IN THE HIGH COURT AT CALCUTTA Constitutional Writ Jurisdiction ORIGINAL SIDE W.P.No.205 of 2017 Shirin Foods Limited & Anr.
Versus Kolkata Municipal Corporation & ORS.BEFORE The Hon’ble Justice HARISH TANDON Mr.Anjan Bhattacharya, Adv.….for the petitioners Mr.Alok Ghosh, Adv.……for the K.M.C.Judgment On : 11.05.2017 HARISH TANDON, J : The Kolkata Municipal Corporation floated E-Tender inviting an application for operation and maintenance of the newly established modern abattoir for slaughter of the animal.
Clause 1.3 (e) of the notice inviting E-tender mentioned that the abattoir complex will run in two shifts and the fiRs.shift will be dedicated to the authorised licensee of the Corporation to slaughter 400 animals upon payment of a slaughter charges fixed by the Corporation and meant for local consumption whereas the second shift will be operated by the bidders for private business/value addition or export of meat products.
The successful bidder shall be handed over the abattoir complex upon execution of agreement for a period of 10 years on license / rental basis.
The petitioner feels grieved by clause 1.3 (e) of the NIT being arbitrary, irrational and discriminatory and offends Article 14 of the Constitution of India.
Principally, the NIT is challenged in the instant writ petition on the above ground.
The undisputed facts are that the Corporation established the modern abattoir for slaughter of the animals having a maximum capacity of 1200 slaughters per day.
Since the Corporation finds difficulty in operating and maintaining and/or managing the said modern abattoir, it floated E-tender inviting application from various bidders to operate and maintain the same on a lease / rental basis and an agreement in this regard shall be executed in favour of the successful bidder.
Previously, the application of the petitioner company made to the Kolkata Municipal Corporation (KMC) was considered and was allowed permitting 200 slaughters of buffaloes per day in the said modern abattoir.
The said licence was issued for the year 2012-13 stipulating that the slaughtering will commence only after the new abattoir start functioning and/or operating.
The petitioner-company applied for renewal of the license for the year 2013-14 but the same was kept in abeyance which compelled the petitioner to move before the Court by filing W.P.27729 (w) of 2014.
The said modern abattoir became operational on and from 1st September, 2014 and the application filed by the petitioner company for renewal was disposed of by the K.M.C on 5th December, 2014 in terms of the order passed in the said writ petition.
The order reveals that the said license is granted only for domestic purposes which was challenged by the petitioner company in W.P.4091 (w) of 2015 on various grounds including that the Corporation has no authority to restrict the right to carry on trade or business.
The said writ petition was disposed of 6th October, 2016 holding that the KMC authority had no authority or power to restrict the manner in which the petitioner may deal with the buffalo meat, after slaughtering the buffalo in the said abattoir.
The power to export the end product is vested with the Agricultural and Processed Food Products Export Development Authority (APEDA) Act.
It was ultimately held that if the KMC have issued the license to the petitioner company, it is reasonably expected that it would issue the similar license for the future, if proper application is made provided the petitioner is found otherwise eligible.
The application of the petitioner company for issuance of the license or permission for the year 2016-17 was taken up by the Chief Municipal Health Officer, KMC and the permission was granted for slaughtering 15 buffaloes in a day in the said modern abattoir set up by the KMC.
The said order was further challenged in W.P.136 of 2017 which was disposed of on 13th April, 2017 with a categorical finding that the said impugned order does not suffer from any illegality and/or infirmity at least on a day when it is passed.
It was observed that once the Co-ordinate Bench in an earlier writ petition did not interfere with the agreement entered into between the KMC and the other company who obtained license and permission from APEDA for export of the buffalo meat and the said agreement is still in force, any observation or interference thereupon may tantamount to upsetting the findings recorded therein.
It was further observed that after expiration of the period of the said agreement, it is open to the petitioner company to apply afresh and the corporation was correspondingly directed to take a decision in a pragmatic way while restricting the number of slaughters of the buffalo while granting permission or the license to the applicant.
Since the agreement entered into with the other company expired the corporation floated the E-tender for operation and maintenance of the modern abattoir earmarking the number of slaughters of the buffaloes meat for export and domestic purposes.
The learned Advocate appearing for the petitioner submits that clause 1.3 (e) of the E-tender is directly in conflict with the observations recorded in W.P.4091 (w) of 2015 where it has been categorically held that the corporation has no authority to grant license or permission to slaughter buffalo either for export or domestic purposes.
