B-2 Computers Vs. State and ors. - Court Judgment

Muzaffar Hussain Attar, J.

1. This petition is filed on 27th of April 2007 seeking the following reliefs:

a. that respondent Deputy Commissioner Kargil/ Chairman District Purchase Committee Kargil be commanded to take a decision with regard to tender issued by way of annexure A by invoking Article 226 of Constitution of India read with Section 103 of Constitution of J&K.;

b. writ of certiorari quashing supply orders issued in favour of respondent No. 6 in violation of Rules and Regulations.

c. writ of mandamus that mater be got investigated by State Vigilance Department.

d. by writ of mandamus commanding respondent Deputy Commissioner Kargil/chairman District Level Purchase Committee and respondents 7 to 14 to compensate petitioner by adequate compensation by resorting to under hand methods by showering favours to respondent No. 6 in violation of Rules and Regulations.

e. that the action of official respondents is in violation of Article 14 and Article 19 of Constitution of India and also other provisions of Constitution.

f. any other relief which the Hon'ble court deems fit and proper in the circumstances of the case be granted in favour of petitioner against respondent.

2. Briefly stated the case of petitioner is that he is an engineering graduate and as he could not secure Government job, in order to sustain himself launched business of dealing with computers and its accessories under the name and style of 'B-2 Computers Kargil'. A tender notice was issued by Dy. Commissioner/Chief Executive Officer LAHDC Kargil bearing No. CMO-K/Acctt-24/2005 dated 05.09.2006, wherein and where-under sealed tenders were invited from the manufacturers, or registered/authorized dealers for supply of computer sets with accessories required by the office for the year 2006-07, as shown in annexure 'A' of the said tender notice. The last date for receipt of tender(s) was fixed as 22nd of Sept. 2006 up to 2 PM. The petitioner responded to the tender notice and submitted all his documents to the competent authority. The tenders were opened on 23rd of Sept. 2006 by the Accounts Officer posted in the Office of Dy. Commissioner Kargil. The tender according to petitioner were neither accepted nor rejected and petitioner claims that in-fact no decision has been taken by Dy. Commissioner/Chief Executive Officer Kargil till the date of filing of the writ petition. Further the grievance of petitioner is that respondent No. 1 did not take any decision in respect of tender notice dated 5th Sept.2006, and the said authority was approached by filing of applications as also by making oral requests for taking decision in the matter.

3. The petitioner further submits that Principal Degree College Kargil floated tender for supply of computers and other connected accessories vide tender notice No. GDC-K/Acctt- 12/333- 50 dated 10th August 2006. Petitioner having responded to the said tender notice was allotted work for supply of computers to the said Decree College.

4. The petitioner further submits that following departments i.e District Industries Central, Kargil; Chief Education Office Kargil; Tourism Department Kargil; Handicraft Department Kargil; District Hospital Kargil; Weights and Measures Department Kargil; Chief Medical Officer Kargil and Assistant Labour Department Kargil also required computers but for purchase of computers tenders were not floated and in cruel disregard to the settled norms the supply orders were issued in favour of respondent No. 6 and this act of the official respondents has infringed constitutional rights of the petitioner. The petitioner further states that he made all efforts to obtain copy of supply order issued in favour of respondent No. 6 but same was not provided to the petitioner by the Dy. Commissioner Kargil for malafide reasons. The petitioner, however, submits that one such supply order issued by General Manager District Industries Centre Kargil dated 21st Nov. 2006 was obtained by him which has been placed on the writ record as annexure 'F'. The petitioner submits that he was denied opportunity to participate in the process for securing supply orders as the official respondents did not resort to the tender process but issued the supply order arbitrarily and illegally in favour of respondent No. 6.

5. The respondent No. 3 Dy. Commissioner Kargil in his objections at para (8) has stated that the notice inviting tenders dated 5th Sept. 2006 could not fructify in issuance of supply order as rates which were offered by competing persons, which include petitioner also, were unreasonably high. In essence the respondent No. 3 submits that the process initiated in terms of the advertisement tender notice dated 5th Sept. 2006 got aborted.

6. It is further submitted at para (15) of the objections that the persons who had submitted the tender documents had joined hands to cause loss to the Government exchequer. The respondent No. 3 has however denied the allegations that he showered benefits on respondent No. 6.

