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Syed Moosa Quadri Vs. State of Andhra Pradesh and ors. - Court Judgment

LegalCrystal Citation
SubjectCivil
CourtAndhra Pradesh High Court
Decided On
Case NumberWrit Appeal No. 206 of 1979
Judge
Reported inAIR1980AP236
ActsConstitution of India - Article 226; Hyderabad Municipal Corporation Act, 1956 - Sections 124 to 129 and 675 to 679
AppellantSyed Moosa Quadri
RespondentState of Andhra Pradesh and ors.
Appellant AdvocateUpendralal Waghray, Adv.
Respondent AdvocateGovt. Pleader for Transport, ;K. Janardhanarao, Standing Counsel for Municipal Corporation and ;S. Srikrishna, Adv.
Excerpt:
civil - tender - article 226 of constitution of india and sections 124 to 129 and 675 to 679 of hyderabad municipal corporation act, 1956 - sole tender submitted by respondent rejected by municipal corporation for exceeding sanctioned estimate - subsequent invitation of tender - acceptance of original tender submitted in prior invitation meanwhile accepted by municipal corporation pursuant to government order advising it to accept such tender - acceptance of tender questioned - government not competent to pass such an order - endorsement of respondent bidder on tender form shows withdrawal of cash and bank deposit which he had paid as earnest money - such withdrawal implies that bidder has accepted prior rejection of tender - such fact not disclosed in subsequent application to minister -..........order of the government of andhra pradesh in g. o. ms. no. 928 m. a. dated 13-11-1971 advising the municipal corporation of hyderabad to consider and accept the tender of the 3rd respondent for construction of putli bowli market complex as illegal and to direct the respondents to issue tender forms to the appellant for the said works. 2. the facts giving rise to this appeal are as follows:3. the municipal corporation of hyderabad called for tenders for construction of putlibowli market complex in the hyderabad city which was estimated to cost rs. 75.77 lakhs. the first notice inviting the tenders was issued on 25-8-1976 fixing the last date for receipt of the tenders as 25-2-1977 which was later extended to 7-3-1977. the 3rd respondent was the sole tenderer but his tender was rejected on.....
Judgment:

Ramachandra Rao, J.

1. This writ appeal is preferred against the order dismissing the writ petition filed by the appellant for the issue of a writ of mandamus declaring the order of the Government of Andhra Pradesh in G. O. Ms. No. 928 M. A. dated 13-11-1971 advising the Municipal Corporation of Hyderabad to consider and accept the tender of the 3rd respondent for construction of Putli Bowli Market Complex as illegal and to direct the respondents to issue tender forms to the appellant for the said works.

2. The facts giving rise to this appeal are as follows:

3. The Municipal corporation of Hyderabad called for tenders for construction of Putlibowli Market Complex in the Hyderabad City which was estimated to cost Rs. 75.77 lakhs. The first notice inviting the tenders was issued on 25-8-1976 fixing the last date for receipt of the tenders as 25-2-1977 which was later extended to 7-3-1977. The 3rd respondent was the sole tenderer but his tender was rejected on 31-1-1978 by the Special Officer on the ground that it was 33.8% in excess of the sanctioned estimate. On 20-4-1978 a second notice was issued calling for fresh tenders fixing the last date for submission of tenders as 28-5-1978. While so, the 3rd respondent made a representation to the Minister for Municipal Administration that his tender was improperly rejected and that suitable orders should be issued to the Corporation to give the contract to him.

4. By a first amendment, the date for receipt of tenders pursuant to the second notice calling for tenders was extended to 16-6-1978 and by another second amendment, it was further extended to 17-7-1978. The appellant paid the necessary amount by challan and applied to the Corporation for furnishing tender documents. But the tender forms were not furnished to the appellant. On 14-7-1978, the second notice dated 20-4-1978 calling for tenders was kept in abeyance. On 17-7-1978 the Corporation entered into negotiations with the 3rd respondent calling upon him to withdraw some of the conditions of his tender. On 18-7-1978, the 3rd respondent waived some of the special conditions of the original tender. On the same date the 3rd respondent revalidated the Bank Guarantee for the entire amount which he had earlier withdrawn on 24-4-1978. On 20-8-1978, by amendment notice No. 4 the Municipal Corporation cancelled the tender notice dated 25-8-1976?

