I.A. Ansari, J.
1. When a lis is brought or a proceeding is instituted in a Court of law, desirable it is that the Court, unless the law indicates otherwise, decides the maintainability of such a lis/proceeding. Howsoever, appealing may be the case of the party bringing the matter before the Court, the Court shall, keeping its mind completely disabused from the impression that it might have formed on the merit of the case, decide the question of maintainability. If the Court finds that the proceeding is not maintainable, the proceeding must terminate without carrying out any exercise to determine the merit or otherwise of the respective cases of the parties concerned and/or ' the question as to what reliefs the parties are entitled to. This rule is, however, subject to certain exceptions, one of such exceptions being that if the proceeding cannot progress on account of omission to implead the necessary party, the Court shall give an opportunity to the person, who approaches the Court, to implead the necessary party and if, even after being afforded with such an opportunity, the person, who approached the Court, does not implead the party concerned, the proceeding must end in dismissal. Such is the scenario, which this writ appeal depicts.
2. What is the law regarding immunity from judicial process in India? Is the immunity, in India, given to foreign sovereign, diplomats, etc. including international organizations, associations or bodies involving foreign sovereign unrestricted and unqualified? Is it, in any way, different from what the law, in this regard, in England is, though we have largely followed the Anglo-Saxon principles of law? Is it essential for being impleaded in a proceeding under Article 226 of the Constitution of India that the person sought to be impleaded as a party is a person or authority or State within the meaning of Article 226? Can a writ application be maintained, wherein it seeks, in effect, relief against a person, who is not a State, authority or person within the meaning of Article 226 or against a person, who is immune to the judicial process in India? Does Article 12 impose any limitation upon, or circumscribes the scope of, even the powers of the High Court under Article 226? Is the International Development Association, which is an organ of the World Bank, amenable to writ jurisdiction under Article 226? These are the vital issues, which the present appeal has raised.
3. Challenge, in this writ appeal, is to the findings of the learned single Judge reached in the judgment and order, dated 27-10-2003, passed in WP (C) No. 5620/ 2003 (reported in 2003 (3) Gauhati LT 555), that the World Bank is a necessary party and since the writ petitioner has insisted on not making the World Bank a party to the writ petition, the writ petition cannot proceed and must fail.
4. Shorn off the long and circuitous pleadings and vast mass of materials available, on record, before this Court, what surfaces as the material facts leading to this appeal may be summarized as follows :
(i) The present dispute relates to the award of contract for supply of 449 tractors to the Agriculture Department, Government of Assam, to be procured by the Government on fund being made available to it, on credit, by the International Development Association (hereinafter referred to as 'the IDA'), popularly known as the 'World Bank', under a tripartite agreement, commonly known as Development Credit and Project Agreement, the parties to the agreement being the Government of India, Government of Assam and the IDA, the project having been conceived for the benefit of a group of small and marginal farmers of the State of Assam to whom there tractors were to be distributed through Field Management Committees with farmers' share therein being to the extent of 50% of the cost of the tractors. The Agriculture Department, Govt. of Assam, through the Assam Rural Infrastructure and Agricultural Services Project (hereinafter referred to as 'the ARIASP') initiated an International Competitive Bidding (in short 'ICB') for procurement of 898 numbers of Pneumatic Wheeled Agricultural tractors with accessories by publishing, on 12-2-2003, a Notice Inviting Tender (hereinafter referred to as 'the NIT') issued by the Chief Engineer, Agriculture Department, Government of Assam. By a subsequent corrigendum, the NIT was amended by bifurcating the entire bid into two parts for 449 sets of tractors each, instead of 898 sets earlier announced, fixing the bid security at Rs. 2.25 million of each schedule as the IDA agreed, for the time being, to finance the proposed procurement of 449 tractors only. The date of opening of the sealed tender, which was initially fixed as 26-3-2003, was subsequently extended till 23-4-2003. As many as 14 bidders participated in the tender process including the respondent No. 4, namely, M/s. Mahendra & Mahendra Ltd. (hereinafter referred to as 'M&M;') and the petitioner-appellant, namely, M/s. Tractor and Farm Equipment Ltd. (hereinafter called 'TAFE'). The respondent No. 4 (M/s. M & M) was found to be the lowest tenderer followed by the petitioner-appellant (TAFE) as the next lowest. TAFE offered the model named MF 1035 DI. while the model offered by M & M was B 275 DI-TU. On the very next day of the opening of the bid, TAFE wrote a letter, dated 24-4-2003, to the State respondents stating to the effect, inter alia, that the offer of M/s. M&M; suffered from some material deviations, the material deviations being, broadly speaking, three, namely, (1) that the deposit of Bid Security by M/s. M & M was inadequate and improper inasmuch as no separate Bid Security had been submitted by M/s. M & M in respect of Schedule 2 of the tender, (2) the test report from the respondent No. 5, namely, Central Farm Machinery Training and Testing Institute, Budni, (hereinafter referred to as 'CFMTTI') submitted by M/s. M & M was in respect of model B 275 DI-High Torque, whereas the model quoted and offered by M/s. M & M was B 275 DI-TU, which did not appear to be a tested or approved model and (3) while Clause 2.90 (a) of the Technical Specification (Section VII) of BD provides that overload capacity at rated RPM should not be less than 10%, the test report, in question, showed that the model offered by M/s. M & M had an overload capacity of only 9.4%, which was much below the required capacity. A Bid Evaluation Committee (hereinafter referred to as 'the First Committee') was constituted by the State Government by issuing a notification, dated 10-4-2003, to study and evaluate all the bids, both technically as well as commercially and to recommend suitable bidder for placement of order. As TAFE, vide their letter, dated 24-4-2003, aforementioned had pointed out that in their bid, M/s. M & M had quoted model B 275 DI TU and enclosed Test Report from CFMTTI, Budni, in respect of model B 275 DI 'High Torque', the Chief Engineer, Agriculture, Assam, sought for a clarification from CFMTTI vide a fax message, dated 15-5-2003, as to whether the test report in respect of model B 275 DI 'High Torque' was same as B275 DI TU. The Director, CFMTTI, vide his letter, dt. 19-5-2003, respondent by stating that model B 275 DI (High Torque) had been tested by CFMTTI, but they were not aware at what stage the word 'High Torque' had been replaced by 'TU' and that 'for all official purposes, the said Test Report represented a model name as mentioned in the Test Report only.' By another letter, dated 19-5-2003, the Chief Engineer, Agriculture, further requested the CFMTTI to let the Government know as to what procedure was carried out by a Tractor . had not applied for CMVR certificate under the new name with suffix 'TU'. This letter also stated that in case any change in the name of the model is proposed for an existing model, the manufacturer has to submit a request along with technical specifications of the existing tractor for existing model name as well as the technical specifications of proposed model name in a comparative form and if there is no change in the specifications of the tractor, which is already tested and the new name proposed, then, the case is referred to the administrative ministry, which is the final authority to allow the change of name. Thereafter, during the evaluation process of the bids, M/s. M & M, vide a letter, dated 27-5-2003, informed the State-respondents that the Test Report, had several references to 'TU' in the Test Report and that the product that they would supply is 275 DI 'High Torque' belonging to 'TU' series, the photograph on the cover page of the test report has the term 'TU' visibly marked, that all the technical specifications supplied in the literature refer to 'B 275 DI TU/High Torque'', that the technical specifications are the same as in the Test Report, in question, the model offered by M/s. M & M would conform to the technical specifications of the Test Report, the model would be 275 'High Torque' and that if there were any doubts, then, the model offered can be tested, for compliance with the Test Report, at the cost of M/s. M & M. In short, thus, by their letter aforementioned, M/s. M & M maintained that the technical specifications of B 275 DI 'High Torque' and B 275 DI TU' were the same and in respect of the same tractor and that in the specifications section under the heading tractor, while the model stated was High Torque, the 'serial number of the first prototype of this series' was stated as 'TU 1001'. Thereafter, in response to yet another fax message, dated 30-5-2003, sent to the Director, CFMTTI, by the Chief Engineer, Agriculture, Assam, CFMTTI, the Director, responded by a letter, dated 30-5-2003, sent by fax, stating, inter alia, that the Test Report, in question, covered serial No. TU 7436 IV and the serial number of the first prototype of the series was TU 1001' indicating thereby that the prototype tested by them and covered by the test report, in question, actually belonged to 'TU 1001' series. In the meeting of the First Committee, the letter, dated 27-5-2003, aforementioned of M/s. M & M and also further clarifications given by CFMTTI in their letter, dated 30-5-2003. aforementioned were not considered and, on a finding arrived at by this Committee that the model of the tractor offered by M/s. M & M had no valid test report, the same was held to be technically deficient and, therefore, terming the bid of the respondent No. 4 as non-responsive, the Committee recommended TAFE for awarding of the contract. The State Government, then, by a notification, dated 5-7-2003, constituted another Committee (hereinafter referred to as the 'Second Committee') to re-examine the Bid Evaluation Report submitted by the First Committee. Thereafter, a fax message was sent, on 7-7-2003, by the Agriculture Production Commissioner, Assam, to the Joint Secretary, Government of India, Ministry of Agriculture, requesting the latter to approve the visit of the Director, CFNTTI, in the meeting of the Second Committee to be held, on 14-7-2003, regarding evaluation of the bid for procurement of tractors on the ground that the advice of the Director, CFMTTI, was necessary. The Second Committee met on 14-7-2003, wherein the Director, CFMTTI, gave, in writing, to the effect, inter alia, that on the basis of the materials available from the record of the Institute and the comparison sheets attached to the application, dated 26-3-1999, for change of model name given by M/s. M & M from 275 DI 'High Torque' to 275 Dl 'TU', it transpires that though the said change of model was not effected, yet, so far as the technical specifications were concerned, there was no change in the specifications of 275 DI 'TU' and 275 DI 'High Torque', the difference being only in the model name. The Second Committee, then, submitted a report, dated 14-7-2003, stating to the effect that the entire issue of M/s, M & M having offered a different model from the one that had been tested was based on the earlier letters given by CFMTTI indicating lack of link between the two models, in question, but in view of the new materials, which had surfaced and also the opinion of the Director of the Institute, a link had been established between the two models and the test report, in question, the specifications of both the models being exactly the same. The Committee, therefore, expressed the view that the offering of the model name as 275 DI 'TU' could not be considered a material deviation in terms of ITB Clause 24 of the bidding documents nor did it change the substance of the bid inasmuch as this difference did not violate Clause 1.1, of the technical specifications of the bidding documents, which required a test report from CFMTTI for the domestic manufacturers and that M/s. M & M had committed a minor irregularity in omitting to quote the official name by which the model had been tested by CFMTTI and that the difference in the nomenclature of the model of the tractor was a minor irregularity. The Second Committee accordingly recommended that the Bid Evaluation report may be corrected making thereby the tender of the respondent No. 4 substantially responsive and the respondent No. 4 being, otherwise, the lowest tenderer, the Respondent No. 4 be awarded the contract. By a letter, dated 16-7-2003, addressed to the World Bank, the appellant-writ petitioner requested the World Bank to the effect that the Bank should take note of the fact that the two models were not the same as there was no test report in respect of the offered model of M/s. M & M, yet, the Director, CFMTTI, contrary to the contents of his earlier letters, had given a clarification, in writing, that both the models were one and the same. The appellant-writ petitioner addressed another letter, dated 19-7-2003, to the World Bank graphically describing the events, which took place with regard to the whole selection process including what the First Committee had found, how the Second Committee had proceeded and about the change in the views of the Director, CFMTTI, as well as the fact that the Second Committee had agreed with the opinion of the Director thereby reversing the recommendations of the First Committee. The World Bank, vide its letter, dated 22-7-2003, asked for parawise comments of the State respondents on both the letters received by them from the appellant-writ petitioner, namely, letters, dated 16-7-2003 and 19-7-2003, aforementioned.
(ii) When the matter stood so poised and before the State respondents offered their parawise comments to the World Bank's letter, dated 22-7-2003, aforementioned, the appellant-writ petitioner came, on 24-7-2003, to this Court, with the help of a writ petition, being WP (C) 5620/2003, seeking, inter alia, issuance of writ/writs setting aside and quashing the constitution of the Second Committee and the recommendations, if any, made by them and commanding the respondent-authorities to cancel/ forbear from giving effect to the recommendations of the Second Committee and to act in accordance with the recommendations of the First Committee. This writ petition, however, gave no indication at all that the appellant-writ petitioner had already approached the World Bank, their grievances, however, being to the effect, inter alia, that the bid of the respondent No. 4 (M/s. M & M) suffered from the said three irregularities, (which we have already indicated hereinabove) and, yet, for no valid reasons, the recommendations of the First Committee were rejected by the State-respondents, a Second Committee had been constituted, which consisted of comparatively junior officers and was less representative, the Committee held its meeting on 14-7-2003, the deviations, which the tender of the respondent No. 4 suffered from, were material deviations and were not relaxable, the Second Committee had been constituted on extraneous considerations with a view to bestowing undue favour on the respondent No. 4 and that the Second Committee was liable to be declared illegal and its recommendations were liable to be set aside and quashed. No interim order was, however, passed by the learned single Judge, who came in seisin of the writ petition.
