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Damodaraswamy Naidu Vs. President of District Board, Coimbatore and anr. - Court Judgment

LegalCrystal Citation
SubjectContract
CourtChennai High Court
Decided On
Case NumberWrit Petn. No. 271 of 1956
Judge
Reported inAIR1957Mad149
ActsConstitution of India - Article 226; Madras District Boards Act, 1920 - Sections 199(2); Madras Local Boards Act - Sections 199(2); Madras Local Boards Rules - Rule 9
AppellantDamodaraswamy Naidu
RespondentPresident of District Board, Coimbatore and anr.
Appellant AdvocateK.S. Naidu and ;C.R. Vedachalam, Advs.
Respondent AdvocateAdv. General for V.V. Raghavan, Adv., ;C.R. Pattabhiraman and ;R. Ramasubbu Aiyar, Advs.
DispositionPetition dismissed
Cases ReferredRamphal Slngh v. State of Blttar
Excerpt:
.....of india, section 199 of madras district boards act, 1920 and rules 9 and 10 of madras local board rules, 1920 - government invited tender for execution of work - lowest tender accepted by first respondent - petitioner one of tenderer filed writ petition for writ of certiorari - like private individuals government is at liberty to accept or reject tender considering certain circumstances without breach of statutory rules - petitioner has no legal right to have his tender accepted - petitioner has no locus standi to file suit. - - so on the facts placed before me, it is not possible to hold that there was a violation of rule 10. 8. though earlier i observed that the conditions imposed by rule 9 were not satisfied by the 2nd respondent, when he submitted a cheque for the earnest..........tender. learned counsel contended that the 2nd respondent did not comply either with the statutory rule, rule 9, or with the conditions of the tender notice.instead of depositing the money with the district board or into the treasury, the 2nd respondent sent a cheque. that subsequently the cheque was returned to the 2nd respondent and he deposited the amount required with the district board does not really affect the question at 'issue. on the facts admitted, the 2nd respondent did not comply with rule 8, because instead of depositing the money as required by that rule, he sent a cheque for that amount.5. the further contention of the petitioner was that rule 10 was also violated. the petitioner pleaded that the 2nd respondent was not a registered contractor at all. the second respondent.....
Judgment:
ORDER

Rajagopalan, J.

1. Improvements had to be carried out to the Palladam-Cochin Frontier Road which lay in the Coim-batore district. The work had to be paid for by the District Board of Coimbatore. The estimated cost of the work was Rs. 98000. The Divisional Engineer, Highways, called for tenders for the execution of that work--tenders to be sub-mitted before 12-5-1955. The petitioner the 2nd respondent and others submitted tenders. Eventually, under the orders of the Government, the tender of the 2nd respondent, which was the lowest, was accepted by the District Board That was on 19-12-1955.

2. It was the validity of that action of the District Board which the petitioner challenged by his application under Article 226 of the Constitution for the issue of a writ of certiorari.

3. The petitioner contended that the acceptance of the tender of the 2nd respondent was vitiated by breach of Rules 9 and 10 of the rules for Tenders of Contracts framed by the Government Under Section 199(2)(n) of the Madras District Boards. Act, 1920, Act XIV of 1920. Rule 9 runs:

'No tender shall ordinarily be treated as valid unless it is accompanied either by the earnest money specified in the tender notice, or by a treasury receipt in token of the party having remitted into treasury the amount of the earnest money........'

4. Learned counsel for the petitioner pointed out that the notice inviting tenders specified that the earnest money or Rs. 4900 should be deposited with the District Board or should be deposited in treasury and the challan produced along with the tender. Learned counsel contended that the 2nd respondent did not comply either with the statutory rule, Rule 9, or with the conditions Of the tender notice.

Instead of depositing the money with the District Board or into the treasury, the 2nd respondent sent a cheque. That subsequently the cheque was returned to the 2nd respondent and he deposited the amount required with the District Board does not really affect the question at 'issue. On the facts admitted, the 2nd respondent did not comply with Rule 8, because instead of depositing the money as required by that rule, he sent a cheque for that amount.

