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Omega Advertising Agency Vs. the State Electricity Board and ors. - Court Judgment

LegalCrystal Citation
Subject;Constitution
CourtGuwahati High Court
Decided On
Case NumberCivil Rule No. 599 of 1980
Judge
ActsConstitution of India - Articles 12 and 14; Electricity (Supply) Act, 1948 - Sections 5 and 18; Evidence Act, 1872 - Sections 115
AppellantOmega Advertising Agency
RespondentThe State Electricity Board and ors.
Appellant AdvocateR.C. Choudhuri, B. Chaudhuri and B. Tanti, Advs.
Respondent AdvocateB.C. Barua, J.M. Choudhuri, N.N. Saikia and D.P. Chahha, Advs.
DispositionPetition allowed
Excerpt:
.....which would render any word of the document meaningless should be avoided. a corporation, like the aseb acting as the instrumentality or agency of the state would also be bound by the same principle and subject to the same limitations and duties. the court would not, therefore, strike down an action as invalid on this ground unless it is clearly satisfied that the action is unreasonable or not in public interest. but where it is so satisfied it would be the plainest duty under the constitution to invalidate the governmental action. it is imperative in a democracy governed by the rule of law that governmental action must be kept within the limits of the law and if there is any transgression, the court must be ready to condemn it. those have been enshrined as a matter of constitutional..........20-9-1980 (annexure-b) as follows:'sealed offers are invited from reputed agencies for handling of aseb advertisements (other than display advertisements) initially for a period of two consecutive years beginning nov. 1, 1980, under the following terms and conditions:(a) the agency must have its registered head office within the state of assam and office/offices in city/cities outside the state.(b) the agency must be financially sound and must be capable of furnishing in favour of the aseb a sum of rs. 50,000/- as security deposit in form of cash, certificate or bank guarantee.(c) the agency must have the experience of handling at least two national accounts of reputed organisations.(d) the agency must preferably be approved by the davp and be a member of iens.applications supported by.....
Judgment:

K.N. Saikia, J.

1. M/s. Omega Advertising Agency, a proprietorial concern, through its sole proprietor Shri Shankar Rajkhowa in this writ petition impugns two orders of the Assam State Electricity Board dated 30-10-1980 splitting its classified advertisements between the petitioner and the respondent No. 3 and appointing the latter for handling those for offices and projects in Zones other than Lower Assam Zone.

2. The Assam State Electricity Board (Shortly ASEB) issued a notice in the Assam Tribune on 20-9-1980 (Annexure-B) as follows:

'Sealed offers are invited from reputed Agencies for handling of ASEB advertisements (other than display advertisements) initially for a period of two consecutive years beginning Nov. 1, 1980, under the following terms and conditions:

(a) The Agency must have its Registered Head Office within the State of Assam and Office/offices in city/cities outside the State.

(b) The Agency must be financially sound and must be capable of furnishing in favour of the ASEB a sum of Rs. 50,000/- as security deposit in form of cash, certificate or Bank guarantee.

(c) The agency must have the experience of handling at least two national accounts of reputed organisations.

(d) The agency must preferably be approved by the DAVP and be a member of IENS.

Applications supported by photostat copies of certificates of membership/approval etc. should reach the undersigned on or before September, 29, 1980. Canvassing directly or indirectly will be regarded as a disqualification.'

3. The petitioner, which possessed all the qualifications, applied in response thereto for appointment as an advertising agency to handle the accounts of the ASEB on 20-9-1980, complying with all the requirements. Respondent No. 3 and another also applied in response to the same notice. By the impugned order (Annexure F) dated 30-10-1980 the Information and Public Relations Officer, ASEB (Respondent No. 2) informed the petitioner that the ASEB had decided to split its classified advertisements between the petitioner and the Respondent No. 3. By their next letter of the same date (Annexure G) the petitioner was informed that the ASEB had been pleased to accept the petitioner's offer for renewal of appointment as handling agents of ASEB classified advertisements in part and that the petitioner had been allotted the responsibilities of handling ASEB classified advertisements issued by all offices and projects situated in its Lower Assam Zone.