(iii) The State-respondents resisted the reliefs sought for by the appellant-writ petitioner by tiling their affidavit, on 30-7-2003, their case being, in brief, thus. When the First Committee held its meeting on 30-5-2003, the aforesaid letter, dated 27-5-2003, of M/s. M & M was not formally placed before the Committee. Thus, without the benefit of the letter, dated 27-5-2003, of M/s. M & M, the Committee had opined that the model offered by M/s. M & M was not acceptable. However, since a substantial price difference appeared involved between the lowest and the next bids, both the bidders being reputed companies, and since there would have been considerable loss to the public exchequer and the contribution of poor farmers would have also increased substantially if the next higher bid were to be accepted, it was felt that the bid evaluation report be re-examined. Contrary to what has been mentioned by the petitioner, the Second Committee was constituted by more senior officers, with the object of safeguarding public money and public interest, there being no ulterior, collateral or extraneous motive involved in the matter. In fact, the entire evaluation process is already over. The basic issue, which really had to be looked at by the Second Committee was the issue as to whether the non-consideration of the bid offered by M/s. M & M was on valid grounds and since the entire issue hinged on the two letters written by the CFMTTI, Budni, it was felt that it would be better to have the Director of the Institute present before the Committee to give his views and also to examine all the documents, which had been presented by M/s. M & M in support of its bid. The Director of the Institute was, accordingly, called, on 14-7-2003, to give his views on the issue after perusal of all the documents. The Committee also perused the letter, dated 12-7-2003, aforementioned of M/s. TAFE along with a copy of the GDI Guidelines issued vide letter No. 7-37/98-MY (I & P) part III dated 16-4-2001. The Director, CEMTTI, however, stated that the GO! guidelines referred/to in the letter of writ petitioner would not be relevant, for, the tractor was tested in 1999 and the GOI guidelines would be applicable only for tractors tested after April, 2001. The Committee also perused the letter, dated 12th July, 2003 (received on 14-7-2003) of M/s. M & M in which they had referred to the letter, which they had submitted to CFMTTI as far back as on 26-3-1999, much before they submitted their bid, in which they had requested the CFMTTI that the name of their model should be changed from B 275DI (High Torque) to B 275 DI TU. The Director, CEMTTI, stated that on further scrutiny of the records in his office after getting the invitation for the meeting, he had seen in their records, the letter, dated 26th March, 1999, or M/s. M & M and he confirmed that such an application had, indeed, been made to the CEMTTI prior to the release of the test report of Model No. B 275 DI (High Torque) and that at that time, the change should have been made as per the request of the M/s. M & M, but the same was not done. Along with this letter, dated 26th March, 1999, M/s. M & M had attached a comparative statement showing the technical specifications of both the tractors, which differed only in their model names. The Director confirmed that there was no technical difference between the two models. The Director of the Institute accordingly submitted his opinion, in writing, and the Committee, upon considering all the materials on record as welt as the information, which had been received since after the meeting of the First Committee, and in view of the new materials and the opinion of the Director, CFMTTI, showing that there was a definite link between the test report of B 275 DI (High Torque) and that of B 275 DI TU and in view also of the fact that the technical specifications of the two were exactly the same, the Committee opined that the offering of the model name as 275 DI TU would not be considered a material deviation in terms of ITB Clause 24 of the Bidding Document nor would it change the substance of the bid, i.e. it did not violate Clause 1.1 a of the technical specifications of the biding documents and the Committee was of the considered view that M/s. M & M had committed a minor irregularity in not quoting the official name by which the model had been tested by CFMTTI, but this irregularity could be waived as per Clause ITB 24.3 and, hence, the Committee recommended that the same may be waived as this does not change the relative ranking of the bidder, whose price is the lowest. The Govt. of Assam accordingly formed an opinion that the bid from M/s. M & M Ltd. should not be rejected on the ground of the aforesaid minor irregularity in the nomenclature of the model of the tractor offered. In this view of the matter, the Government was of the opinion that the model offered may be correctly read as 'B275 DI (High torque)' for the purpose of this bid, As far as the issue of back-up torque raised by the petitioner, this aspect of the matter was not gone into by the Bid Evaluation Committee for bona fide reason inasmuch as according to technical specifications, the requirement, as per Clause 2.90 (a) of the Bidding Document, is that 'Overloading capacity at rated RPM should not be less than 10%'. In the opinion of the Department, the requirement cannot strictly be equated with 'Back-up Torque'. Contrary to what the petitioner agitates, overloading capacity and back-up torque are two different technical parameters and while Overloading Capacity is determined from horsepower of the engine, the Back-up Torque is derived from the Torque. Further, even if the State Government were to accept the contention that the two were the same, the fact remains that as per Clause 24.3 of ITB, this would be deemed as minor non-conformity to the specifications of the bid and, hence, could be waived. As per the technical specifications para 2.6, the tractor should be 'Piston type/gear hydraulic pump with a lifting capacity of 1000 kg. minimum horizontally.' As per the report from CFMTTI in respect of the model offered by M/s. TAFE, the lifting capacity is 883 kg. Similarly, in the tractors offered by other bidders also minor non-conformity had been observed with regard to turning axle radii (M/s. International Tractors), Specific fuel consumption (Changzhao Machinery & Equipments Imp & Exp Co.), etc. However, those bids have also not been declared as non-responsive for minor technical deviations. Thus, the issue of backup torque is not an issue, which can be defined as a material deviation. The Bid Evaluation Report has not yet been finalized by the Government, but the same has been sent to the World Bank for obtaining no objection certificate from the Bank and the same is still being scrutinized by the Bank. The objections that ,the petitioners have raised in their writ petition have also been raised by them with the World Bank and the World Bank procurement experts are still examining the issue, particularly, in the light of the objections raised. The act of the petitioner in filing the writ petition is premature and is liable to be dismissed.
(iv) The respondent No. 4 also contested the writ petition, their case being what has already been indicated hereinabove, the respondent No. 4 having, however, raised a preliminary objection as regards the maintainability of the writ petition on the ground that the writ petition was pre-matured and the World Bank, being a lending institution and approving authority of the recommendations for award of the contract, was a necessary party, but the said Bank had not been arrayed as a party-respondent in the writ petition.
(v) While the writ petition was pending, responding to the World Bank's letter, dated 22-7-2003, aforesaid asking for parawise comments, the State respondents, vide their letter, dated 2-8-2003, offered their comments, in the matter, by stating to the effect inter alia, that the difference between the model offered by M/s. M & M and TAKE for 449 tractors and accessories worked out to the tune of Rs. 74,86,596/-, which, in turn, translates to Rs. 16,673/- per tractor, half of the cost would have to be borne by the farmers and the Government was of the view that it would be in the public interest to award the contract to the lowest bidder if saving of such a huge amount could be made without compromising the specifications and quality. It was also stated in this letter that by their letter, dated 27-5-2003, M/s. M & M had clarified that the test report, in question, had several references to 'TU', that the product that they would supply, namely, 275 DI 'High Torque' belonged to 'TU' series and that all technical specifications in respect of 275 DI 'High Torque' were the same as in respect of 275 DI 'TU' and that the photographs of the tractor on the cover page of the test report referred to 'TU'. However, in the First Committee meeting, the letter, dated 27-5-2003, aforementioned of the Respondent No. 4 was not formally placed and, therefore, the Committee could not consider what had been pointed out in the said letter, dated 27-5-2003, and accordingly, the Committee opined that the model offered by M/s. M & M was not acceptable. It was further mentioned by the State respondents in their letter, dated 2-8-2003, aforesaid that since there was a substantial price difference between the lowest and the next lowest bidders and that both the bidders were reputed firms and, further, that a substantial amount of price difference was to be borne by poor farmers, it was felt that the initial bid evaluation report be re-examined by more senior officers of the Government and as the basic issue was whether non-consideration of the bid offered by M/s. M & M was on valid grounds and since the entire issue hinged on the two letters written by the CFMTTI, it was decided that the presence of the Director of the Institute be availed for obtaining his views in the matter, the Government of India was accordingly requested to make the Director of the Institute available and the Director gave it, in writing, to the Second Committee that the technical specifications of both the tractors were one and the same and the Second Committee, therefore, recommended that as the error committed by M/s. M & M was a minor irregularity, the Government should waive the same, the Government accordingly formed the opinion that the bid from M/s. M & M should not be rejected on the ground of minor irregularity in the nomenclature of the model of the tractor offered and that the Government was of the further view that model offered by M/s. M & M be read as DI 275 'High Torque' for the purpose of the bid. On the basis of the comments so offered by the State respondents in their letter, dated 2-8-2003, aforementioned, the State respondents requested the World Bank to issue their no objection to the Bid Evaluation Report. Thereafter, the World Bank, vide its letter, dated 19-8-2003, addressed to the State-respondents, intimated that upon considering the letters, dated 25-7-2003, as well as 2-8-2003, aforementioned, the Bank had no objection to the recommendations for award of the contract to the 'lowest evaluated responsive bidder, M/s. M & M'. Based on the Bank's furnishing of such no objection to the award of the contract in favour of M/s. M & M, the letter of acceptance was issued by the State respondents on 28-8-2003, the letter of intent was opened on 4-9-2003 and the contract agreement was signed, on 10-9-2003, between the parties concerned.
(vi) When it was brought on the record that the bid already stood approved by the World Bank and that the same had been acted upon by the State-respondents, the appellant writ petitioner amended their writ petition seeking, inter alia, relief of issuance of writ(s) setting aside and quashing the letter of acceptance, dated 28-8-2003, the contract agreement, dated 4-9-2003, and the letter of intent, dated 10-9-2003. The learned single Judge accordingly heard the writ petition on its maintainability as well as on merit and, thereafter, by the impugned judgment and order, dismissed the writ petition on the ground that the World Bank was a necessary party, but the appellant-writ petitioner having refused to implead the World Bank as a party-respondent in the writ petition, the same was not maintainable and since the writ petition itself was not maintainable, the Court would not enter into the question of determination of the merit of the award of the contract in favour of M/s. M & M. Aggrieved by the conclusions so reached and the dismissal of the writ petition, the petitioner has, now, moved this Court with the present appeal.
5. We have perused the materials on record. We have heard Mr. A.K. Ganguli and Mr. K.N. Choudhury, learned Senior counsel appearing on behalf of the appellant. We have also heard Mr. H. Roy, learned counsel for the respondent Nos. 1, 2 and 3, Mr. C. Choudhury, learned counsel for the respondent No. 5, and Mr. N. Dutta, learned Senior counsel appearing on behalf of the respondent No. 4.
6. Before proceeding any further, we wish to make it clear that we have heard the learned counsel for the parties on the issue of maintainability of the writ petition and also on merit. We, however, make it clear that we will, first, deal with the issue of maintainability of the writ petition and depending upon the conclusion that we may reach on this issue, we will answer whether the issues, raised on merit, deserve discussion.
7. Presenting the case on behalf of the petitioner-appellant, on the issue of nonjoinder of necessary party, Mr. Ganguli has submitted that the learned single Judge has incorrectly concluded that the World Bank is privy to the contract in question, though it is clear, points out Mr. Gunguli, from para 2 of Appendix 4 to procurement guidelines that it is the Borrower i.e. the State respondents, who would be legally responsible for the procurement, it is the Borrower, who invites, receives, evaluates bids and awards the contract and that the contract is between the Borrower and the supplier or the contractor and that the Bank is not privy to the contract.
8. The contents of the para 2 aforementioned, emphasizes Mr. Ganguli, leaves no room for doubt that since the World Bank is not a party to the contract, it cannot be treated to be privy to the contract and that in such a situation, it will be wrong to say that the World Bank was a necessary party. In the instant case, submits Mr. Ganguli, the whole process of inviting of the tender, evaluation of the bids, selection of the suppliers and the placing of order was done by the Government from the beginning to the end and the World Bank had no determinative role to play in this regard. Hence, the World Bank, according to Mr. Ganguli, ought not to have been held as a necessary party.
