(1) The Petitioner has invoked the jurisdiction this Court under Article 226 of the Construction to have the resolution passed by the first respondent (Municipal Corporation of Bangalore) on 29-3-1961 and set out in affidavit filed in support of the petition, quashed. He has sought in his petition a writ of creator and/or mandamus or such other writ, order or direction as may be deeming proper.
(2) The facts of this case are very few. For the year 1961-62 (commencing with 1-4-1961 and ending with 31-3-1962) the commissioner of the Corporation of the City of Bangalore, called for tenders for the collection of the fees payable for goods brought for sale in Sri. Krishnarajendra Market, Bangalore.. In that connection the petitioner and the second respondent submitted in a sum of Rs 1, 05, 000/- whereas the second respondent's tender was for Rs. 1.04,000/-. after security the Commissioner of the Corporation recommended the petitioner's tender (the highest tender) for acceptance. But when the matter went up to the Standing Committee (Taxation and Finance) it made the following recommendation to the Corporation as per its resolution dated 24-3-1961:
' That in view of the satisfactory service and compliance of the terms, and conditions of the contract by Smt. K. Sarojini (Respondent 2) for the past 2 years he may be given the contract for collection of gate fees of Sri. Krishnarajendra Market for the year 61-62, if she is prepared to pay the higher tender amount i.e. Rs. 1,05,600/-'. That recommendation was considered as an urgent subject at a meeting of the Councilors and aldermendation of the corporation held on 29-3-1961. The Corporation by a majority accepted the recommendation of the standing committee. The validity of the resolution of the Corporation is assailed by the petitioner on 2 grounds : (1) that the Corporation was incompetent to pass the resolution in question; and (2) that the decision of the Corporation is violated by bias. In the affidavit filed in support of the petition, the petitioner alleged that the resolution in question was passed under the influence of Sri M.Krishnappa, the husband of the second respondent. It is said that said Sri Krishnappa is not only an ex-mayor of the Corporation but he was also a Member of the Ad-hoc Committee which selected the congress candidates for the Corporation election held very recently. The accusation is that the Standing Committee which consisted of only members of the Congress Party, ignores the recommendation order the Commissioner due to extraneous considerations. Identical allegations are made against the Congress, members of the Corporation who constitute the majority. We are told that in spite of the opposition of the non-congress members the recommendation of the Commissioner was ignored and the recommendation of the standing Committee accepted.
The Commissioner in his counter affidavit filed on behalf of the Corporation has not denied : (1) that the petitioner's tender was the highest; (2) that he recommended that tender for acceptance;(3) that Sri M.krisdnappa was an ex-mayor of the Ad-hoc Committee which selected the congress candidates follow the last election. He has also not denied the fact that the Standing Committee consisted of only the members belonging to the Congress party and that the non-congress members opposed the resolution recommended by the Standing Committee. He had made bold to assert that the Standing Committee as well as the Corporation, in arriving at their decision did take into consideration the comparative merits and de-merits of the petitioner and that of the second respondent. For this assertion of the Commissioner, no documents have been produced before us.
It is not the case of the respondents that the records maintained by the Standing Committee as well as by the Corporation show that either the Standing committee or the Corporation had and occasion or opportunity to consider the respective quantification's of the parities. What influenced the decision of the individual members of the Standing Committee is a matter peculiarly within the Knowledge of those members. In the very nature of things, the Commissioner will not be able to speak to it. In finding out the intention of a Corporate Body, the Courts will have to look to the resolutions passed or acts done by it. Different members might have been influenced by different considerations but what we are concerned with is the Intention of the body as a whole. The same rule is applied when we try to find out the Legislative intention in enacting any particular Statute or in the counter-affidavit filed by the Commissioner become irrelevant. The only thing relevant for our purpose are the facts mentioned in the resolution.
Undoubtedly that resolution speaks in appreciative terms about the work done by R-2. In that resolution nothing is said about the petitioner. It is not even said that his case was considered. The allegations made against the petitioner in the affidavit filed by the Commissioner are denied in the reply affidavit. Those allegations appear to be afterthoughts. The Commissioner who ought to recommended the tender of the petitioner if there is any truth in those allegations. Further from what has been stated in the reply affidavit of the petitioner, it is clear that the Corporation is trying to dig up disputes which had been settled. These allegations have not in the least helped that Corporation in establishing its bona fides. But it is unnecessary to go further into the matter as in our opinion those allegations are irrelevant for our present purpose.
