LegalCrystal – Blog

BBMP OFFICIALS WORKED OVERTIME/OVERNIGHT!

[News you can use]

Bruhat Bangalore Mahanagara Palike officials worked overtime on Tuesday and Wednesday 12th & 13th January to give a big push to development. Keeping in mind that the election code of conduct comes into effect on January 15,[in view of the BBMP election scheduled to be held on 22nd ] officials cleared files on Wednesday, the last working day before the deadline.

The members of Civic Front stormed into the BBMP office and protested against e-tendering. The coalition of political parties like CPM, CPI and AIADMK accused the BBMP of clearing tenders worth over Rs.3,000 crore overnight on Tuesday in a very undemocratic process. BBMP councilors stayed on at office till the wee hours of Wednesday to clear all these tenders for developmental work, they alleged ‘What was the hurry to finalize the tenders at midnight’?

PEOPLE BEWARE! YOU ARE EXPLIOTED AFTER TAKING YOUR VOTE! ITS YOUR DUTY /OBLIGATION TO ENSURE TRANSPERANCY IN PUBLIC PROCUREMENT OF GOODS AND SERVICES BY THE AUTHORITIES!

Professionals/Businessmen and People be Aware of the Law relating to Public Procurement of Goods and Services – to understand more go through the narration of the following case law – judgement delivered by Hon’ble Justice N.Kumar of Karnataka High Court.

[Let me brief you about a practical case discussed in 2009(4) AIR Kar R 98]

In the above case one M/s Nsoft(India) Services Pvt. Ltd., has challenged two contracts awarded to one M/s Zygax and sought for quashing of the same. The first contract is in respect of spot billing and collection in BESCOM Sub-Divisions,Second contract refers to maintenance of billing software.

The BESCOM Ltd., floated a tender inviting bids for Total Revenue Management of Billing and Collection of BESCOM Sub-Divisions in respect of 4 lots. The common qualifying requirements were stipulated for all the Lots. The Nsoft India Services was one such bidder and so also M/s Zygax. The Nsoft India’s bid was not accepted whereas the zygax bid was accepted. The grievance of the Nsoft India is that the zygax did not possess the requisite qualification, namely three years experience of providing similar services in any electricity supply utility in India. The zygax contended that they do possess the three years qualification. The BESCOM has not categorically stated in the statement of objections that the zygax do possess the requisite qualification of three years experience. And the Nsoft preferred a statutory appeal against the order passed by the tender accepting authority under Section 16 of the Karnataka Transperancy in Public Procurements Act 1999. The appellate authority after considering the rival contentions held according to BESCOM the requirement as stated in the bid document, is only work of similar nature. Since there is no specific definition in the tender document on what constitutes work of similar nature, the decision of the tender inviting authority in determinig this was accepted and accordingly it dismissed the appeal of Nsoft India. Aggreived by the said orders he is before the Hon’ble High Court.

Kindly be Aware of the Law:

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[Karnataka Transparency in Public Procurements Act (29 of 2000)]

The above Act was enacted by the Karnataka State Legislature to provide for ensuring transparency in public procurement of goods and services by streamlining the procedure in inviting, processing and acceptance of tenders by Procurement Entities and for matters related thereto.

“Procurement Entity” has been defined under the said Act to mean any Government Department, a State Government undertaking, Local Authority or Board, Body or Corporation established by or under any law and owned or controlled by the Government and any other body or authority owned or controlle4d by the Government and as may be specified by it.

Chapter II of the above Act deals with regulation or procurement. Section 5 provides that, on and from the date of commencement of the Act no procurement entity shall procure goods or services except by inviting tenders for supply. Section 6 contemplates that no tender shall be invited, processed or accepted by a procurement entity after the commencement of the Act except in accordance with the procedure laid down in the Act or the Rules made thereunder.

Act provides for publication of tender bulletins, tender bulletin officers, tender inviting authority and tender accepting authority, tender scrutiny committee, opening of tenders, duties of tender inviting authority, how a tender is to be accepted, how a tender is to be rejected and a statutory appeal to a person aggrieved in the aforesaid tender process.

Therefore, after coming into force of the Act, inviting tenders for procuring the goods and services is the rule and the said procurement should be in accordance with the procedure prescribed under the Act. However, the Act makes two exceptions. Firstly, as contemplated under Section 3 the provisions of the Act are not made applicable to the projects funded by international financial agencies or projects covered under international agreements. The Second exception , with which are concerned is found in Section 4 which reads as under :

“S.4 Exception to applicability-The provisions of Chapter II shall not apply to Procurement of goods and services:-

(a) During the period of natural calamity or emergency declared by the Government.

