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Franco Wheeler by Proprietor, A.R. Dass Vs. State Industries Promotion Corporation of Tamil Nadu Ltd. Reptd. by the Managing Director and anr. - Court Judgment

LegalCrystal Citation
SubjectContract
CourtChennai High Court
Decided On
Reported in(1984)2MLJ461
AppellantFranco Wheeler by Proprietor, A.R. Dass
RespondentState Industries Promotion Corporation of Tamil Nadu Ltd. Reptd. by the Managing Director and anr.
Cases ReferredRamana v. I.A. Authority of India
Excerpt:
- .....first respondent cannot come within the ambit of 'state' under article 12 of the constitution of india. learned counsel was at pains to demonstrate this aspect by placing reliance on the pronouncements of the supreme court, where the tests have been laid down to find out and determine as to when a corporation can be said to be an instrumentality or agency of the government. we find that though the principles stand elucidated from the pronouncements relied on by the learned counsel, yet, there is a lack of disclosure of the relevant materials to enable us to adjudicate this question and push out the petitioner even at the threshold of the writ jurisdiction. furthermore, since we are inclined to sustain the other grounds put forth by mr. n.c. raghavachari, learned counsel for the first.....
Judgment:

S. Nainar Sundaram, J.

1. The prayer in the writ petition is for the issue of a writ of mandamus, directing the first respondent to forbear from implementing the award of contract to the second respondent for the erection of the Tamil Nadu Pavilion at the India International Trade Fair, 1983, to be held at Pragati Maidan, New Delhi, from l4-11-1983 to 27-11-1983. The provocation for the petitioner for approaching this Court under Article 226 of the Constitution of India, seeking the above relief has arisen under the following circumstances: The Government of Tamil Nadu decided to participate in the India International Trade Fair, 1983, to be held at Pragati Maidan, New Delhi, from 14-11-1983 to 27-11-1983. The Fair is to be conducted by the Trade Fair Authority of India, who has organised the same. The Government of Tamil Nadu entrusted the responsibility of erecting the Tamil Nadu Pavilion to the first respondent. By letter dated 22-7-1983, the first respondent called for quotations for the erection of the Tamil Nadu Pavilion. This invitation for quotations was limited to eight concerns including the petitioner and the second respondent. There is a sentence in that letter, which runs as follows:

Contract will be served to only those who are in the approved list of TFAI.

(Trade Fair Authority of India).

This clause has proved the bone of contention between the parties, which we shall advert to presently. Four concerns, including the petitioner and the second respondent, made their tenders with their models. On 5-8-1983, all these tenders were rejected by the first respondent and second sets were called for. On 10-8-1983, the second sets were offered by the very same four concerns. On 17-8-1983, even the second sets were rejected by the first respondent. On 23-8-1983, the third sets were submitted. By letter dated 1-9-1983, the first respondent chose to accept the tender of the second respondent and called upon the second respondent to execute the agreement. The agreement between the first respondent and the second respondent was executed on 2-9-1983. Pursuant to the agreement, the first respondent has paid, and the second respondent has received a sum of Rs. 3,31, 250/- on 5-9-1983. On 7-9-1983, the present writ petition has been filed and interim injunction has been obtained. The second respondent would state that the work of erecting the pavilion was commenced even on 9-9-1983.

2. The petitioner challenges the award of the contract of erecting the pavilion by the first respondent to the second respondent on the ground that the first respondent prescribed the standard with regard to acceptance of the tender for the erection of the pavilion when it stated that 'Contract will be awarded to only those who are in the approved list of TFAI., and the first respondent must be rigorously held to the standards by which it professes its action to be judged and it must scrupulously observe those standards on pain of invalidation of an act in violation of them and the first respondent cannot accept the tender of the second respondent, because, the second respondent did not fulfil the requisite qualification of being in the approved list of TFAI. Mr. N. Ganapathy, learned Counsel for the petitioner, draws inspiration and support for this proposition from the decision of the Supreme Court in Ramana v. I.A. Authority of India : (1979)IILLJ217SC .