5. The Government appears to have called for reports on the 3rd respondent's application and thereafter issued the impugned G. O. Ms. No. 928, Municipal Administration dated 13-11-1978 which read as follows:

'In G. O. Ms. No. 581 M. A. dated 20-12-1976, administrative sanction was accorded to the work relating to the construction of Putlibowli Market Complex at an estimated cost of Rs. 75-77 lakhs.

2. Municipal Corporation of Hyderabad invited tenders for the above work on two occasions. The second call of tender was issued fixing the last date of receipt of tenders as 25-2-1977 and it was further extended to 7-3-1977.

3. Only Sri R. S. Rangadas, Contractor, Public Works Department and Road Transport Corporation submitted his tender to Municipal Corporation of Hyderabad. He has also submitted the representation first read above for consideration of his tender and to issue suitable orders to the Municipal Corporation of Hyderabad to let out the above work to him based on the rates tendered by him.

4. The Government after careful examination of the entire issue, consider that the balance of advantage lies in accepting the tender of Sri R. S. Ranga Das. They therefore advised the Special Officer, Municipal Corporation of Hyderabad to consider and accept the tender of Sri R. S. Ranga Das, Contractor. The Special Officer, Municipal Corporation of Hyderabad is advised accordingly.

5. The records received with reference to 3rd and 4th read above are returned herewith to the Chief Engineer, Municipal Corporation of Hyderabad. Their receipt my be acknowledged at an early date.'

6. Pursuant to the said order of the Government, the Municipal Corporation accepted the tender of the 3rd respondent on 29-11-1978 and the agreement was signed by the 3rd respondent on 30-1-1979 and by the Special Officer on 17-4-1979. The writ petition out of which this appeal arises, was filed by the appellant on 18-4-1979 and interim stay of all proceedings including signing of the agreement and letting out the work pursuant of the order of the Government, was granted on 18-4-1979 in W. P. M. P. No. 4193 of 1979. A further order of stay was passed on 15-5-1979 in W. P. M. P. No. 4692 of 1979 staying all further proceedings with regard to construction of the Market Complex by the 3rd respondent. Thereafter a direction was issued on 29-5-1979 for expediting the hearing of the writ petition.

7. The appellant mainly contended that the Government had no jurisdiction to issue the order advising the Special Officer of the Corporation to consider and accept the tender of the 3rd respondent. This contention was upheld by the learned Judge and the impugned order of the Government was held to be not warranted. However, the learned Judge refused to grant relief to the appellant on the ground that he did not submit any tenders when the first notice calling for tenders was issued, and that the contract was signed on 30-1-1979 and the site handed over to the 3rd respondent had also done some work, and that if the contracts were to be cancelled, it would involve the Corporation in litigation, and that the appellant had only applied for purchase of the tender documents, and that, therefore public interest did not warrant the grant of a relief to the appellant, and in that view, the learned Judge dismissed the writ petition.

8. In this appeal, it is contended by Sri Waghray that when once it is found that the order of the Government was without jurisdiction, the Corporation should not have acted upon the impugned order of the Government and that the tender of the 3rd respondent having been rejected, the Corporation should not reconsider the tender on the basis of the impugned order of the Government, and that the learned Judge having held that the order of the Government was not valid, should not have refused relief to the appellant and that the grounds on which the learned Judge refused relief are not tenable.

9. Sri I. Balayya, the learned Government Pleader appearing for the Government contended that the impugned order is within the powers of the Government and that the Government merely advised the Corporation and therefore the action of the Corporation entrusting the work to the 3rd respondent cannot be challenged.