9. Drawing attention of this Court to the decision in Udit Narain Singh Malpaharia v. Additional Member, Board of Revenue, Bihar, AIR 1963 SC 786, Mr. Ganguli submits that a necessary party is one, without whom, no order can be effectively passed. In the case at hand, contends Mr. Ganguli, without making the World Bank a party and without their presence, the writ petition could have been safely disposed of giving the relief(s), which the writ petitioner had sought for, and, hence, in such a situation, reiterates Mr. Ganguli, the World Bank could not have been legally held to be a necessary party.
10. It is also submitted by Mr. Ganguli that the role of the World Bank, in the present case, is that of a mere funding body, whereas the relationship of the State Government and the supplier is that of buyer and seller Elaborating this aspect of his submission. Mr. Ganguli contends that in the present case, the World Bank merely provides fund and it is up to the State Government to decide, in accordance with the procedural guidelines and the bidding documents, the person in whose favour the order for supply of tractors shall be placed. In the placing of such order, the World Bank, according to Mr. Ganguli, does not play any material role inasmuch as the decision to place the order for supply in favour of any particular bidder has to be and has been, in this case, that of the State Government. In a situation, such as this, submits Mr. Ganguli, it was incorrect to hold that the World Bank was a necessary party. Mr. Ganguli further submits that the writ petitioner has not sought for any relief against the World Bank or from the World Bank and in such a case, the World Bank ought not to have been treated as a necessary party.
11. The contention that the World Bank is not a necessary party is sought to be strengthened by Mr. Ganguli by pointing out that the World Bank is an organ of the United Nations Organization, popularly called 'the UNO', the World Bank is a body of some developing countries to aid and develop the economy of underdeveloped and developing countries and since this is an organization, which has not been set up by the State Government or the Central Government, the same cannot be regarded as a person or an authority and/or an instrumentality of the State within the meaning of Article 226 and the World Bank is, therefore, not amenable to the writ jurisdiction of the High Court under Article 226 of the Constitution of India. Since the World Bank is, according to Mr. Ganguli, not amenable to the writ jurisdiction of the High Court, no relief against the World Bank can be granted by this Court and it is for this reason that the World Bank has not been made a party to the writ petition. For being treated as a necessary party, submits Mr. Ganguli, not only that the relief shall be available against such a party concerned, but that the party concerned shall also be amenable to the writ jurisdiction of the Court. Since the World Bank, reiterates Mr. Ganguli, is not a person or an authority amenable to the writ jurisdiction under Article 226, the World Bank is not a necessary party and was rightly not impleaded as a party by the writ petitioner.
12. Initiating submissions on behalf of the respondent No. 4, Mr. Dutta has pointed out that the scope of the Division Bench in a Writ Appeal is somewhat circumscribed inasmuch as the appellate Court, while dealing with such an appeal, does not act as a superior Court and if two views are plausible on the basis of materials on record and if the learned single Judge has adopted, in the impugned judgment, one of such views, the appellate Court will be justified in not substituting its own views in place of the views of the learned single Judge. With this self-imposed restraint, this writ appeal, submits Mr. Dutta, needs to be considered. Reference, in this regard, is made by Mr. Dutta to the State of Tripura v. Ramendra Nath Dey, reported in (2001) 1 Gauhati LR 54.
13. Mr. N. Dutta has submitted that the concept of necessary party has undergone a sea change over a period of time and from its narrow confines, the concept of necessary party, today, stands visibly broadened. Mr. Dutta has sought to derive strength for the submission so made by him by referring to Deputy Commissioner, Hardoi in charge Court of wards, Bhavawan Estate v. Rama Krishna Narain, AIR 1953 SC 521 and pointed out that in this case, two tests have been laid down for deciding the question as to who can be regarded as necessary party, the tests being (1) that there must be a right to some relief against such a party in respect of the matter involved in the proceedings, in question, and (2) that it should not be possible to pass an effective decree in the absence of such a party.
14. Making this Court traverse through the case of Udit Narain Singh Malpaharia (AIR 1963 SC 786) (supra), Mr. Dutta has pointed out that in this case, the Apex Court has clearly laid down that a person, whose rights are directly affected by an order, which is sought to be obtained, is a necessary party and an order against such a person cannot be passed behind his back. The law so laid down, points out Mr. Dutta, was further widened in Prabodh Verma v. State of U. P., AIR 1985 SC 167, wherein the Apex Court has made it clear, contends Mr. Dutta, that the persons, who would be vitally affected by the judgment of the Court in a writ petition, are necessary parties and if their number is very large, the High Court must, at least, make some of them as parties in a representative capacity. What is, therefore, required to be borne in mind by a writ Court, while considering the question of necessary parry, contends Mr. Dutta, is that the persons, who would be vitally affected by the judgment that may be rendered in the writ petition, are necessary parties and must be heard before the judgment is pronounced. The interest of such a person, according to Mr. Dutta, may be temporal pr even spiritual and such spiritual interest will include, points out Mr. Dutta, even the reputation of the person concerned. In the present case, submits Mr. Dutta, if the contract agreement, in question, is quashed without making the World Bank a party, it will, in the context of the facts on record, leave an indelible stigma on the reputation of the World Bank inasmuch as the contract has been awarded by the respondents on receiving necessary 'no objection' from the World Bank. In such a situation, it will be, contends Mr. Dutta, tantamount to condemning the World Bank behind their back and without giving them any opportunity of having a say in the matter.
15. Taking us through the procurement guidelines and also the bidding documents, Mr. Dutta submits that these documents provide for a review by the World Bank of all the steps, which may be taken by the Borrower (i.e., the State Government) from the very moment, when the terms and conditions of the NIT are finalized and published, until the time, when the Borrower decides to place the order for supply of tractors and also between the period, when the order for supply is placed by the Borrower, and the payment for making supplies is decided to be made. In other words, there is, according to Mr. Dutta, a prior review by the World Bank of all the steps taken and materials considered by the Borrower for taking the decision to place the order for supply of tractors with any particular bidder. In short, there is, submits Mr. Dutta; a pre-review by the World Bank before the award of the contract and also during the post award period, when the supplies begin. This apart, the contents of the various clauses of the procurement guidelines read with the contents of the bidding documents clearly show, points out Mr. Dutta, that the approval of the World Bank is necessary for the purpose of awarding of the contract and in such a situation, it cannot be said, submits Mr. Dutta, that the World Bank is not a party to the decision making process, which is under challenge in the present writ petition and, in the face of these facts, the learned single Judge, submits Mr. Dutta, committed no error in holding that the World Bank was a necessary party.
16. It is also of immense importance to note, submits Mr. Dutta, that after the institution of the writ petition, since there was no interim direction restraining the respondents from finalizing the contract and the World Bank was not a party at all to the writ petition, the World Bank approved the State Government's decision to award the contract in favour of the respondent No. 4 and based on this approval, the letter of intent (LOI) was opened on 4-9-2003 and the contract agreement was signed, on 10-9-2003, by the parties concerned and in pursuance of this contract agreement, substantial part of the supply has already been made by the respondent No. 4 and the remaining supplies would be completed by the respondent No. 4 well before 31st December, 2003, which is the dead-line set forth for completion of the project by the parties concerned including the World Bank. Hence, in such a case, interference by the Court may cause, submits Mr. Dutta, serious prejudice to the parties concerned.
17. Though the writ petitioner was, contends Mrs. Dutta, fully aware of all the developments, which have been taking place in the matter of the award of the contract, the petitioner chose not to make the World
Bank as a party to the writ petition and,
hence, in the absence of the World Bank,
approval granted by the World Bank to the
decision of the Borrower to award the contract in favour of the respondent No. 4 can
not be set aside and quashed and the resultant effect of such a situation will be,
according to Mr. Dutta, that notwithstanding setting aside and quashing of the order
awarding the contract, the approval granted
by the World Bank would still remain on the
record and in the face of such approval, no
effective decision in the writ petition can be
said to have been rendered by this Writ
Court, Viewed from this angle top, points
out Mr. Dutta, the World Bank is a necessary party.
18. Controverting, further, the submissions made on behalf of the appellant, Mr. Dutta has pointed out that if a body of the UNO works in India and if it acts, during the course of any of its projects, against the interest of a citizen of the State and infringes the fundamental rights of such a citizen, the Writ Court, which is the protector and defender of the Constitution, can very well take cognizance of such a matter under Article 226 and the fact that such an organ is a part of the UNO can, in an appropriate case, will be of little or no significance inasmuch as powers of the High Court under Article 226 are all pervasive. The scope of Article 226, according to Mr. Dutta, stands widened immensely since coming into force of the Constitution and immunity of any organisation of the UNO working in India cannot wholly obliterate the powers of the High Court under Article 226. Though it is true, submits Mr. Dutta, that an authority within the meaning of Article 226 has to be, generally an instrumentality of the State, yet the fact remains that even a private person may not remain, in an appropriate case, beyond the scope of Article 226. If a private person performs a public duty in a State, the High Court will be, according to Mr. Dutta, competent to issue writ to such a person if the facts and circumstance of a given case so justify.
19. In the case at hand, points out Mr. Dutta, the IDA, which is a part of the World Bank, does not even enjoy complete immunity from judicial process, in India, inasmuch as the immunities granted, in India, to the IDA are codified in a statute, namely, International Development Association (Status Immunities and Privileges) Act, 1960. Section 5 of the this Act, contends Mr. Dutta, confers some status, immunities and privileges on the IDA, its officers and employees and beyond the immunities so given, the IDA does not enjoy any other immunity. In such a case, submits Mr. Dutta, the IDA, which has been referred to by the parties and also in the impugned judgment as the World Bank, cannot be said to be beyond the scope of Article 226, when any of its acts infringes fundamental or legal rights of an Indian citizen.
20. Mr. Dutta has also pointed out that even in the case of Asia Foundation & Construction Ltd. v. Trafalgar House Construction (I) reported in (1997) 1 SCC 738, the IDA was a party both in the Orissa High Court and also in the Supreme Court, though they did not enter appearance. Thus, it is clear, submits Mr. Dutta, that the IDA is not such a body, which is not amenable to the writ jurisdiction under Article 226 and in view of the fact that in the facts and circumstance of the case at hand, the IDA is a necessary party, there was no legal impediment on the part of the writ petitioner to make the IDA a party respondent to the writ petition. However, candidly submits Mr. Dutta, there was no order, in writing passed by the learned single Judge asking the petitioner to make the IDA a party to the writ petition, but the fact remains that the writ petitioner having not done so, despite opportunities received not only before the learned Single Judge, but also before this Division Bench, the learned single Judge was, within the ambit of law, in dismissing the writ petition and this Court may also therefore, uphold the impugned judgment and order and if this Court is, now, of the view that such an opportunity needs to be granted, appropriate orders may be passed in this regard.
21. Controverting the submissions made, on behalf of the petitioner appellant, Mr. H. Roy has taken us extensively through various clauses; of the procurement guidelines and bidding documents, particularly, Clauses 1.1, 1.2, 1.11, 1.13, 1.15, 2.13, 2.20, 2.45, 2.46, 2.53 and 2.56 to show that the World Bank remains and has, in fact, remained completely involved in the entire decision making process from the very stage of the commencement of the tender process until the time the contract was finally entered into by the State respondents with the respondent No. 4 indicating thereby that the Bank is a necessary party. For bringing this contention home, Mr. Roy has also referred us to, the loan agreement, in question, between the World Bank and the State respondents and various correspondence, which the respondents had from the beginning till award of the contract with the World Bank. Mr. Roy has brought to our attention the fact that the project, in question, has to come, according to the agreement between the respondents and the World Bank, by 31-12-2003.
22. Mr. Roy has addressed us extensively on the merit of the writ petition by endeavouring to show that at no stage of the decision making process, the approach of the State respondents was irrational, unreasonable and/or contrary to the public interest.