5. The further contention of the petitioner was that Rule 10 was also violated. The petitioner pleaded that the 2nd respondent was not a registered contractor at all. The second respondent virtually admitted that on the date he submitted his tender he had not been registered in Coimbatore district itself as a contractor, and registration was granted to him subsequently on 1-10-1955; but he pleaded that he was a registered contractor in the adjoining districts.

6. Rule 10, violation of which was alleged by the petitioner, runs as follows:

'Only tenders from registered contractors shall be considered. This condition shall not be enforced in the case of capital works the contract amount of which exceeds Rs. 20,000..... In the case of capital works the contract amount of which exceeds Rs. 20,000, tenders from engineering firms of standing and from contractors registered In or outside the district for such capital works may be considered. Tenders from unregistered contractors may also be considered, if they are accompanied by copies of testimonials or record of previous execution by them of any such capital work and by proof of their financial stability and capability for executing such capital works......'

I shall omit the proviso, as it will not be necessary to refer to that.

7. The contention of the petitioner was that; along with the tender which the 2nd respondent submitted, he did not furnish testimonials or proof of his financial stability and capability for executing such a capital work. That argument, of course, was based on the assumption, that the 2nd respondent Was an unregistered contractor. The specific plea of the 2nd respondent which I have already referred to above, wag that, though he had not been registered in Coimbatore, his status was that of a registered contractor.

He was a contractor registered not inside Coimbator district but outside the district and therefore under Rule 10 he was entitled to have his tender considered without the limitations imposed on an unregistered contractor as such. That the 2nd respondent was a registered contractor Outside the Coimbatore district was not denied by the petitioner. So on the facts placed before me, It is not possible to hold that there was a violation of Rule 10.

8. Though earlier I observed that the conditions imposed by Rule 9 were not satisfied by the 2nd respondent, when he submitted a cheque for the earnest money, it should be noticed that what Rule 9 provides for is that the earnest money should be deposited in the manner prescribed under ordinary circumstances. Some significance must be given to the word 'ordinarily'.

It is not an inflexible rule of law that has been embodied in Rule 9. In the present case the District Board, which had invited the tenders, was obviously prepared to condone the delay, either directly or under instructions from the higher au-thorties. I am unable to hold that, though a cheque was in fact sent by the 2nd respondent, there was a real violation of Rule 9, because Rule 9 itself provides for exceptions; and what should be an exception may normally be a matter for the other contracting party, i.e., the District Board to decide.

9. It should be enough to dispose of this petition on the findings I have recorded above, that no violation of Rule 10 has been established; and no real violation of Rule 9 has been/ established either.

10. The learned Advocate General raised largerissues 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 2nd respondent in violation of anystatutory rule, a writ of certiorari should not issue.That contention would appear to be well foundedespecially with reference to the circumstancesestablished in this case. The learned AdvocateGeneral referred to the observations of the learned author, Street on Governmental Liability, 1953Edn. at page 97:

'....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......' That observation was based upon Perkins v. Lukens Steel Co., (1940) 84 Law Ed. 1108 . Dealing with The question to what extent breaches of statutory provisions -- in that present case the breach complained of is of statutory rules -- would afford scope for any Judicial review, the learned Judges pointed out at 1114;

'Like private Individuals and businesses, the Government enjoys the unrestricted power to pro-duce its own supplies, to determine those with whom it will deal, and to fix the terms and conditions upon which it will make needed purchases. Acting through its agents as it must of necessity, the Government may for the purpose of keeping Its own house In order lay down guide posts by which its agents are to proceed in the procurement of supplies, and which create duties to the Government alone.

It has done so in the Public Contracts Act. That Act does not depart from but instead embodies the traditional principle of leaving purchases necessary to the operation of our Government to administration by the executive branch of Government, with adequate range of discretion free from vexatious and dilatory restraints.... It was not intended to be a bestowal of litigable rights upon those desirous of selling to the Government;

It Is a self-imposed restraint for violation of which the Government -- but not private litigants --can complain.' At page 1116 the learned Judges observed:

'......prospective bidders for contracts derive no enforceable rights against the agent for an erroneous interpretation of the principal's authorisation. For erroneous construction of his instructions, given for the sole benefit of the principal, the agent is responsible to his principal alone because his misconstruction violates no duty he owes to any but his principal.