7. At para (26) of the objections respondent No. 3 has made categorical statement that he has not taken any decision nor accorded approval for placement of order for supply of computers to other departments. Para (26) is reproduced as under:

In reply to para 26, it is submitted that the departments purchased the computers on the same rates which were approved for Degree College, Kargil, since the requirements of the above mentioned departments and Degree College, Kargil in the matter of computers was similar, therefore, the rates offered in response to the tender notice issued by Principal Degree college, Kargil were much lesser as rates in response to the tender notice issued by Dy. Commissioner, Kargil on 5/9/2006, the purchase seems to have been made on the lower rates offered in response to the tender notice dated 10.08.2006 and printers/UPS have been purchased by the concerned departments as the rates approved by the District Purchase Committee during the year 2004-05 as rates for these specified item have not been approved by District Purchase committee for any department during the year 2006-07. However the answering respondent was not sanctioned any order in this behalf. It is again submitted at the cost of repetition that the district purchase committee had cleared the tender initiated in response to tender notice issued by the Degree College, Kargil and beyond that no sanction has been issued by the answering respondent.

8. At para (34) respondent No. 3 has further stated that he did not issue any sanction for purchase of computers on the previously approved rates of the District Purchase Committee.

9. Respondents 7 to 14 have also filed objections in which they have stated that the said respondents placed order for supply of computers and its accessories on respondent No. 6 on the rates approved by District Purchase Committee in the year 2006-07 which decision was taken by the said committee in respect of purchase of computers for Degree College Kargil. The respondents have further stated that in order to save time and not to allow the funds to lapse they in good faith made the purchase of the computers etc on the rates fixed by the Purchase Committee. It is further pleaded that the rates quoted by the petitioner for similar items in pursuance of tender notice dated 5th Sept. 2006 were higher as compared to the rates on which the purchase of computers has been made both for Degree College Kargil as well as for the other departments which were headed by respondents No. 7 to 14. It is further pleaded by the said respondents that Printers/UPS have been purchased by the said departments at the rates approved by District Purchase Committee during the year 2004-05. The respondents 7 to 14 have thus, admitted that purchase of computers, printers and UPS were made by them without inviting tenders and were purchased on the rates approved by District Purchase Committee for the year 2006-07 and 2004-05.

10. The respondent No. 6 in his objections has stated that the writ petition has become infructuous for the reason that he has made supplies in pursuance of supply orders by end of Dec. 2006. He has further submitted in respect of tender notice dated 5th Sept. 2006 that the tenders were opened but the rates quoted were not accepted by the authorities and accordingly rejected the tender documents of the competing persons. It is further pleaded by respondent No. 6 that the petitioner from 2003 to 2006 was given the supply orders on the rates quoted by him in response to single tender notice, but the petitioner could not compete with the respondent No. 6, he has raised the controversy that too when the supply orders have been issued and supplies made. The respondent No. 6 further submits that after making supply of computers etc he has received payment thereof. The respondents thus, seek dismissal of the writ petition.

11. Heard ld. counsel for parties and considered the matter.

12. The Hon'ble Supreme Court in case titled Ramana Dayaram Shetty v. International Airport Authority of India reported in : (1979)IILLJ217SC has stated as under:.It must, therefore, be taken to be the law that where the Government is dealing with the public, whether by way of giving jobs or entering into contracts or issuing quotas or licenses or granting other forms of largess, the Government cannot act arbitrarily at its sweet will and, like a private individual, deal with any person it pleases, but its action must be in conformity with standard or norm which is not arbitrary, irrational or irrelevant. The power or discretion of the Government in the matter of grant of largess including award of jobs, contracts quotas, licenses etc. must be confirmed and structured by rational, relevant and non discriminatory standard or norm and if the Government departs from such standard of norm in any particular case or cases, the action of the Government would be liable to be struck down, unless it can be shown by the Government that the departure was not arbitrary, but was based on some valid principle which in itself was not irrational, unreasonable or discriminatory....

13. The Hon'ble Supreme Court in case titled M.D., H.S.I.D.C and Ors. v. Hari Om Enterprises reported in : AIR2009SC218 has in unambiguous terms stated that state without justification cannot make any discrimination when the parties are similarly situated. The following paras of the said judgment are reproduced as under:

Para 42

Appellant being a 'State' within the meaning of Article 12 of the Constitution of India, it without a justification cannot make any discrimination when the parties are similarly situated. [See Mahabir Auto Stores and Ors. v. Indian Oil Corporation and Ors. : [1990]1SCR818 Moreover, the act on the part of the respondent must be a reasonable one. [See Bharat petroleum Corporation Ltd. v. Maddula Ratnavalli and Ors. : (2007)6SCC81 ]

Para 44.

This Court in ABL International Ltd. and Anr. v. Export Credit Guarantee Corporation of India Ltd. and Ors. : (2004)3SCC553 laid down the law in the following terms.