23. Reacting to the submissions, made on behalf of the respondents, as a whole. Mr. K.N. Choudhury has pointed out that the the affidavit filed by the State respondents does not take the plea that the World Bank is a necessary party. Seeking to derive strength from this fact, Mr. Choudhary has submitted that so far as the respondent No. 4 is concerned, it is a mere beneficiary of the contract and the objection raised by such a respondent that the World Bank is a necessary party is not at all material in the absence of such a plea having been raised by the State respondents too. Insisting on the appellants plea that the World Bank is not a necessary party, Mr. Choudhary submits that World Bank is not bound by any Government policy and is not subject to judicial process and it cannot, therefore, be treated as an authority under Article 12 or as an authority or a person within the meaning of Article 226 and, hence, in this view of the matter, the World Bank need not have, been arrayed as a party in the writ petition. To strengthen his submission, Mr. Choudhary also submits that there is nothing on the record to show that if the World Bank stops financing the project, the State Government cannot continue with the project and when such a possibility is not wholly excluded, the World Bank cannot be regarded as a necessary party, Mr. Choudhary has further submitted that International Development Association (Status, Privileges And Immunities) Act, 1960, gives certain immunities to the Bank and beyond these immunities, they may be answerable for any other charge/accusation in a Court, which may not be a High Court, for, the Court, in the said Act of 1960, according to Mr. Choudhary, does not include High Courts. For this purpose, Mr. Choudhary has drawn our attention to Article 366(14) of the Constitution of India, which defines High Court, and Section 3(25) of the General Clauses Act to show that the word 'Court' referred to in the said Act of 1960 means a municipal Court or the Court, which administers municipal law. In support of this submission that the World Bank is not an authority or a person even for the purpose of Article 226, Mr. Choudhary has referred to Pradeep Kumar Biswas v. Institute of Chemical Biology, reported in (2002) 5 SCC 111.
24. It is also submitted by Mr. Choudhary that the World Bank has no public duty and discharges no public function, they are not set up by the Centre or State Government nor are they answerable for their activities to any of the Governments and, hence, in such a situation, they may not be regarded as an authority or a person for the purpose of Article 226 and the learned single Judge committed serious error of law by applying principles laid down in Shri Andi Mukta Sadguru Shree Mukherjee Vandas Swami Suvarna Jaynti Mahotsav Smarak Trust v. V.R. Rudani, AIR 1989 SC 1607 to the case at hand for treating the World Bank as a necessary party.
25. Let us, now, determine the correctness or otherwise of the rival submissions made before us, on behalf of the parties, on the issue of non joinder of necessary parties and on the very maintainability of the writ petition.
26. While dealing with the present appeal, one has to bear in mind that a writ appeal is really not a statutory appeal preferred against the judgment and order of an inferior to the superior Court. The appeal inter se in a High Court from one Court to another is really an appeal from one coordinate Bench to another co- ordinate Bench and it is for this reason that a writ cannot be issued by one Bench of the High Court to another Bench of the High Court nor can even the Supreme Court issue writ to a High Court. Thus, unlike an appeal, in general, a writ appeal is an appeal on principle and that is why, unlike an appeal, in an ordinary sense, such as a criminal appeal, where the whole evidence on record is examined anew by the appellate Court, what is really examined, in a writ appeal, is the legality and validity of the Judgment and/ or order of the Single Judge and it can be set aside or should be set aside only when there is a patent error on the face of the record or the judgment is against the established or settled principle of law. If two views are possible and a view, which is reasonable and logical, has been adopted by a Single Judge, the other view, howsoever appealing such a view may be to the Division Bench, it is the view adopted by the single Judge, which should, normally, be allowed to prevail. Hence, the impugned judgment of the learned Single Judge cannot be completely ignored and this Court has to consider the judgment and order in its proper perspective and if this Bench, sitting as an appellate Bench, is of the view that the decision has been arrived at by the learned Single Judge without any material error of fact or law, then , the judgment, in question, should be allowed to prevail. The reference made, in this regard, by Mr. Dutta to the case of Ramendra Nath, Dey (2001 (1) Gauhati Lr 94) (supra) is not misplaced.
27. While considering this appeal, one has to also bear in mind that jurisprudence is really the science of law. The law regulates and brings to order the society so as to enable the mankind to live in peace, harmony and prosperity. The concept of law, is, thus, inter woven with the conditions of the society. When the society changes, the concept of law may also change . At times, even when the text of law, i.e. the words of statute remains unaltered, interpretation of the concept of the statute may change depending upon the change in the attitude and conditions of the society. For instance, there was a time, when, if any conflict was noticed between medical evidence and ocular evidence, it was the medical evidence, which used to prevail, because the words of doctors were almost sacrosanct, but as the days rolled by, like any other profession in our society, the values in the medical profession too started dwindling. The result was that the doctors lost the trust and confidence of the people at large so much so that even when a pathological examination is advised by a doctor today, the common man's reaction is that the pathological investigation has been advised with ulterior motive to make some material gain. Can we notice the effect of this dramatic change, in the attitude of the people towards, the doctors, on the concept of law The answer is not very far to seek. The consequence of this conceptual change of the society was bound to be reflected from the decisions of the Courts. With the passage of time, the Courts too started realizing that the doctors may be as good or as bad, as faithful or as unfaithful, as trustworthy or as untrustworthy, as any other individual in the society. The resultant effect was that the Courts started feeling uncomfortable in giving the sanctity and importance, which used to be given, in the past, to the evidence of the doctors and the time came, when the Apex Court of the country had to say that medical evidence cannot always be treated as touch stone for testing the veracity of the ocular evidence and that even when the medical evidence belies the eye witness's account of the occurrence, the Court can reject the medical evidence and found conviction of the accused on the testimony of the eye witness if the eye witness's evidence is found to be trustworthy and reliable.
28. While considering the case at hand, it is of paramount importance to note that there is a marked, though subtle, distinction between the concepts of necessary party in a civil suit and the concept of necessary party in a writ petition. This distinction has become a little more pronounced with the passage of time, for writ Courts under Article 226 have been required, as the time passed by to interfere on numerous occasions, when, during discharge of public duty, the State or an authority established by the State, its instrumentalities and even individuals, both natural as well as juristic persons, infringe fundamental or legal rights of a citizen or even of a foreigner, in an appropriate case.
29. It is Order I of the Code of Civil Procedure, which deals with parties, in general, as well as necessary parties. In a civil suit or proceeding, the Court considers the question of necessary party keeping in view the litigation before it and the litigants appearing before it or available on the record, whereas a writ Court takes a birds eye view of the whole matter and, in such a process , its vision embraces not only those, who are litigating before it, but also those, who are likely to be affected by the decision in the litigation. In a civil suit, so long as the question of granting of relief, sought for, can be decided in the presence of the parties appearing before the Court, the Civil Court will not consider anyone other than such a litigant as a necessary party, but a decision emanating from a writ Court reverberates, at times, far beyond the litigants and affects a large section of the people. Hence, the writ Court cannot keep itself confined merely to the litigants appearing before it or on the record nor will it keep itself confined only to the Us before it, but will also take into account the consequences or the effect, which the decision will have or is likely to have on the interest of others, who may not be wholly necessary for decision of the issue at hand, but whose interest would be vitally affected in consequence of the decision rendered in the writ petition. Viewed from this angle, the concept of necessary party in a purely civil suit and a writ petition cannot be one and the same. Far from this, the scope of necessary party in a writ petition will be much wider than in the civil suits.
30. While considering the case of Rama Krishna Narain, (AIR 1953 SC 521) (supra) and the law laid down therein, it is of utmost importance to note that this is a decision, which rests on a civil suit. The law laid down in Rama Krishna Narain (supra) is, undoubtedly, binding on all the Courts, in India, yet the fact remains that the law enumerated therein was in respect of civil suits. In Rama Krishna Narain (AIR 1953 SCC 521) (supra), the Apex Court hast observed thus, ......... 'The majority judgment was delivered by Pathak J. He enunciated two tests for
deciding whether certain person was a necessary party in a proceeding (1) that there
must be a right to some relief against such
a party in respect of the matter involved in
the proceedings, in question; and (2) that it
should not be possible to pass an effective
decree in the absence of such a party and
proceed to observe that the creditors of a
landlord who have claimed relief under the
Encumbered Estates Act are necessary par
ties to the object of the Act is to compel the
landlord to surrender his entire property for
the benefit of his creditors and to liquidate
the debts for all the creditors in accordance
with and to the extent permitted by the Act.
There can be no question that these are
the true tests for determining whether a
person is a necessary party to certain proceeding. ......'
31. In Rama Krishna Narain (AIR 1953 SC 521) (supra), two tests have really been laid down for determining the question as to who can be regarded as necessary party in a civil suit, the tests being (1) that there must be a right to some relief against such a party in respect of the matter involved in the proceedings, in question, and (2) that it should not be possible to pass an effective decree in the absence of such a party.
32. When the scope of necessary party was taken up for consideration in Udit Narain Singh Malpaharia, (AIR 1963 SC 786) (supra), the Apex Court was really dealing with the scope of necessary party in a writ petition under Article 226. In this case, the Apex Court observed,--
'7. To answer the question raised it would be convenient at the outset to ascertain who are necessary or proper parties in a proceeding. The law on the subject is well settled, it is enough if we state the principle. A necessary party is one without whom no order can be made effectively, a proper party is one in whose absence an effective order can be made but whose presence is necessary for a complete and final decision on the question involved in the proceeding.'
8. .........................................................
9. The next question is whether the parties whose rights are directly affected are the necessary parties to a writ petition to quash the order of a tribunal. As we have seen a tribunal or authority performs a judicial or quasi judicial act after hearing parties. Its order affects the right or rights of one or the other of the parties before it. In a writ of certiorari, the defeated party seeks for the quashing of the_ order issued by he tribunal, in favour of the successful party. How can the High Court vacate the said order without the successful party being before it : Without the presence of the successful party, the High Court cannot issue a substantial order affecting his right. Any order that may be issued behind the back of such a party can be ignored by the said party, with the result that the tribunals order would be quashed but the right vested in that party by the wrong order of the tribunal would continue to be effective. Such a party, therefore, is a necessary party and a petition filed for the issue of a writ of certiorari without making him a party or without impleading him subsequently, if allowed by the Court, would certainly be incompetent. A party whose interests are directly affected, is, therefore, a necessary party.'
(Emphasis is added)
33. The above observations clearly show that leaving the narrow confines of determining the question of necessary parties from the standpoint of giving of reliefs to the parties concerned in a civil litigation, as had been considered in Rama Krishna Narain, (AIR 1953 SC 521) (supra), the Apex Court considered even those persons as necessary parties, whose rights were to be directly affected by the order that would be passed in the writ petition. The apex Court made it clear that behind the back of such a party, no order shall be passed by a writ Court.
34. A new dimension was, thus, added to the concept of necessary party by laying down, in effect, in Udit Narain Singh Malpaharia (AIR 1963 SC 786) (supra) that while considering the question of necessary party in a Writ application, the principles of natural justice are required to be maintained. The High Court, fundamentally speaking, seeks to 'preserve', 'protect' and 'defend' the Constitution. The Constitution enjoins upon the High Court the duty to interfere whenever the fundamental or legal rights of a citizen are sought to be infringed. For the purpose of civil suit, it is enough for the civil Court to bring on record only those persons or parties, whose presence is necessary for effective disposal of the dispute or for granting of the decree as sought for. But the High Court, sitting as a writ Court, looks beyond the parties appearing before them and must ensure that not only the persons, who are essential for the purpose of the disposal of the case, but also those, who will be vitally affected by the order to be passed, are made parties so that nothing is decided behind their back.
35. When the question of necessary party was considered in Prabodh Verma (AIR 1985 SC 167) (supra), the Apex Court broadened the scope of the necessary party by further laying down as follows :--
'28.......................................................
A High Court ought not to decide a writ petition under Article 226 of the Constitution without the persons who would be vitally affected by its judgment being before it as respondents or at least by some of them being before it as respondents in a representative capacity if their number is too large, and, therefore, the Allahabad High Court ought not to have proceeded to hear and dispose of the Singhs writ petition without insisting upon the reserve pool teachers being made respondents to that writ petition, or at least some of them being made respondents in a representative capacity, and had the petitioners refused to do so, ought to have dismissed that petition for non joinder of necessary party.'
36. The observations of the Court in Udit Narain Singh Malpaharia (AIR 1963 SC 786) (supra), read with what has been observed and laid down in Prabodh Verma (AIR 1985 SC 167) (supra), it clearly follows that it would be against the principles of natural justice to make an adverse remark behind the back of the persons, who are to be directly affected by the decision, sought for, in the writ petition. In other words, if the decision of a writ Court is likely to adversely affect even the reputation of a person, such a person must be regarded as a necessary party. This, in turn, indicates that a writ Court, while considering the question of necessary party, the Court has to bear in mind the principles of natural justice and should be conscious of the fact that no decision be reached behind the back of the party, whose interest will be vitally affected by the decision that may be pronounced in the writ petition, though in the writ petition, no relief has been sought for against such persons and though they may not be necessary for deciding the question of relief. In short, in view of the fact that such persons are likely to be affected by the decision that may be taken, principles of natural justice demand that they be heard before the decision is taken and in such a context, such a party will be regarded as a necessary party for disposal of an application under Article 226.
