Rajasthan High Court - Jodhpur
Satveer Singh vs State Of Raj. & Ors on 26 March, 2009
Author: Gopal Krishan Vyas
Bench: Gopal Krishan Vyas
1
IN THE HIGH COURT OF JUDICATURE FOR RAJASTHAN AT
JODHPUR
:ORDER:
1. S.B. Civil Writ Petition No.1644/2009.
(Surendra Kumar Vs. State of Rajasthan & Others)
2. S.B. Civil Writ Petition No.1749/2009.
(Ramesh Kumar & Anr. Vs. State of Rajasthan & Others)
3. S.B. Civil Writ Petition No.1779/2009.
(Harbans Kumar & Ors. Vs. State of Rajasthan & Others)
4. S.B. Civil Writ Petition No.1780/2009.
(Rajiv Kumar Vs. State of Rajasthan & Others)
5. S.B. Civil Writ Petition No.1783/2009.
(Gaurav Saluja Vs. State of Rajasthan & Others)
6. S.B. Civil Writ Petition No.1837/2009.
(Sukhjindra Singh Vs. State of Rajasthan & Others)
7. S.B. Civil Writ Petition No.1838/2009.
(Manoj Kumar Vs. State of Rajasthan & Others)
8. S.B. Civil Writ Petition No.1904/2009.
(Satveer Singh Vs. State of Rajasthan & Others)
9. S.B. Civil Writ Petition No.1905/2009.
(Mani Ram Vs. State of Rajasthan & Others)
10. S.B. Civil Writ Petition No.1906/2009.
(Ravindra Singh Vs. State of Rajasthan & Others)
11. S.B. Civil Writ Petition No.2080/2009.
(Manoj Kumar Vs. State of Rajasthan & Others)
2
DATE OF ORDER : March 26th , 2009.
PRESENT
HON'BLE MR. JUSTICE GOPAL KRISHAN VYAS
____________________________________
Mr. Sandeep Mehta/Mr. Vineet Jain/Mr. Pankaj
Sharma/
Mr. Vijay Kumar Vyas/Mr. Sanjeet Purohit,
Advocates for the petitioners.
Mr. M.R. Singhvi for the Department.
Mr. R.L. Jangid, Addl. Advocate General.
Mr. N.M. Lodha/Mr. Rajesh Joshi/Mr. R.S.
Choudhary for private respondents.
Reportable
BY THE COURT :
In the above writ petitions, the petitioners are challenging the action of respondents accepting the financial instrument other than bank draft for the purpose of application fees and 10% earnest money of the license fees for considering the case of private respondents for the grant of licence under the Rajasthan Excise Act, 1954 (in short, to be called "the Act"
hereinafter) and the rules framed thereunder, being Rajasthan Excise Rules, 1956 (in short, to be called "the Rules" hereinafter). All the petitioners have prayed that the application for grant of license to the private respondents for sale of poppy straw may be cancelled and the same may be awarded to the petitioners; and, further, 3 in some of the writ petitions, it is prayed that the respondents may be directed to convene fresh lottery after rejecting all the applications of the private respondents.
For the sake of convenience, however, the facts narrated in S.B. Civil Writ Petition No.1644/2009, Surendra Kumar Vs. State of Rajasthan & Others are taken into consideration for adjudication of the controversy involved in these writ petitions.
Petitioner Surendra Kumar is a liquor contractor dealing in liquor for last 30 years and he is having both retail as well as wholesale licence for last so many years. Case set out by the petitioner is that on 10.02.2009 respondent No.2 Excise Commissioner, Udaipur invited applications for grant of licence for the retail as well as wholesale shops of poppy straw for the year 2009-2010 for various districts in the State. In the advertisement Annex.-1 issued by the respondent, there are two very important features to be noted viz., (i) application fee will be one per cent of the licence fee reserved for the shop for which the application is made and that fees was to be payable by way of demand draft which would be non-refundable, (ii) in case of any deficiency in the application fee, earnest money or documents regarding identification, the application will not be considered in the lottery 4 procedure which was to be adopted by the respondents. As per Schedule-B appended to the application form, the licence fee, earnest fee and application fee, for the district Sriganganagar, the licence fee fixed was Rs.6,35,02,000/- and, accordingly, the corresponding application fee, being 1% of the licence fee, was Rs.6,35,020/-. There were 12 wholesale groups (in production field) and 24 wholesale/retail groups (in consumption field) for which the applications were invited and it was provided that the persons who succeeded in 24 retail groups will only be eligible to apply for 12 wholesale groups. After drawl of the lots for retail groups, lottery of wholesale groups was to be drawn on 13.03.2009. The last date for filing application for wholesale group was 12.03.2009.