10. Sri K. Janardhana Rao, the learned counsel for the Municipal Corporation contended that the Corporation independently considered the tender submitted by the 3rd respondent and that in view of the withdrawal of some of the conditions by the 3rd respondent his tender was accepted as it was beneficial to the Corporation, and that the Corporation acted independently and bona fide and it was not influenced by the impugned order of the Government in accepting the tender of the 3rd respondent. He also contended that there were laches on the part of the appellant in not taking prompt steps to challenge the action of the Corporation in not furnishing him with the tender forms, and that the second notice calling for tenders was cancelled on 20-8-1978 and no longer subsisting. Hence, the appellant has no right to challenge the impugned order of the Government or the action of the Corporation in accepting the tender of the 3rd respondent. He also submitted that the site was handed over and the agreement was signed prior to the filing of the writ petition and the 3rd respondent has already commenced some work and the work was in progress and that if the contract to the 3rd respondent is to be cancelled at this stage, it will involve the corporation in unnecessary litigation and heavy expenditure, and, therefore, the appellant is not entitled to any relief.

11. Sri S. Srikrishna, the learned counsel for the 3rd respondent first sought to contend that the action of the Corporation was legal, but subsequently, he fairly conceded that the action of the Corporation in accepting that tender of the 3rd respondent on the basis of the order of the Government was not proper or valid.

12. During the course of argument, we called for the file relating to the render submitted by the 3rd respondent. On a perusal of the file, we find that an endorsement was made on the reverse of the first page of the tender form on 20-4-1978 by the 3rd respondent, which is to the following effect.

'Received back the DD No. 4795960161 4795960161 , dated 4-3-1977 for Rs. 10,000/- and B. G. for Rs. 80,000/- from Syndicate Bank, New Nallakunta, Hyderabad.

Sd. R. S. Rangadas

20-4-1978.'

This endorsement show that the 3rd respondent had withdrawn on 20-4-1978 the cash of Rs. 10,000 and Bank Guarantee for Rs. 80,000/- which he had paid as earnest money. This fact that the 3rd respondent had withdrawn that cash deposit and the Bank Guarantee on 20-4-1978 does not appear to have been brought to the notice of the Government by the Corporation nor does it appear to have been brought to the notice of our learned brother when the writ petition was being heard. When this endorsement was brought to the notice of Sri. S. Srikrishna, the learned counsel for the 3rd respondent, he has fairly conceded that the endorsement indicates that the 3rd respondent had accepted the rejection of the tender and withdrew the earnest money. If so, it follows that the Corporation could not have validly revived the tender of the 3rd respondent. It is regrettable that a crucial, relevant and material fact that the 3rd respondent had withdrawn the earnest money deposit and the Bank guarantee on 20-4-1978 was not brought to the notice of the Government. In view of the withdrawal of the cash deposit and the Bank guarantee by the 3rd respondent on 20-4-1978, fresh tenders were called on 20-4-1978.

13. It is only on 4-5-1978, that the 3rd respondent made a representation to the Minister for Municipal Administration for consideration of his tender suppressing the fact that he had already withdrawn the cash deposit and Bank Guarantee. The Government could not have, therefore validly passed an order advising the Corporation to consider or accept the tender of the 3rd respondent, as the tender was no longer subsisting by the date the petitioner made a representation to the Minister or by the date of passing of the impugned order. Even the Corporation could not have accepted the tender of the 3rd respondent when he had already withdrawn the earnest money paid by way of cash and Bank Guarantee. The action of the Corporation is, therefore, illegal and devoid of jurisdiction.

14. Even otherwise, we find that the Government has no jurisdiction to pass the impugned order and the corporation which is an autonomous body should not have meekly submitted to the directions contained in the impugned order of the Government. Sri Balayya sought to support the order of the Government on the basis of Sections 124 to 129 and Sections 675 to 679 of the Hyderabad Municipal Corporation Act as empowering the Government to issue directions to the Corporation. But, we find that none of the aforesaid provisions empowers the Government to give any directions to the Corporation with regard to consideration and acceptance of tenders relating to works undertaken by the Corporation.

15. Sri. K. Janardhana Rao, sought to contend that the Corporation acted independently and bona fide. But we find it difficult to accept the submission. The correspondence that was exchanged between the Corporation and the Government which culminated in passing of the impugned order by the Government clearly shows that the corporation did not act independently. The impugned order of the Government was construed as a mandate by the corporation to give the contract to the 3rd respondent and the Corporation implemented this direction. We, therefore, find it difficult to accept the contention that the Corporation acted independently in entrusting the contract to the 3rd respondent. On the other hand, we find that the Corporation acted on the direction given by the Government which is ultra vires of powers, and therefore, both the impugned order of the Government and the action taken by the Corporation pursuant to the said order in accepting the tender of the 3rd respondent are illegal and devoid of jurisdiction.