37. We may also point out that in the context of the facts of a given case, a person may become a necessary party in a writ petition, though he may not be an authority or a person within the meaning of Article 226. Supposing an employee of an Association approaches the High Court for invoking its jurisdiction under Article 226 on the ground of arbitrary dismissal from service. If the Court comes to take the view that the Association, in question, is not an authority within the meaning of Article 12 and/or an authority or person within the meaning of Article 226, the consequence would be that the writ application would not be maintainable. Now, let us, look into this problem from a different angle. Assuming that the District Collector of the district, where the Association is located, settles a plot of land in favour of the Association. A person, who has been in occupation and use of the plot of the land, approaches High Court with an application under Article 226 for quashing of the order of settlement on the ground that he had been in occupation and use of the land for more than 50 years and had been repeatedly applying, in accordance with law to the authorities concerned, to settle the land in his favour, but arbitrarily and without considering his case at all, the land has been settled in favour of the Association, in question. Strictly speaking for the purpose of giving relief to such an applicant, making of the Association, in question, a party to the writ petition is not necessary, but in view of the fact that the interest of the Association, in question, can be directly and vitally affected by the order, the Association becomes a necessary party. At the same time, however, though the Association, in question, becomes a necessary party, it may not be an authority within the meaning of Article 12 and/or an authority or a person within the ambit of Article 226. The conclusion, therefore, which we safely reach is that for considering as to whether a person is or is not a necessary party in a writ application under Article 226, there can be no condition precedent that the person concerned must be an authority or person under Article 226. In other words, even if a person is not an authority or a person within the meaning of Article 226, yet in the given set of facts and circumstances, impleading of such a person may become necessary and such a person has to be, then regarded and treated as a necessary party. In such a case, it will be immaterial as to whether the writ petitioner has asked for any relief against such a party or from such a party or not.
38. Keeping in view the above mentioned broad principles governing the concept of necessary party in an application under Article 226, we, now, turn to the question as to whether the IDA ought to have been made a party in the present writ petition. While considering this aspect of the matter, it is appropriate to bear in mind that the question as to whether a person or a party is or is not a necessary party to a proceeding is not always a mere question of law and, in the case at hand, it is really a mixed question of facts and law. While considering this aspect of the matter, it is of paramount importance to note that while dealing with the question of arbitrariness or irrationality in allotment of contract, the writ Court is not concerned with the decision, rather, what it is concerned with is the decision making process. Thus, the question will be as to whether the IDA, was, in the context of the facts of the present case, an integral part of the decision making process, which culminated into awarding of the contract, in question, to the respondent No. 4.
39. In the backdrop, when we come to the facts of the case at hand, we find that the facts, which are essential for determination of the question as to whether the IDA is a necessary parry or not, in the present petition, are not really in dispute . Admittedly, the project, in question, is a result of an arrangement reached by way of a tripartite agreement entered into by the Govt. of India, the IDA and the State Government, The invitation for bid, dated 12-2-2003, mentions, clearly that bidding will be conducted through the International Competitive Bidding, procedures specified in the World Bank's Guidelines for procurement under IBRD loans and IDA credits and is opened to all bidders from eligible source countries as defined in the Guidelines. These facts, in turn, clearly indicate that procurement guidelines of the World Bank form part of the bidding documents. This position is not, of course, under challenge before us.
40. The bidding documents contain instructions to bidders and the very introductory portion of the instructions, while clarifying the source of funds, mentions thus : 'Payment by the Bank will be made only at the request of the Borrower and upon approval by the Bank in accordance with the terms and conditions of the Loan Agreement' The source of funds, so worded, made it clear to the bidders that though the payment would be made by the Bank only at the request of the borrower (i.e. the State Government), yet such payment would be made available by the Bank only upon receipt of approval by the Bank. In other words, the borrower as well as all concerned including the bidders were put to caution that no payment would be released by the Bank unless such payment was approved by the Bank itself. This shows that if the terms and conditions mentioned in the bidding documents or in the loan agreement or in the procurement guidelines were not followed by the borrower or by the bidder, the Bank, is not bound to make payment. With this background, when we proceed further, we find that while inviting eligible bidders, the instructions to bidder at Clause 2.1 also made it clear that this invitation for bid was open to all suppliers from eligible source countries as per IBRD Guidelines for procurement. Thus, the bidders cannot feign ignorance of the conditions under which they were to carry on the contract. This position was further clarified by Clause 5.2 under the heading 'The Bidding Documents', which reads, 'The bidder is expected to examine all instructions, forms, terms and specifications in the bidding documents. Failure to furnish all information required by the bidding documents or to submit a bid not substantially responsive to the bidding documents in every respect will be at the Bidders risk and may result in the rejection of its bid.'
41. With the above aspects of the bidding documents in view, when we turn to procurement guidelines, we find that Clause 1.1 of these guidelines, under the heading 'General Conditions', makes it clear that the purpose of these guidelines is to inform those, who carry out the projects, that these guidelines are applicable to procurement of goods and works for the projects as provided in the agreement meaning thereby that not only the loan agreement, which governs primary relationship between the borrower and the Bank, but even the guidelines aforementioned would be applied to the procurement of goods and works for the projects. None of the parties to the agreement can, therefore, escape from the rigours of the procurement guidelines.
42. The impression that the Banks role is not merely that of a provider of fund is clear from Clause 1.2 of the procurement guidelines under the heading 'general conditions', which reads as follows :--
'The responsibility for the implementation of the project and, therefore, for the award and administration of contracts under the project, rests with the Borrower. The Bank, for its part, is required by its Articles of Agreement to 'ensure that the proceeds of any loan are used only for the purposes for which the loan was granted, with due attention to considerations of economy and efficiency and without regard to political or other non economic influences' or considerations, and it has established detailed procedures for this purpose. While in practice the specific procurement rules and procedures to be allowed in the implementation of a project depend on the circumstances of the particular case, four considerations generally guide the Banks requirements.
(a) the need for economy and efficiency in the implementation of the project, including the procurement of the goods and works involved;
(b) the Banks interest, as a cooperative institution, in giving all eligible bidders from developed and developing countries 6, an opportunity to compete in providing goods and works financed by the Bank;
(c) the Banks interest, as a development institution, in encouraging the development of domestic contracting and manufacturing industries in the borrowing country; and
(d) the importance of transparency in the procurement process.'
(Emphasis is added)
43. A close scrutiny of the general conditions quoted hereinabove shows that the Bank would ensure that the loan is utilised for the purpose for which the loan has been granted. In other words, utilisation of the loan, contrary to the procurement guidelines, would not be permitted meaning thereby that the Bank will have a close watch on the entire procurement process and if the procurement of the tractors and supply thereof is not in accordance with the procurement guidelines, the Bank would not make the payment.
44. The applicability of the guidelines', as reflected from Clause 1.5 of the procurement guidelines, make it clear that for the goods and works financed, in whole or in part, by the Bank, the procedures outlined in the guidelines shall be applicable.
45. Clause 1.11 of the procurement guidelines gives the Bank the power to review procurement of contract and it reads thus : 'Bank Review : The Bank reviews the borrower's procurement procedures, documents, bid evaluations, award recommendations and contracts to ensure that the procurement process is carried out in accordance with the agreed procedures. These review procedures are described in appendix 1. The loan agreement shall specify the extent to which these review procedures shall apply in respect of the different categories of goods and works to be financed, in whole or in part, from the Bank loan.'
(Emphasis is supplied)
46. The power of review vested in the Bank under Clause 1.11 makes it clear that the Bank reviews the entire procurement procedure, documents, bid evaluation as well as award recommendations to ensure that the procurement process is carried out in accordance with the agreed procedures. The word 'award recommendation', occurring in Clause 1.11, will obviously mean that the borrower's (i.e. the State Government's) recommendation to award the contract in favour of any party is reviewed by the Bank. If these recommendations are not in accordance with the procurement guidelines, the Bank will not finance the project nor will it make payment therefor. This, in turn, clearly indicates that the very recommendations of the bid evaluations will be subject to scrutiny by the Bank and without its approval of the recommendations for awarding of the contract, the contract, if awarded, will not be financed by the Bank if the Bank finds that guidelines have not been followed. In other words, it will become mandatory for the borrower i.e. the State Government to obtain approval of the Bank before awarding the contract. No wonder, therefore, that the Bank's approval, as we shall see shortly, was obtained by the State respondents before awarding the contract to the respondent No. 4.
47. It is also important to note that Appendix 1 aforementioned to the procurement guidelines reads as follows :--
'Review By The Bank Of Procurement Decisions : The Bank shall review the procurement arrangements proposed by the Borrower, including contract packaging, applicable procedures, and the scheduling of the procurement process, for its conformity with these Guidelines and proposed implementation program and disbursement schedule. The Borrower shall promptly inform the Bank of any delay, or other changes in the scheduling of the procurement process, which could significantly affect the timely and successful process, which could significantly affect the timely and successful implementation of the project contracts, and agree with the Bank on corrective measures.'
48. Coupled with the above, the fact that the Bank undertakes a prior review of the matter in its entirety and before the contract is awarded is more than abundantly clear from the power given to the Bank, under Clause B of the Appendix 1 to the procurement guidelines, to hold a prior review. Sub-clause (c) of Clause B aforementioned reads as follows :--
'(c) After bids have been received and, evaluated, the Borrower shall, before a final decision on the award is made, furnish to the Bank, insufficient time for its review, a detailed report (prepared, if the Bank shall so request, by experts acceptable to the Bank), on the evaluation and comparison of the bids received, together with the recommendations for award and such other information as the Bank shall reasonably request. The Bank shall, if it determines that the intended award would be inconsistent with the Loan Agreement, promptly inform the Borrower and State the reasons for such determination'.
(Emphasis is added)
49. A careful reading of Sub-clause (c) clearly reveals that the awarding of contract in favour of any bidder is subject to prior review by the Bank. In other words, without clearance from the Bank, by way of prior review, award of contract, as indicated hereinabove, is not possible. In short, thus, approval of the Bank is a condition precedent for awarding of the contract to any bidder. This, in turn, demonstrates that the Bank is not a mere financier, but that it also is a party to the very awarding of the contract. Had the Bank not approved the contract in favour of respondent No. 4, no award of the contract by the State respondents in favour of the respondent No. 4 would have been possible.
50. The impression that the Bank keeps a close watch on the entire process is also evident from the procurement guidelines' Clause 1.13, which, under the heading 'Mis-procurement', reads, 'The Bank does not finance expenditures for goods and works, which have not been procured in accordance with the agreed procedures in the loan agreement and it is the policy of the Bank to cancel that portion of the loan allocated to the goods and works that have been misprocured. The Bank may, in addition, exercise other remedies under the loan agreement'. Thus, Clause 1.13 clearly reveals that if the procurement is not in accordance with the agreed policy, then, the Bank will not finance the expenditures. This impression is also strengthened from Clause 1.15, which makes it clear, under the heading 'Fraud and Corruption', that the Bank will not finance if the recommendation for awarding of the contract to a bidder is a result of corrupt or fraudulent practice.
51. It is really Clause 2.13 under the heading 'Validity Of Bids And Bid Security, which clinches the issue. Clause 2.13 reads, 'Bidders shall be required to submit bids valid for a period specified in the bidding documents, which shall be sufficient to enable the borrower to complete the comparison and evaluation of bids, review the recommendation of award with Bank (if required by the loan agreement) and obtain all the necessary approvals so that the contract can be awarded within that period'.
(Emphasis is supplied)
This Clause more than amply shows that the entire matter including recommendations of award or review thereof shall be placed for approval before the Bank and only upon receiving requisite approval from the Bank, the contract can be actually awarded by the State respondents. In the face of the contents of Clause 2.13, there can be no escape from the conclusion that no award of contract is possible without approval having been obtained by the State Government from the Bank.
(Emphasis is supplied)
52. The above impression gets reinforced from the fact that under Clause 2.53, the borrower shall prepare a detailed report on the evaluation and comparison of the bids setting forth the specific reasons on which the recommendation is based for the award of the contract. This clause shows that the request for recommending award of the contract in favour of a particular, party has to be sent to the Bank. The purpose of sending such evaluations for scrutiny of the Bank is obviously to enable the Bank to review the same and accord, if found-alright, necessary approval.
