Madras High Court
Review Applicant: Mrs. Farida Shaukath vs Unit Trust Of India, Madras-1 And ... on 26 July, 1999
Equivalent citations: 1999(2)CTC736
Author: P.D. Dinakaran
Bench: P.D. Dinakaran
ORDER
1. The above review application is directed against the order dated 26.11.1998, made in W.P.No. 20884 of 1992, whereby the said writ petition was dismissed in the following terms:
"The petitioner seeks for issue of a Writ of Mandamus to direct the respondent to sell the property at 75, Poes Garden, Madras-86 to the petitioner.
"It appears that the petitioner is the owner of Door No. 76 Poes Garden, Madras and the house at Door No. 75, Poes Garden, Madras- 86, is admittedly, owned by the first respondent, who invited sealed offers for disposing of the suit property, to which, the petitioner and the second respondent, made their offers. In spite of some negotiations between the first respondent and the second respondent in disposing the said property, the sale could not be finalised by the first respondent Not satisfied with the terms of negotiations or the result thereon, the petitioner has approached this Court for the above relief.
I am of considered opinion that the petitioner is not entitled to invoke Article 226 of the Constitution of India for the relief as prayed for in the writ petition, as the same is very much contractual in nature. Hence the writ petition is dismissed."
2. Mr.K. Chandru, learned senior counsel for the review applicant contends that even though the review applicant/writ petitioner could not unfortunately be represented on 26.1.1998. the writ petition was disposed of only on the basis of the submission that even though the writ petitioner was invited for negotiations, but the terms of the negotiations are not satisfactory. The contention of Mr. K. Chandru, learned senior counsel for the review applicant, that the review applicant was not invited for negotiations persuaded me to admit the above review application.
3. Placing reliance on the decision of the Apex Court in Food Corporation of India's case, , Mr.K. Chandru, learned counsel for the review applicant contends that even in contractual transactions, the State and the instrumentalities of the State are expected to act fairly and reasonably; that any act of arbitrariness by the State or instrumentalities of the State in such contractual dealings would attract Article 14 of the Constitution of India; and that the aggrieved persons, staking their claim on legitimate expectation, can question the same by way of judicial review. Hence any decision of the 1st respondent herein, which is a public authority, affecting the legitimate expectation of the review applicant that his bid would be confirmed, is subject to judicial review under Art. 226 of the Constitution of India.
4. Per contra, Mr. R. Krishnamurthy, learned senior counsel for the 1st respondent, inviting my attention to the averments in para 6 of the affidavit filed in support of the above writ petition that in the month of October, 1992, on the call from the 1st respondent requesting her to come over to the office of the 1st respondent for personal discussion, the review applicant went to the office of the 1st respondent and met Shri S.S. Hegde and S. Gopukumar and she was informed by them that her offer was the highest valid offer and during the course of discussion, the review applicant was requested to quote a figure higher than that quoted by her by increasing the same and, however, the review applicant refused to quote a higher figure, contends that in view of such averment by the review applicant herself in the affidavit filed in support of the writ petition, it is not correct to contend that the review applicant was not called for the negotiations. Mr. R. Krishnamurthy, learned senior counsel further contends that unless the review applicant points out any error, which is self-evident and does not require any process of reasoning, apparent on the face of the order dated 26.11.1998 made in W.P.No. 20884 of 1992, the same cannot be reviewed. Mr. R. Krishnamurthy, learned senior counsel for the 1st respondent, placing reliance on the decision of the Apex Court in Parsion Devi and others v. Sumitri Devi and others, , contends that the review jurisdiction cannot be converted as an appellate jurisdiction and rehear the matter for detecting an error in the earlier decision, which is not self-evident and has to be detected by a process of reasoning.
5. That apart, Mr. R. Krishnamurthy, learned senior counsel for the 1st respondent, placing reliance on the decisions of the Apex Court in Tata Cellular case, and Sterling Computer Ltd, case, , contends that the dismissal of the writ petition, by order dated 26.11.1998, is well-reasoned and justifiable, which does not call for any judicial review much less a review under consideration.