It is further submitted that the APEDA is the only authority for granting permission to export the buffalo meat which does not in any way be construed to confer any power upon the corporation to categorize the slaughters meant for export or domestic purposes.
It is ardently submitted that clause 1.3(e) is arbitrary, irrational and discriminatory and is liable to be struck down.
It is succinctly submitted that restricting the number of slaughters in a particular shift for export purposes is to recognize a monopolistic position of a particular trader and is violative of Article 14 of the Constitution.
On the other hand, the Corporation says that the APEDA who is an authority to grant license to export the meat and meat products, have issued license in favour of some persons and fixation of the numbers of slaughters per day for export purposes is on the basis of such license.
It is further submitted that the modern abattoir has been established with a grant provided by the APEDA and, therefore, the license granted by the said authority indicating the number of slaughters per day is to be provided.
In other words, it is sought to be contended that the remaining capacity of the modern abattoir has to be distributed amongst the various persons and therefore, the aforesaid clause cannot be said to be irrational, illegal and violative of Article 14 of the Constitution.
Indubitably, the KMC constituted under the KMC Act, 1980 is to ensure better Municipal governance in the city of Kolkata and have statutory obligation to build and maintain a hygienic slaughter house.
It is thus a statutory obligation and responsibility of the Corporation to maintain and set up slaughter houses under Section 426 of the Act which runs thus: “ S.”
426. Provision of municipal markets and slaughter-houses.(1) The Municipal Commissioner, when authorised by the Mayor-inCouncil in this behalf, may provide and maintain municipal markets, slaughter-houses or stockyards in such number as he thinks fit together with stalls, shops, sheds, pens and other buildings and conveniences for the use of persons carrying on trade or business in, or frequenting, such markets or slaughter-houses.
(2) Any municipal slaughter-house or municipal stockyard may be situated within or, with the sanction of the State-Government, outside.
(3) A municipal market or a slaughter-house or a stockyard shall be under the control of the Municipal Commissioner.
(4) Subject to the orders of the Mayor-in-Council, the Municipal Commissioner may, after giving general notice, close any municipal market or slaughter-house or stockyard or any portion thereof on the date specified in the notice; and the premises occupied for any municipal market, slaughter-house or stockyard or any portion thereof so called may be disposed of as the property of the Corporation.” It is trite to say that the contracts by the Corporation must be normally granted through public auction/tender inviting eligible persons to participate therein and the same should be advertised in any medium of circulation indicating the requisites in order to ensure the transparency in the public procurement.
The action of the Corporation shall not only be fair but to provide the equal treatment to all tenderers in order to eliminate the irregularities, interference and corrupt practices by the authorities concerned.
This is what is the basic requirement under Article 14 of the Constitution.
There must be an element of fairness in the action which should be legitimate and should be above-board, safeguarding any kind of aversion or affection far to speak of discrimination.
There may be an exception to such rule necessitating departure provided the same is justified by compulsion which should be real and rational and not suggestive of discrimination.
The State or its instrumentality has a freedom to take a policy decision and fix the terms and conditions of the contract provided it does not offend Article 14 of the Constitution of India or the other rights guaranteed under the Constitution.
I am not oblivion of the proposition of law that ordinarily, the Court should not interfere or review the administrative action and does not sit as a Court of appeal provided the action of the authority is fair, rational and reasonable.
The restriction imposed for judicial review is well defined and if the action is impinged on arbitrariness , discrimination, malafides or violative of any fundamental rights guaranteed under the constitution, the High Court is justified in interfering at the NIT stage.
Normally, the terms of the NIT are not open to judicial review or scrutiny and cannot be whittled down.
In case of Jagdish Mandal –versus State of Orissa & ORS.reported in 2007 (14) SCC517 the Apex Court held: “22.
Judicial review of administrative action is intended to prevent arbitrariness, irrationality, unreasonableness, bias and mala fides.
Its purpose is to check whether choice or decision is made “lawfully” and not to check whether choice or decision is “sound”.
When the power of judicial review is invoked in matters relating to tenders or award of contracts, certain special features should be borne in mind.
A contract is a commercial transaction.
Evaluating tenders and awarding contracts are essentially commercial functions.
Principles of equity and natural justice stay at a distance.