53. What emerges from the above discussion is that the Bank is associated with the entire process of procurement from the beginning to the end. The Bank examines evaluation of bids, the comparative statements of the bidders, borrower's reasons for making recommendations for awarding of the contract in favour of a particular bidder and, upon scrutiny, if the Bank approves the recommendation so made, then and then only it will be possible for the borrower (i.e. the State Government) to award the contract. Even after the contract is awarded, the Bank keeps examining and scrutinizing the whole process and for a variety of reasons, it may decide not to make payment.
54. Mr. Ganguly has laid great emphasis on Clause (2) of Appendix-4 of the guidelines, which, under the heading 'Responsibility For Procurement', reads, 'As emphasized in paragraph 1.2 of the Guidelines, the borrower is legally responsible for the procurement. It invites, receives and evaluates bids, and awards the contract. The contract is between the borrower and supplier or contractor. The Bank is not a party to the contract'. Relying upon the contents of Clause 2, Mr. Ganguly contends that the Bank is not privy to the contract.
55. What needs to be carefully noted, while considering the above aspect of the matter, is that the entire bidding documents and the procurement guidelines make it clear that the Bank is not only involved as a mere financier, but that it is an intricate and inseverable part of the entire procurement process from its very commencement till the end of the project. What Clause (2), which Mr. Ganguly relies upon, conveys really is that when the contract is finally awarded to a bidder, the contract will be between the borrower (i.e. State Government) and the bidder and that the Bank will not be privy to this contract. This does not mean that the Bank is not privy to the selection process, which is carried on for determining the validity of the bids and/or for determining the person to whom the contract has to be awarded. What Clause (2) really conveys is that so far as the contract entered into between the borrower and the supplier is concerned, the same is not binding on the Bank, but it does not mean, if we may hasten to add, that the Bank is not privy to the decision-making process, the ultimate selection and the award of contract.
56. What, thus, crystallizes from the above discussion is that the Bank's role in the ultimate award of the contract is not that of a mere provider of funds, but of a party, which is intricately and inseparably involved in the entire selection process as well as during the course of the completion of the project. In short, the bidding documents coupled with the procedural guidelines, amply convey that the Bank is privy to the selection of the person to whom the award is, eventually, awarded.
57. Having concluded that in the face of the terms and conditions embodied in the bidding documents of which the procedural guidelines formed a firm and integral part, the Bank, in question, was a party to the decision making process for awarding of the contract, we may also, now, look into the events leading to this appeal so as to be reassured that not only, according to the bidding requirements alone, but also, as a matter of fact, the World Bank was an integral part of the entire decision-making process commencing from the stage of the issuance of the NIT until the award of the contract in favour of the respondent No. 4.
58. While considering the above aspect of the matter, it is imperative to point out that all the three grievances with which TAFE has approached this Court, the same grievances, worded succinctly, were reduced in the form of letters, dated 16th and 19th July, 2003, aforementioned and sent to the World Bank by TAFE. In other words, the grievances of the appellant were, admittedly, conveyed, in the form of the said letters, to the World Bank, whereupon the World Bank sought for the comments of the official/State respondents and in response to the comments, so asked for, the State-respondents offered their para-wise comments by their letter, dated 2-8-2003. aforementioned.
59. The letter, dated 2-8-2003, aforementioned has been examined in the Court by Mr. K.N. Choudhury, learned Senior Counsel appearing on behalf of the appellant. From this letter, nothing has been pointed out, on behalf of the appellant, before this Court, to show that in the statements made in the official respondent's letter, dated 2-8-2003, any of the grievances of the petitioner had not been responded to by the official respondents. From a bare reading of the letter, dated 2-8-2003, aforementioned, it is more than abundantly clear that whatever the official respondents have, now, submitted before this Court were, indeed, submitted by them in the form of their comments in their letter aforementioned to the Bank. By this letter, it was clearly conveyed to the World Bank that the price difference between the offered model of respondent No. 4 and that of the appellant was to the tune of Rs. 74,86,596/- and if a saving of Rs. 16,673/- could be made on the purchase of a single tractor without compromising the technical specifications and the quality, it would be in the public interest to award the contract to the lowest bidder, which the respondent No. 4, admittedly, was if their bid had not been held as non-responsive.
60. Coupled with the above, the State respondents also offered their comments on the allegations made by the appellant in their letters aforementioned. In the face of the contents of the letter quoted hereinabove, there can be no room for doubt that the World Bank was, indeed, informed by the State Government as to why the Second Committee was constituted and why the offered model of the respondent No, 4 was accepted and, upon considering the allegations made by the appellant in their letters, dated 17 July, 2003 and 19 July. 2003, aforementioned vis-a-vis the comments offered by the official respondents, the World Bank vide their letter, dated 19-8-2003, conveyed their approval to the State Government's recommendations to accord the contract to the respondent No. 4 and in pursuance thereof, the contract agreement aforementioned was signed by the respondents.
61. Situated thus, there can be no escape from the conclusion that the IDA was in seisin of the whole gamut of the matter and upon consideration of the matter in its entirety, the IDA accorded its approval to the recommendations for awarding of the contract to the respondent No. 4. The IDA cannot, therefore, be said to be not a party to the decision making process for awarding of the contract to the respondent No. 4. Even if for a moment, one has to assume that the State Government misled the World Bank and/or the IDA, as is alleged by the appellant, the fact remains that such allegations cannot undo the conclusion that the IDA had remained, indeed, a party to the entire decision-making process, which culminated into the awarding of the! contract in favour of the respondent No. ,4 inasmuch as it was on the basis of the approval received from the IDA that the Letter of Indent was opened on 4-9-2003 and the contract agreement, dated 10-9-2003, aforementioned was finally executed between the State respondents and the respondent No. 4.
62. In the face of the facts pointed out above, one has no option, but to hold that the IDA was, indeed, a necessary party in the writ petition.
63. The above conclusion can be viewed from another angle too. If, for any reason, this Court takes the view that the awarding of the contract to the respondent No. 4 was arbitrary, irrational and/or illegal, as contended by the appellants, and this Court sets aside the contract agreement, the fact remains that the approval for awarding of the contract to the respondent No. 4 given by the IDA will still remain on record. Notwithstanding, thus, the fact that even if the contract agreement in the instant case is set aside and quashed, no effective order will, in consequence thereof, be passed without the approval of the IDA, for, the State respondents, as already indicated hereinabove, will not, without requisite approval of the IDA, be able to carry out the project inasmuch as it is not the case of any of the parties appearing before us that even if finance is not made available by the World Bank, the Project would be still on. Far from this, as pointed out, on behalf of the respondents and as transpires from the materials available on record, the entire project has been conceived and has become possible on account of the fact that the World Bank has agreed to substantially finance the project and this project would be brought to an end in accordance with the agreement, which the State respondents have with the World Bank, by 31-12-2003.
64. We may also pause here to point out that though it has been submitted, on behalf of the appellant-petitioner, that it is not the case of the State respondents that if the World Bank refuses to finance the project, in question, the State-respondents, on its own, would not complete the project, this submission appears to have been very casually made inasmuch as, we find, the State-respondents have categorically mentioned, in their affidavit, that the Government has been facing severe financial crunch and it would not be able to take up the project without the funds being made available by the World Bank.
65. It is apposite, at this stage, to recall the law settled by the Apex Court in Suresh Jindal v. R.C. DSP T.V. S.P.A., AIR 1991 SC 2092 wherein the Court, on finding that the picture, in question, though shot in India, was being exhibited in foreign countries, held as follows :--
'7. ...............Even if we give a direction as proposed, it might be difficult for this Court to ensure that the respondents carry out these directions. Even the appellant would not be in a position to ensure that such directions are complied with. It is well known that a Court will not issue directions over the compliance of which it has no control. In view of this we think that we should not issue such general directions as indicated above.'
(Emphasis is added)
66. In the case of Suresh v. Vasant, AIR 1972 SC 1680, the Apex Court has clarified that where the writ issued would be futile, the Court should restrain itself from issuing writ.
67. In the case at hand, if the IDA is not made a party, the approval aforementioned given by the IDA will remain unaltered and no meaningful purpose will be achieved even if the writ application is allowed. In a situation, such as this, the Court should not entertain the Writ application.
68. It is also of immense importance to note, at this stage, that notwithstanding the plea taken by the appellant that the IDA is not a necessary party, it is really the appellant, who had, first, approached the IDA by their letter, dated 17 July, 2003, aforementioned and, then, again by their letter, dated 19 July, 2003, aforementioned. Despite the fact that they had so approached the IDA already, they did not even make a whisper in their writ petition that they had already approached the IDA, with the same allegations, which they expressed before this Court. Withholding this material information from the Court, they approached the Court seeking, inter alia, interim reliefs against the State respondents restraining them from awarding the contract to respondent No. 4. The appellant was, it is transparent from the record, playing hide and seek with the Court. While they were agitating the matter before the IDA, on the one hand, they, on the other hand, approached this Court too, without giving slightest indication that the appellant had already conveyed their grievances to the IDA and by suppressing this material aspect of their case, the appellant sought for interim directions. The only inference, which is irresistible to draw from such modus operandi, is that the appellant was apprehensive that if they informed the Court that they had already approached the IDA with the same grievances, it was likely that the Court would not immediately grant interim directions, as had been sought for. The suppression of material facts by the appellant was, thus, not accidental, rather, it was deliberate. It is for this reason that at the time of hearing of the matter, not even an attempt has been made, on behalf of the appellant, to show as to why they withheld the information from the Court that they had already approached the IDA with the same grievances with which they approached this Court too.
69. Considered thus, we are firmly of the opinion that the IDA was a necessary party in the writ petition and also in this appeal, for, they were privy to the decision-making process and that in their absence, no effective order and/or meaningful relief could have been possible, we have already indicated hereinabove that for a person to be a necessary party in a writ petition, the person may or may not be a State or an authority or a person within the meaning of Article 226. Thus, without determining the question as to whether the IDA, which forms, admittedly, a part of the World Bank is a State or an authority or a person within the meaning of Article 226, one can, safely conclude, as we have done hereinabove, that the IDA was, indeed, a necessary party.
70. However, even if the IDA is impleaded as a party, the question would still remain if the Writ of this Court can? bind the IDA. This question, in turn, brings us, now, to the question as to whether the IDA is amenable to the writ jurisdiction under Article 226. While considering this aspect, it is necessary to bear in mind that though the learned Single Judge as well as the parties on record have loosely referred to the IDA as World Bank as if both are synonymous. We must point out that the IDA is merely a part of the world Bank and not the World Bank in itself.
71. On turning to the question as to whether the IDA is a person or authority within the meaning of Article 226, it is pertinent, however, to note that Mr. Dutta has submitted that since in Asia Foundation & Construction Ltd., 1977 (1) SCC 738 (supra), the IDA was a party, it can be safely treated to be a person or authority amenable to the writ jurisdiction of the High Court's under Article 226.
72. No doubt, it is true, as submitted by Mr. Dutta, that the IDA was a party in Asia Foundation and Construction Ltd. (supra) (hereinafter referred to as 'AFCON') before the Orissa High Court and also in the Supreme Court, yet the contention of Mr. Dutta that on account of the fact that since the IDA was a party in AFCON's case, the, IDA, as an Association, is amenable to the writ jurisdiction of the High Court under Article 226 is, to our mind, somewhat misplaced inasmuch as it is trite that a decision is an authority for what it decides and not what can be deduced from it.
73. In AFCON (supra), it was not agitated that the IDA was not a person or authority within the meaning of the Article 226. Thus, in AFCON's case, the Court was not called upon to decide whether the IDA, as an entity, was an authority or a person within the meaning of Article 226. This decision cannot; therefore, be treated as an authority on the question as to whether the IDA is or is not a person or an authority under Article 226.
74. To answer the question as to whether the IDA is amenable to the writ jurisdiction under Article 226, it is necessary to know as to what the IDA is.
75. The IDA is one of the five organisations of the World Bank, the other four being IBRD, IFC, MIGA and ICSID. When the International Bank for Reconstruction and Development (IBRD), better known as the World Bank, was established in 1944, its first task was to help Europe recover from the devastation of World War II. Once Europe was rebuilt, the Bank turned its attention to the developing countries. As the 1950s progressed, it became clear that the poorer developing countries could riot afford
to borrow needed capital for development on
the terms offered by the Bank. They required
easier terms.
76. With the United States taking necessary initiative, a group of member countries of the Bank decided to set up an institution that could lend to very poor developing nations on highly concessional terms. They called it the International Development Association (IDA). Its founders saw IDA as a way for the 'haves' of the world to help the 'have-nots'. But they also wanted the IDA to be imbued with the discipline of a bank. Whereas IBRD raises most of its funds from the World's financial markets, the IDA is funded largely by contributions from the Governments of richer member countries.