6. Mr. R. Krishnamurthy, learned senior counsel for the 1st respondent, invited my attention to C1 (6) of the sale notice dated 1.7.1992, which reads as follows:
"UTI reserves the right to cancel or postpone the sale at any time at its discretion. It also reserves the right to reject any offer including the highest offer without assigning any reason. In such event, the money paid will be returned without any interest unless the sale is forfeited as above."
Mr.K.R. Krishnamurthy, learned senior counsel for the 1st respondent therefore contends that the 1st respondent has got every right either to cancel or postpone the sale at any time at its discretion or to reject any offer, including the highest offer without assigning any reason.
7. Mr. R. Krishnamurthy, learned senior counsel for the review applicant also brought to my notice that the 2nd respondent herein has subsequently filed a civil suit, C.S.No. 368 of 1999, on the file of the Original Jurisdiction of this Court, seeking a decree for specific performance of the contract. Hence, Mr. R. Krishnamurthy, learned senior counsel for the 1st respondent contends that the relief sought for by the review applicant in the writ petition cannot be entertained and granted as rightly held in the order dated 26.11.1999 in W.P.No. 20884 of 1992.
8. Lastly, Mr. R. Krishnamurthy, learned senior counsel for the 1st respondent contends that the 1st respondent is not going to either accept the bid offered by the review applicant or that of the 2nd respondent as the 1st respondent has taken a decision not to sell the property in question.
9. Mr.T.V. Ramanujam, learned senior counsel for the 2nd respondent fairly admits the fact of pendency of the civil suit in C.S.No. 368 of 1999, filed by the 2nd respondent, on the Original Side of this Court. Learned senior counsel contends that even though power is reserved for the 1st respondent either to cancel or postpone the sale at any time at its discretion and to reject any offer, including the highest offer, without assigning any reason and the same is the subject-matter to be decided in the above civil suit and, therefore, the subsequent decision of the 1st respondent not to confirm the sale either in favour of the review applicant or the 2nd respondent would not tilt the right of the parties.
10. 1 have given my careful consideration to the submissions of all the parties.
11. The Apex Court in Food Corporation of India case, held that the failure of the State or its instrumentality, even in contractual transactions, to consider and give due weight to the legitimate expectations of the persons concerned may render the decision arbitrary and unfair and this is how the requirement of due consideration of a legitimate expectation forms part of the principle of non- arbitrariness, a necessary concomitant of rule of law.
12. In Tata Cellular case, , the Apex Court, while analysing the power of judicial review under Article 226 of the Constitution of India in respect of contracts entered into on behalf of the State, held as follows:
"The principle of judicial review would apply to the exercise of contractual powers by Government bodies in order to prevent arbitrariness or favouritism. However, there are inherent limitations in exercise of that power of judicial review. Government is the guardian of the finances of the State. It is expected to protect the financial interest of the State. The right to refuse the lowest or any other tender is always available to the Government. But, the principles laid down in Article 14 of the Constitution have to be kept in view while accepting or refusing a tender. There can be no question of infringement of Article 14 if the Government tries to get the best person or the best quotation. The right to choose cannot be considered to be an arbitrary power. Of course, if the said power exercised for any collateral purpose the exercise of that power will be struck down."