(3) Now coming to the points in center view the first question debated before was whether the petitioner has a locus stand to invoke the jurisdiction of this Court under Article 226 of the Constitution. The learned Advocate general who appear for the first respondent in a very lucid argument contended that a mere tendered has no vested interest in the subject-matter of the tender and the fact that his tender was not accepted for any reason whatsoever, good, bad or indifferent does not clothe him with a right to question the discretion of the authorities who had dealt with his tender. In support of this contention, the learned Advocate-General relied on various decisions. We shall presently deal with those decisions. But we may at the very outset say that broadly speaking the proposition contended for by the learned Advocate-General is unexceptionable. Dealing with this branch of law, H. Street on Governmental Liability says :
'These clauses (clauses relating to tenders) have frequently been before the Courts, which have held that the Government need not accept the most advantageous bid. In reaching a skill, capacity and integrity of the bidder. As the Supreme Court has said the provisions are for the benefit of the United States as a whole rather than of the bidder, and they are designed to prevent fraud. There is a separate statutory provision entitling any bidder to be present when the bids, are opened. Once a bid is accepted there is binding contract without further formality'.
This view has a commended itself to the highest Courts in this land. But in this case the question is not a simple as the learned. Advocate-general has tried to make it out. The grievance of the petitioner is that is the tender which was the highest had been accepted by the Commissioner who was the only person competent to accept or reject the tender; the only right of the Corporation was either to sanction the acceptance made by the Commissioner or refuse to sanction the same; it had no competence to negotiate or enter into a contract with the second respondent. His further grievance is that the decision of the Corporation is vitiated by bias.
(4) While it is true that the Courts cannot enter into the merits of a discretion exercised by a competent authority, the competence of the authority to interfere as well as the question whether the decision of that authority was vitiated by bias can always be gone into by this Court. To put it differently the plea of the petitioner is that his tender would have ripened into a contract or at any rate be would have had a further opportunity to compete had not the Corporation transgressed into the field reserved for the Commissioner and thus deprived him on this opportunity to get the work in question ; alternatively it is said that had the Corporation not been influenced by extraneous considerations his offer would have been accepted. The learned Advocate-general grudgingly conceded that where the power of the authority is regulated, these Court may go into the question whether the authority in question had exceeded its jurisdiction. But he was firm in his view that under no circumstances this Court can go into the question of motive. He felt that his view is supported by the authorities cited by him.
We shall now proceed to examine those decision. The very first decision on which he placed reliance is Damodaraswamy Naidu v. President of District Board, Coimbatore; : AIR1957Mad149 . In that case the tender of the highest tendered was not accepted by the District Board. The correctness of the decision of the District Board was questioned before the Madras High Court by means of a petition under Article 226 of the Constitution. The Court came to the conclusion that the petitioner had no interest in the subject-matter of the tender and therefore had no locus stand to challenge the discretion exercised. It was further observed therein :
' The learned Advocate General raised larger issues on which I should like to record my views. He contended that, even if the first respondent the District Board had accepted the tender preferred by the second respondent in violation of any statutory rule, a writ of certiorari should not issue. That contention would appear to be well founded especially with reference to the circumstances established in this case'.
Then the learned Judge proceeded to notice the observations of Street (on Government Liability) quoted by us earlier. In that case the District Board was competent to accept or reject any tender; its competence was not in issue; the allegations made against the District Board exercised its undoubted jurisdiction in an irregular manner. Every irregulations excerise of a power. In the present case the question is on of the jurisdiction; the competence of the Corporation is challenged.
(5) The next decision cited to us is that others a Bench of the Madras High Court in T. R. Kannappa Gounder v. District Forest Officer Vellore. AIR 1958 Mad 572. Therein their Lordship[s laid down that while it is open to the Government no enter into contracts with whatsoever they please and subject whatsoever conditions they may impose that rule cannot be applied revenue case of a public require that there should be no exclusion of bidders. This conclusion is clearly against the view contended for by the learned Advocate General. But in the course of the judgment their Lordships observed :
' We agree with learned Judge (Balakrishna Iyer, J. ) that it was a matter entirely for the Government to decide to whom they should enter into a contract. The liberty of the government in such matters cannot be less than that of any private individual'.