The contention of the petitioner in the writ petition is that as per terms and conditions provided with the application form, there is condition at point 4.2 which provides that the applicant shall have to deposit 1% of the reserve price as application fee and the same shall not be refundable and the said fee may be deposited in the form of demand draft drawn in favour of the concerned District Excise Officer and to be annexed with the application form. As per the condition at point No.4.8, it is mentioned that 5 any incomplete application form shall not be taken into consideration. Point No.5 of Annex.-
2 provides that 10% earnest money shall be deposited along with the application and the earnest money which will be 10% of the annual licence fee of the relevant group shall also be annexed along with the application in the form of demand draft drawn in favour of the concerned District Excise Officer; and, if the applicant is selected for licence, the earnest money deposited shall be adjusted against the security deposit. It is also made clear that 1% of the licence fee deposited along with the application form is not refundable whereas 10% of the earnest money of the annual licence fee will be refundable if the applicant is not selected; meaning thereby, as per the procedure for grant of licence of wholesale/retail group, 1% application fee is not refundable whereas 10% earnest money is refundable to those applicants who do not succeed to get the licence whereas 10% earnest money of the selected applicant shall be adjusted against the security deposit.
The case of the petitioner is that in Sriganganagar district where the petitioner applied he was allotted No.11 for participating in the process of lottery. Respondent No.5 along with certain other persons, one of them being Vijendra Singh also applied for grant of 6 licence in Sriganganagar district as well as for other districts. Respondent No.5 Hastimal, in all, submitted 5 applications and Vijendra Singh submitted 3 applications; but, respondent No.5 along with his application did not annex any demand draft as required under the conditions of the application form but annexed cheques for the amount of 1% application fees, therefore, the applications of respondent No.5 were not only bereft of demand draft as required under the conditions of the application form but also contained cheques which were not drawn on his account but were drawn on the account of one Adarsh Credit Cooperative Society Ltd.
The case of the petitioner is that every application was required to be supported by the demand draft and there is no provision in the terms and conditions to accept any cheque or other instrument but respondent No.5 filed 5 applications and along with those applications, he has annexed the cheques, therefore, his chances of getting the licence enhanced considerably whereas the chances of those applicants, including the petitioner, who filed proper applications along with demand draft diminished. The petitioner's case is that at the time of drawing of the lots when the petitioner came to know the irregularity committed by respondent No.5, then, an objection 7 was raised before the District Excise Officer, Sriganganagar orally as well as to the Excise Commissioner telephonically; but, the complaint of the petitioner yielded no result. Therefore, a copy of the complaint was sent by the petitioner through FAX to the Excise Commissioner, in which, he pointed out the irregularity committed by respondent No.5 during the draw.
In the complaint, it is pointed out by the petitioner that due to illegal action of the respondent District Excise Officer all the legitimate applicants were illegally ousted from the process by condoning the irregularity of respondent No.5. The objection which is raised by the petitioner was thrown in the waste-paper basket and respondents proceeded to draw the lottery; and, obviously, in the draw, respondent No.5 whose chances were enhanced by accepting his five applications by the respondents without any demand draft was declared successful for the groups of shops in Sriganganagar district and the petitioner was kept in the reserve-list at S.No.1.
The case of the petitioner is that, in all, 35 applications were received for the shops in the Sriganganagar district and, out of those, five applications were made by respondent No.5 and three applications were made by Vijendra Singh; and, all these eight applications were 8 supported with cheques instead of demand draft in contravention of the conditions No.4.2 and 5 of application form. Therefore, those applications were to be rejected at the threshold but the respondent Department has committed an illegality in permitting the incompetent applicants to participate in the lottery procedure which resulted into lesser opportunity to the petitioner and like persons. In this view of the matter, the action of the respondents in permitting incompetent applicants to participate in the procedure and awarding licence to such person is totally illegal.
Contention of the petitioner is that it is specifically stipulated under condition No.4.2 that application form shall be accompanied with demand draft of 1% application fees and, admittedly, no demand draft was submitted by respondent No.5 and he filed five applications and all those five applications were supported by cheques issued by the Adarsh Credit Cooperative Society Ltd, which is not permissible under the condition published by the respondents, therefore, direction may be issued to respondents to grant licence to the petitioners because he is at S.No.1 in the reserve-list and reject all those applications filed by the private respondent supported by cheques because it is in contravention of condition No.4.2 mentioned in 9 the advertisement issued by the respondents inviting applications.
Learned counsel for the petitioner vehemently argued that bare look at the advertisement will go to show that the condition for depositing 1% of the licence fee is provided with the restriction that it should be in the form of demand draft only and, admittedly, no demand draft was deposited by respondent No.5 whose application is selected after the drawl of the lottery. Further, it is argued that the application-fee is non-refundable and the petitioner has filed the demand draft of application fee of Rs.6,35,020/-, which is not refundable. Such condition is a big discouragement to the non-serious as well as unscrupulous elements in participating in the lottery procedure. In condition No.4.2, it is specifically mentioned that the application fee is to be deposited by way of demand draft drawn in favour of the concerned District Excise Officer. It is contended by learned counsel for the petitioner that this condition has no room for any relaxation or interpretation in either way except that relevant demand draft must accompany the application form. It is further contended by learned counsel for the petitioner that the condition of not refunding 1% application fees filed along with application 10 forms is meant to impose the condition for weeding out unnecessary applications and non- serious applicants because on being unsuccessful this amount of more than six lakh rupees is not going to be refunded. According to learned counsel for the petitioner such condition is analogous to imposition of penalty because despite being unsuccessful, the applicant is deprived of the amount deposited and it is settled law that any penal statute or policy is to be interpreted strictly and the provisions thereof require to be followed strictly; meaning thereby, the respondent had no jurisdiction to relax such condition enumerated in the advertisement because no such power is contained in the application form or is provided in the rules. Therefore, the applications of respondent No.5 accepted by the respondent department on the basis of cheques is totally arbitrary and illegal; and, accordingly, this Court is required to interfere in the matter under Article 226 of the Constitution of India to check such type of illegality committed by the respondents.
