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Aga Construction Vs. Cheif Engineer, Municipal Corporation of Hyderbad and anr. - Court Judgment

LegalCrystal Citation
SubjectConstitution
CourtAndhra Pradesh High Court
Decided On
Case NumberW.P. Nos. 2477 and etc. of 1981
Judge
Reported inAIR1982AP70
ActsConstitution of India - Articles 14, 19(1), 213, 246 and 254; Hyderabad Municipal Corporation Act, 1956 - Sections 129-A and 585; Hyderabad Municipal Corporation (Second Amendment) Ordinance, 1981; Municipal Corporation of Hyderabad Tender Rules, 1970 - Rule 3-A; Indian Contract Act, 1872 - Sections 11 and 129A; Hyderabad Municipal corporation Act, 1955; Hyderabad Municipal Corporation (Amendment) Act, 1981 - Sections 129-A
AppellantAga Construction
RespondentCheif Engineer, Municipal Corporation of Hyderbad and anr.
Appellant AdvocateV. Jagannadha Rao, Adv.
Respondent AdvocateAdvocate General and ;K. Janardhana Rao, Adv.
Excerpt:
constitution - pre-qualification - articles 14, 19 (1), 213, 246 and 254 of constitution of india, rule 3-a of municipal corporation of hyderabad tender rules, 1970 and hyderabad municipal corporation act, 1955 - pre-qualification prescribed for tenders for contract works for over fifty lakhs of hyderabad municipal corporation were questioned - municipal corporation issued pre-qualification tender notice for execution of 4 works - notice was issued to avoid unhealthy competition among contractors - court observed that pre-qualification notice issued by municipal corporation, constitution of tender committee, selection committee, approval given by government and notice issued to 11 persons to submit their tenders were valid. - - 124 to 129 of the hyderabad municipal corporation act.....order1. the pre-qualification prescribed for tenders for contract works for over fifty lakhs of hyderabad municipal corporation are questioned in this writ petitions. contract works of the municipal corporation were giving under ss.124 to 129 of the hyderabad municipal corporation act , 1955 (herein after called the municipal corporation act) and the municipal corporation of hyderabad tender rules ,1970 .from the affidavit of the special officer, municipal corporation of hyderabad field in this writ petitions , it appears that the past experience of the corporation has shown that whenever tender were called for , contractors of the different status were participating quoting tender and in certain cases contract with out having sufficient experience to tackle the jobs of required magnitude.....
Judgment:
ORDER

1. The pre-qualification prescribed for tenders for contract works for over fifty lakhs of Hyderabad municipal corporation are questioned in this writ petitions. Contract works of the municipal corporation were giving under Ss.124 to 129 of the Hyderabad municipal corporation Act , 1955 (herein after called the municipal corporation act) and the municipal corporation of Hyderabad tender rules ,1970 .From the affidavit of the special officer, municipal corporation of Hyderabad field in this writ petitions , it appears that the past experience of the corporation has shown that whenever tender were called for , contractors of the different status were participating quoting tender and in certain cases contract with out having sufficient experience to tackle the jobs of required magnitude procedure the work and subsequently it was found by the Municipal Corporation of Hyderabad that their experience was much below the expected standard and they spoil the important prestigious project . In order to avoid the unhealthy competition among the contractors propose to have pre-qualification for the contractors and also to get the best result , the corporation proposed to have pre-qualification for the contractors. The object of stipulating pre-qualification for the tendering for the work of large magnitude to estimate to cost rupee fifty and more was to ensure that contractors who were experienced in the works of similarly magnitude in the construction work of similar magnitude involving similarly skills and who have the necessary equipment, machinery and men in handling such jobs only will tender for such works so that the taken up are completed in time , according to the specifications, and the Municipal corporation of Hyderabad derives the best result on the investment made on the works.