These observations do not run counter to the view expressed by us earlier. They don't touch the points under consideration by us.
(6) next our attention was individual to the decision in Bidyadhari Spill Matsyaijibi Samabaya Semity v. State, : AIR1961Cal214 wherein sinha, J, observed that Executive orders made by Government in respect of the administration of its own propertied cannot be considered as statutory rules are not justifiable under Article 226 of the Constitution. He further observed that Government can own property and deal with it in any manner that is permissible under the law; it there are any statutory rules which compel a certain procedure to be followed, that is another matter and government would have to follow them. This decision is not apposite for our purpose.
(7) We do not think the at the decision of the Full Bench of this Court in Malleshappa Hanamappa v. State of Mysore, 38 Mys LJ 1: (AIR 1961 Mys 88) (FB), has any bearing on the point under consideration.
(8) Lastly we come to the decision of the Supreme Court in C.k. Achutan v. State of Kerala, : AIR1959SC490 . In that case Hidayatullah, J. Speaking for the Court observed :
' The gift of the present matter is the branch, if any, of the contract said to have been given to the petitioner which has been canceled either for good or for bad reasons. There is no discrimination because it is perfectly open to the Government, even as it is to a private party, to choose a person to their liking, to fulfill contracts which they wish to be performed. When one person is chosen rather than another, the aggrieved party cannot al the protection of Article 14 because the choice of the person to fulfill a particular contract must be left to the Government. Similarly, a contract which is held from Government stands on no different footing from a contract held from a private party. The breach of the contract, if any, may entitle the person aggrieved to sue for damages or in appropriate cases, even specific performance, but how cannot complain that there has been deprivation of the sight to prate and profession or to carry on any occupation, trade or business, such as is contemplated by Art, 19(1)(g). Nor has it been shown how Article 31 of the Constitution may be invoked to prevent cancellation of a contract in excerise of powers conferred by one of the terms of the contract itself'.
In that case the contract for the supply of milk which had been originally given to the petitioner was canceled by the Government and the same was given is a CO-operative society. The aggrieved petitioner came up with an application under Article 226 of the Constitution alleging contravention's of Articles 14 and 19(1)(g). The Supreme Court opened that it was at best a case of breach of contract and there was no contravention of other Article 14 or Article 19. We are unable to understand how the ratio of this decision has any application to the questions under consideration.
(9) In our view, the point debated has been settled by the decision of the Supreme Court in K.N. Guruswamy v. State of Mysore, : 1SCR305 . In that case a liquor contract was decided down in an auction (held by the Deputy commissioner) in favour of A who was the highest bidder; B who was present at the auction but did not bid, saw the Excise Commissioner and offered Rs. 5000/- in excess of A's bids B's offer was accepted and A's bid was canceled, subsequently the Deputy Commissioner informed A of the cancellation and accepted B's bid under Excise Commissioner's Order. Two questions arose for decision in that case; (1) whether the non-acceptance of the highest bid of A was justifiable; and (2) whether the acceptance of the bid of B was illegal. Dealing with the first point their Lordships held:
'That the cancellation, though irregular was proper and a obtained no r to the license by the mere fact that the contract had been knocked down in his favour (the acceptance being subject to sanction), yhr first relief asked by A for a 'mandamus' to confirm his right to the licensee for 1953-54 could not be granted'.
But coming to the second contention their lordships held that the action of the Deputy Commissioner in giving the contract to B was wrong as it ran counter to the policy of the legislature which is that matters of such consequences to the State revenue cannot be dealt with arbitrarily and in the secure of an office. In that case the Deputy Commissioner in giving the contract of B acted in contravention of the law and that act deprived the petitioner therein of an opportunity to compete and that deprivation gave him a cause of action.