It is contended by learned counsel for the petitioner that respondent No.5 has been allowed to tamper with the process of drawing the lots as well as said tampering has been condoned by the official respondents. In this case, respondent 11 No.5 has filed 5 applications and although there is no bar upon filing more than one applications; but, in view of the fact that the application fee is more than approximately six lakh rupees, a person may not be in a position to apply, as in this case, by filing five application and paying the amount five times, therefore, in connivance with the respondents, by annexing cheques which are only negotiable instrument drawn on a future date and not involving any deposit of money before its drawal, meaning thereby, the respondents have illegally condoned the mandatory condition of furnishing demand draft and permitted respondent No.5 to file 5 applications supported by cheques whereas the applications of respondent No.5 which were not accompanied by demand drafts were to be rejected at the threshold. But, by fraud and illegality writ large on the face of record, respondent No.5 was allowed to file application along with cheque issued by Adarsh Credit Cooperative Society Ltd. of the Bank of Rajasthan Ltd. and respondent No.5 was not even asked as to how these cheques will be drawn by him or were connected with him. Non-filing of demand draft by respondent No.5 and acceptance of his applications has infringed the right of the petitioner of equal protection of law granted under Article 14 of the Constitution of India and respondent No.5 has been granted 12 undue advantage. Therefore, the whole proceedings undertaken by respondent while accepting the applications which were annexed with cheques is totally illegal and the applications filed by respondent No.5 deserved to be rejected at the very initial stage but respondent No.5 and Vijendra Singh were given opportunity to participate in the lottery and, ultimately, due to increased number of applications, application of respondent No.5 was drawn in the lottery, therefore, it is apparent that large scale fraud has been played by the respondent No.5 in connivance with the officials of respondent department.
Learned counsel for the petitioner vehemently argued that Adarsh Credit Cooperative Society Ltd. is not banking institution; but, respondent No.5, who is in connivance with the respondents has propped him up so as to avoid the public glare and it is only best known to the respondents that how respondent No.5 came in possession of the cheques of Adarsh Credit Cooperative Society Ltd. and how the respondents overlooked this material aspect despite objections raised by the petitioner in this regard; but, the fact remains that due to action/inaction the right of the petitioner and like persons of property in business provided under Article 19 (1) (g) and 300A of the 13 Constitution of India has been denied to the petitioner while illegally accepting the application for licence in favour of respondent No.5 and the petitioner has been deprived from carrying out his business which is not permissible in the eye of law.
Learned counsel for the petitioner has invited the attention of this Court towards judgment of Hon'ble Supreme Court reported in (1979) 3 SCC 489 (Ramana Dayaram Shetty Vs. International Airport Authority of India & Ors.) in which according to learned counsel for the petitioner, it has been held by Hon'ble Supreme Court that administrative authorities are bound by the norms, standards and procedure laid down by it for others. Disregard to the norm or standard would invalidate its action unless based on some valid principle which is neither irrational or unreasonable nor discriminatory. The State Government cannot Act arbitrarily in entering into relationship, contractual or otherwise with a third party but its action must conform some standards or norms, which is rational and non-discriminatory. But, here in this case, the respondent No.5 has been granted a special indulgence while accepting his applications without any demand draft, therefore, in view of the judgment in case of Ramana Dayaram Shetty (supra), the action of the respondents 14 accepting the application forms without demand draft or on the basis of other document then the demand draft is illegal. So also, there is no power left with the respondents to relax the said condition.
While citing judgments reported in AIR 2006 SC 2652 (Kuldeep Singh Vs. govt. of NCT of Delhi) and AIR 2007 SC 119 (Noble Resources Ltd. Vs. State of Orissa & Anr.), it is argued that in the aforesaid judgments, it has been held by Hon'ble Supreme Court that in contractual matters the terms of invitation to tender may not be opened to judicial scrutiny but Courts can scrutinize the action of the Government or its agencies in exercise of their power of judicial review to prevent arbitrariness or favouritism in granting contract. For the said purpose, the public interest may be one of the factors to exercise power of judicial review. Therefore, it is prayed by learned counsel for the petitioners that the procedure adopted by the respondents while accepting the application forms without demand draft can be defined as illegal and arbitrary action, therefore, the petitioners are entitled for relief as sought for in the writ petitions and these writ petitions deserve to be allowed.
