due course have acquired the monopolist position in matters of sale and purchase of products and with so many ventures in hand, they can come out with a plea that it is not always possible to act like a quasi-judicial authority while awarding contracts. Under some special circumstances a discretion has to be conceded to the authorities who have to enter into contract giving them liberty to assess the overall situation for purpose of taking a decision as to whom the contract be awarded and at what terms. If the decisions have been taken in bona fide manner although not strictly following the norms laid down by the courts, such decisions are upheld on the principle laid down by Justice Holmes, that courts while judging the constitutional validity of executive decisions must grant certain measure of freedom of ‘play in the joints’ to the executive.” 10. Again, the Hon’ble Apex Court, in case titled ‘Directorate of Education & Ors.
Again, the Hon’ble Apex Court, in case titled ‘Directorate of Education & Ors. v. Educomp Datamatics Ltd. And Ors.’, reported as ‘ (2004) 4 SCC 19 ’, while applying the principles enunciated in Tata Cellular’s case (supra), at Paragraph No.12, laid down as follows: “12. It has been held in these decisions that the terms of the invitation to tender are not open to judicial scrutiny, the same being in the realm of contract. That the Government must have a free hand in setting the terms of the tender. It must have reasonable play in its joints as a necessary concomitant for an administrative body in an administrative sphere. The Courts would interfere with the administrative policy decision only if it is arbitrary, discriminatory, malafide or actuated by bias. It is entitled to pragmatic adjustments which may be called for by the particular circumstances. The Courts cannot strike down the terms of the tender prescribed by the Government because it feels that some other terms in the tender would have been fair, wise or logical. The Courts can interfere only if the policy decision is arbitrary, discretionary or malafide.” On an appreciation of the law laid down above, what comes to limelight is that the modern trend points to judicial restraint in administration action and that the Court does not sit as a ‘Court of Appeal’, but merely reviews the manner in which the decision was made. It has also been declared that Court does not have the expertise to correct the administrative decision and that if a review of the administrative decision is permitted, it will be substituting its own decision, without the necessary expertise which itself may be fallible. In the matter of contract, the Government must be left free. Furthermore, fair play in the joints is a necessary concomitant for an administrative body functioning in an administrative sphere or quasi-administrative sphere and quashing administrative decisions may impose heavy administrative burden on the administration and lead to increased and unbudgeted expenditure. 11. It is, thus, settled that public authorities must be left with the same liberty as they have in framing the policies, even while entering into contracts because many contracts amount to implementation or projection of policies of the Government.
11. It is, thus, settled that public authorities must be left with the same liberty as they have in framing the policies, even while entering into contracts because many contracts amount to implementation or projection of policies of the Government. But, it cannot be overlooked that unlike policies, contracts are legally binding commitments and they commit the authority which may be held to be a State within the meaning of Article 12 of the Constitution of India in many cases for years. It is for this reason that the Courts have impressed that even in contractual matters the public authority should not have unfettered discretion. In contracts having commercial element, some more discretion has to be conceded to the authorities so that they may enter into contracts with persons keeping an eye on the augmentation of the revenue. But, even in such matters, they have to follow the norms recognized by Courts while dealing with public property. It is not possible for the Courts to question and adjudicate every decision taken by an authority because many of the Government Undertakings, which in due course have acquired the monopolist position in matters of sale and purchase of products and with so many ventures in hand, they can come out with a plea that it is not always possible to act like a quasi-judicial authority while awarding contracts. Under some special circumstances, a discretion has to be conceded to the authorities who have to enter into contract by giving them liberty to assess the overall situation for purpose of taking a decision as to whom the contract be awarded and at what terms. If the decisions have been taken in bonafide manner, although not strictly following the norms laid down by the Courts, such decisions are upheld on the principle laid down by Justice Holmes that Courts, while judging the constitutional validity of executive decisions, must grant certain measure of freedom of ‘play in the joints’ to the executive. Looking at the instant case in the above perspective, the appellant/ Writ petitioner has not been able to establish, either before the learned Single Judge or before this Court, that the decision taken by the respondent Department in allotting the contract in favour of the respondent No.4 was/ is an arbitrary exercise of power or that the same was/ is malafide in nature.
In “Jagdish Mandal v. State of Orissa” reported as “ (2007) 14 SCC 517 ”, at Paragraph No.22, the Hon’ble Supreme Court held, thus: “22. …. Therefore, a Court before interfering in tender or contractual matters in exercise of power of judicial review, should pose 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”; (ii) Whether public interest is affected. If the answers are in the negative, there should be no interference under Article 226.” From a bare perusal of the pleadings on record as well as the relevant record made available before this Court, it is more than apparent that the decision taken by the respondent Department was certainly not irrational in any manner whatsoever or intended to favour anyone. The decision appears to be lawful and not unsound. 12. For the foregoing reasons, we are of the view that the impugned judgment passed by the learned Single Judge does not suffer from any illegality or perversity as would warrant its interference from this Court. Accordingly, the instant appeal fails and is hereby dismissed as such alongwith all connected CMs. Interim directions, if any, subsisting as on date, shall stand vacated. 13. Parties to bear their own costs. 14. The photocopy of the relevant records, as produced before this Court, is returned through Mr Wajahat Hussain, I/C Litigation Officer, JKRTC and Mr Akhtar Ali, Chief Accounts Officer, Food, Civil Supplies and Consumer Affairs, Kashmir, in the open Court. Besides, the Registry shall also return the Writ Court records to the concerned with due dispatch.