4. The petitioner thereafter submitted a representation (Annexure-H) pointing out that in the notice inviting offers there was no clause for splitting the classified advertisements and that M/s. Frontier Advertising Agency (Respondent No. 3) did not have the requisite qualifications under clauses (c) and (d) of the said notice and those points had been overlooked. Even so, the petitioners informed that they were prepared to sign the agreement and comply with all other requirements without prejudice to their right of handling the classified advertisements in all other Zones of the ASEB. The petitioner also requested the ASEB not to issue any work order to Respondent No. 3 as their appointment was in contravention of the conditions of appointment laid down in the notice inviting offers, and their appointment was arbitrary and illegal. The petitioner though received no reply to its aforesaid representation, has in the meantime executed the agreement and has been handling split up advertisements as per the impugned orders dated 30-10-1980 and on 3-11-1980 deposited a sum of Rs. 50,000/- as fixed deposit with the United Bank of India, Silpukhuri Branch, as security deposit in favour of the ASEB and claims right to have the entire advertisement. Hence this petition.

5. Mr. R.C. Choudhury, the learned counsel for the petitioner, submits that while the petitioner fulfils all the qualifications as given in the notice inviting offers and as such was the only concern qualified to apply, the Respondent No. 3, M/s. Frontier Advertising Agency, did not fulfil the qualifications and as such was not even eligible to apply; and that the impugned order splitting the classified advertisements and appointing Respondent No. 3 for handling a portion thereof is discriminatory; and the ASEB being an authority under Article 12 of the Constitution of India, the same is violative of Article 14 of the Constitution of India and is liable to be quashed.

6. Mr. B. C. Barua, the learned counsel appearing for Respondent No. 3, on the other hand, submits that the decision to split up the classified advertisements is an administrative decision, and the petitioner having already accepted the appointment to handle a part, as per the impugned order, he has no right to question the apointment of Respondent No. 3 for handling the other part of the classified advertisements; and that the decision to split up was taken in public interest and is not in any way arbitrary or illegal.

7. The precise questions requiring judicial determination are (i) whether the ASEB is an authority under Article 12 of the Constitution of India; (ii) whether the impugned orders, namely, those splitting up of the classified advertisements, appointing the petitioner to handle one part, and appointing the respondent No. 3 to handle the other part are discriminatory and violative of Article 14 of the Constitution of India; and (iii) whether those orders are liable to be quashed by this court,

8. The ASEB was constituted by the State Government of Assam in exercise of powers under Section 5 of the Electricity (Supply) Act, 1948 (hereinatfer referred to as 'the Act') which provides that the State Government shall as soon as may be after the issue of notification under Sub-section (4) of Section 1, constitute by notification in the official Gazette a State Electricity Board under such name as shall be specified in the notification. The Board shall consist of not less than three and not more than seven members appointed by the State Government. The status and categorisation of the ASEB has, therefore, to be decided in the light of the provisions of the Act. Section 12 of the Act deals with incorporation of the Board and provides that the Board shall be a body corporate by the name notified under Sub-section (1) of Section 5 having perpetual succession and a common seal, with power to acquire and hold property both movable and immovable, and shall by the said name sue and be sued. There is no provision for raising capital by issue of shares etc. It is not a profit making body. Under Section 59 the Board shall not, as far as practicable and after taking credit for any subventions from the State Government under Section 63, carry on its operations under this Act at a loss, and shall adjust its charges accordingly from time to time : provided that where necessary any amounts due for meeting the operating, maintenance and management expenses of the Board for the purposes of Clauses (i) and (ii) of Section 67 may, to such extent as may be sanctioned by the State Government, be paid out of capital.