Per contra, Mr. M.R. Singhvi, learned counsel appearing for Excise Department first of all 15 raised certain preliminary objections for dismissing this writ petition. The contention of learned counsel for the respondent is that this writ petition is not maintainable because no legal or fundamental rights of the petitioners are denied. On the contrary, all the petitioners were bestowed the equal consideration and their applications were put into lottery and upon draw of lottery, it was found in favor of private respondent, therefore, the respondent Department has made literal compliance of Article 14 of the Constitution of India and have not committed any illegality.
Further, it is submitted that totally incorrect statement has been made by the petitioner that certain persons have applied along with the cheques of Rural Bank, which are not Nationalized Banks nor their head office is situated at Sri Ganganagar. But in fact, this assertion is totally incorrect because no cheque was appended with the application form of the Rural Banks and in fact as per general notice dated 10.2.2009 unequivocally and unambiguously provides that amount shall be deposited along with the application form by way of demand draft/ pay order in favor of the concerned District Excise Officer and this fact is available at page No.25 of the paper book. The applicant was required to pay application fees which is 16 Rs.6,35,020/- and same was not refundable and in the same manner 10% earnest money was to be deposited subject to adjustment in case the application is accepted against the amount to be paid by the applicant after acceptance of the application, otherwise upon rejection of application, 10% earnest money is refundable. The above provision was made for the object to secure the amount of the Government and in the present case, the amount by way of application fees was duly secured and has even been encashed on the basis of the same pay order which were filed by the applicant along with the application form, therefore, the decision of the Department is correct.
Learned counsel for the respondent-Department vehemently argued that this writ petition has been filed only with a view to cause loss to the State revenue so as to get this process and contract frustrated and call upon the State Government to invite fresh applications and refund the entire amount of all the applicants including private respondent. In this case 35 applications were filed and all the applicants deposited 1% application fees which is not refundable and 10% earnest money, which is refundable but now after selection of respondent No.5, with an oblique motive this writ petition has been filed on technical ground and it is 17 prayed that process is not in accordance with law. If such type of plea which is totally baseless is accepted then certainly in the present case, the Government is required to refund Rs.2,22,25,700/- to the respective applicants. The petitioner has tried to urge that on account of inclusion of the private respondent, the number of applicants have increased which has resulted into diminishing his chances/reducing his chances but this contention is totally unfounded because decision taken in this matter is a matter of policy and the petitioner cannot dictate the State Government how to undertake distribution of such kind of public largess. The method of lottery is quite just and fair in which all the applicants have been considered. Thus, it is abundantly clear that all the applicants were given equal treatment by the respondent Department, therefore, scope of judicial enquiry is confined to the question whether the decision taken by the Government is against any statutory provisions or in violative of the fundamental rights of the citizen or opposed to the provisions of Constitution of India. In fact, the decision taken by the Government does not appear to be agreeable to the Court, still it cannot be interfered. In the present case, every applicant was expected to apply and while applying they are 18 required to append with the application a demand draft of 10% of the stipulated contractual amount as an earnest money and he was further required to deposit 1% of the contractual amount which was not refundable. The substance of the condition is that Government should be assured that payment is secured and safe and this aspect was taken care of by the Government. Therefore, the petitioner cannot raise voice because his case was considered and his application was put to the lottery but unfortunately, he was not selected in the lottery and now he is raising ground that the respondent No.5 has filed five applications, which were not accompanied by demand draft and the Department has accepted the cheques but in fact no cheque was filed but pay order issued by the Adarsh Credit Cooperative Society Ltd. of the Bank of Rajasthan was affixed by the respondent No.5 along with all the five applications and after due enquiry, a conscious decision was taken by the Department to accept the said mode of payment, therefore, the decision taken by the State Government cannot be interfered. More so, it is admitted position of the case that the amount in question has already been encashed on the basis of the pay order/instrument, which is filed by the respondent No.5 along with his applications. As per the respondents, Adarsh Credit Cooperative Society Ltd., who has issued 19 pay order in favor of the District Excise Officer of the Bank of Rajasthan is a registered Banking Institution which is duly registered with the Government of India, Ministry of Agriculture and Corporation and before accepting the said pay order, the Department made an enquiry with regard to the said institution, which is authorized, entitled and competent to issue such type of bill of exchange, therefore, simply on the basis of bald statement of filing only cheques, the contention of petitioner cannot be accepted. The petitioner is raising hyper technical ground and seeking interference of this Court whereas in the present time of electronic era, various types of banking method have come into existence and payment can be made by e-mail, e-banking, online and cash also. The only requirement is that the person competent to receive application must be satisfied that amount involved is duly safeguarded and secured and in this case before acceptance, the Department has made an enquiry and after satisfaction accepted the applications on the basis of the pay order issued by Adarsh Credit Cooperative Society Ltd. in which there is no illegality committed by the respondent Department, therefore, these writ petitions deserve to be dismissed.