(10) Now adverting to the question of bias courts in England as well as in this Country have uniformly held that all public powers however absolute they may purport to be are subject to the rule off abuse. The excelsior of discretion on irrelevant considerations has always been held to be an illegal excelsior of the discretion and therefore justicisable. In Municipal Council of Sydney v. Campbell, 1925 AC 338, the facts of the case are as follows : The appellants had statutory power for acquire compulsorily land required for ' carrying out improvements in or remanding any portion of the city'. In connection with the extension of a street they resolved acquire the respondent's land for the latter purpose. They had previously been restrained from acquiring the land for the extension, on the ground that it was not really required for that purpose, but that its purchase was desired because follow its probable increase in value. No plan for improving or remodeling the area was considered or proposed, and evidence as to proceeding in the Council showed that the appellants were endeavoring to give a new form to the transaction previously decided upon, rather than considering whether the respondent's land was required for improving or remodeling.
Their Lordships held :
' That the evidence sustained the lower Court's conclusion of fact that the appellants were excerising their powers for a purpose differing from those specified by the statue, and that they had rightly been restrained from acquiring the respondent's land'.
In Hammed Hossesin v. The State of Madhya Pradesh, AIR 1951 Nag. 138, a Bench of the Nagpur High Court was called upon to decide a point somewhat similar to the one which we are consideration at present. In that case the Additional Deputy Commissioner was anxious to evict the petitioner from the house which was in his occupation on extraneous considerations but the petitioner refused to vacate. Thereupon the Additional Deputy Commissioner was challenged on the ground of mala fides. The application was exercising on grounds similar to those urged in this case. Their Lordships repelled the contentions advanced on behalf of the State with the following observations :
' The court can undoubtedly check any excess in the excerise of a statutory power. To excerise a statutory power for achieving a collateral object i.e. for any purpose the than the one for which the power is given by the statue, is to abuse such a power. The power conferred by Section 3(1) Central Provinces and Bearer Act LXIII (63) of 1948 on the Government is very wide. The statue does leave the determination of the necessity for requisition to the discretion of the authority empowered by or under the statue. But the authority exercising the power of requisition must act bona fide and can only use the power for fulfilling ends permitted by the statue. Where the order of requisition was not dictated by the necessity of providing accommodation too an officer of the State but was devised as a means to eject the petitioner because of the religious susceptibilities of the landlord, the order is a misuse of the power given by the statue and cannot be sustained'.
If we may say so with respect, the above remarks enunciate the law correctly.
(11) Now we shall proceed to examine the two objections formulated against the impugned resolution. As mentioned earlier, the first objection is that the Corporation was incompetent to pass the resolution in question. At the very outset it is necessary to mention that his contention has not been properly formulated in the affidavit filed by the petitioner. It is nowhere stated in that affidavit that the resolution in question was in excess of power conferred on the Corporation by the city order Bangalore Municipal Corporation Act ( Which shall be hereinafter called the 'Act'). It is vaguely mentioned therein that the Corporation was incompetent to give a counter offer. But in the course of the arguments these aspects have been clarified and we have given the learned Advocate General that he has been taken by surprise on this point. As the point in issue raises a owe question of law we have permitted the learned Counsel for the petitioner to argue the same.
(12) According to Sri Venkataramaiah the learned counsel for the tenders in question had to be dealt with under Section 79(2)(A) order the 'Act'. That section reads :
'With respect to the making of contracts under or for any purpose of the Act, the following provisions shall have effect, namely :-
(a) every contractor shall be made on behalf of the Corporation by the Commissioner :'
We don't think that this provision has any application to the transaction under scrutiny. Section 79 lays down general provisions regarding contracts. That section defines the limits of the powers of the Commissioner in entering into contracts on behalf of the Corporation. We are in agreement with the learned Advocate General that the relieving section is Section 73. But we are not in agreement with him when he contends that the Corporation is the final authority in deciding about the terms of the contract or in selecting the tendered. In our view, under the 'Act' three separate statutory bodies are created. They are (1) the Corporation; (2) the Standing Committee of the Corporation; and (3) the Commissioner, (See Section 4). Each one of these bodies is given special powers and no one of them can encroach on the powers conferred on others. Section 9 says.
'Subject whenever it is hereinafter expressly directed, to the sanction of the Corporation or the Standing Committee, as the case may be, and subject to all other restrictions, limitations and conditions hereinafter imposed, the executive power for the purposes of carrying out thereafter provisions of this Act shall be vested in the Commissioner, who shall also perform all the duties and excerise all the powers specifically imposed order conferred on him'.