If the decision relating to award of contract is bona fide and is in public interest, courts will not, in exercise of power of judicial review, interfere even if a procedural aberration or error in assessment or prejudice to a tenderer, is made out.
The power of judicial review will not be permitted to be invoked to protect private interest at the cost of public interest, or to decide contractual disputes.
The tenderer or contractor with a grievance can always seek damages in a civil court.
Attempts by unsuccessful tenderers with imaginary grievances, wounded pride and business rivalry, to make mountains out of molehills of some technical/procedural violation or some prejudice to self, and persuade courts to interfere by exercising power of judicial review, should be resisted.
Such interferences, either interim or final, may hold up public works for yeaRs.or delay relief and succour to thousands and millions and may increase the project cost manifold.
Therefore, a court before interfering in tender or contractual matters in exercise of power of judicial review, should pose to itself the following questions: (i) Whether the process adopted or decision made by the authority is mala fide or intended to favour someone; or Whether the process adopted or decision made is so arbitrary and irrational that the court can say: “the decision is such that no responsible authority acting reasonably and in accordance with relevant law could have reached”; (ii) Whether public interest is affected.
If the answers are in the negative, there should be no interference under Article 226.
Cases involving blacklisting or imposition of penal consequences on a tenderer/contractor or distribution of State largesse (allotment of sites/shops, grant of licences, dealerships and franchises) stand on a different footing as they may require a higher degree of fairness in action.” What emerges from the above noted decision that the basic requirement under Article 14 is fairness in action by the State or the local bodies and the non-arbitrariness in a sense and substance is the heartbeat of fair play.
There must be some latitude to be given to the state or the local bodies in formulating the conditions in a tender document unless the action is found to be malicious and misused of its statutory powers and affects the public interest.
Let me consider whether the E-tender floated by the KMC can be impinged on any of the grounds enumerated in the above mentioned decision.
There is no quarrel to the fact that the modern abattoir set up by the KMC has a maximum capacity of 1200 slaughters per day.
According to the corporation, since they cannot operate and maintain the modern abattoir involving Large Human Resources and the Finance, a policy decision has been taken to award the contract for such purposes through an open tender process.
There is no difficulty which this Court can see on such policy decision of the Corporation but the question still lies and begging an answer whether the Corporation can divide the maximum capacity of slaughtering for export and domestic purposes.
It was fairly conceded by the Corporation in W.P.4091 (w) 2015 that the Corporation has no authority to grant license or permission to export the meat and meat products.
The export permission or license can only be granted by APEDA constituted under Agricultural and Process Food Products Export Devolpment Authority Act, 1985.
Section 12 of the APEDA Act obligated every person, exporting any one or more of the scheduled products, to apply before the authority to the registrar as an exporter of the scheduled product or products.
The fiRs.schedule appended thereto includes meat and meat products and, therefore, it is imperative on the part of a person intending to export such scheduled products to apply before the said authority in the manner prescribed in the APEDA Act.
My endeavor has failed to find out within the four corners of the APEDA Act that it has any control or superintendence over the slaughter houses established by the Corporation under the relevant act.
Equally this Court does not find either under Section 426 of the KMC Act nor in any provision therein which empowers the Municipal Authorities to earmark the number of slaughters for export and domestic purposes.
Neither the APEDA Act nor the KMC Act contains any provisions dividing the capacity of the slaughter house for export and domestic purposes.
If the Corporation has no authority as held in an earlier writ petition to direct how the end product from the said slaughter would be used, logically, it cannot divide the shift on the basis of an export and domestic consumption.
Giving a junk lot of the maximum capacity to the Company who have obtained the permission from APEDA to export the end products and restricting least number of slaughters for domestic consumption does not appear to be logical for the reason that the KMC has no authority to grant license either to export the end products or to use the same for domestic purposes.
There is no rationality in the aforesaid clause as one section is permitted to utilize the major capacity whereas the others have to squeeze themselves within the remaining capacity.
The said clause is discriminatory and this Court does not find any reasonableness in to it.
This Court does not find that the NIT containing such clause does not require any intervention.
The Clause 1.3(e) of the NIT is declared as violative of Article 14 of the Constitution and hereby quashed and set aside.
The Corporation is permitted to float E-tender afresh deleting clause 1.3(e) within the reasonable time.
The writ petition is thus disposed of.
However, there shall be no order as to costs.
(Harish Tandon, J)