14. The Hon'ble Supreme Court in case titled Nagar Nigam, Meerut appellant v. Al Faheem Meat Exports (p) Ltd. and Ors. respondents reported in (2006) 13 SCC 382 has succinctly dealt with the awarding of contracts. Para 12, 13, 16,18 and 23 are reproduced as under:

P.12.

In this case, however, we are concerned with a different question. It is now a well settled principle of law that having regard to the provisions of Article 14 of the Constitution of India, a State within the meaning of Article 12 thereof cannot distribute its largesse at its own sweet will, vide Ramana Dayaram Shetty v. International Airport Authority of India. The Court can ensure that the statutory functions are not carried out at the whims and caprices of the officers of the Government / local body in an arbitrary manner. But the court cannot itself takeover these functions.

P.13.

This Court time and again has emphasized the need to maintain transparency in grant of public contracts. Ordinarily, maintenance of transparency as also compliance with Article 14 of the Constitution would inter alia be ensure by holding public auction upon issuance of advertisement in the well known newspapers. That has not been done in this case. Although the Nagar Nigam had advertised the contract, the High Court has directed that it should be given for 10 years to a particular party (Respondent 1). This was clearly illegal.

P. 16.

The law is well settled that contracts by the State, its corporations, instrumentalities and agencies must be normally granted through public auction / public tender by inviting tenders from eligible persons and the notification of the public auction or inviting tenders should be advertised in well known dailies having wide circulation in the locality with all relevant details such as date, time and place of auction, subject matter of auction, technical specifications, estimated cost, earnest money deposit, etc. The award of government contracts through public auction / public tender is to ensure transparency in the public procurement, to maximize economy and efficiency in government procurement, to promote healthy competition among the tenderers, to provide for fair and equitable treatment of all tenderers, and to eliminate irregularities, interference and corrupt practices by the authorities concerned. This is required by Article 14 of the Constitution. However, in rare and exceptional cases, for instance during natural calamities and emergencies declared by the Government; where the procurement is possible from a single source only; where the supplier or contractor has exclusive rights in respect of the goods or services and no reasonable alternative or substitute exists; where the auction was held on several dates but there were no bidders or the bids offered were too low, etc., this normal rule may be departed from and such contracts may be awarded through 'private negotiations'. (See Ram and Shyam Co. v. State of Haryana.)

P. 18

The law is, thus, clear that ordinarily all contracts by the Government or by an instrumentality of the State should be granted only by public auction or by inviting tenders, after advertising the same in well known newspapers having wide circulation, so that all eligible persons will have an opportunity to bid in the bid (sic auction), and there is total transparency. In our opinion this is an essential requirement in a democracy, where the people are supreme, and all official acts must be actuated by the public interest, and should inspire public confidence.

15. In our Constitutional scheme protections have been afforded against arbitrary exercise of power, mal-functions of authorities, against unfairness and unreasonableness. Article 14 is one of such important provisions of the Constitution of India which like other provisions of constitution of India like Article 19, 21, form constitutional soul of the Constitution of India. The makers of the Constitution who besides being great thinkers and visionaries had personally also suffered deprivation of basic human rights. The Constitution of India is sacred document which besides fulfilling other laudable purposes also brings within its protective wall the human rights of the individual.

16. The Constitution of India is a living document and with the passage of time, and having faced new challenge after the independence, further stronger teeth have been given to the Constitutional provisions by the Hon'ble Supreme Court and other Constitutional Courts to secure the basic human rights while interpreting the provisions of the Constitution.

17. Article 14 of the Constitution falls in part III of the Constitution and is essential ingredient of the fundamental rights. Article 14 in essence projects constitutional conscience and constitutional morality and strikes at the very root of arbitrariness, unreasonableness and unfairness. The Constitutional Courts have a sacred duty to see and ensure that these constitutional provisions are strictly followed and adhered to. The Constitutional courts are sentinel and guardians of the rights of the people, so have sacred duty to discharge to ensure faithful compliance not only of the letter but the spirit of mandate of constitution.

18. This Court is conscious that certain limitations are also placed on the exercise of its powers regarding administrative matters. This Court has not to consider the administrative order as if the court is sitting as an appellate authority. This Court under its extra ordinary writ jurisdiction is required to review the decision making process and to find out whether same satisfy the fundamental principles of fairness, reasonableness and transparency.