The USA is the largest donor. A country must be a member of IBRD before it can join the IDA. In all, 164 countries are members of the IDA. The IDA lends to the countries that have a per capita income, in the year 2002, of less than $875 and lack the financial ability to borrow from the IBRD. At present, 81 countries are eligible to borrow loan from the IDA.
77. The IDA's Articles of Agreement became effective in the year 1960 and India is a signatory to the International Agreement by which the IDA has been established. Article VIII of the Articles of Agreement of the IDA provides for granting to the Association, its officials and employees certain status, immunities and privileges in the territory of each member country. The Parliament, in India, has accordingly enacted International Development Association (Status, Immunities and Privileges) Act, 1960, to implement the international agreement for the establishment and operation of the IDA insofar as the same relates to the status, immunities and privileges of the Association and for matters connected therewith.
78. For a developing country like India, it is difficult to go ahead with high cost project unless the financial institutions like IDA grant loan or subsidy. When financial institution like IDA grants such loans, they always insist that any project for which loan has been sanctioned must be carried out in accordance with the specifications and within the scheduled time and the procedure for granting or settling of the contract must be duly adhered to. In the present case, the IDA exercises supervisory control in the matter of awarding of contract and the same cannot be finalised without its approval.
79. While coming to the above conclusion, we are also guided by the Apex Court's observations about the IDA made in AFCON, 1997 (1) SCC 738 (supra), which runs as follows :
'9. The Asian Development Bank came into existence under and Act called the Asian Development Act, 1966, in pursuance of an international agreement to which India was a signatory. This new financial institution was established for accelerating the economic development of Asia and the Far East. Under the Act the Bank and its officers have been granted certain immunities, exemption and privileges. It is well known that it is difficult for the country to go ahead with such high costs projects unless the financial institutions like the World Bank or the Asian Development Bank grant loan or subsidy, as the case may be. When such financial institutions grant such huge loans they always insist that any project for which loan has been sanctioned must be carried out in accordance with the specification and within the scheduled time and the procedure for granting the awards must be duly adhered to.'
80. Having, thus, settled as to what the IDA is, what role it, in general, plays in India, we, now, turn to the question if the IDA, as contended on behalf of the appellant, is immune from the judicial process of this country and if it is, in the facts and circumstances of the present case too, not amenable to the writ jurisdiction under Article 226?
81. While dealing with the above aspect of the matter, it is pertinent to note that immunity from judicial process for independent sovereign State rests on the principles of international law. Such immunity is granted on the ground that the exercise of jurisdiction of a Court over the sovereign independent State would be incompatible with the dignity and independence of the superior authority enjoyed by every sovereign State. This principle is not founded upon any technical rules of law, but upon broad considerations of public policy, international law and comity. Unlike English Courts, where immunity is primarily based on convention and is almost absolute in nature, such immunity is governed, in India, by the provisions of the law enacted by Parliament in terms of the provisions of the Constitution. It is Article 253, which forms, in India, the basis for grant of such immunity. According to this Article, Parliament has the power to make law for the whole or any part of India for implementing any treaty, agreement or convention with any other country or countries or any decision made at any international conference, association or other body. Except limited immunity, which the Constitution of India gives to its own heads of the State, no other immunity can be given to any one including independent sovereign State without an Act of the Parliament framed in terms of Article 253. No wonder, therefore, that for the purpose of giving immunity to various organizations of the UNO, the United Nations (Privileges and Immunities) Act, 1947, exists. This Act confers on the United Nations, its representatives and officers, certain privileges and immunities. Section 3 of this Act vests the Central Government with the powers to declare that the provisions relating to the privileges and immunities set out in the Schedule to the Act shall, subject to such modifications, if any, the Government may consider necessary or expedient to make, apply mutatis mutandis to the international organisation specified in the notification, its representatives and officers and, thereupon, the said provisions shall apply accordingly and, notwithstanding any thing to contrary contained in any other law, shall, in such application, have the force of law.
82. By virtue of the powers vested in the Central Government under Section 3 of the said Act of 1947, many of the associations of the United Nations have been granted immunities. These organizations include, inter alia. International Bank of Reconstruction and Development (i.e. IBRD), which is a part of the World Bank. The IDA is not such a notified organization under this Act. However, the IDA does enjoy some immunities under the International Development Association (Status, Immunities and Privileges) Act, 1960. Similarly, the United Nations (Security Council) Act, 1947, exists, in India, for giving, subject to the certain exceptions, force to the resolutions of the Security Council and to give effect thereto. Immunities enjoyed by various diplomats, etc., are also governed, in India, by appropriate legislations, such as, Diplomatic Immunities (Conferences with Common-Wealth Countries and Republic of Ireland) Act, 1961, Diplomatic Privileges Act, 1964, Diplomatic Relations (Vienna Convention) Act, 1972, etc.
83. In short, while in India, the immunity granted is limited and governed by enacted laws, such immunity, in England is however, almost absolute. Many countries of the world have drawn distinction between the sovereign and non-sovereign activities of the sovereign States. While the sovereign activities of a sovereign State is not subject to judicial process in any country, the non-sovereign activities of a sovereign State are, in some countries, subject to, and are controlled by, the judicial process of the country. (See Halsbury's Laws of England (Volume 18, 4th Edition) which reads as follows:
'1548. Immunity of foreign States and sovereigns.-- An independent sovereign State may not be sued in the English Courts against its will and without its consent. This immunity from the jurisdiction is derived from the rules of international law, which in this respect have become part of the law of England. It is accorded upon the grounds that the exercise of jurisdiction would be incompatible with the dignity and independence of any superior authority enjoyed by every sovereign State. The principle involved is not founded upon any technical rules of law, but upon broad considerations of public policy, international law and comity.
1553. State trading activities.-- With respect to actions on personam, no distinction is drawn in English Law for the purposes of immunity of foreign states from the jurisdiction between governmental activities (acta imperil) and commercial activities (acta gestionis). Immunity is not therefore limited to actions arising out of official governmental transactions, but covers also actions arising out of personal contracts and trading activities. The distinction has been drawn by the Courts of many other countries, and it is possible that the English Courts have extended the doctrine of sovereign community further than international law requires. With respect to action in rem, however, it appears that immunity will not be accorded to a vessel owned by a foreign Government which is being used either by the foreign Government itself or by a third party for trading purposes, and which is not being used or is not intended to be used for the public service.
1554. Limitation on state immunity.--There is no absolute rule that a foreign sovereign or a state cannot be impleaded in the English Courts in any circumstances. It is not entirely clear, however, in what cases the plea of immunity is not available. In some cases, when engaged in administering a trust fund, the Court of Chancery has made a sovereign or state a formal party to proceedings so as to afford him or it an opportunity to defend himself or itself. An order for winding up a company may be made even though a state may have ah interest in the surplus assets. It may be that a Court might entertain an action against a foreign sovereign in respect of private property owned by him in England in his private capacity.
1555. Waiver of immunity.-- A foreign sovereign State may waive its immunity and submit to the jurisdiction of the English Courts. This may be done, for example, by entering an unconditional appearance to the absence begun against it, with full knowledge of its right to immunity any with proper authority from the competent organs of the State. To be effective, waiver must take place at the time at which the Court is asked to exercise jurisdiction; it cannot be inferred from a previous contract to submit to the Court's jurisdiction, or from an agreement to submit to arbitration, nor from an application to set aside an arbitration award. Costs awarded cannot be recovered by execution, and even if the State has submitted to the jurisdiction it does not thereby waive the right to remove its property from the jurisdiction. Submission to the jurisdiction for the purpose of determining liability does not constitute submission for the purpose of execution. By suing a foreign State submits to the jurisdiction for the purpose of an appeal against a decision in its favour.'
84. Unlike England, where it is not clear as to when a foreign sovereign country or State can be impleaded in a proceeding in English Courts, it is clear from what has been pointed out above that in India, no immunity is enjoyed from judicial process by any one except to the extent as may be indicated by the relevant provisions of some enactment of the Parliament made in terms of Article 253.
85. We may, however, point out that Sections 84, 85, 86 of the Code of Civil Procedure prescribes as to when and how a suit can be instituted against a foreign State, an envoy of a foreign State, etc. Section 86 of the Code clearly lays down that no suit can be instituted against foreign States except with the consent of the Central Government. It is, however, of utmost importance to note that the limitation prescribed in the C.P.C. are basically meant for putting restrictions on institution of suits and cannot be applied to restrict or abridge the powers of the High Court under Article 226.
86. Thus, no activities carried out, in India, by a foreign State or international body is wholly immune from the judicial process of this country except to the extent as the law enacted in this behalf may, otherwise, indicate. A foreign State or an international body cannot be made a party in a writ Court if enacted law so indicates. However, even in exercise of powers under Article 253, Parliament cannot make a law in such a way that it takes away the powers of the High Court under Article 226 in relation to activities carried on, in India, by a sovereign State or an international organization. It cannot, therefore, contrary to what Mr. Ganguli contends, be said, in general, that irrespective of whatever may be the activities of a foreign State or international body, such a State or foreign body cannot be made a party in a writ petition for its activities carried out in India. However, if such a foreign State or international body does not fall within the ambit of the expression State or authority within the meaning of Article 12 or State or authority or person within the meaning of Article 226, then, no writ can be issued to such a foreign State or association or body.
87. The IDA is borne, in India, under the International Development Association (Status, Immunities and Privileges) Act, 1960 (hereinafter called 'the IDA Act, 1960'). The statement of objects and reasons of the IDA Act, 1960, makes it clear that a new financial institution called the International Development Association, is being established, as an affiliate of the International Bank for Reconstruction and Development, by an International Agreement to which Indian is a signatory. Article VIII of the Articles of Agreement of the said Association, as already indicated hereinabove, provides for the granting to the Association, its officials and employees certain status, immunities and privileges in the territory of each member country. Section 10 of the Article requires each member country to take such action as is necessary in its own territories for the purpose of making effective, in terms of its own law, the principles set forth in the Article. This Act confers some status, immunities and privileges on the IDA, its officers and employees. Certain immunities will naturally mean that the immunities of the IDA is not absolute. In other words, it is, indeed, subject to judicial process of this country and except in respect of the immunities, which have been granted under the said Act, the IDA cannot claim any other immunity.
88. Though Mr. K.N. Choudhury, while referring to Section 3 of Article VIII, embodied in the IDA Act of 1960, has contended that the word 'Court' will not include the High Court, we find this submission wholly without substance inasmuch as even if the Court, occurring in this Act, means the Court of original jurisdiction, the fact remains that the judicial process may commence in a subordinate Court, but may end in the highest Court of the country and merely because Section 3 of Article VIII speaks of Court of competent jurisdiction, it does not mean that it excludes the High Court. In short, the IDA is a person subject to the judicial process of the country except to the extent that the IDA Act, 1960, grants immunities.
89. Since a very limited immunity has been provided under the IDA Act, 1960, the IDA cannot be said to be beyond the jurisdiction of the High Court under Article 226 unless the IDA is a body, which does not fall within the meaning of State or authority or person under Article 226. What we have, therefore, to determine, now, is whether the IDA falls within the meaning of State, authority or person under Article 226.
90. We may, however, point out that in Vishaka v. State of Rajasthan, reported in (1997) 6 SCC 241 : AIR 1997 SC 3011 the Apex Court has made use of international conventions for strengthening the fundamental rights. The international convention has, thus, been used without the same having been made a part of the Indian law. Immunity from judicial process is, however, an exception and not a rule; hence, the fact that the Apex Court has made use of the international conventions to give meaningful expression to fundamental rights, it will not be logical to say that international conventions can take away the powers of the High Court to issue writs under Article 226.
91. Keeping in view the above, when we turn to Pradeep Kr. Biswas v. Indian Institute of Chemical Biology, reported in (2002) 5 SCC 111, which Mr. K.N. Choudhury has relied upon to contend that the IDA is not amenable to under Article 226, we note that the Apex Court, upon a threadbare examination of the issue as to whether a body falls within the meaning of the word 'State' under Article 12, has observed and laid down in Pradeep Kr. Biswas (supra) as follows :
'40. The picture that ultimately emerges is that the tests formulated in Ajay Hasia are not a rigid set of principles so that if a body falls within any one of them it must, ex hypothesi, be considered to be a State within the meaning of Article 12. The question in each case would be whether in the light of the cumulative facts as established, the body is financially, functionally and administratively dominated by or under the control of the Government. Such control must be particular to the body in question and must be pervasive. If this is found then the body is a State within Article 12. On the other hand, when the control is merely regulatory, whether under Statute or otherwise, it would not serve to make the body a State.'