2. The corporation has undertaken works of large magnitude such has road over bridge at Begumpet , commercial complexes and auditoriums requiring considerable expertise in the relevant field. Therefore on 2-4-1981 the Municipal Corporation of Hyderabad issued a prequalification notice stating that they wanted to put up a number of multi-storeyed buildings, commercial complex , auditorium and road over bridge at Hyderabad . Then the salient feature of the schemes were indicated. the approximate cost of each schemes were range from rupees fifty to 160 lakhs. It was stated in that notice that works were to be carried out and the necessary internal water supply, sanitary, electrical fittings, lifts and fire fittings equipment are also be taken up by the same agency. Then the interested agencies were invited to furnish the following date to enable the Cheif Engineer . Municipal Corporation of Hyderabad to appraise their qualification for the above works

1. Identification .

2. Financial data

3. Relevant experience or performance

4. Equipment and machinery

5. Any other relevant information

6. The agencies who had carried out such and similar jobs of equal value of each works only can apply. Replies in sealed cover had to be addressed to the Cheif Engineer, Municipal Corporation of Hyderabad so as to reach him 20-04-1981. This notice was published in the news papers. In response to that notice 34 persons including the petitioners in all this writ petitions made application giving the necessary particulars regarding their qualifications, experience etc., subsequent to the receipt of those application with a view to have a benefit of getting an impartial selection of contractors who have the experience and capacity to do the work proposed , the special officer wrote a letter dated 24-4-1981 to the state government to constitute a committee who would scrutinise the replies submitted by various contractors in pursuance of the pre-qualification notice issued by the corporation. Pursuant his letter, the government constituted a tender committee consisting of the Cheif Engineer, Municipal Corporation of Hyderabad, Cheif Engineer , Pochampadu, and Cheif Engineer , roads and buildings to scrutinise the applications received in response to pre-qualification notice and prepare a list of contractors to whom the tender schedules could be issued. That the committee met on 23-5-1981 in the office of the cheif engineer, Roads and Buildings , went through the replies given by the 34 contractors and found that 11 contractors were suitable for the constructions proposed by the Municipal Corporation of Hyderabad. The proceedings of the tender committee selecting the 11 contractors were forwarded tot the government for approval for issuing the tender schedules to those selected contractors as mentioned in the proceedings of the tender committee. In G.O Rt. No 627 dated 3-6-1981 the government approved the selection of the 11 contractors made by the tenders committee. On 15-6-1981 notice were issued to the 11 persons selected by the tender committee to submit tender for three works.

3. While so even on 17-4-1981, writ petition 2477 of 1981 was field questioning the pre-qualification notice issued on 2-4-1981. An interim direction was given by this court to receive the reply of the petitioner therein without insisting on qualification for similar work of equal value. When the government approved the list of the 1 contractors in G.O Rt 627 dated 3-6-1981 writ petition No 4258 of 1981 writ petition were filed by some contractors questioning that order. In the interlocutory application field in those writ petition this court director that status quo should be maintained.

4. On 20-6-1981 Government issued G.O Ms No 710 M.A introducing rule 3-A According to the rule in case of work whose estimated cost exceeds rupees a pre-qualification notice inviting application and requiring the application to furnish along with their applications details of : (a) the status of the applicant, (b) solvency of the applicant, (c) experience in the field of executing works of the value of rupees fifty lakhs and above , (d) technical ability to execute the work of the value of rupees fifty lakhs and above in the terms of men machinery and (e) any other relevant in formation. The notice shall be published in at least three daily newspaper of nation wide circulation. After receipt of nation wide circulation . After receipt of the applications, the applications shall be placed before a committee consisting of such members as may appointed by the government from time to time. The committee shall scrutinise the applications placed before it and select the applicants for issue of tender schedules relevant to the works to be awarded. Tender schedule shall be issued to the selected applicant after approval by the government. The committee shall also scrutinise the tender received and make recommendations to the commissioner who shall deal with the tenders in accordance with the provisions of the act.

5. Thereafter the government consulted the Advocate General , who opined that the rule without amending the act. if questioned, may be declared invalid. Then the Andhra Pradesh Legislative Assembly was not in session . Therefore Andhra Pradesh Ordinance no 24 of 1981 was promulgated by governor on 6 th august , 1981 under clause (1) of article 213 of the constitution of India. That ordinance is called the Hyderabad Municipal Corporation (Second Amendment ) ordinance, 1981. It shall be deemed to have come in to force on 1-3-1981. By section 2 of that Ordinance, section 129-a had been inserted section 129 of the Hyderabad Municipal Corporations Act, 1955. That section reads as follows:

'129-A. (1) In respect of any work the estimated cost of which is rupees fifty lakhs or more, the Commissioner shall give notice , by advertising in the news papers in the prescribed from persons who satisfy the pre-qualification specified in such notice.

(2) The government may appoint, or authorise the corporation to appoint, a committee, consisting of such members as they or it may deem fit, for the purpose of scrutinising and evaluating the notice issued under sub-sec. (1), and for making as recommendations to the commissioner as to the suitability or otherwise of persons to whom tender schedules may be issued in respect of the work.