13. Similarly, in Sterling Computers Ltd. case, , the Apex Court, held as follows:
"While exercising the power of judicial review, in respect of contracts entered into on behalf of the State, the Court is concerned primarily as to whether there has been any infirmity in the "decision making process." By way of judicial review the Court cannot examine the details of the terms of the contract which have been entered into by the public bodies or the State. Courts have inherent limitations on the scope of any such enquiry. But at the same time the Courts can certainly examine whether 'decision making process' was reasonable rational not arbitrary and violative of Article 14 of the Constitution. If the contract has been entered into without ignoring the procedure which can be said to be basic in nature and after an objective consideration of different options available taking into account the interest of the State and the public, then Court cannot act as an appellate authority by substituting its opinion in respect of selection made for entering into such contract. But, once the procedure adopted by an authority for purpose of entering into a contract is held to be against the mandate of Article 14 of the Constitution, the Court cannot ignore such action saying that the authorities concerned must have some latitude or liberty in contractual matters and any interference by Court amounts to encroachment on the exclusive right of the executive to take such decision."
14. As per the survey of the principles laid down by the Apex Court in the aforesaid decisions, it is well settled in law that the public authorities alone could well judge the implications and the resultant effect of their policies and the court is not the Judge of the merits of the decision-maker's policy. While the choice of the policy is for the policy-maker alone, the fairness of his decision is the concern of the Court. The scope of judicial review is limited only to test the decision-making process and not the very decision itself.
15. The Apex Court, in its recent decision in Punjab Communications Ltd. v. Union of India, , of course, referring to the decision in Food 3Corporation of India's case, while dealing with the principle of legitimate expectation, held that the change in policy defeating the substantive legitimate expectation must satisfy the test of Wednesbury reasonableness. The Apex Court further held that there cannot be a cause of action on the basis of "attempt at fraud" which did not materialise or fructified and the issue which has become non-issue having regard to the subsequent developments would render the writ petition filed earlier as infructuous. The decision-maker can sustain the change in policy by adhering to Wednesbury principle of rationality, predictability and certainty in their dealings with the public and if the change in policy, which is the cause for defeating the substantive legitimate expectation, satisfies the Wednesbury principle, the revised policy cannot be said to be in gross violation of any substantive legitimate expectation of the persons concerned which warrants interference in judicial review proceedings.
16. In the instant case, as rightly be pointed out by Mr. R. Krishnamurthy, learned senior counsel for the 1st respondent, the mere refusal of the 1st respondent either to accept the bid of the review applicant or that of the 2nd respondent cannot be complained of as an arbitrary and unreasonable act of the 1st respondent. In my considered opinion, the decision of the 1st respondent not to accept the bid offered by the review applicant, as well as that of the 2nd respondent, is only with a view to get still more lucrative offer than that of the review applicant and the 2nd respondent. Such a change in decision taken by the 1st respondent, which is a public authority, cannot be subjected to judicial review under Article 226 of the Constitution of India especially when the 1st respondent has properly balanced the legitimate expectation of the review applicant vis-a-vis the need for a change in its decision. The reason for such a change in its decision is to get highest possible bid than offered by the review applicant and the 2nd respondent. The change in decision of the 1st respondent, though it defeats the substantive legitimate expectation of the review applicant, is well justified on Wednesbury principle of reasonableness and the same cannot be said to be irrational or perverse when such right has been reserved in the very sale notice dated 1.7.1992. As observed above, this Court, while exercising the powers of judicial review under Article 226 of the Constitution, cannot appreciate the cause of action on the basis of an attempt at fraud, which, as on date, not yet materalised or fructified.
17. In any event, review is by no means an appeal in disguise whereby an erroneous decision is reheard and corrected, but lies only for patent error. No mistake or error apparent on the face of my order dated 26.11.1998, made in W.P.NO. 20884 of 1992, is brought to my notice, warranting review of the same. Therefore, the grounds raised by the review applicant do not fit in any one of the grounds adumbrated in Order 47, Rule 1, of C.P.C. read with Article 226 of the Constitution of India, requiring review of my order dated 26.11.1999, made in W.P.No.20884 of 1992. Hence, the review application is dismissed without prejudice to the review applicant to work out her remedy in the manner known to law. I am further obliged to observe that parties, uninfluenced by the order in the above review application, can very well agitate their rights in the civil suit, C.S.No. 368 of 1999, pending on the file of this Court.