(b) Where the goods or services are available from a single source or where a particular supplier or contractor has exclusive rights in respect of the goods or services or construction work and no reasonable alternatives or substitutes exist:

Provided that for the purpose of this clause there shall be a committee of three experts consisting of one technical representative of the procuring entity one technical respresentative of the Government organization dealing with similar procurement and one respresentative from a reputed Academic or Research Institution or Non-commercial Institution having expertise in such line to examine and declare that the goods or services are available from a single source.”

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In the above case After much deliberations the Hon’ble High Court held – applying exceptions as per Section 4 of the Act to the facts of this case the BESCOM has committed first error in not appointing experts in the field as committee members, The committee constituted was not of expert committee committed an error in referring the matter to a professor, an expert in the field for which they had no power under the Act, It is the procurement entity which has to constitute a three member expert committee to consider the services rendered by M/s Zygax and then to find out whether he is the only person who has got exclusive control of the said service. That has not been done. After the matter was referred to professor Sadagopan obviously he was not aware of the provisions of this Act. He has not certified that the petitioner is the only source from which this service could be procured. The recommendation made by him is very general in nature. It does not satisfy the requirement contemplated under proviso to sub-section(b) of Section 4 of the Act. In the letter addressed by him to the BESCOM he has not declared that the goods or services are available from a single source or that M/s Zygax has exclusive rights in respect of the goods and services. The third error committed was without properly understanding the contents of the said letter, the BESCOM has proceeded on the assumption that Sri Sadagopan is of the view that M/s Zygax is the only single source from whom the said service could be procured and they have awarded the contract to the M/s Zygax on the basis of the said letter.

From the aforesaid facts, it is clear that there is total non-application of mind by the BESCOM in the constitution of the expert committee, in making reference to an expert and also in not understanding what the expert has stated by way of his opinion. Therefore, the BESCOM has committed a serious illegality in awarding the contract to M/s Zygax.

Having regard to the object with which the Act was passed by the Karnataka Legislature nearly nine years back, the tendency of the BESCOM an Instrumentality of the State, to continue to indulge in manipulations and distributing the public largesse is quite evident in this case. When the whole machinery of an instrumentality of the State is directed towards preferring a particular individual or a company in preference to other persons who are similarly placed and anxiety shown by the statutory authority in awarding contract, in utter violation of provisions of the Act clearly demonstrates that the authorities are acting in violation of the rule of law. In fact the way tender is worded also gives an impression that from the inception they have kept in mind the interest of M/s Zygax and not of the authority. When these facts are brought to the notice of this Court, this Court cannot be a silent spectator. It is not a mere issue of a writ to quash an illegal action. A duty is cast on the Court to see in future such illegalities do not occur. Therefore it is very much necessary for this Court to quash these contracts in particular the second contract which is granted in utter violation of the provisions of the Act. As M/s Nsoft India has succeeded in showing the illegality he is entitled to succeed and is entitled to get both the contracts quashed.

However, merely because the contract awarded to M/s Zygax is quashed at the instance of M/s Nsoft India, M/s Nsoft India is not entitled to the award of Contracts straightway. Before they could be said to be entitled to the contract, he should satisfy the tender accepting authority that he possess the requisite qualification. That is an exercise to be done by the tender accepting authority and not by this Court. Writ Petition Allowed.

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WHETHER VALID?

VALID / VOID / VOIDABLE  AGREEMENTS

The following questions/issues regarding a Society allotment/Sale is very beautifully discussed in a case law – decision delivered by Justice N.Kumar-High Court of Karnataka:

Whether the Sale Deed executed by the Society in favour of a non-member is void or voidable?

• Whether the sale deeds executed by the Society represented by its office bearers contrary to bye law 36 is valid or void?

• Whether the Sale Deed executed by the Society in favour of its member in respect of the sites for which the Society had already executed sale deed in favour of non-member is void or voidable?
• Whether the cancellation deeds executed unilaterally by the society is void or voidable? In order to answer these questions one should have a clear distinction between the legal terms such as valid, void and voidable: A valid agreement is one, which is enforceable by law as a contract, by the parties to the agreement. A void agreement is one, which does not exist in the eye of law, and therefore fails to receive any legal recognition or sanction.  In legal parlance it is a nullity or non-est.  It is not a contract at all.  It would be automatically null and void without more ado.  Its existence or continuation has no value, as you cannot continue a nullity. If a statute specifically provides that a contract contrary to the provisions of the statute would be void, it is no contract in the eye of law, it is void ab intio, and the said agreement is unenforceable in law.

In between these two extreme positions, lies the voidable agreement.  In law it exists and also recognized.  It is a contract.  It can also be enforced.  But because of some defect in its origin, at the option of the party to the agreement, it is liable to be cancelled or set aside.  In other words, a voidable agreement is one which is void or valid at the election of one of the parties.  However, it is valid, till, it is declared void by a competent Court of law, in a manner known to law.  Therefore, it is not a nullity or non est.  It is valid and good unless avoided.