(3) The committee shall, after considering the recommendations of the committee and with the prior approval of the government, accept any of the tenders or applications so recommended which appears to him upon a view of all circumstances, to be thereupon issue the tender schedules in respect of the work to the persons whose tender or application is so accepted.

(4) The government may, by notification in the andhra pradesh gazette make rules for carrying out the purpose of this section, and any rule made under this section may be made so as to have retrospective effect.'

6. Therefore notification was issued in G.O.Ms No 975 (9737) dated 27-8-1981 under sub-s. (1) of s. 585 read with subsec. (4) of S. 129 A of the Hyderabad Municipal Corporation Act, 1955 amending shall be deemed to have come into effect on 1-3-1981 for rule 3-A , the following rules was substituted. it read as follows:

'3-A (1) In respect of any work the estimated cost of which is rupees fifty lakhs or more, the commissioner shall give notice specifying the following pre-qualification :--

(a) Name of the contract or firm:

(b) Financial status:

(c) Details of experience in the execution of work of similar nature:

(d) Equipment and machinery possessed

(e) qualification of personnel employed including the technical personnel;

(f) List of major works of similar nature completed by the agency or under execution.

(g) Any other relevant qualification .' The notice shall be published in at least three daily newspapers of nationwide circulation.

(2) After receipt of the applications, the application shall be placed before a committee consisting of the three members of whom one shall been an offer of the rank of a cheif Engineer. The committee shall scrutinise and evaluate the application placed before it and select the applicant for issue for tender schedules relevant to the work to be awarded. The committee shall also scrutinise who shall deal with the tenders in accordance with the provisions of the Act.'

7. Subsequently on 27-8-1981 another pre-qualification notice was issued by the Municipal Corporation of Hyderabad calling for application for four works. sixteen persons including the petitioners in W.P.Nos 2477/81 , 4317/81 and 4318/81 have applied. Questioning the ordinance and rule 3-A and the noticed dated 27-8-1981 issued by the Municipal Corporation of Hyderabad.

8. In all these writ petitions Sri Upendralal Waghary and Sri vedula jagananadha Rao, the counsel for the petitioners, have made the following sub-missions;

(1) The A.P Ordinance 24 of 1981 is unconstitutional, for the conditions laid down in Art. 213 of the constitution are not satisfied and also the assent of president of India was not obtained.

(2) Section 129A introduces ' by the ordinance is a colourable piece of legislation for it is given retrospective effect and also does not lay down any guidelines.

(3) Rules 3-A was not previously published therefore is invalid.

(4) The elimination of the petitioners amount to blacklisting and it was done without giving them an opportunity and it also violates the fundamental rights of the petitioners under Arts. 14 and 19(1)(g) of the constitution of India.

9. First I take up the contention whether the A.P. ordinance 24 of 1981 had been validly promulgated. Art 213(1) of the constitution of India reads as follows;

'If at any time except when the legislative Assembly of a state is in session, or where there is a legislative council in a state , except when both Houses of the legislature are in session , the governor is satisfied that circumstances exit which render it necessary exit which is satisfied that circumstances exit which render it necessary for him to take immediate action, as the circumstances appear to him to require;

Provided that the government shall not, without instruction from the president, promulgate any such ordinance if-

(a) a Bill containing the same provisions would under this constitution have required the previous sanction of the president for the introduction therefore into the Legislature; or

(b) he would have deemed it necessary to reserve a Bill containing of the same provisions for the consideration of the president; or

(c) an Act of the legislature of the state containing the same provision would under this constitution have been invalid unless, having been reserved for the consideration of the president, it had received the assent of the president.'

10. Basing on this article, two argument are advanced. First, an Ordinance can be promulgated by the governor, provided he is satisfied that circumstances exit which render it necessary for him to take immediate action . It is stated that in this case there are no such circumstances which render is necessary for him to take immediate action by promulgating the ordinance. Secondly , the Hyderabad Municipal Corporation Act, 1955 has received the assent of the president of India on 14-2-1956, while the present ordinance did not receive the present ordinance did not receive any such as sent. It is argued that S.129A relates to contractors , which is in the concurrent list and therefore the assent of the president of India should have been obtained for the Ordinance.