Learned counsel for the respondents vehemently argued that action of the respondents 20 cannot be treated as non compliance of the terms of the application form. The Adarsh Credit Cooperative Society Ltd. upon enquiry assured that the Society is prepared to make payment of the bill of exchange, which is pay order, as and when presented to it, therefore, the pay orders are not unknown phenomena but are documents akin to banker's drafts for current use frequently obtained by customers for making payments to Government Department. Therefore, no illegality has been committed by the respondent Department while accepting the pay order filed by the respondent No.5 along with application form. Learned counsel for the respondent vehemently argued that this writ petition suffers from non- joinder of necessary party because the petitioner is challenging the credibility, competence and authority of Adarsh Credit Cooperative Society Ltd., therefore, the said Society is necessary party and in absence of said society, the writ petition is not maintainable. Further, it is pointed out by learned counsel for the respondents that on one hand, the petitioner without any pleading raising voice with regard to status of Adarsh Credit Cooperative Society Ltd. but on the other hand in reply to the preliminary objections raise in para No.10 of the preliminary objections, it is specifically stated by the petitioner that the preliminary objections are 21 denied and further it is stated that there is no challenge to the credibility, competence and authority of the Adarsh Credit Cooperative Society Ltd. but challenge has been made to the illegal action of the respondent-Department, therefore, the Adarsh Credit Cooperative Society Ltd. is not a necessary party. Hence, the preliminary objection is not tenable.
Learned counsel for the respondent Department as well as learned counsel for the respondent No.5 vehemently argued that this writ petition has been filed on hyper technical ground that the respondents have accepted the application forms without any demand draft but in the terms and conditions of the application form in para No.4.2, it was specifically mentioned that the applicant should have affixed the demand draft of application fees in favor of District Excise Officer of the said area. Admittedly, though the application was not supported with the demand draft but application was supported with the pay orders issued by the Adarsh Credit Cooperative Society Ltd. and after due enquiry and satisfaction for encashment the said document was accepted and no illegality has been committed by the respondent Department, so also, the petitioner's case was also considered because he has filed the demand draft along with his application and all the applications received by 22 the Department were put to lottery and in lottery unfortunately the petitioner was not selected, therefore, now on this technical ground, he has filed this writ petition and challenging the entire proceedings, so also when his name was included at Sl. No.1 in reserve list, then, he has made prayer that while rejecting the application of respondent No.5, the license may be granted in his favour for sell of poppy straw in Sriganganagar District. Learned counsel for the Department vehemently argued that there is no specific pleading with regard to status of Adarsh Credit Cooperative Society Ltd. but at the time of arguments, arguments were raised with regard to status of said society and provisions of Banking Regulation Act, 1949 were placed before this Court. During the course of arguments, it is urged that the said society is not banking institution, therefore, the Department has committed an error while accepting the document which is issued by the said society, which is not a banking institution as provided under the Act of 1949. Learned counsel for the respondent has cited certain judgment that without pleadings no such plea can be raised by the petitioner. More so without impleading the Adarsh Credit Cooperative Society Ltd. as party. Therefore, this writ petition deserves to be dismissed.
In reply to the writ petition, it is admitted 23 by the respondents that the respondent No.5 has filed five applications accompanied by pay orders issued by the Adarsh Credit Cooperative Society Ltd. and those pay orders cannot be defined as cheques but the petitioner has mentioned in the writ petition that the cheques were accepted by the Department but in fact this contention is totally false. Further, in reply, it is admitted that while accepting those pay orders issued in favour of District Excise Officer, Sriganganagar by the Adarsh Credit Cooperative Society Ltd. of the Bank of Rajasthan Limited in support of application, a necessary enquiry was made and after due satisfaction for encashment of money and to get satisfaction that revenue will be collected, the decision was taken by the Department and applications of respondent No.5 were put to lottery. It is true that an objection was raised by the petitioner at the time of lottery that the applications filed by respondent No.5 cannot be accepted for the simple reason that he has not affixed demand draft which is condition precedent in para No.4.2 of the terms and conditions of the application form but after due satisfaction when department satisfied that the pay orders will be encashed then after receiving a communication Annexure-R1/2 dated 26.2.2009 and a certificate of registration Annexure-R1/3, a conscious decision has been 24 taken by the Department to accept the pay orders for the simple reason that intention of accepting the application fees, which is not refundable was to ensure the encashment of money and in this case immediately the money was encashed upon the said document. Therefore, no illegality has been committed by the Department while accepting the application form of the respondent No.5 on the basis of pay orders issued by the said society.
