Judgment:
1 IN THE HIGH COURT OF JHARKHAND, RANCHI W.P. (C.) No. 1122 of 2014 1.Mukesh Kumar Sahu, S/o Sri Ram Bilash Sahu, resident of Kishore Gunj, Harmu Road, Ranchi, P.O.-GPO P.S. Sukhdeonagar, District Ranchi ... ... ... Petitioner Versus 1. State of Jharkhand through its Secretary, Food, Public Distribution and Consumer Affairs Department, Jharkhand project Building, 4th Floor, Dhurwa, PO and PS Dhurwa, District Ranchi 2.Jharkhand State Food and Civil Supplies Corporation Limited, a Company incorporated under the Companies Act, 1956 and a Government of Jharkhand Undertaking having its registered office at Itki Road, Hehal Ranchi, PO Hehal, P.S. Sukhdeonagar, District Ranchi through its Managing Director 3.Managing Director, Jharkhand State Food and Civil Supplies Corporation Limited Itki Road, Hehal, PO Hehal, P.S. Sukhdeonagar, District Ranchi .. ... ... Respondents With W.P. (C.) No. 873 of 2014 2.Rajesh Kumar Agarwal son of Sri Braj Bhushan Prasad Agarwal, resident of Manatu, P.O. and P.S. Manatu, District Palamu ... ... ... Petitioner Versus 1. The Jharkhand State Food & Civil Supply Corporation through its Managing Director, having its office at Itki Road, Hehal, P.O. Hehal P.S. Sukhdeoghar, District Ranchi 2.The Managing Director, Jharkhand State Food & Civil Supply Corporation, having its office at Itki Road, Hehal, P.O. Hehal, P.S. Sukhdeoghar, District Ranchi 3.The Secretary, Food, Public Distribution & Consumer Affairs Department, Government of Jharkhand, Project Bhawan, Dhurwa, P.O. Dhurwa, P.S. Jagannathpur, District Ranchi 4.The State of Jharkhand through Secretary Food & Supply Department, Project Bhawan, Dhurwa, P.O. Dhurwa, Dist. Ranchi 5.Arun Kumar Gupta S/o Sri Ram das Sahu R/o Village & PO Paduma P.S. Manatu District Palamau 6. Anil Kumar Sahu S/o Ram Das Sahu R/o village & PO Paduma P.S. Manatu District Palamau 7. Ratan Kishore Mishra S/o Shambhu Nath Mishra R/o Jimco, Mishra Bagan Linc no. 3, Near Vodafone Tower PO and P.S. Telco, Town, Jamshedpur District East Singhbhum ... ... ... Respondents CORAM: THE HON’BLE MR. JUSTICE PRASHANT KUMAR ............ For the Petitioners : Mr. Anoop Kumar Mehta (In 1122/2014) Mr. Rajendra Krishna (In 873/2014) Mr. J.S.Tiwary For the Respondents : Mr. Binod Poddar, A.G. Mr. Jai Prakash, A.A.G. Mrs. Debolina Sen Hirani, J.C. to A.A.G. Mr. Mrinal Kanti Roy, Advocate For Respondent No. 6 Mr. M.S. Mittal, Sr. Advocate M/s Ashok Kumar Yadav, Sudhansu Kumar Deo 2 3/10.09.2015 Both the writ applications are heard together, as they arose from the same impugned order.
2. These writ applications have been filed for quashing the order contained in memo No. 241, dated 24.01.14 passed by the Secretary, Food, Public Distribution & Consumer Affairs Department, Government of Jharkhand, Ranchi whereby and whereunder, he rescinded the tender No. 05/2013 issued vide letter No. 1048 dated 30.11.2013.
3. It appears that respondent No. 2 (the Managing Director, Jharkhand State Food & Civil Supply Corporation) had issued a tender vide tender No. 05/2013 on 30.11.2013 for transportation and handling of food grains for different district godowns to the godowns at the block level. It appears that the petitioners and intervenors participated in the tender for different districts. It appears that they have been declared L-1 by the Corporation and were called for negotiation. During that period, some of the unsuccessful bidders approached respondent No. 4 and made certain complaints against the Managing Director of the Corporation. On the basis of aforesaid complaints, respondent No. 4 called response from the Managing Director. Thereafter vide order contained in memo No. 241, dated 24.01.2014 cancelled the tender as contained in Annexure-2 and directed the Corporation to fix the terms and conditions of the tender and then take the approval of the Chairman of the Board of Directors on the terms and condition.
4. It is submitted by learned counsels for the petitioners that the Secretary of the Department of Food and Public Distribution and Consumer Affairs has no power to rescind the tender issued by respondent No. 2, therefore the impugned order is wholly without jurisdiction and therefore nonest in the eye of law.