11. It is not dispute that the legislature was not in session, when the ordinance was issued . It is true that under art. 213(1) the Governor can promulgated an ordinance only when he is satisfied that circumstances exist which it necessary for him to take immediate action by promulgating such an ordinance . The question is whether those condition are justiciable. The learned counsel for the petitioners relying upon R. Sultan V.Government of andhra pradesh , ILR (1970) Andhra Pra 1075 submitted that the satisfaction of the is open to judicial scrutiny. In that decision a division Bench of this court consisting of Rao J. hold that the subjective satisfaction of the Governor is not justiciable , that he is not bound to expound the reason for this satisfactory or the circumstances which existed , nor is he bound to prove affirmatively in a court of law that the a state of emergency did actually exist and the court cannot go into the question of validity of an ordinance made by the Governor on the ground that there were no sufficient reason for promulgating the ordinance even were the Governor states his reasons for his satisfaction . At the same time they held that it does not mean that the court is powerless or has no jurisdiction to consider whether the ordinance based on such subjective formula is valid. They observed that it is open to the court to firstly sea whether there existed certain circumstances and secondly such circumstances are relevant to the purpose of issuing ordinance on a particular subject and for the formation of opinion that they render it necessary to take an immediate action. In this connection they purported to follow - Barium Chemicals Ltd. V. Company Law Board , : [1967]1SCR898 ; Rohtas industries Limited V. S. D . Agarwal, : [1969]3SCR108 .

12. I am afraid, the learned judges did not laydown the correct law. In Lakhi Narayan Das v. Province of Bihar, Air 1950 FC 59 while interpreting section 88 (1) of the Government of India Act (1935), a provision similar to Article 213 of the constitution of India, the Federal Court held that the Governor alone has to satisfy himself as to the existence of the circumstances necessitating the promulgation of an Ordinance and the existence of such necessity is not a justiciable matter. which the court could be called upon to determine by applying an objective test. See also Jnan Prosanna v. province of West Bengal , Air 1949 Cal 1 (fb). In S.K.G Sugar Ltd. v. Stateof Bihar, AIR 1947 SC 1533 the supreme court held that the necessity of immediate action and of promulgating an Ordinance is a matter purely for the subjective satisfaction of the Governor, that he is the sole judge of the circumstances necessitating the making of an Ordinance, that his satisfaction is not justiciable and it cannot be questioned on ground of error of judgement or otherwise in Court.

13. In view of these decision I hold that the opinion formed by the Governor with regards to the existence of circumstances, which render it necessary for him to take immediate action is not justiciable. In fact in the preamble of the ordinance 24 of 1981 it is stated 'where as the Legislature of the state is not in session and the Governor of Andhra Pradesh is satisfied that circumstance exits which render it necessary for him to take immediate action '. Even assuming for the government is justiciable, still in my opinion the burden is upon the petitioned to show that the conditions mentioned in Art. 213 do not exist. and they have failed to discharge it. if at all the facts are against them. Railway over bridge at Begumpet , Public etc., are work of public importance. They cannot brook any delay. Pre-qualification notice was issued on 2-4-1981. To remedy the legal defects, Ordinance was promulgated on 6-8-1981. The state legislature was not in session. It is common knowledge that as days pass by cost of construction escalates . Therefore there were certainly circumstances which necessitated the immediate promulgation of the ordinance . I, therefore , reject this contention.

14. The Hyderabad Municipal Corporation Act 1955, has received the assent of the president on 14-2-1956. the question is whether the A.P. Ordinance No 24 of 1981 cannot be promulgated without obtaining the prior instructions of the president.

15. Proviso to Art 213 provides that the Governor shall not without instruction from the president promulgate any Ordinance if (a) a Bill containing the same provision would under the constitution have required the previous sanction of the president for the introduction therefore in to the Legislature , or

(b) he would have deemed it necessary to reserve a Bill containing the same provision for the consideration of the president ; or (c) Act of Legislature of the state containing the same provisions would under the constitution have been invalid unless having been reserved for the consideration of the president, it had received the assent of the president.

16. According to Art 246 of the constitution the parliament has exclusive powers to make laws with respect to any of the matters enumerated in list I in the Seventh Schedule (Union list); the legislature of any state exclusive power to make laws with respect to any of the matters enumerated in list II in the seventh schedule (state list); and the parliament as well as the Legislature of state have power to make laws with respect to any of the matter enumerated in List III in the seventh schedule (concurrent list).