Learned counsel for the respondent - department during the course of arguments submitted that the Hon'ble Supreme Court in case of Poddar Steel Corporation Vs. Ganesh Engineering Works & Ors., reported in 1991 (3) SCC 273 held that as a matter of general proposition it cannot be held that an authority inviting tenders is bound to give effect to every terms mentioned in the notice in meticulous detail, and is not entitled to waive even a technical irregularity of little or no significance. The requirements in a tender notice can be classified into two categories, those which lay down the essential conditions of eligibility and the others which are merely ancillary or subsidiary with the main object to be achieved by the condition. In the first case the authority issuing the tender may be required to enforce them rigidly. In the other cases, it must be open to the authority to deviate from and 25 not to insist upon the strict literal compliance of the condition in appropriate cases. While inviting attention towards the aforesaid judgment, it is submitted that the condition of filing demand draft as provided under para No.4.2, it can be said that this condition is ancillary condition and department is having jurisdiction to deviate from it and not to insist upon in its strict sense. In this case, the Department has chosen to accept the pay orders which is filed by the respondent No.5 after due satisfaction of encashment of application fees, which is not refundable, therefore, in view of aforesaid judgment in which two other judgments of Bombay and Kerela High Courts were considered and upheld reported in AIR 1984 Bom 351 and AIR 1982 Ker 81, it has been held by Hon'ble Apex Court that the authority inviting tenders is not bound to give effect of every terms mentioned in the notice in meticulous detail and is entitled to waive the ancillary conditions, which has been done in this case.
Heard Mr. Sandeep Mehta, Mr. Pankaj Sharma, Mr. Vineet Jain, Mr. V.K. Vyas and Mr. Sanjeet Purohit, learned counsel for the petitioners and Mr. M.R. Singhvi, learned counsel appearing on behalf of respondent-Department as well as Mr. Rajesh Joshi and Mr. N.M. Lodha, learned counsel appearing on behalf of private respondents. 26 First of all, I deem it just and proper to decide the preliminary objection raised by respondents with regard to maintainability of the writ petition.
The respondents have raised preliminary objection that the petitioner has not submitted correct facts before this Court and categorically stated in the writ petition that a cheque was filed by the respondent No.5 along with the application form. This assertion has been made to mis-guide this Court and to obtain relief from this Court and in fact the respondent No.5 has filed pay orders issued by the Society in favor of District Excise Officer, therefore, all the writ petitions deserve to be dismissed on this ground alone. In my opinion, these writ petitions cannot be dismissed on this preliminary objection because admittedly the petitioners are raising voice that the private respondent and others were allowed to file applications for grant of license without affixing demand draft as required under Condition No.4.2 of the application form and this question requires adjudication on merit, therefore, the prayer of the respondents for dismissing these writ petitions upon preliminary objection is rejected.
After hearing both the parties and perusing the entire record, in these cases, the following crucial question is involved which is to be 27 adjudicated by this Court :
"Whether the action of the respondent Department in accepting the application forms for grant of licence of poppy straw in respect of various districts of the State supported by an instrument other than demand- draft for 1% application fees, which is non- refundable and 10% amount of earnest money of license fees, is arbitrary, illegal or unconstitutional in view of the fact that as per para 4.2 of the application form it was notified that every application may be accompanied by demand-draft ?"
For adjudicating the above question which is involved in all these cases, it is required to be observed that the following facts are admitted facts in these cases :
(1) The petitioners' applications were accepted and put to lottery for the purpose of grant of poppy straw licence for the districts for which they applied. None of the applications supported by the demand-draft was rejected by the respondent Department. (2) It is also admitted fact that all the petitioners were allowed to participate in the drawal of the lottery and those persons whose applications were accepted on the basis of demand drafts along with those 28 applications which were supported by instrument other than demand draft did not challenge the process. Only the petitioners have raised this question that the Department has illegally accepted the applications on the basis of instrument other than demand draft and enhanced the chance of respondent No.5, therefore, they did not succeed at the lottery and those applicants who filed applications along with other instrument than the demand draft were granted licence.
(3) It is also admitted position of the case that one applicant can file more than one applications but only condition is that he has to pay non-refundable application fee of 1% of the licence fee and 10% of the annual licence fee as earnest money which is refundable in the event of rejection of the application with each application.
However, in the event of acceptance of the application, 10% of the annual licence fee deposited as earnest money is adjustable towards security deposit.
The petitioners' case is that as per the application form for grant of licence for poppy straw, the Excise Department of the State issued administrative instructions/guideline for the year 2009-2010. According to the said 29 administrative instructions/guideline, every applicant was having right to file application accompanied by 1% of the licence fee as application fee and, for the mode of payment of the same, a demand draft for the said amount was required to be filed along with the application form. It was also made clear that 1% application fee is non-refundable. Likewise, in condition No.5, it is specifically provided that 10% of the annual licence fee was required to be deposited towards earnest money and, for the same, a demand draft was to be filed along with the application form; and, it was made clear that in the absence of deposit of the earnest money, the application form will not be considered and, if after affixing the earnest money, the applicant gets selected, then, the amount of 10% of the annual licence fee shall be adjusted.
It is not disputed before this Court that no application fees or earnest money was filed along with the applications filed by the petitioners as well as private respondents and other applicants. The grievance of the petitioners is that they complied with the condition incorporated in the instructions and conditions issued by the Government which were mandatory in nature; but, the private respondent filed cheque of Adarsh Credit Cooperative Society Ltd. along with the application form and those applications were 30 accepted by the Department; and, due to this illegal action, the private respondent got more chances to get the licence whereas probable chances of the petitioners were decreased. As per the petitioners, the Department has contravened their own terms and conditions and illegally accepted the application form of the private respondents accompanied by cheque.