5. Sri Jaiprakash, learned Additional Advocate General submits that the aforesaid order passed by the Secretary in the capacity of the Chairman of Food and Civil Supply Corporation. Thus, he has got the power to rescind the tender issued by the Managing Director. It is further submitted that the petitioners have no locus standi to challenge the aforesaid order, because still the work order had not been issued in their favour. Accordingly, it is submitted that the present 3 writ applications are liable to be dismissed.
6. Learned counsel for the intervenors supported the plea taken by the petitioners and submitted that respondent No. 4 has no power to interfere with the tendering process of the Corporation.
7. Having heard the submissions, I have gone through the record of the case. Petitioner has annexed the Articles of Association of the Jharkhand State Food and Civil Supply Corporation Ltd. as Annexure-1. From perusal of clause-46 of the aforesaid Articles of Association it is clear that the Secretary Food, Public Distribution and Consumer Affairs is ex-officio Chairman of the Corporation. From perusal of Clause-60 of the Articles of Association it appears that the Secretary, Rural Development Department, Secretary, Finance Department, Secretary, Information and Technology Department, Secretary, Cooperatives Department, Manging Director of the Jharkhand State Agriculture Marketing Board and Managing Director of the State Food and Civil Supply Corporation, are the members of Board of Directors. The power of Board of Directors given at clause-65 (2) of the Article of Association is relevant for this case, which runs as follow:- 65. Specific powers to Board:- (1) ... ... ... (2) To plan schemes, to call for tenders, and to execute the works, provided that no scheme involving a capital expenditure exceeding Rupees Ten Crore shall be sanctioned by the Board unless prior approval of the Governor in this regard has been obtained. Clause 66 of the Article of Association also relevant which runs as follow:- Clause 66 of the Articles of Association provides that :- Notwithstanding anything said in Article 65 above, the Managing Director shall have the powers to exercise the powers of Board of Directors in anticipation of Board of Directors provided that all such instances of exercising such power shall be placed for approval before the Board of Directors at the Board's immediate next meeting. Clause-68 (g and m) of the Articles of Association are also relevant for this case. Thus, aforesaid provisions are also quoted hereinafter:- (68)MANAGEMENT ... ... ... (a) ... ... ... (b) ... ... ... (c) ... ... ... (d) ... ... ... 4 (e) ... ... ... (f) ... ... ... (g) To enter into, vary or cancel all manner of contracts on behalf of the Company (h) ... .... ... (i) ... ... ... (j) ... ... ... (k) ... ... ... (l) ... ... ... (m) To enter into all such negotiations and contracts and rescind and vary all such contracts and execute and to do all such acts, deeds and things in the name of and on behalf of the Company as he may consider expedient for or in relation to any of the matters aforesaid or otherwise for the purpose of the Company.
8. Thus, from perusal of clause 66 it is clear that the Managing Director of the Corporation can exercise all the powers vested in the Bord of Directors in anticipation of approval of Board of Directors subject to the condition that he will get the formal approval of the action taken at the Board's immediate next meeting.
9. It is submitted by learned Additional Advocate General that the power for changing the terms and conditions of the tender is vested in the Board of Directors. Under the said circumstance, in anticipation of the approval of the Board of Directors, the Managing Director has power to change the terms and conditions of the tender subject to the condition that he will get the approval of the Board of Directors in the next meeting. 10 However, from perusal of entire Articles of Association, I find that the Chairman has no power to undo any action of the Managing Director in the capacity of Chairman. In my view, if the Chairman wants to take any action against the order passed by the Managing Director, he can do so by calling the meeting of the Board of Directors. Under the aforesaid circumstance, in my view, the Chairman has no power to entertain any complaint against the action of Managing Director and even if he received any complaint, he should place it before the Board of Directors for decision.
11. From perusal of impugned order I find that the same has been passed by the Secretary of Food, Public Distribution & Consumer Affairs Department. A plain reading of the impugned order shows that it has not been passed in the capacity of Chairman of the Jharkhand State Food and Civil Supply Corporation Ltd. From perusal of Articles 5 of Association and Counter-affidavit filed by the State, I do not find any provision which gives power to the Secretary of the Department to interfere with day to day affairs of the Corporation. In the counter- affidavit, State has only stated that the Secretary had passed the aforesaid order in the capacity of Chairman. As notice above, even the Chairman has no power to rescind or vary the action taken by the Managing Director of the Corporation. 12 Since the impugned order passed by the Secretary, Food, Public Distribution & Consumer Affairs Department, who has no power to pass the same, therefore I am of the view that the impugned order is without jurisdiction, thus, nonest in the eyes of law.
13. Accordingly, I allow these writ applications and quash the impugned order contained in memo No. 241, dated 24.01.14 passed by the Secretary, Food, Public Distribution & Consumer Affairs Department, Government of Jharkhand, Ranchi. (Prashant Kumar, J.) Binit