19. Article 14 of the Constitution springs up with full force and vigor to strike at the unfair, unreasonable and arbitrary exercise of power. The Article 14 also flexes its powerful muscles where stark discrimination becomes apparent, to ensure that constitutional goal of maintaining parity in similar situations is not only maintained but preserved as well. The sacred document of constitution in a democratic, socialist and secular country like ours has been enacted to inculcate the constitutional conscience and constitutional morality in all subjects of the State. The constitution is the fountain head of other laws. The purpose of enacting other laws is also to instill and secure moral values in the society. Looking back upon the facts of the case it is admitted that the tender notice dated 5.9.06 could not materialize in awarding contract in favour of the competing parties for the reason that unreasonably high prices were quoted by the competing contractors. The ground for not proceeding further with the said tender notice is reasonable and satisfies the requirements of rationality and cannot be found fault with. It is duty of the authority to ensure that public money is not allowed to be plundered and looted. However, the decision taken by respondents 7 to 14 to place supply orders on respondent No. 6 for supplying computers and their accessories without calling for tenders and without allowing all eligible persons to compete, falls foul of the constitutional mandate as contained in Article 14 of the Constitution. In view of the law laid down by Hon'ble Supreme Court, it the natural duty of authority/officers who hold the public office(s) to ensure to be fair and reasonable in their actions.

20. The respondents 7 to 14 in their objections have stated that they have placed the orders for supply of computers etc on the rates approved by District Purchase Committee during the year 2004-05. This approach of the respondent No. 7 to 14 on the face of it smacks of malafide exercise of power to benefit one single individual. It is of common knowledge that the value and prices of items like computers and its accessories get reduced with the passage of time. If a computer of particular brand was available in the market say at Rs. 40,000/- in the year 2004-05, the same will be available in the market for Rs. 30,000/- in the year 2006.

21. The respondents however, have not quoted prices on which the computers and other accessories have been purchased. The District Development Commissioner in his objections filed separately has categorically stated that the rates which were approved by District Purchase Committee during the year 2004 -05 for specified items have not been approved by District Purchase Committee for any department during the year 2006-07 and no sanction has been issued by the said authority for issuing orders in favour of respondent No. 6 for supply of these items.

22. The respondents 7 to 14 could in exceptional circumstance deviate from normal course of floating tender for supply of computers and its accessories, but no exceptional circumstance has been put-forth for deviating from the normal course of purchasing computers and its accessories by floating tenders.

23. The action of respondents 7 to 14 besides being unreasonable and unfair also violates fundamental rights of the petitioner to carry on trade/occupation as guaranteed under Article 19 of the Constitution of India. The respondent No. 7 to 14 besides playing pranks with the Constitutional provisions, to which they have to exhibit unqualified and un-inhabited obedience, have also caused great loss to public exchequer.

24. The respondent No. 6 in his objections stated that he has not only made supply but also received the payment as well. In this fact situation supply orders passed are declared to be illegal but cannot be quashed, same having out lived their life. This, fait-accomply presented in this case, however, shall not deter the Constitutional Court to pass appropriate orders and issue appropriate directions, as otherwise, it would tent-amount to placing premium on the un-constitutional acts of the respondents 7 to 14.

25. This writ petition is accordingly disposed of with the following directions:

a) The respondent No. 3, will identify the officers/officials viz respondents 7 to 14 who were holding posts at relevant point of time and put them on notice as to why departmental action shall be initiated against them and further as to why the case shall not be referred to competent police authority for registration of case for having caused wrongful loss to public exchequer and wrongful gain to themselves and respondent No. 6.

b) In case after hearing the respondents 7 to 14 the respondent No. 3 is satisfied that action both departmental as well as under criminal law is required to be initiated then he shall make recommendations accordingly to the authorities responsible for conducing such enquiry/investigation.

c) If after such enquiry it is found that wrongful loss has been caused by illegal acts of respondents 7 to 14 to the public exchequer then besides inflicting appropriate punishment on these authorities orders shall be passed for recovery of the amount to the extent of loss suffered by public exchequer.

d) The Deputy Commissioner Kargil will hold and complete the preliminary enquiry within four weeks from the date coy of this order is served on him and he will submit compliance report to this Court immediately thereafter.

e) The authorities are directed that in future they must adhere to settled norms in awarding contracts and in distributing state largesse.

f) The Registrar Judicial Srinagar will send copy of this judgment to Chief Secretary Govt of J&K;, who will himself or will cause to monitor the inquiry ordered.

g) The Registrar Judicial Srinagar is directed to send copy of this judgment to respondent No. 3 Dy. Commissioner Kargil and when the compliance report is submitted same shall be placed before the Court.

Disposed of.