Learned counsel for the respondents, Mr. M.R. Singhvi has pointed out that the petitioners have not submitted correct facts before this Court. In fact, no cheque was filed by the private respondent; but, he has filed pay-order issued by Adarsh Credit Cooperative Society Ltd. and, at the time of accepting his application, it was first ascertained after due enquiry and satisfaction was made by the respondent Department that in the event of acceptance of the application, the payment shall be released immediately in favour of the Department. It is stated at Bar that after acceptance of the application the money has been encashed and deposited in the government treasury.
In my opinion, the State Government has issued administrative instructions and terms/conditions which are not statutory in character, therefore, it is to be seen which condition is essential and which is ancillary and, to what extent, this Court can interfere in 31 the decision taken by the State Government while accepting the application on the basis of a document/instrument other than a demand draft. In this view of the matter, upon perusal of the language used in para 4.2 of the terms/conditions, it is obvious that a condition was incorporated that every application shall be accompanied by demand draft of 1% of the licence fee as application fee in favour of the District Excise Officer. But, in the event of filing other document/instrument, decision was taken by the respondent Department that upon enquiry if it is satisfied by the financial institution that the payment shall be released forthwith, then, those applications may also be accepted. This decision was taken upon the objection raised by the petitioner at the time of lottery as per condition No.17 of the said terms/conditions in which there is power left with the respondent Department to take final decision in case any dispute arises. Said condition No.17 reads as under :
"17. व द आदद क स त म त रय डड प क दक क कत, आ द ए आ द पत क श य अ ज पत क श क सम%न' म ककस) पक र क व द ककस) क )क तद,, व षम , ल प आदद क स त क सम%न' म आ%क र/ आयक क त रय अत म ह ग ए अ ज ' र/ उसस % धय ह ग ।"
In this view of the matter, a decision was 32 taken by the Department after due satisfaction that payment will be released forthwith by Adarsh Credit Cooperative Society Ltd. in the event of acceptance of the application of respondent No.5. In my opinion, a conscious decision is taken in the interest of the State having jurisdiction to take such decision, then, interference in the decision is not warranted. The case of the respondents is that although as per condition No.4.2 a demand draft was to be attached along with the application; but, other document/instrument which is admittedly not a cheque but a pay-order issued by Adarsh Credit Cooperative Society Ltd. who assured the Department by way of issuing certificate that they will make payment in the event of acceptance of the application which is admittedly encashed also, then, certainly private respondent Hastimal has lost 4% of the licence fee as application fee because his four applications were rejected and one was accepted; meaning thereby, a decision was taken by the Department after due satisfaction for the release of the payment of application fee which cannot be questioned.
The ground of the petitioner that his chances were decreased is not tenable in view of the fact that at the Jaipur Bench of this Court, a writ petition was filed by one Sant Ram, being S.B. Civil Writ Petition No.2052/2009, decided on 33 24.02.2009, in which, the co-ordinate Bench of this Court (at the Jaipur Bench) held that no restriction can be imposed upon any applicant to file more than one applications. Every applicant has a right to file more than one applications but each of such application must be accompanied by 1% of the licence fee towards the application fee through document/instrument which ensures payment of said 1% amount of the application fee which is not refundable.
The contention of the petitioner with regard to decreasing probable opportunities of the petitioner is also unfounded because, at the time of acceptance of application form of the private respondent, it was first satisfied after due enquiry by the respondent Department that in the event of accepting the application at the final lottery, 1% amount of licence fee towards application fee which is essential for considering the application will be released.
In this view of the matter, when the petitioners' applications were also considered
and put to lots for the purpose of lottery, then, it can be said that no right of the petitioner was infringed. More so, while accepting large number of applications filed by the applicants, the State has gained revenue without causing prejudice to anyone, therefore, the contention of the petitioners is totally unfounded. More so, 34 in my opinion, the latter part of condition No.4.2, is only ancillary condition of furnishing 1% amount of the licence fee as application fee, and, for the same, the jurisdiction vests in the Department in view of the para 17 of the terms/conditions, whereunder, upon any dispute raised by the applicants with regard to violation of terms and conditions, the Excise Commissioner had had jurisdiction to take decision and the decision of the Excise Commissioner is final in such event.
In the case on hand, a conscious decision has been taken by the Department in the interest of the State for which the State cannot be blamed. Merely upon the objection raised by the petitioner that condition No.4.2 and Condition No.5 has been violated. In my opinion, the condition of filing demand draft is required to be ignored because condition No.4.2 and condition No.5 does not put any restriction that no instrument other than demand draft will be accepted. Therefore, such type of condition can be termed as ancillary condition because in present time of electronic era; various types of banking methods have come into existence and payment can be made by e-mail, e-banking, online and cash, therefore, providing only one mode of payment by way of filing demand draft itself is un-reasonable and insufficient, therefore, in the 35 interest of State and within the jurisdiction left with the Department under Condition No.17, final decision was taken to get more revenue without causing prejudice to the rights of any person by way of accepting applications which were supported by the instrument other than demand draft.