92. It is clear from the above observations made in Pradeep Kr. Biswas (supra) that in the face of the facts established before the Court, the Court is required to decide, on the basis of the function, administrative domain and finances, whether the body, in question, is financially, functionally and administratively dominated by or under the control of the Government. If such control were absent, it would not become a body of the State.
93. So far as the IDA is concerned, it is, admittedly, not financed by the Govt. or any of its instrumentalities or authorities. The IDAs function and administrative domain is not under the control of the Central or the State Government. It is an association of some developed countries, which make finances available to the developing and under developing countries for the purpose of improving economic conditions of such countries. The IDA has come to finance the project, in question, in terms of the agreement entered into by the Central and State Governments as indicated herein-above. By no means, the IDA, as an entity, can be regarded, in general, as an instrumentality of the State or an authority within the meaning of Article 12.
94. The scope of Article 226 is, however, far wider than Article 226 inasmuch as a writ under Article 226 can be issued to any 'person or authority' for a purpose other than enforcement of fundamental rights. A writ under Article 226 can lie against a person or authority if it is a statutory body or performs the public function or discharges a public or a statutory duty (Praga Tools Corporation v. C.A. Imanual, AIR 1969 SC 1306, Shri Anadi Mukta Sadguri Trust v. V.R. Rudani, (1989) 2 SCC 691 : (AIR 1989 SC 1607), VST Industries Ltd. v. Workers' Union (2001) 1 SCC 298 : (2000 AIR SCW 4566), Unni Krishnan J.P. v. State of A.P. , AIR 1993 SC 2178 (per Mohan, J. para 82, 83) and G. Bassi Reddy v. International Crops Research Institute, (2003) 4 SCC 225 : (AIR 2003 SC 1764).
95. In Shri Anadi Mukta Sadguri Trust (AIR 1989 SC 1607) (supra), the Supreme Court observed as follows :
'The term 'authority' used in Article 226, in the context, must receive a liberal meaning unlike the term in Article 12. Article 12 is relevant only for the purpose of enforcement of fundamental rights under Article 32. Article 226 confers power on the High Courts to issue writs for enforcement of the fundamental rights as well as non fundamental rights. The words 'Any person or authority' used in Article 226 are, therefore, not to be confined only to statutory authorities and instrumentalities of the State. They may cover any other person or body performing public duty. The form of the body concerned is not very much relevant. What is relevant is the nature of the duty imposed on the body. The duty must be judged in the light of positive obligation owed by the person or authority to the effected party. No matter by what means the duty is imposed. If a positive obligation exists mandamus cannot be denied.
96. Duty is a species of obligation. It is the prescription of conduct towards the achievement of some end. A duty prescribes a person's behaviour primarily for some purposes of other than his own interest. Duty, as a prescriptive pattern of conduct, is enforceable. 'Enforceability' may itself mean one of two things compelling observance of the pattern of conduct enjoined by the duty or the indirect method of inflicting a penalty or sanction, in the event of a failure to observe it. Duty can be distinguished as 'legal', whenever a sanction attaches to its breach. (See Dias Jurisprudence 5th Edn. pgs 228-236).
97. Apparently in the present case, the affected party is the petitioner and it is required to be seen as to whether the IDA owes any positive obligation to the petitioner in the matter of any of its functions or duties, which may be treated as public function or public duty of the IDA.
98. In De Smith's Judicial Review of Administrative Action, 4th Edition at page 541, the learned author states, 'Mandamus lies to secure the performance of a public duty, in the performance of which the applicant has a sufficient legal interest. The applicant must show that he has demanded performance of the duty and that performance has been refused by the authority obliged to discharge it ....... To be enforceable by mandamus, a public duty does not necessarily have to be one imposed by statute. It may be sufficient for the duty of have been imposed by charter, common law. custom or even contract.' Thus, even a contractual obligation, in the performance of public duty, may give rise to issuance of writ of mandamus. This position of law is not in dispute before us.
99. The Supreme Court in G. Bassi Reddy (AIR 2003 SC 1764) (supra), while observing that it is not easy to define what a public function or public duty is, went, on to state that such functions are similar to, and closely related to, those performed by the State in its sovereign capacity. The loans are advanced and the projects are financed in conformity with the banking discipline. The IDA has a role, which extends beyond the territorial boundaries of India and its activities are designed to benefit people from all over the World. While the Indian public is a beneficiary of the lending activities of the IDA, it cannot be said that IDA owes, in general, a duty to the people of India to advance loans. Similarly, it cannot be argued that a citizen of India has, in general a legally enforceable right against the IDA in the matter of performance of any of its functions in the matter of advancing loans. To this extent, we differ with the views of the learned single Judge.
100. In the case at hand, though the fund is provided for the project by the IDA, the fact remains that half of the cost of each of the tractor has to be borne by the Indian citizens. The question is not whether the allegations of defective quality of the tractors having been offered by respondent No. 4 is true or not; the question is whether in the whole contract process, public interest is involved. Since half of the cost of the tractors has to be borne by the Indian citizens and assuming that the tractors supplied arc defective, it cannot be said that no public interest is involved in the selection of the supplier of tractors and the State cannot be allowed to arbitrarily choose the bidder and accept technically deficient tractors. If the defective tractors are supplied despite the same having been brought to the notice of the Court, the Court cannot remain as a mute spectator, for, if it is ignored or allowed to go unchecked, it will shake vigorously the confidence of the public in the ability of the Courts to ensure that the State, its instrumentalities or persons discharging public duties, within the meaning of Article 226, function in accordance with law. It is the duty of the Court to retain confidence of the public in the ability of the Courts to ensure that the State and its instrumentalities function subject to the rule of law. Whenever any occasion of public loosing confidence in the rule of law arises, writ Court has to move into the picture in the interest of the public and interfere with the wrong sought to be done to the rule of law.
101. In the case at hand, the supply of tractors is not a mere commercial transaction. It is the State, which has floated the tender inviting bids. The IDA does not remain as a mere financier or provider of funds. It, rather, intrinsically involves itself in the selection of the bidders and the material supplied. In a situation, such as this, when the provider of funds involves itself so deeply in the activities of the State or associates itself inseparably with the whole selection process of the State, it cannot be said that the IDA's such activities will not be amenable to the writ jurisdiction under Article 226. By involving itself in the whole selection process, the IDA makes itself a party to the entire tender process. In the context of such facts, the IDA cannot be regarded as a person not amenable to the writ jurisdiction under Article 226.
102. Whether a person is an 'authority' or a 'person' within the meaning of Article 226 is really a question of fact. In a given set of facts, a person, say 'X,' may not be an authority or a person falling within the ambit of Article 226, but in another set of facts, the same person, i.e. 'X,' may become an authority or a person within the meaning of Article 226. The present one is, undoubtedly, one of such cases, though may be rare.
103. The power to issue writ(s) under. Article 226, basically, arises when the rights of a person, fundamental or legal, is infringed. Hence, while considering the question of amenability of a person to the writ jurisdiction of the High Court under Article 226, the nature of the rights of that person, whose right is alleged to have been infringed, is to be considered and in the light of the nature of the rights of such a person, the question of amenability of the person (who is alleged to have violated the rights) has to be decided and not from the point of view of what the general functions and duties of the person, in question, are.
104. From the observations made in G. Bassi Reddy (AIR 2003 SC 1764) (supra), it is clear that a writ under Article 226 can lie against a person not only when it is a statutory body, but also when the person performs a public function or discharges public or statutory duties. When the IDA involves itself in the project, in question, not merely as a provider of funds, but also as a person, who has the decisive say in matter of selection of man and materials, it cannot be said to have not been performing, in the context of the terms and conditions of the contract, in question, a public function and when it so functions, it must adhere to the terms and conditions of the contract and if the conditions of contract are violated as alleged by the writ petitioner, the IDA cannot be said to be beyond the reach of the High Court under Article 226.
105. Thus, in normal circumstances, the IDA cannot be regarded as a State or an authority or a person within the meaning of Article 226, but when the IDA involves itself in the sovereign activities of the State and, instead of remaining as a mere financier or provider of funds, mingles itself in the activities of the State, then, its such activities cannot be ignored and it cannot be considered de hors its activities and must, in such a situation, be regarded as a person within the meaning of Article 226; otherwise, the public interest may seriously suffer. When a private person, in his private capacity, floats a tender for construction of a building, but arbitrarily settles the tender with any of the tenderers, no element of public interest gets involved and the remedy of the party, who considers himself aggrieved by such arbitrary act of the person floating the tender, will lie in instituting civil suit either for damage or for specific performance of the contract, but when the State floats a tender and invites public bids and when it acts arbitrarily in selecting the bidder, the arbitrariness of the State cannot be said to involve no public interest.
106. In the context of the facts of the present case, while the IDA has to be regarded as a person within the meaning of Article 226, it cannot be regarded such a person in all cases; for example, if an employee of the IDA comes to the Court against his arbitrary dismissal from service, the writ Court may refuse to interfere on the ground that the IDA, in itself, is not such an entity, which can be regarded as a person or an authority or instrumentality of the State inasmuch as it has not been set up by any statute, it is not administratively, financially and/or functionally controlled by the State. But in the context of the facts of the present case, when the IDA involves itself inseparably with the activities of the State, when the State is discharging its sovereign activities, the IDA cannot be said to be beyond the reach of the High Court under Article 226. We wish to make it clear, while deciding the question of immunities of the IDA to the writ jurisdiction of the High Court under Article 226, that this decision of our is for the limited purpose of the facts of the present case and neither our observations made herein-above nor our decision would be regarded as a law having been laid down that the IDA, in all cases, will be regarded as a person within the meaning under Article 226.
107. There may be a thin or fine line of demarcation between the activities of the IDA, in general, and the activities of the IDA in the context of the case at hand, in particular, but there does lie a difference between the two. Though, ordinarily, perhaps, the IDA may not be regarded as a person within the meaning of Article 226, yet in the present case, since the IDA has involved itself in the sovereign activities of the State, it must be regarded as a person falling within the ambit of Article 226.
108. It is trite that it is in the facts of the given case that one has to decide whether the petitioner is a person to whom the IDA owes a positive obligation. When the IDA gets a tender floated according to its own approval and invites public bids, it undertakes the obligation to complete the selection process in accordance with the terms and conditions of the NIT and in accordance with the law of this country. If it violates any of the two, it cannot, but be held to have failed to perform its duties. It its duty is in the realm of public interest or in the realm of the sovereign activities of the State, the IDA has got to be regarded as a person falling within the meaning under Article 226.
109. An Indian citizen may not be able to maintain a writ application against the IDA, when he approaches the Court to command the IDA to advance loan to a particular person. Had the IDA merely provided the fund by setting forth the conditions under which the selection is to be made and the project is to be carried out, the IDA could have, perhaps, been regarded a body not coming within the ambit of Article 226; but when the IDA not only sets the terms and conditions for selection of the person, who will provide the materials, which would be supplied to the Indian citizens, half of the cost of which would be borne by the Indian citizens and having, thus, acquired the power to have the ultimate say in the selection of the men and materials, it loses, in the context of the contract, in question, distinct identity, if any, that it may, otherwise, hold and must, in such a situation, be held to have, become a person within the ambit of Article 226.
110. We have already held hereinabove that for a person to be impleaded as a necessary party in a writ petition, the person may or may not be the State or authority or person within the meaning of Article 226, but when the relief is asked not only against such a person, but also from such a person, the person to be so impleaded must be a person amenable to the writ jurisdiction of the High Court under Article 226. If the person is not so amenable and/or if the person concerned cannot be made a party, then, the writ petition must fail. G. Bassi Reddy (AIR 2003 SC 1764) (supra) may be referred to.
111. In the case at hand, the relief, in substance, has been sought for against the IDA, for, if the approval given by the IDA is not set aside, no effective relief can really be given to the writ petitioner. The IDA, in the context of the facts of the present case, was, indeed, amenable to the writ jurisdiction of the High Court under Article 226, but the writ petitioner having not made the IDA a party to the writ petition and having insisted upon not making the IDA a party to the writ petition, this writ petition must fail, particularly, when in the public interest, the project, in question, cannot be made to suffer and it must be allowed to come to its end at the earliest in accordance with the terms and conditions of the tripartite agreement reached by the State-respondents with the IDA.
112. Situated thus, we find it wholly unreasonable and impossible to allow the appellant any further time and/or opportunity to implead the IDA as a party. The writ appeal must, therefore, fail.
113. In the result and for the reasons discussed above, the writ appeal fails and the same is dismissed.
114. We leave the parties to bear their own costs.