16. There is no merit in the contention that the appellant has no right to challenge the impugned order of the Government or the action of the Corporation or that there were any laches on the part of the appellant. The appellant had applied for tender forms after paying the requisite amount but he was not furnished with the same by the Corporation and ultimately the second notice calling for tenders was cancelled on 20-8-1978. It is contended by Sri Waghray, the learned counsel for the appellant that the appellant bona fide thought that as the second notice calling for tenders was cancelled, there was no useful purpose served by the appellant in taking further steps in the matter. It is only when the appellant came to know that the contract was being given to the 3rd respondent and that the Special Officer was about to sign the agreement that the appellant filed this Writ petition on 18-4-1979. The appellant was not aware of the representations made by the 3rd respondent to the Government or the negotiations that were going on between the Corporation and the respondent. The appellant was under the bona fide impression that the rejection of the 3rd respondent's tender was accepted and fresh tenders were called and that there would be no further negotiations for accepting tender of the 3rd respondent. Hence, the appellant was justified in not taking any steps earlier to challenge the action of the respondents. We do not, therefore, think that there were any laches on the part of the appellant which disentitled him to relief.

17. The appellant has a right to tender for the works to be given out on contract by the Corporation. That right is denied to him by the action of the Government and the Corporation in giving the contract to the 3rd respondent, whose tender was already rejected and who had withdrawn the earnest money deposit and the Bank Guarantee. The appellant is, therefore, entitled to seek relief under Article 226 of the Constitution.

18. The fact that the Corporation is likely to get involved in litigation if the contract given to the 3rd respondent is to be cancelled, is not a ground for refusing relief to the appellant. It is only on account of the illegal action of the Government and the Corporation in accepting the tender of the 3rd respondent that has resulted in denying the appellant a right to submit, his tender for the work. We do not, therefore, think that the appellant can be denied relief when we find that the order of the Government and the action taken by the Corporation are wholly ultra vires and illegal.

19. For the foregoing reasons, this Writ Appeal is allowed. The order dismissing the Writ Petition is set aside and the Writ Petition is allowed, and the impugned order of the Government is quashed and the action of the Corporation in entering into contract with the 3rd respondent for construction of the Putlibowli Market Complex is declared as illegal and void, and a Writ of Mandamus will issue directing them to forbear from enforcing the impugned order of the Government in G. O. Ms. No. 928 Municipal Administration dated 13-11-1978 and also to forbear from entrusting the construction of the work to the 3rd respondent. The appellant will have his costs both in the writ petition and in the Writ Appeal.

Chowdary, J.

20. I entirely agree with the opinion of my learned brother. But considering the fact that we are differing from the final order made by Gangadhara Rao, J. I thought it proper to say a few things on my own.

21. The Hyderabad Municipal Corporation constituted by the Hyderabad Municipal Corporation Act, invited tenders for the construction of Putlibowli Commercial Complex estimated to cost Rs. 75-77 lakhs. Respondent No. 3 was the only tenderer. On 31-1-1978, the Corporation rejected that tender on the ground that the rates quoted in the tender were excessive by about 33%. On 20-4-1978, it called for fresh tenders. After the Municipal Corporation rejected the tenders to the third respondents, the third respondent had withdrawn in the last week of April, 1978 (on 24-4-1978) his earnest money deposited by him partly in the form of cash and partly in the form of Bank Guarantee. After the fresh tenders were called for, the third respondent had never made a fresh tender. On the other hand the Writ Petitioner applied on 27-6-1978 for the supply of tender forms with a view to tender for the work in response to the second tender notice. But he was not supplied tender forms and was thus effectively prevented from tendering. The third respondent who had not tendered in response to the second tender notice went straight to the Minister for Municipal Administration and filed a written application on 4-5-1978. The Government presumably after full and careful consideration of this application of respondent No. 3 issued G. O. Ms. No. 928 M. A. dated 13-11-1978. By means of that order, Government advised the Special Officer, Municipal Corporation of Hyderabad to consider and accept the tender of respondent No. 3. The Special Officer, therefore, accepted the tender of the respondent No. 3.