As per the above provision, all executive power of the Corporation are conferred on the Commissioner. Some of those powers he can excerise without getting the sanction of either the Standing Committee or the Corporation whereas in dome cases he has to get the sanction of the Standing committee or the Corporation as the case may be. In a necessary case all executive powers can be exercised only by him and by nobody else. Neither the Standing Committee nor the Corporation is an appellate body. All that they can do is, to sanction or withhold sanction to any particular proposal made by the Commissioner if their sanction is required by law. Bearing in mind the provision contained in Sections 4 and 9 we shall now proceed to consider the scope of Section 73, which reads as follows :
'(1) Subject to the provisions of Section 79, the Commissioner may dispose by sale or exchange of any Corporation movable property the value of which does not exceed five hundred rupees in each instance, or grant for any term not exceed able property or a lease or concession of any right of fishing or granting or of gathering and taking fruit and the like :
Provided that every such disposal, lease of concession made or granted by the commissioner shall be reported to the standing committee within 15 days.
(2) With the sanction of the standing committee, the commissioner may dispose by sale or exchange of any corporation doesn't exceed five thousand rupees in each instance, or grant for any term adjudication exceeding 3 years a lease of any corporation immovable property or a lease or concession any such right as aforesaid.
(3) With the sanction of the corporation commissioner may lease, sell or otherwise diagnose of any corporation property, moveable or immovable.
(4) The sanction of the Standing Committee under sub-section (2) or that of the corporation under sub-section (3) may be given either generally or for any class of cases or specially for any particular case.
(5) The commissioner may lend or let out on hire any corporation movable property on such conditions and for such periods as may be specified in regulations made by the standing committee in that behalf.
(6) 'Notwithstanding anything contained in the foregoing provisions of this Section, no property whether movable or immovable exceeding two thousand rupee in value shall be sold otherwise than by public auction and no property movable or immovable of whatever value shall be granted free of cost except with the previous sanction order the Government'. (Underlining (here in ' ') is ours).
Under sub-section (1) of section 73, the commissioner can lease or dispose of the property concerned without anybody's sanction. All that he need do is to the standing Committee within fifteen days about the action taken by him; sub-section (2) of Section 73 provides that the right of the Commissioner to dispose of the properties mentioned therein by sale or exchange or grant on lease is subject to the sanction of the Standing Committee; under sub-section (3) before leasing or selling or otherwise disposing of any property included therein, the Commissioner must obtain the sanction of the Corporation; under sub-section (6) no property of the Corporation whether movable or immovable exceeding two thousand rupees in value can be disposed of by the Commissioner except by public auction. The cumulative effect of these provisions is to make the Commissioner alone responsible for all transactions entered into on behalf of the Corporation. The other bodies mentioned in the 'Act' only act as checks on him; they can merely limit his power and not take it away. These provisions are founded on sound political philosophy. Graft and patronage argument the greatest enemies of democratic forms of Government. The conflicts between idealism and opportunism are internal. There is need to keep away the politician from economic pastures lest both politics and economics should get tainted. Further, the Councilors and Aldermen may not posses sufficient special knowledge to deal with economic matters whereas the Commissioner who is usually a senior Member of the Civil Service may be excepted to posses the required qualities. Further he is always amenable to the disciplinary jurisdiction of the Government if he does not discharge his duties according to law. Clause 3 of the Tender Notice accords with view taken by us about the powers of the Commissioner vis--vis with those of the Standing committee or the Corporation. In that tender notice there is absolutely no reference to the Standing Committee or to the Corporation.
(13) The learned Advocate General sought assistance of Sections 23(1) and 24 of the 'Act' to support his contention that the final authority to all matters is the corporation. Section 23(1) says :
'Subject to the provision of this Act the Municipal Government of the city shall vest in the Corporation'.
Section 24 says :
'The Standing committee and the Commissioner shall be bound to give effect to every resolution of the Corporation unless such resolution is canceled in whole or in part under Section 47 of the Act'.
