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Prabhudasbhai Bhikhabhai Patel Vs. State of Gujarat and ors. - Court Judgment

LegalCrystal Citation
SubjectContract;Constitution
CourtGujarat High Court
Decided On
Case NumberLetters Patent Appeal No. 12 of 1981 with Civil Appln. No. 185 of 1981
Judge
Reported inAIR1981Guj117; (1981)GLR570
ActsConstitution of India - Articles 14 and 226
AppellantPrabhudasbhai Bhikhabhai Patel
RespondentState of Gujarat and ors.
Appellant Advocate G.K. Sukhwani and; Maya Bhavnani, Advs.
Respondent Advocate J.M. Thakore, Adv. General,; J.R. Nanavaty. Govt. Pleader,;
Excerpt:
.....an international level against global competition and has vast experience and can reasonably be trusted to execute the work in the best possible manner in the shortest possible time, it would be evident that a charge of arbitrariness cannot be conscientiously levelled. in fact the state government might well have been accused of sacrificing national interest for the sake of saving a couple of crores of rupees if it had not realised the significance of and the nature of the work which was to be executed and its importance in the national life......to award or not to award a contract and substitute its own decision for the decision taken by the state government. the decision to award contract to respondent no. 6 company can be quashed and set aside provided and only provided it is established that the decision is arbitrary and discriminatory so as to attract article 14 of the constitution of india. we are not prepared to say that merely because the lowest bid is not accepted, the decision is rendered arbitrary. we are also not prepared to say that a saving of about rs. 6 crores is a consideration which should have weighed with the state government. in fact it would appear that completion of the work in an efficient and satisfactory manner at the earliest and within the stipulated time limit is of much greater importance having.....
Judgment:

Thakkar, J.

(1) . Arbitrary? Is it arbitrary (on the part of State Government) to refuse to award a rupees 37 crore contract in respect of a work (Rock Fill Dams in the Head Reach of Narmada Project Main Canal) which will have tremendous impact on the life and well-being of the people of the entire State, nay of the entire Nation, to the lowest bidder, the appellant? And has it acted arbitrarily in violation of Article 14 of the Constitution of India in awarding it in preference to the appellant, to the respondent No. 6 Company, which indubitably has (1) a vast experience of executing large contracts not only in India but in Iraq, (2) vast organization and (3) vast resources a compared to the appellant? These are the questions raised by the appellant, whose petition under Article 226 of the Constitution of India praying that (1) the contract granted to the respondent No. 6 Company be set aside and (2) it be granted to the appellant. And in order to answer these questions following further questions will have to be posed.

(1) What matters in the life of a Nation - saving of a couple of crores of rupees or (i) satisfactory (ii) successful and (iii) timely, execution of a work of National importance and significance?