22. The petitioner filed this writ petition challenging the validity of the action of the Hyderabad Municipal Corporation accepting the tender of the third respondent and also validity of the aforesaid G. O. Ms. No. 928 M. A. dated 13-11-1978 issued by the State Government.

23. Our learned brother Gangadhara Rao, J., agreed with the petitioner's complaint that both the Government and the Corporation acted without authority of law but dismissed the Writ petition, against which the present Writ Appeal is filed.

24. It is well-known that ' the powers of a Corporation created by statute are limited and circumscribed by the statutes which regulate it, and extend no further than is expressly stated therein, or is necessarily and properly required for carrying into effect the purpose of its incorporation' (see Halsbury's Law of England, Fourth Edition Para 1333 and also M. Pentaiah v. Veeramallappa : [1961]2SCR295 ). The impugned action of the Hyderabad Municipal Corporation in entering into contract with the third respondent is clearly ultra vires of its powers and is therefore null and void. The Corporation had entered into such a contract which is so patently ultra vires of its authority because it acted to the dictates of G. O. Ms. No. 928 M. A. dated 13-11-1978, issued by the State Government directing the Hyderabad Municipal Corporation to consider and accept the tender of the third respondent. It was in those circumstances, that the Writ petitioner challenged the validity of the action of the Hyderabad Municipal Corporation. Our learned brother Gangadhara Rao, J., having held that the action of the Municipality is ultra vires of its powers, yet, dismissed the Writ Petition on the ground that it is not in public interest to issue a writ as that is likely to involve the Corporation in litigation. With greatest respect to Gangadhara Rao, J., I cannot agree with him. I utterly fail to see how refusal to enforce rule of law would promote public good. It could only promote cynicism towards law. If this Court does not interfere on behalf of the citizens to checkmate the illegal activities of the State, there is a grave danger of the people's faith in the judicial process being eroded and finally imperiled. The ground that Corporation is likely to be involved in litigation can never be allowed by the High Court to operate as a basis for permitting the illegal activities of the Government and Municipal corporation to be carried on. From the facts which have been narrated in detail by my brother, it is clear to me that the Government issued the impugned G. O. Ms. No. 928 in order to benefit the third respondent, even without caring to verify the elementary fact whether or not, the third respondent's tender had lapsed by then. There is no acceptable reason advanced by the Government explaining this lapse. What is more, the Government issued the impugned G. O. Ms. No. 928 being fully aware of the fact that it has no such authority to issue the G. O. That was the reason why G. O. Ms. No. 928 had been dressed up as a suggestion and had been made to speak as if it was a mere advice to the Hyderabad Municipal Corporation although it was intended to be a direction. In these circumstances of clear misuse of governmental power, this court should not in my opinion, consider the matter from the point of view of monetary gain or loss to the Municipal Corporation. What the great Master of Rolls, Lord Denning said in Bradbury v. Enfield LBC (1967) 1 WLR 1311 at p. 1324, in more or less similar circumstances in England, is worthy to be quoted here and followed.

Lord Denning Said:-

'Ought an injunction to be granted against the council? It has been suggested by the Chief Education Officer that, if an injunction is granted, chaos will supervene. All the arrangements have been made for the next terms, the teachers appointed to the new comprehensive schools, the pupils allotted their places and so forth. It would be next to impossible, he says, to reverse all those arrangements without complete chaos and damage to teachers, pupils and the public. If a local authority does not fulfil the requirements of the law this Court will see that it does fulfil them. It will not listen readily to suggestions of 'Chaos', The Department of Education and local education authority are subject to the rule of law and must comply with it, Just like every one else. Even if chaos should result, still the law must be obeyed.'

In another comparable decision Congreve v. Home Officer, 1976 Q. B. p. 629, Lord Denning observed:

'It would be a misuse of the power conferred on him (minister) by parliament; and these Courts have the authority - and, I would add, the duty - to correct a misuse of power by a minister or his department, no matter how much he may resent it or warn us of the consequences if we do.'