Section 23(1) provides for the Government of the City by the Cooperation subject to the provisions of the ' Act'. In other words the powers of the Corporation are the subject to the provisions of the 'Act' which means that they are subject to Ss. 4, 9 and 73 amongst other provisions. Though Section 24 speaks of 'every resolution of the Corporation', the learned Advocate General is in agreement with us that that expression has in view only lawful resolutions. In other words if the Corporation passes a resolution which beyond its competence or if the Corporation transgresses into the fields reserved for other bodies, the resolution in question is void and is of no effect. The Corporation like all the subordinate statutory bodies has no inherent powers of its own. Its powers of those conferred by law. In this connection the learned Advocate General tried to press into service the decision in Harinath Das v. State of Assam, AIR 1958 Assam 70 (SB). In that case certain fishery rights were put up for public auction. The Sub-divisional Officer who held the auction accepted the highest bid. The acceptance in question was subject to the approval of the Commissioner. By the time the papers reached the Commissioner, one of the defeated bidders filed an appeal before him. The Commissioner considered that appeal along with the recommendation made by the Sub-section Divisional Officer. He came to the conclusion that the contract in question should be entrusted to the appellant before him on certain conditions and therefore directed that the said fishery should be settled on the appellant before him. The validity of that order came up for consideration before a special Bench of the Assam High Court. The leading judgment in that case was delivered by Mehrotra, J. Generally speaking Sarjoo Prasad. C.J. agreed with the conclusions arrived at by did not subscribe to the view of Mehotra, J. In that judgment the learned Judge Observed :
There is nothing in R. 8 which precudes the Commissioner, while examining the report of the Deputy Commissioner, sent to him for confirmation of the sale to consider various matters and to above the Deputy Commissioner about the ,manner in which the settlement is to be made and the particular bidder in whose favor the settlement should be made. It cannot be said that the Commissioner in making any such recommendation has acted illegally or arbitrarily so as to give power to the High Court to interfere with his order under Article 226 of the Constitution'.
The learned Advocate General appears to be right in his contention that the form of the order of the Commissioner shows that a direction was given to the subordinate authorities and it is difficult to understand the same as an advice. But we are not concerned with that aspect. The High Court of Assam considered it as an advice. In the view of Mehortra,J, on which we do not express any opinion, the Commissioner was within his rights in giving such an advice and it was for the concerned authority either to accept the advice given by the Commissioner or not. Assuring, without deciding, that this view is correct, in the instant case the Corporation had not given any advice or even direction to the Commissioner. It had acted over the head of the Commissioner. There is no reference to the Commissioner in the resolution passed by the Corporation. The Commissioner had no choice either to accept or to reject the view of the Corporation as embedded in its resolution. In fact the Corporation had directly proposed to the second respondent certain terms and informed her that it is prepared to enter into a contract with her if she chooses to accept those terms.
What we have to consider is whether the action taken by the Corporation has any basis in law. From heat we have said above, it is clear that the resolution passed by the Corporation was in excess of the powers conferred on it by the 'Act' and therefore the same is void. The only power the Corporation had was either to sanction the lease proposed by the Commissioner or to refuse to sanction the same. If it had refused to sanction the lease, the Commissioner had to take further steps according to law. We other not share the apprehension of the learned Advocate General that the view taken by us may create complications. On the other hand we think that view will prevent mixing up politics with economics. Democracy as is often said is a very of life and not merely a form a Government. There is little danger from those who openly attack our democratic society by institutions. But the real danger comes from those who undermine the foundation of our democratic society of covert attacks and sinister methods. The danger is all the greater if the guardians of our political institutions are not true to their professions. These are not more political theories but real dangers that luck in the corners. Eternal vigilance is the price that we have to pay for assuring to ourselves the benefits of our political institutions. This Court as one of the guardians of the Constitution shall always keep up its vigil against those dangers.
(14) In view of our above conclusions it is unnecessary for us to go into the question whether the resolution of the Corporation dated 29-3-1961 was influenced by extraneous considerations. The Court are always reluctant to attribute mala fides to statutory bodies. But if from the facts proved the only reasonable inference is that extraneous consideration had entered into the decision of the Corporation then it to say that we are not happy with what had happened in this case and we hope that similar things will not be repeated.
(15) In the result, we quish the resolution of the Corporation (1st respondent ) passed on 29-3-1961, and set out in full in the affidavit filed by the petitioner and referred to by us earlier. It will be now open to the authorities concerned to take such steps as are permitted by law. The first respondent will pay the costs of the petitioner. Advocate fee Rs. 100/-.
(16) Writ Petition allowed.