(2) Does the Court exercise appellate jurisdiction against an administrative decision of the executive to grant a contract and take upon itself the responsibility to make contracts itself In other words, will the Court run the administration for the executive? How far can the Court probe when there is no charge of mala fides or oblique motive? The grievance of the appellant Society, a State level Corporation, is that its bid was the lowest and yet the contract has been entrusted to respondent No. 6 Company. It transpires from the affidavits that the contract was entrusted to respondent No. 6 Company for a sum of Rs. 37,10,70.561.00/- though the appellant was prepared to execute the work for about Rs. 6 crores less. Counsel for the appellant has declared that the decision to award the contract to respondent No. 6 Company is not being challenged on the ground of mala fides, but is being challenged only on the ground that it is arbitrary. It is argued that having regard to the fact that the appellant Society has executed numerous works satisfactorily in the past, the contract should have been awarded to the appellant Society particularly having regard to the fact that the acceptance of its bid would have resulted in a saving of about Rs. 6 crores. The jurisdiction of this Court in a matter of this nature is understandably circumscribed. This Court will not sit in appeal against the administrative decision to award or not to award a contract and substitute its own decision for the decision taken by the State Government. The decision to award contract to respondent No. 6 Company can be quashed and set aside provided and only provided it is established that the decision is arbitrary and discriminatory so as to attract Article 14 of the Constitution of India. We are not prepared to say that merely because the lowest bid is not accepted, the decision is rendered arbitrary. We are also not prepared to say that a saving of about Rs. 6 crores is a consideration which should have weighed with the State Government. In fact it would appear that completion of the work in an efficient and satisfactory manner at the earliest and within the stipulated time limit is of much greater importance having regard to the nature of the work and its impact on the National economy not to speak of the economy of the State. It is a part of the work related to the Narmada Project. It is a very important link in the chain of works to be executed in connection with the main work. It is no doubt true that global tenders for the main work have yet to be invited. It, however, stands to reason that meanwhile works which are capable of being completed are executed. The Nation can ill afford to waste a moment of national time in the execution of a project of this magnitude which can (1) augment the agricultural capability of the Nation, (2) add thousands of tons of grain to the National granary (3) bring a smile on the faces of thousands of cultivators, (4) bring food nearer to the hungry mouths of thousands of citizens and thus alter the economic profile of the entire Nation. If the matter is examined from this perspective and it is realised that respondent No. 6 Company has executed numerous large projects satisfactorily even at an international level against global competition and has vast experience and can reasonably be trusted to execute the work in the best possible manner in the shortest possible time, it would be evident that a charge of arbitrariness cannot be conscientiously levelled. A glance at annexure 'II' to the affidavit sworn by Shri S. K. Jain, a Director of respondent No. 6 Company, on December 16, 1980 reveals that the Company has on its permanent rolls 2965 technicians and employs about 8,000 workers on project sites. The Company has got branches at Bangalore, Lucknow and Baghdad and Project Offices at Rishikesh, Kudremukh, Tehri and Navagam (Baroda). And Annexure 'A' goes to show that the Company has completed 12 major works in the last five years. The largest work was in respect of a contract of Kudremukh Iron Ore Co. Ltd. for a sum of 120 million rupees. Next in importance is the construction of Veerbhadra Barrage and erection of gates at Rishikesh for 110 million rupees. These are only 2 of the 12 works listed in Annexure 'A'. Annexure 'B' shows that it has on hand 4 large works in India and 2 abroad. One of the two contracts is the contract relating to Sewarage Net Work in Iraq at a cost of 1500 million rupees. The next in importance is a contract relating to West Bank Trunk Sewer at Baghdad in Iraq involving a cost of 150 million rupees. One of the four contracts in India is for Tehri Division Tunnel in U. P. at a cost of 200 million rupees. As against this the averments made in para 2 of the petition show that the appellant Society (petitioner) has so far executed seven relatively minor works and only one major work. The value of the seven minor works ranges between 1.6 million rupees to 35.5 million rupees. The remaining one which is the larger was valued at 1353 million rupees. The affidavit-in-reply (see para 6) sworn by Shri I. M. Shah, Chief Engineer (Narmada) on 15th December, 1980 (page 72) shows that out of these contracts the work relating to Kadana Dam valued at 14 million rupees had to be withdrawn as the appellant was unable to execute it within the stipulated time. It further shows that progress of the work relating to Damanganga Dam valued at 35.5 million rupees was slow (it was 66% of the stipulated quantity). Besides, in regard to the manpower resources, Annexure 'A' shows that respondent No. 6 Company employs 45 Civil Engineers, 10 Mechanical Engineers, 10 Electrical Engineers etc. As against this, the technical staff available with the appellant Society, as per the information supplied by it to the State Government, consists of 6 technically qualified Engineers, only one of whom is an Engineering graduate (remaining five being mere Diploma holders). The affidavit sworn by Shri 1. M. Shah, Chief Engineer (Narmada) and Joint Secretary to the Government of Gujarat Irrigation Department, on December 15, 1980 shows that the Secretary (Irrigation) had prepared a note in which the details regarding the works carried out by the respective-contractors were given and had opined that if the work was to be executed in a time-bound manner the Government should be prepared to spend some more amount and award the contract to respondent No. 6 in preference to the appellant Society. Reliance was also placed on the circumstance that the appellant Society had not been able to complete some projects within time and the work was delayed. It is not necessary or proper for us to launch an investigation into the causes of the delay in order to ascertain who was at fault. The decision of the Government is built on the consideration as regards the satisfactory and speedy completion of the work. Under the circumstances, it can not be said that the State Government has acted arbitrarily. It is not necessary to advert to details pertaining to the course of events or to the correspondence exchanged with the officials of the State Government. Nor is it necessary to dwell on a number of trivial matters in respect of which averments have been made in the petition and controverted by the other side. Having regard to the aforesaid larger perspective it cannot be said that the State Government has acted arbitrarily. In fact the State Government might well have been accused of sacrificing National interest for the sake of saving a couple of crores of rupees if it had not realised the significance of and the nature of the work which was to be executed and its Importance in the National life.

2. We see no substance in the appeal. It fails and is dismissed summarily.

3. The learned counsel for the appellant applies for a certificate of fitness to appeal to the Supreme Court of India. In our opinion the matter does not involve any substantial question of law of public importance which needs to be decided by the Supreme Court of India. The request for certificate is, therefore, refused.

4. The learned counsel for the appellant applies for continuation of the interim relief. In our opinion, it would be undesirable to continue the interim relief for apart from the fact that according to the affidavit filed on behalf of respondent No. 6 the Company is incurring a daily loss of Rs. 50,000/-, the loss to the National interest is so immense that the matter would not brook a day's delay. It must also be realised that there is no prejudice to the appellant. If the appellant Society ultimately succeeds it will get the benefit of whatever work has been executed by respondent No.6 company till then. We, therefore do not consider it proper to extend the interim relief even by a day. The request is, therefore, refused.

5. Order accordingly.


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