We will be clearly failing in our duty if this court does not unhesitatingly correct these acts of executive excesses and abuses flouting the law made by the legislature. After all Law is what it does and not what it says; certainly not what it says about itself. Rules of law must note that slowly but steadily a feeling is gaining ground in our country over the years that Bacon's description of law as a cobweb where small files are caught and the great break through is after all true. In time we must rise up to the realization that this growing feeling poses threat to the edifice of rule of law in our country.

25. In England from where we borrowed these prerogative remedies, standards of public administration are maintained even today at such high levels that in a normal year not more than ten applications for the issuance of writs are filed. There the grievances of the citizens are mainly redressed by the executive administration itself. There, it is unheard of a Minister being charged with mala fides or corrupt motives.

Therefore for their purpose probably they do not require the wide judicial authority as we find conferred on our courts in Article 226 of our Constitution. But of late, even in that country Courts have been empowered to award damages in writ matters. In our country Article 226 is worded in the widest language possible. The situation obtaining in public life as noticed by the Supreme Court in the recent Presidential reference case is certainly not encouraging. In Re. Special Courts Bill, 1978, : [1979]2SCR476 , Justice Krishna Iyer wrote:

'Right at the beginning, an exordial enunciation of my socio legal perspective which has a constitutional bearing may be set out. I lend judicious assent to the broader policy of social justice behind this Bill. As I read it, this measure is the embryonic expression of a necessitous legislative project, which, if full fledged, will work a relentless break through towards catching, through the compulsive criminal process, the higher inhabitants of Indian public and political decks, who have in practice, remained 'untouchable' and 'unapproachable' to the rule of law. 'Operation clean up' is a 'consummation devoutly to be wished', although native optimism cannot obfuscate the obnoxious experience that law made in terrorem against those who belong to the top power block prove in action to be paper tigers. The pathology of our public law, with its class slant, is that an unmincing ombudsman or sentinel on the qui vive, with power to act against those in power, now or before, and offering legal access to the informed citizens to complain with immunity does not exist, despite all the bruited umbrage of political performers against peculations and perversions by higher echelons. Law is what law does, not what law says and the moral gap between word and deed menaces people's faith in life and law. And then, the tragedy - democracy becomes a casualty.

The greatest trauma of our times, for a developing country of urgent yet tantalising imperatives, is the dismal, yet die hard, poverty of the masses and the democratic, yet graft given, way of life of power wielders. Together they blend to produce gross abuse geared to personal aggrandizement, suppression of exposure and a host of other horrendous, yet hidden, crimes by the summit executives pro tem, the para political manipulators and the abetting bureaucrats.

And the rule of law hangs limp or barks but never bites. An anonymous poet sardonically projected the social dimension of this systemic deficiency:

'The law locks up both man and woman who steals the goose from off the common, but lets the greater felon loos who steals the common from the goose'.

The impact of 'summit' crimes in the Third world setting is more terrible than the Watergate syndrome as perceptive social scientists have unmasked. Corruption and repression - cousins in such situations - hijack developmental processes. And, in the long run, lagging national progress means ebbing people's confidence in constitutional means to social justice. And so, to track down and give short shrift to these heavy weight criminaloids who often mislead the people by public moral weight lifting and multipoint manifestoes, is an urgent legislative mission .......'

I therefore think that our Courts too, enjoying extensive jurisdiction and authority under Article 226 of the Constitution should be activists in maintaining purity of public administration. They should without a second thought quash the illegal orders of the Ministers and their departments. But they should do more. In appropriate cases they should investigate into the civil liability of all those involved in shady transactions. This is the only way of fixing individual responsibility which is necessary for upholding rule of law. As professor Wade says, 'it was and is a principle of first importance that ministers and officials of all kinds high or low are personally liable for any injury for which they cannot produce legal authority ........'

'The personal liability of officials was ..... one of the great bulwarks of the rule of law'. Purity of public administration in our country which is made our charge under the constitution calls today for nothing less drastic. What is more, Equality Clause of our Constitution as applied to criminal and civil liability calls for equal enforcement. It must be known to all those who exercise the powers of the State mala fide and in utter abuse of authority that they would run the risk of exposing themselves to civil criminal liabilities.

26. Appeal allowed.


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