The Secretary's responsibility is to superior executive and legislative authority. Respondents have no standing in court to enforce that responsibility or to represent the public's interest in the secretary's compliance with the Act. That respondents sought to vindicate such a public right or interest is made apparent both by their prayer that the determination be suspended as to the entire steel industry and by the-extent of the injunction granted.'

11. The learned Judges held In that case thatthe complaining companies had no real locus standiat all to complain of the infringement of any statutory duty by the Governmental officials. Theyobserved at p. 1117:

'Our decision that the complaining companies lack standing to sue does not rest upon a mere formality. We rest it upon reasons deeply rooted in the constitutional divisions of authority in our system of Government and the impropriety of judicial interpretations of law at the instance of those who show no more than a mere possible injury to the public.'

Those principles could well apply to the facts of this case. Even the tender notice contained a specific clause, that any tender was liable to be rejected without any reasons being assigned, it was in response to a notice containing such a specific provision that the petitioner submitted his tender. His was not the lowest tender. Even apart from that, he had no legal right to have his tender accepted. All that he now complains of is that the District Board was wrong in accepting the tender submitted by the 2nd respondent on the grounds specified above.

VJrtually this petitioner's case resolves itself to this: because the 2nd respondent had paid the earnest money by cheque instead of by depositing it in cash with the District Board or into the sub-treasury, the statutory authority, the District Board, which was entitled to enter into a contract for the execution of the work in question, was guilty of a violation of a statutory liability laid upon it by Rule 9 and that was sufficient to vitiate the exercise of the jurisdiction it had to enter into a contract and further that that was sufficient to have the acceptance of the tender set aside by the issue of a writ' of certiorart.

Even if the conditions had not been satisfied --and I have held they were -- the petitioner would really have had no locus standi to ask for a writ of certiorari. The enforcement of any liability of the District Board -- and obviously District Boards must conform to the statutory rules framed for their guidance -- is not for the petitioner, and certainly not through means of a writ of certiorari in proceedings under Article 226 of the Constitution.

12. The learned counsel for the petitioner referred to Gurusami v. State of Mysore, : [1955]1SCR305 (B). At p. 595 the learned Judges went into (he question whether the appellant there could complain of a violation of statutory, provisions by way of a writ. In the circumstances of that case, where It should be 'observed the appellant's highest bid should have been accepted under the rules In force, the learned Judges held that he had a legal right which he could vindicate by recourse to the jurisdiction under Article 226 of the Constitution.

I am unable to see arty real analogy for the application of the principle laid down there to the facts of this case. Nor is there really anything common between the facts in issue In this case and those the learned Judges of the Patna High Court had to consider in Ramphal Slngh v. State of Blttar, : AIR1954Pat235 (C). It was a writ of mandamus that was asked for to enforce a statutory duty laid upon the statutory authority, which Is not the position here.

13. Another contention of the learned Advocate General was that neither a notice Inviting tenders nor a tender by itself creates any rights. It Is still in the stage of an offer; even an accepted tender under the Local Boards Act may not be enough; because the law provides for a contract In writing with due formalities before the contract is enforceable even by the contracting parties. In the present case, we have gone past the stage of a mere acceptance of tender. It was represented that a contract had been executed.

But It is not on that ground that I am resting, my decision in this case. The acceptance of the tender by the District Board was not beyond Its Jurisdiction, and the exercise of its Jurisdiction, was in no way vitiated either. Nor is it upon that I am resting my observation that there was no real violation of any statutory rule; even If any such violation had been established, the petitioner would have had no locus standi to ask for a writ of certiorari.

14. The rule is discharged. The petition Isdismissed with the costs of the 2nd respondent,Counsel's fee Rs. 100.


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