9. Under Section 78 of the Act the State Government may after previous publication, by notification in the Official Gazette, make rules to give effect to the provisions of this Act, and in particular, and without prejudice to the generality of the foregoing power, such rules may provide for --

'(a) the powers of the Chairman and the term of office of the Chairman and other members of the Board, the conditions under which they shall be eligible for re-appointment and their remuneration, allowances and other conditions of service;

(b) the terms and conditions of appointment of members of State Electricity Consultative Councils and Local Advisory Committees, the convening of meetings of such Councils and Committees, and the conduct of business thereat;

(c) the form in which the annual financial statement and supplementary statements under Section 61 shall be prepared by the Board and the particulars to be included therein;

(d) the conditions subject to which the Board may borrow under Section 65.

(e) the manner in which stock issued by the Board shall be issued, transferred, dealt with and redeemed;

(f) the manner in which the accounts of the Board shall be published under Section 69;

(g) the form in which and the date by which the annual report of the Board shall be submitted under Section 75, and the form and manner of furnishing statistics and returns by the Board under that section;

(h) the business of the Board upon which the Local Advisory Committees concerned shall be consulted.

10. Section 78A enables the State Government to give directions as under:

'78A. Directions by the State Government.-- (1) In the discharge of its functions, the Board shall be guided by such directions on questions of policy as may be given to it by the State Government,

(2) If any dispute arises between the Board and the State Government as to whether a question is or is not a question of policy, it shall be referred to the authority whose decision thereon shall be final.'

11. Under Section 10 of the Act the State Government may suspend from office for such period as it thinks fit or remove from office any member of the Board and conditions laid down therein. The general duties of the Board are enumerated in the Act. The Board is charged with the general duties of promoting the coordinate development of general supply and distribution of electricity within the State in the most efficient and economical manner with particular reference to such development in areas not for the time being served or adequately served by any licensee under the Indian Electricity Act, 1910 and for the purpose the Board is empowered to prepare schemes to carry out the same under Chap.-V. and to supply electricity to owners of the controlled stations and to other licensees or to persons requiring supply of electricity.

12. In Sukhdev Singh v. Bhagatram, reported in AIR 1975 SC 1331 it was ruled that the expression 'other authorities' in Article 12 is wide enough to include within it every authority created by a statute and functioning within the territory of India, or under the control of the Government of India. The expression will include all constitutional or statutory authorities on whom powers are conferred by law. The State as defined in Article 12 is comprehended to include bodies created for the purpose of promoting economic interest of the people. The circumstance that the statutory body is required to carry on some activities of the nature of trade or commerce does not indicate that the Board must be excluded from the scope of the word, State. In Rajasthan State Electricity Board v. Mohan Lal, AIR 1967 SC 1857 it was observed that the Electricity (Supply) Act showed that the Rajasthan Electricity Board had power to give directions, the disobedience of which was punishable as a criminal offence. The power to issue directions and to enforce compliance was held to be an important aspect. The Board was invested by the statute with extensive powers of control over electricity undertakings. The power of the Board to make Rules and Regulations and to administer the Act was said to be in substance the sovereign power of the State delegated to the Board.

13. Under Section 79 of the Act the Board may make Regulations not inconsistent with the Act and the Rules made thereunder to provide for all or any of the matters stated thereunder for the purpose of carrying out the functions of the Board.

14. In Bisra Stone Lime Co. Ltd. v. Orissa State Electricity Board, reported in AIR 1976 SC 127 it was held that the State Electricity Board assumed all obligations of the State Government and as such was bound by agreement.

15. From the above enunciation of the law it can safely be held that the ASEB is an authority under Article 12 of the Constitution of India.