17. Art 254(2) provides that where a law made by the Legislature of a state with respect to one of the matters enumerated the concurrent List contains any provision on repugnant to the provision of an earlier law made by parliament or an existing law with respect to that matter, then, the law so made by Legislature of such state shall, if it as been reserved for the consideration of the president and has received his assent, prevail in the state.

18. Contract is item 7 of List III in the seventh schedule . Item 5 of List II in the seventh schedule relates to local government. Since contract is in concurrent List both the parliament as well as the state legislature can make laws with respect to that item .But any law made by a state Legislature if it contains any provision repugnant to the provision of an earlier law made by parliament or an existing law, then the law so made by the legislature of such state shall, if it had been reserved for the consideration of the president and has received his assent prevails in that state . Therefore , what is necessary to see is whether there is repugnancy between the provisions of S. 129A of the Hyderabad Municipal Corporation act, 1955 and the provision of the contract Act. If there is repugnancy since instructions of the president were not obtained, it will be invalid. If there is no repugnancy, there is no need to obtain the instruction of the president. The learned counsel for the petitioners, has not placed before me the reason as to why the main Act was reserved for the assent of the president. it was submitted that, the Act was reserved for the assent of the president. It was submitted that, that Act was reserved for the assent of the president, because there are certain provision in that Act relating to contracts, It is true Ss. 124 to 129 of the Hyderabad Municipal Corporation Act relate to contract. But it is not shown to me that those provision are repugnant to the provisions on the Indian contract Act and therefore it was reserved to the president of India. Therefore it is more a matter of guess as to why that Act was reserved for the assent of the president. There are certain provisions in the Municipal corporation act, which may come into conflict with the provision of certain central acts. For instance, Ss. 384 and 385 relate to acquisition of lands and buildings. Ss 252 and 256 relate to octroi duty. Ss 516 and 520 relate to Factories. They may come into conflict with the land Acquisition Act, Art 304 of the constitution and the factories Act. Therefore may be the assent of the president was obtained for the main Act. The learned counsel for the petitioners have not shown to me any repugnancy between S. 129a of the A.P Ordinance and the provision of the contract Act. The contract Act provides for calling for tenders and accepting or rejecting them. It does not say that while calling for tender a pre-qualification should not be scrutinised. Therefore I hold that there is no repugnancy between S. 129a (as inserted by?) the ordinance and the provisions of the contract Act, an existing law made by the parliament . if so , there is no need to obtain the prior instructions of the president before promulgating the ordinance. See Narayan Das v. Province of bihar (AIR 1950 FC 59).

19. In Durga rice and Baba Oil Mills Co .v . State of Andhra Pradesh, : AIR1964AP266 it has been held by division bench of this court that it is not every amendment that should be submitted for the assent of the president irrespective of whether the amendment involves anything which call for the assent of the president, merely because the main Avt was referred to for his assent. It was observed that often the parent act by a state legislature may contain same provisions which deal with a matter coming under list III and it is only to save a law made by such a legislature from challenge on the plea of repugnancy between it and an existing law or a parliament law that the device of obtaining the president's assent is resorted to. See also -Jnan Prosanna V.Province of west Bengal (Air 1949 Cal 1) (FB) and Hanuman Dall & General Mills v. State of Haryana, .

20. The learned counsel for the petitioners referred to Achiah Chetti v.State of Mysore ,AIR 1962 Mys 218; Gwalior rayons silk Mfg. (Wvg) Co. V. Government of Kerala : AIR1979Ker56 ; State of Mysore v. Achiah Chetti, : [1969]3SCR55 to substantiate their plea. The facts in those cases are distinguishable. They have not laid down any different proposition of law. It is not shown to me by the learned counsel for the petitioners that S. 129A is repugnant to any of the provision of the contract act .Therefore the provision instruction of the president need not be obtained before promulgating the ordinance. consequently I reject the contention.

21. Next it was submitted by the learned counsel for the petitioners that the ordinance is a colourable piece of legislation, for retrospectivity is given to section 129A from 1-3-1981 and sub-clause (4) of that section empowers the Government to make rules with retrospective effect. It is argued that the ordinance has been given retrospective effect not to save any rule or notification, but to save any rule or notification , but to save the eleven persons that were selected by the tender committee. It was also contended that no public interest is involved so as to make the ordinance retrospective and also to empowers the government to make rules with retrospective effect.