3. Mr. P. Chidambaram, learned Counsel for the second respondent, would advance a preliminary objection with regard to the maintainability against the first respondent of the writ petition on the ground that what is complained of by the petitioner is violation of Article 14 of the Constitution of India and the first respondent cannot come within the ambit of 'State' under Article 12 of the Constitution of India. Learned Counsel was at pains to demonstrate this aspect by placing reliance on the pronouncements of the Supreme Court, where the tests have been laid down to find out and determine as to when a Corporation can be said to be an instrumentality or agency of the Government. We find that though the principles stand elucidated from the pronouncements relied on by the learned Counsel, yet, there is a lack of disclosure of the relevant materials to enable us to adjudicate this question and push out the petitioner even at the threshold of the writ jurisdiction. Furthermore, since we are inclined to sustain the other grounds put forth by Mr. N.C. Raghavachari, learned Counsel for the first respondent and Mr. P. Chidambaram, learned Counsel for the second respondent, we do not feel compelled to probe into this matter, calling for further factual details.

4. The first substantial ground of attack put forth by the learned Counsel is that by its own conduct, the petitioner as has disentitled itself from invoking the highly prerogative jurisdiction of this Court under Article 226 of the Constitution of India and getting reliefs from its hands. In Our view, this is a tenable ground on facts, and it requires countenance and acceptance. The petitioner has not pleaded that it was not aware of the fact that the second respondent was not in the. 'approved list of TFAI' and it came to know about it only subsequently. From the inception, the petitioner did have this knowledge. Yet, there was no protest by the petitioner that the second respondent could not be allowed to participate in the tenders, As narrated above, the first set of tenders was made on 1-8-1983; and the third set of tenders was made on 23-8-1983. The very averments in the affidavit filed in support of the writ petition project the anxiety experienced by the petitioner to have its tender accepted by the first respondent. If, in fact, the petitioner had a grievance that the second respondent was wholly incompetent to participate in the tenders and it must be sent out of the field on the ground that it had not satisfied the norms prescribed, in all fairness the petitioners must have protested at the initial stage and this, the petitioner consciously omitted to do so. Now the tender of the second respondent has been accepted; the resultant agreement has been executed; and the work has been entrusted and it is going on.

5. This Court will issue a writ under Article 226 of the Constitution of India only in the interests of justice and equity, and not merely for enforcing the technicalities of law. There cannot be any doubt that the conduct of the petitioner is a relevant consideration for the exercise of the discretion under Article 226 of the Constitution of India. The petitioner will be certainly disentitled to obtain any relief from this Court on account of this conduct. If a party participates in proceedings or affairs without either questioning the jurisdiction of the tribunal or the competency of the participants or competitors and agitates for his rights without a demur with regard to the competency of the participants or the other competitors, the cannot be allowed to question this aspect as a last resort by approaching this Court in its extraordinary jurisdiction. It is nothing short of an abuse of process of this Court.

6. In Moon Mills v. Industrial Court, Bombay (1968)1 S.C.J. 364 : A.I.R. 1967 S.C. 1450, it was observed that a writ of certiorari is legally a matter of sound discretion and will not be granted if there is such negligence or omission on the part of the applicant to assert his right as taken in conjunction with the lapse of time and other circumstances, causes prejudice to the adverse party. The Supreme Court took note of the principle stated by Sir Barnes Peacock in Lindsay Petroleum Company v. Prosper Armstrong Hurd (1874)5 P.C. 221, which runs as follows:

Now the doctrine of laches in Courts of Equity is not an arbitrary or a technical doctrine. Where it would be practically unjust to give a remedy either because the party has, by his conduct, done that which might fairly be regarded as equivalent to a waiver of it, or where by his conduct and neglect he has, though, perhaps not waiving that remedy, yet put the other party in a situation in which it would not be reasonable to place him if the remedy were afterwards to be asserted, in either of these cases, lapse of time and delay are most material. But in every case, if an argument against relief, which otherwise would be just, is founded upon mere delay, that delay of course not amounting to a bar by any statute of limitations the validity of that defence must be tried upon principles substantially equitable. Two circumstances, always important in such cases, are, the length of the delay and the nature of the acts done during the interval, which might affect either party and cause a balance of justice or injustice in taking the one course or the other, so far as relates to the remedy.

The above principle stands reiterated in the pronouncement of the Supreme Court in M.S.R.T. Corporation v. B.R.M. Service : [1969]1SCR808 .