16. The notice inviting offers (Annexure B) was clear as to its requirements. The petitioner claims to have satisfied all the qualifications and this claim is not denied by the ASEB. In its letter dated 20-9-80 (Annexure C) the petitioner stated that it handled the national accounts, namely, ASEB, Oil & Natural Gas Commission, Nazira, North Eastern Electric Power Corporation Limited, Shillong, Meghalaya State Electricity Board, Shillong, Assam Petrochemicals Limited, Namrup, and Hindusthan Paper Corporation Limited. Jagiroad, and Ashok Paper Mills Limited, Jogighopa. It was also accredited to the Directorate of Advertising and Visual Publicity (DAVP), New Delhi and Indian and Eastern Newspaper Society (IENS), New Delhi. These statements have not been denied. There can, therefore, be no doubt that the petitioner was fully qualified to apply.

17. The learned counsel for the ASEB, while not denying the above claims states that the petitioner concern has been given the appointment in terms of the notice but administratively the advertisements have been split up in public interest and Respondent No. 3 was appointed to handle a part thereof.

18. The Respondent No. 3 in its affidavit states that it has been registered by the Directorate of Advertising and Visual Publicity (DAVP), Ministry of Information and Broadcasting as one of the approved firms for the North-Eastern Region (except Bihar and West Bengal) and that it has been doing business of advertisement since 1960 and as such has got vast experience and knowledge in the matter of advertisement. It submits that Clause (d) of the tender notice was directory and not mandatory. It further says that it is experienced in handing accounts of various public sector undertakings, and as such it substantially fulfils the requisite qualifications as per the notice inviting offers.

19. That the Respondent No. 3 did not possess all the requisite qualifications is not in doubt. It did not possess the qualification mentioned in Clauses (c) and (d). It had no experience of handling at least two 'national accounts' of reputed organisations. It had been enlisted on its approved panel on a provisional basis by the Directorate of Advertising and Visual Publicity, Ministry of Information and Broadcasting for the North Eastern Region (except Bihar and West Bengal). It was however, not a member of the IENS.

20. From the tenor of the notice it is clear that an applicant must have fulfilled all the qualifications stated therein and no power was reserved for relaxing any of those qualifications, There is, therefore, no escape from the conclusion that the respondent No. 3 was not qualified to apply.

21. The above being the position, the action of the ASEB in splitting up the classified advertisements and giving a part to respondent No. 3 is clearly contrary to the tenor of the notice inviting offers in which there was no reservation as to the totality of the advertisements and as to the requisite qualifications. 22. It is now well settled by the decision in Ramana Dayaram Shetty v. International Airport Authority of India, AIR 1979 SC 1628 followed by that in Kasturi Lal Laxmi Reddy v. State of Jammu and Kashmir, AIR 1980 SC 1992 that an executive authority must be rigorously held to the standards by which it professes its action to be judged; and it must scrupulously observe those standards on pain of invalidation of an act in violation of them. It is also well settled that the notice inviting offer has to be construed without ascribing any superfluity to its language, and any construction which would render any word of the document meaningless should be avoided. So construed, there is no room for appointing anyone who does not possess the qualifications. The notice prescribed the conditions of eligibility which were required to be fulfilled by every party applying for appointment. The qualifications laid down in Clauses (a), (b), (c) and (d) of the notice constituted the standard or norm of eligibility and the ASEB prescribing those has fettered its own discretion to go outside that norm; and it must be rigorously held to the norm or standard by which it professed to act. If they were to appoint somebody who did not qualify, according to the norm or standard, it would amount to discrimination and violation of Article 14 of the Constitution. As was pointed out in Ramana's case, the rule against discrimination though seems to have emanated from Article 14, it does not rest merely on that Article and has independent existence of its own. It is a rule of administrative law evolved by judiciary as a check against abuse or arbitrary exercise of power by the executive authority.

23. In the ever expanding measure of

economic activities of the welfare

State it is necessary to 'structure and

restrict' the power of the executive so

as to conform to the rule of law in the

matter of socio-economic distributive

justice. Modern welfare State is much

more than a police or laissez faire State

and is the dispenser of enormous benefits

including services, contracts, settlement,

licenses, allotments and conferments in

various forms which mean livelihood and

wealth for the citizens. It is, therefore,

necessary to forbid discrimination in

distribution or allotment of

this new kind of wealth. As was observ

ed by Bhagwati, J. in Ramana's case

(para 11) --

'Some interests in Government largess, formerly regarded as privileges, have been recognised as rights while others have been given legal protection not only by forging procedural safeguards but also by confining/structuring and checking Government discretion in the matter of grant of such largess. The discretion of the Government has been held to be not unlimited in that the Government cannot give or withhold largess in its arbitrary discretion or at its sweet will.'