22. It is true that the ordinance is deemed to have come into force on 1-3-1981. It is also true that sub-sec. (4) of S. 129A provides that the Government can make rules for carrying out the purpose of section and any rule made under that section may be made so as to have retrospective effect. There is on doubt of the fact that the Ordinance was given retrospective effect in order to validate the pre-qualification notice that was issued on 2-4-1981 the constitution of the tender committee and the recommendations made by them. But that is different from saying that the Ordinance was given retrospective effect in order to save the eleven persons that were selected by the tender committee. Here it should not be forgotten that pursuant to the pre-qualification notice that was issued by the Municipal Corporation of Hyderabad, thirty-four persons including the petitioners had applied and eleven persons were selected by the tender committee. If the petitioners were selected, they would have had no grievance. In the arguments advanced before me by the learned counsel for the petitioners, it is not suggested that the Special Officer of the Municipal Corporation of Hyderabad or the three chief engineers that constituted the tender committee or the Secretary of the Municipal Administration or the Minister for Municipal Administration were in any way interested in the eleven applicants that were selected by the selection committee or they had any axe to grind against the present petitioners, who were not selected by the committee. Therefore, I do not agree with the learned counsel for the petitioners that the Ordinance is a colourable piece of legislation. It was also submitted by the learned counsel for the petitioners that Section 585 (1) of the Hyderabad Municipal Corporations Act does not empower the Government to make rules with retrospective effect and it is rather odd that sub-sec. (4) of S. 129A should give them such a power. S. 585 of the Act empowers the Government to make rules for purposes of carrying into effect all or any of the provisions of the Act. Government to make rules with retrospective effect. But it does not mean that the Legislature cannot prescribe that the Government can make rules with retrospective effect for carrying out purposes of S. 129A, Obviously retrospectivity was given in order to bright rule 3-A into effect from 1-3-1981; When the ordinance came into effect i.e. on 1-3-1981. it is not shown to me by the learned counsel for the petitioners that the Legislature cannot pass an Ordinance with retrospective effect much less it cannot provide in the Act itself to make rules with retrospective effect. Legislature has power to validate actions by passing laws to that effect. See of Orissa v. Bhupendra Kumar, : AIR1962SC945 .

23. It was submited by the learned counsel for the petitioners that S. 129A is arbitrary and discriminatory as it offends Arts. 14 and 19(1)(g) of the consititution of India. Let us see S. 129A. It say that in any respect of work the estimated cost of which is rupees fifty lakhs or more, the Commissioner shall give notice by advertisements in the newspapers in the prescribed manner, inviting tenders or application from person who satisfy the pre-qualification specified in such notice. Then the Goverment can appoint or authorise the Corporation to appoint a committee for scrutinising and evaluating the pre-qualification of the tenderers or applicants and for making its recommendations to the commissioner as to the suitability or otherwise of the persons to whom tender schedules may be issued in respect of the work. After considering the recommendation of the commitee and with the prior approval of the Goverment, the Commissioner shall accept any of the tenders or applications so recommended, which appears to him upon a view of all the circumstances to be the most advantageous and thereupon issue the tender schedules in respect of the tender is so accepted.

24. It is not shown to me as to how the procedure prescribeb in this section is not in the public interest or is not germane to the object of the Act or is discriminatory. From the counter-affidavit field by the special officer it is evident that it has been the sad experience of the Municipal Corporation of Hyderabad during all these years that contracts given to some of the persons were not carried out promptly and properly and thereby the Corporation was sustaining losses and the public were suffering great inconvenience. Apart from that, it was leading to unhealthy competition among the contractors. The pre-qualification are prescribed in order to get the work done by contractors who has the necessary experience, expertise and the resources to carry out the work. Itis true taht the petitioners are registered as class I contracters. But that does not by itself mean that they are capabile of handling all types of work involving different categories of skills. A class I contractors handling earth work jobs will not necessarily have the experience in the construction of high rise builindings and fly over or sanitary works . Similary a class I contractors who has experience in high building will not have experience in sewage treatment works or sewer system of large magnitude. The municipal Corporation of Hyderabad has taken up works of large magnitude such as the road over bridge at Begumpet, commercial complexes and auditouriums requring considerable expertise in the relevant field. It is in these circumstances the Goverment through it proper that for works whose estimated cost is 50 lakhs or more pre-qualification should be prescribed. The application received are scrutinised and evaluated by a commitee of three persons. Here the commitee consisted of three Cheif Engineers, one of whom is the Cheif Engineer of Municipal Corporation of Hyderabad . The other two cheif Engineer belong to two other departments. They are certainly experts in the line and they are proper persons to scrutinise and evaluate the qualifications as to the suitability of the applicant to do the contract works, It is definitely an impartial body.Even then it is not as if those applicant are staightway given the contracts. They are only given the tender schedules. Those tender schedules may be accepted or may not be accepted . It only means that they can tender for the work. Itis only after considering the recommendations of the committee, and with the prior approval of the goverment, the commissioner could accept any of tthe tender or application only if upon a view of all the circumstances he considers it to be most advantageous to the corporation. Iam of the opinion that these safeguards are eminently reasonable and provided in the public interest to get the work done by the best contractors in the best manner possible and without delay.