Sale of Site belonging to Co-operative Society in favour of non-members is Not expressly prohibited by Bye laws of Society the object of selling sites to non-members is to raise money to pay loan to Corporation the Object behind sale neither illegal nor against interest of members of society Sale was for a valid consideration sale deed executed by society in favour of non-members cannot be said to be void Said agreement is not forbidden by law or is of such a nature that it would defeat provisions of any law -  not immoral or opposite to public policy.  It is enforceable.

[for more detailed information on above questions- kindly refer 2008(5) AIR  Kar R 120]

image source : http://www.falcommercial.com.au

An appeal shall lie to the High Court from every decree passed in appeal by any Court subordinate to the High Court, if the High Court is satisfied that the case involves a substantial question of law.[section 100 C.P.C.]

Any question of law which affects the final decision in a case is a substantial question of law as between the parties. A question of law which arises incidentally or collaterally, having no bearing on final outcome, will not be a substantial question of law.

Even if there is a clear enunciation of law by Supreme Court or by the concerned High Court, but the lower Court had ignored or misinterpreted or misapplied the same, and correct application of the law as declared or enunciated by Supreme Court or the concerned High Court would have led to a different decision, the appeal would involve a substantial question of law as between the parties. Even where there is an enunciation of law by Supreme Court or the concerned High Court and the same has been followed by the lower Court, if the appellant is able to persuade the High Court that the enunciated legal position needs reconsideration, alteration, modification or clarification or that there is a need to resolve an apparent conflict between two view points, it can be said that a substantial question of law arises for consideration.[2008 AIR SCW 4355(A)]

Dear Readers,

This is about Rent Act. Today under Rent Act I would like to give you few tips which you need to know as a Tenant or as a Landlord or to take special care as a prospective Landlord/Tenant:

First I would like to brief you about the history and purpose of the Act in few sentences which I narrate from the books I referred:

The Historical background of the Act is that during the Second World War there was acute problem to find accommodation for the officials transferred from one place to another and owners of the buildings exploited the situation to their advantage. In order to curb such tendencies legislation was brought in throughout the country. The Subject comes under the State List of the Constitution of India. The then Mysore State enacted the Mysore House Rent and Accommodation Control Act 1951 which was replaced by the Karnataka Rent Control Act 1961. It was brought into force for a period of ten years as temporary measure but has been extended from time to time till 31/12/2001. The Karnataka Rent Act 1961 is replaced by the Karnataka Rent Act 1999. It has been passed by the Karnataka State Legislature and published in Karnataka Gazette and it received the assent of the President of India on 22/11/2001. It has come into force from 31/12/2001. The Karnataka Rent Rules 2001 are framed under Section 66(1) of the Act which came into force from the date of their publication in the official Gazette. Thus the Act and the Rules came into force from 31/12/2001 in the State of Karnataka by repealing the 1961 Act.

LIST OF DOCUMENTS TO BE OBTAINED BY A PURCHASER

OF FLAT/S FROM THE PROMOTER/BUILDER BEFORE THE PURCHASE:

AS PER KARNATAKA OWNERSHIP FLATS [RGN] RULES RULE 4 REQUIRES THE PRMOTOR/DEVELOPER TO :

1. GIVE TRUE COPIES OF DOCUMENTS OF TITLE  PERTIANING TO THE LAND ON WHICH THE APERTMENT IS BULIT.

2.  CERTIFCATE BY ADVOCATE  AS PER SEC [a]a of sec 3

3. CERTIFICATE OF ENCUMBRANCE

4. THE  APPROVED PLANS AND SPECIFICATION OF THE BUILDING BUILT OR TO BE BUILT ON THE LAND REFERRED.

5. LIST OF FIXTURES ,FITTINGS AMENITIES

6. CERTIFCATE STATING THAT ORIGINAL TITLE DEEDS ARE NOT DEPOSITED WITH ANY CREDITOR /FINANCIAL INSTITTUTION WITH AN INTENTION TO CREATE EQUITABLE MORTGAGE.

AND AN UNDERTAKING THAT THE ORIGIANL WILL BE HANDED OVER TO THE SOCEITY  AS PER THE PROVISIONS OF Act.

7. COMPLETION CERTIFICATE /OCCUPANCY CERTIFICATE

8. CONSENT LETTER FROM POLLUTION CONTROL BOARD WITH RESPECT TO DISCHARGE OF LIQUID EFFULUENT AND EMISSIONS.

9. A STATEMENT STATING THE BASIS ON WHICH ANY ESTIMATED FUGURES OR OTHER INFORMATION IS GIVEN BY THE PROMOTER.

AND ANY OTHER RELEVANT DOCUMENT WHICH INVOLVES THE RIGHT INTEREST AND TITLE OF THE PURCHASER OF FLAT.

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