7. The rule is the issue of a writ, order or direction under Article 226 must be guided by the principles of equity. Hence, the principles of equitable estoppel by acquiescence and want of good faith would stand in the way of the petitioner. We cannot recapitulate this principle in a better language than that of Cotton, L.J., in Russell's case (1883)25 Ch. D. 559, when he said:

The doctrine as to a personally lying by as to create an equity against . him arises, if either he does something from which it can be reasonably inferred that he induced the other persons to think he would raise no objection to what they were doing; or if he knows facts, which are unknown to the other persons acting in violation of the right which those facts give, and does not inform them about it, but lies by and lets them run into a trap.

The conduct of the petitioner in the present case comes within the mischief of the above principles and if so applied, it will definitely dissuade us from granting the petitioner, and disentitle it from getting the relief asked for by it. The petitioner kept quiet without raising its voice on the plea of the second respondent being disqualified to be a competitor at the appropriate time. If the petitioner had raised its voice of protest, most likely, the irregularity, if any, could have been rectified or there would have been a relaxation of the condition and setting right of matters by appropriate process if the other requisites for the execution of the work stood satisfied.

8. There are two other grounds which the learned Counsel for the respondents advanced to get out of the ratio of the Supreme Court in Ramana v. I.A. Authority of India : (1979)IILLJ217SC . One is, according to the learned Counsel, the stipulation that the tenderer must be in the approved list of TFAI cannot be equated to any objective standard or norm and secondly, it could be departed from and departure is justifiable. In the above decision, the qualification laid down was objective. In that case the notice required that only a person running a registered second class hotel or restaurant and having at least five years' experience as such should be eligible to submit a tender. This was a condition of eligibility and hence, the Supreme Court held that it was difficult to see how this condition could be said to be satisfied by any person who did not have five years' experience of running a second class hotel or restaurant, and the test of eligibility laid down was an objective test and not a subjective one. In the present case, the stipulation referred to above is neither patent nor latent as to what is the standard that should be satisfied and that is required for the purpose of executing the work concerned, by one being in the approved list of TFAI. What should be the qualification, a person should satisfy to get into this approved list and how far those qualifications could be of objective value in deciding about the entrustment of the work to a particular person, are all left in the vacuum. Mr. N. Ganapathy, learned Counsel for the petitioner, has not placed before us any acceptable material to show as to what are the norms and standards required by the Trade Fair Authority of India for including any person in its approved list, so that it can be stated that there was an objective standard for making a person listed in the approved list and hence, when the first respondent laid down that stipulation, it was done only with a view to adhere to this objective standard. In the absence of such features being disclosed, we find force in the submission of learned Counsel for respondents 1 and 2 when they stated that the stipulation that a tenderer must be in the approved list of TFAI must be deemed to be a formality not amounting to prescription of an objective standard and any departure from that formality to suit the exigencies and to entrust the work to a contractor who fulfils the other expectations of the first respondent with regard to the execution of the work per excellence cannot be taken exception to. Hence, if there had been a departure, the departure is a justifiable one. It is not from the objective standard or norm. Further more, the first respondent accepted the tender made by the second respondent and hence it must be deemed to have waived it and such a waiver cannot, be said to have been a breach of any objective standard or norm. The very letter dated 22-7-1983, calling for tenders indicates that the desire was to improve the image of the first respondent during the Fair, taking note of the fact that last year, the Tamil Nadu Pavilion bagged the Silver Medal for its excellence. The first respondent was apparently satisfied with the model submitted by the second respondent and the Chairman of the first respondent has sworn to an affidavit stating that the model submitted by the second respondent depicted the cultural heritage and novel features of architecture, industrial advancement of the State of Tamil Nadu and that induced all concerned to select that model. Hence, we have to uphold that in the present case the stipulation referred to above would not amount to laying down any objective standard or norm and departure was permissible as well as justifiable. Learned Counsel for respondents 1 and 2 would also submit that the petition itself is not in the approved list of TFAI and hence, it would not lie in the mouth of the petitioner to voice forth a grievance that the second respondent is not in the approved list of TFAI. This is being stoutly denied by Mr. N. Ganapathy, learned Counsel for the petitioner. The materials placed before us are inadequate and in any event, in view of the fact that we have sustained the other substantial grounds advanced by learned Counsel for respondents 1 and 2, there is no need to advert to this aspect. The sustenance by us of the substantial grounds put forth by learned Counsel for respondents 1 and 2 has militated against the case and the claim of the petitioner and this obliges us to dismiss the writ petition. Accordingly, this writ petition is dismissed. There will, however, be no order as to costs.


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