25. It was submitted by the learned counsel for the petitioners that no guidelines are provided in the section. It is atated that the pre-qualification that have to be satisfied in the notice are not mentioned in th section. It is argued that the basis on which on the committee has to scrutinise and evaluate the qualification of the tenderers or applicants is not mentioned. I find it difficult to accept this argument. The pre-qualification are pre-scribed in rule 3-A. The tender committee evaluates the tender in accordance with the pre-qualification mentioned in that Rule.

26. Rule 3-A provides that in respect of any work the estimated that cost of which is rupees fifty lakhs or more, the commissioner shall give notice specifying the following pre-qualifications.

'(a) Name of the contractors or firm;

(b) Financial status;

(c) Details of experience in the execution of work of similar nature;

(d) Equipment and machinery possessed;

(e) Qualification of personnel employed including the technical personnel;

(f) List of major works of similar nature completed by the agency or under execution;

(g) Any other relevant information.''

27. These clauses provided guidelines on the basis of which the tender commitee can select the applicants.

28. It was also submitted by the learned counsel for the petitioners that the tender committee did not give any reason for rejecting the applications of the petitionars. In my opinion there is no need for them to give reasons. They are not Discharging any quasi-judical functions. They are only a committee for scrutinising the applications. It is not the case of the petitioners that the tender committee have arbitrarily selected the eleven applicants ignoring the just claims of the petitioners. In fact to satisfy my self I have gone through the proceedings of the tender committee. I cannot say that they should not choose the best persons out of all the applicants.

29. The learned counsel for the petitioners relying upon Kasturi Lal v.State of Jammu and Kashmir, : [1980]3SCR1338 submitted that the government while entering into contracts cannot act arbitrarily at its sweet will and their actions in that regard is liable to be tested for its validty on the touchstone of reasonableness and public interest and if it fails to satisfy either test, it would be unconstitutional and invalid. It is true the goverment cannot give the contracts as a private party does. it cannot arbitrarily choose the contractors at its sweet will and pleasure. it has to act reasonably and fairly and in the public interest while giving contracts. The question for consideration is whether the procedure prescribed by section 129a is unreasonable and contrary to public interest .As stated by me alreadly it is eminently reasonable and in the public interest. I therefore hold that section 129A is neither arbitrary, nor discriminatory and it does not offend article 14 or 19(1)(g) of the constitution.

30. Here I may add that no persons has a fundamental rights to carry on business with the Goverment. All that he can claims is that the Goverment should be reasonable and fair in giving its contracts and it must be in the public interest. While selecting persons for giving tenders, certain conditions to experience etc., can be prescribed.

31. In Ramana v. I. A. Authority of India , : (1979)IILLJ217SC a notice was issued notirfying tenders. the Airport Authority has stipulated a condition of eligibility by providing that a person submitting a tender must be a second class hotelier having at least five years experience. The supreme Court observed that the condition of eligiblity has to be satisfied by ever person submitting a tender and if in any respect of any person this condition was not satisfied his tender was ineligible for being considered it observed that the test of objective test and not a subjective one . Thus the condition of eligibility in that case was upheld by the supreme Court. On princplei do not find any difference when a pre- qualification is prescribeb for making an application for contracts over fifty lakls . Evidently those qualifiaction are prebebd to see wheather they have the requiste experience to do the work. the contract workk cannot be given to each and every one particularly when lakhs and lakhs of public monies and public interest are involved and when the works have to be executed within the prescribed period and properly.