24. The Government, unlike a private individual, cannot always pick and choose the person with whom it will deal, The activities of the Government have a public welfare and distributive element in them wherefor there lies a duty on the State to act with fairness and without discrimination. The State is not bound to enter into contract with anyone, but if it does so it must do so fairly and without discrimination. Any action contrary to this principle would be liable to be struck down unless it can be shown that the departure was not arbitrary, but based on some valid ground. The Government may act through its instrumentality or agency. A Corporation, like the ASEB acting as the instrumentality or agency of the State would also be bound by the same principle and subject to the same limitations and duties. In case of a departure, its action shall have to satisfy the test of reasonableness or public interest, failing which, its action cannot be sustained. It is true, as was observed in Kasturi Lal's case (AIR 1980 SC 1992) (supra), the Court cannot lightly assume that the action taken by the Government is unreasonable or without public interest because there are various policy considerations which may weigh with the Government's decision. The Court would not, therefore, strike down an action as invalid on this ground unless it is clearly satisfied that the action is unreasonable or not in public interest. But where it is so satisfied it would be the plainest duty under the Constitution to invalidate the governmental action.

'This is one of the most important functions of the Court and also one of the most essential for preservation of the rule of law. It is imperative in a democracy governed by the rule of law that governmental action must be kept within the limits of the law and if there is any transgression, the Court must be ready to condemn it.'

25. Applying the ratio of the above decisions to the facts and circumstances of the present case, the actions of the ASEB in splitting up the classified advertisements and appointing respondent No. 3 to handle a part, as ordered in Annexures F and G, which cannot be said to be reasonable or in public interest, have to be struck down, and are accordingly done.

26. The last contention of Mr. Barua is that the petitioner having accepted a part of the classified advertisement as per Annexure 'F' is to be taken to have waived his right under the notice inviting offer or to have acquiesced to the splitting and appointment of Respondent No. 3. This submission is not acceptable. The right not to be discriminated against as enshrined in Article 14 of the Constitution of India, is one of the fundamental rights. These fundamental rights have been embodied in our Constitution not merely for the benefit of a particular individual, though individuals are naturally benefited. Those have been enshrined as a matter of constitutional policy and for public good; and the doctrine of waiver or acquiescence cannot be applied thereto. A citizen cannot voluntarily get discrimination or waive his fundamental right against discrimination. (Behram Khurshid v. Bombay State, AIR 1955 SC 123).

27. As was observed in Basheshar Nath v. I. T. Commr., AIR 1959 SC 149, by virtue of Article 12, the State, which is, by Article 14 forbidden to discriminate between persons includes the Government and Parliament of India and the Government and the Legislature of each of the States and all local or other authorities within the territory of India or under the control of the Government of India. Article 14, therefore, is an injunction to both the legislative as well as the executive organs of the State and the other subordinate authorities. It is absolutely clear from the language of Article 14 that it is a command issued to the State as a matter of constitutional policy with a view to implement its object of ensuring the equality of status and opportunity which every welfare State is expected to do; and no person can, by any act or conduct, relieve the State of the solemn obligation imposed on it by the Constitution. A citizen cannot give up or waive the benefits of this fundamental right which is indirectly conferred on him by the mandate directed to the State.

28. In the result the impugned orders of splitting up of the classified advertisements and appointing respondent No. 3 to handle a part as in Annexures 'F' and 'G' to the petition are quashed. The petition is allowed and the Rule is made absolute. Under the peculiar facts and circumstances of the case I make no order as to costs.


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