32. In Kasturi Lal v. State of Jammu and Kashmir : [1980]3SCR1338 While holding that a contract given by the Government can be tested on the object of reasonableness and public interest, it was observed: (Para 14)

'there may be an infinite variety of considerations which may have to be taken into account by the Government in formulating its policies and it is on a total evaluation of various considerations which have weighed with the Government in taking a particulat action, that the Court would have to decide whether the action of the Government is reasonable and in public interest. But one basic principle which must guide the Court in arriving at its determination on this question is that there is always a presumption that the govrnmental action is reasonable and in public interest and it is for the party challnging its validity to show that it is wanting in reasonableness or is not informed with public interest. This burden is a heavy one and it has to be discharged to the satisfication of the Court by proper and adequate material. The Court cannot lightly assume that the action taken by the Governent is unreasonable or without public interest because, as we said above, there are a large number of policy considerations which must necessarily weigh with the Government in taking action and therefore the Court would not strike down governmental 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 of the Court under the Consititution to invalidate the govnmental 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.'

33. I hold that the petitioners have failed to make out that S. 129-A Constitution of India.

34. It was submitted by the learned counsel for the petitioners that R. 3A is invlaid for there was no prior publiction in the Gazette, as enjoined by S. 585 (3) of the Hyderabad Municipalities Act. IT is true that under sub-secs. (1) and (2) shall be subject to the condition of previous publcation and shall be laid before Legistative Assembly. What is argued is that R.3A that ws promulgated in the Notification published in G.O. Ms. No. 973 dt. 27-8-1981 was not preiously published in the Gazette under sub-sec. (3) of S. 585. But the learned counsel for the respondents had placed before me A. P. Ordinance No. 11 of 1981. That Ordinance had amended the A. P. Municipalities Act, 1965 and the Hyderabad Municipal Corporations Act, 1955. It came into force on 16th June, 1981. Under that Ordinance S. 505 is now substituted. Sub-sec. (3) is omitted. Under S. 585, as now substituted there is no need for the previous publication of the Rules in the Gazette. All that is necessary is that every rule made under the Act should be laid before each House of the State Legistature. Therefore it is not necessary to make prior publication of R. 3A.

35. It was contended by the learned counsel for the petitioners that the elimination of the petitioners that the elimination of the petitioners who are already registered as Class I contractors with the Municipal Corporation amounts to black listing and my attention is invited to E. E. & C. Ltd. v. State of West Bengal, : [1975]2SCR674 . I do not agree that the petitioners are black listed. If they are black listed, they will not be permitted to apply at all, even if they have the prequalifications. In fact every one of the petitioners has applied pursuant to the pre_qualification notice issued by the Commissioner. Therefore this is not really a case of black listing Consequently the decision in E.E. & C. Ltd. v. State of West Bengal : [1975]2SCR674 is not relevant.

36. Even is the petitioners have the eligibility to apply at the most they could only claim tht their applications should be considered fairly and impartialy. They cannot claim the contract as of right. Equally they cannot complain that their fundamental rights under Art. 14 or 19(1)(e) are violated merely because their applications were rejected by the Tender Committe. The Tender Committe need not give any reasons for rejecting an application. In this connection I may refer to Sri Rama Engg. Contractors v. Dept. of Space, Govrnment of India, : AIR1981AP165 .

37. Consequently I hold that the A. P. Ordinance No. 24 of 1981, Rule 3A that was promulgated G. O. Ms. No. 973 dated 27th August, 1981, the pre-qualification notice dated 2nd April, 1981 issued by the Municipal Corporation of Hyderabad, the constitution of the Tender Committe, the selections made by the Selection Committe, the approval given by the Govrnment and the notice issued to the 11 persons to submit their tenders, are valid.

38. After the Ordinance was promulgated and R, 3A was framed, on 27-8-1981 the Municipal Corporation of Hyderabad has issued a pre-qualification tender notice for execution of four works. The last date for submitting the applications was 21-9-1981. I am informed that there was 16 applicants including the petitioners in W. Ps. 2477/81, 4317/81 and 4318/81. The learned counsel for the petitioners submit that the other petitioners did nto apply in view of the pendency of the writ petitions, that they wat to apply and since the date for the receipt of the applications has expired by 21-9-1981 I should give them some time to make applications. This request is reasonable. Accordingly I give time for those petitioners that have not applied pursuant to the pre-qualification notice dated 27th August, 1981 to apply on or before 15-10-1981 and it is for the Tender Committe to consider their applicants that are already received.

39. In the result I dismiss these writ petitions but in the circumstances of the case without costs.

40. The direction given in the interimpetitions that status quo should be maintained, is vacated.

41. Order accordingly.


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