The above adjudication is well supported by the judgment of the Supreme Court, reported in (1991) 3 SCC 273, in which, the apex Court has held after considering judgments cited by petitioner, reported in (1979) 3 SCC 489, that the requirements in a tender notice can be classified into two categories viz., those which lay down essential conditions of eligibility and those which are merely ancillary or subsidiary to the main objective. For this proposition, in the present case, too, condition No.4.2 is required to be discussed. In the first part of the said condition, it is mandatory that each application must be supported by 1% of the licence fee towards application fee while the latter part of the condition simply reads that, "
"4.2- .................... उक आ द शलक क डडम णड ड फ, सम%ध' स<ल आ%क र/ अध'क र/ क पक म % य < कर आ द क स सलग कर आ शयक ह ग ।" (latter part of Condition No.4.2) It is thus manifestly clear that the above 36 latter part of the condition is that the application fee may be filed in the form of demand draft; meaning thereby, the purpose of asking the applicants to file demand draft is to ensure the payment which is not refundable. In the context of the present controversy it may be observed that if while exercising power vested in the Department by virtue of condition No.17 of the policy/guideline, upon objection being raised by the petitioner, the Department has waived the latter part of the condition after due satisfaction in favour the private respondent, then, in my opinion, no occasion arises in these cases for interference in exercise of jurisdiction of this Court under Article 226 of the Constitution of India. The decision taken by the Department is not violative of Article 14 of the Constitution. In the above cited case of Poddar Steel (supra), vide para 6, 7 and 8, while considering the judgments cited by learned counsel for the petitioner reported in 1991 (3) SCC 273, following adjudication has been made by Hon'ble Apex Court :
"6. It is true that in submitting its tender accompanied by a cheque of the Union Bank of India and not of the State Bank clause 6 of the tender notice was not obeyed literally, but the question is as to whether the said non-
compliance deprived the Diesel Locomotive Works of the authority to 37 accept the bid. As a matter of general proposition it cannot be held that an authority inviting tenders is bound to give effect to every term mentioned in the notice in meticulous detail, and is not entitled to waive even a technical irregularity of little or no significance. The requirements in a tender notice can be classified into two categories - those which lay down the essential conditions of eligibility and the others which are merely ancillary or subsidiary with the main object to be achieved by the condition. In the first case the authority issuing the tender may be required to enforce them rigidly. In the other cases it must be open to the authority to deviate from and not to insist upon the strict literal compliance of the condition in appropriate cases. This aspect was examined by this Court in C.J. Fernandez v. State of Karnataka a case dealing with tenders. Although not in an entirely identical situation as the present one, the observations in the judgment support our view. The High Court has, in the impugned decision, relied upon Ramana Dayaram Shetty v. International Airport Authority of India but has failed to appreciate that the reported case belonged to the first category where the strict compliance of the condition could be insisted upon. The authority in that case, by not insisting upon the requirement in the tender notice which was an essential condition of eligibility, bestowed a 38 favor on one of the bidders, which amounted to illegal discrimination. The judgment indicates that the court closely examined the nature of the condition which had been relaxed and its impact before answering the question whether it could have validly condoned the shortcoming in the tender in question. This part of the judgment demonstrates the difference the two categories of the conditions discussed above. However, it remains to be seen as to which of the two clauses, the present case belongs.
7. The nature of payment by a certified cheque was considered by this Court in Sita Ram Jhunjhunwala v. Bombay Bullion Association Ltd. Several objections were taken there in support of the plea that the necessary condition in regard to payment was not satisfied and in that context this Court quoted the observations from the judgment in an English decision (vide Spargo case) that it is a general rule of law that in every case where a transaction resolves itself into paying money by A to B and then handing it back again by B to A, if the parties meet together and agree to set one demand against the other, they need not go through the form and ceremony of handing the money backwards and forwards. This Court applied the observations to a transaction requiring payment by one to another. The High Court's decisions in B.D. Yadav case and T.V. Subhadra Amma case are also illustrations where literal compliance 39 of every term of the tender notice was not insisted upon.
8. In the present case the certified cheque of the Union Bank of India drawn on its own branch must be treated as sufficient for the purpose of achieving the object of the condition and the Tender Committee took the abundant caution by a further verification from the bank. In this situation it is not correct to hold that the Diesel Locomotive Works had no authority to waive the technical literal compliance of clause 6, specially when it was in its interest not to reject the said bid which was the highest. We, therefore, set aside the impugned judgment and dismiss the writ petition of respondent 1 filed before the High Court. The appeal is accordingly allowed with costs throughout."
Now, with regard to interference in the matter, a specific ground has been raised by the respondents while citing the judgment of Supreme Court, reported in AIR 1996 SC 11. While discussing the question of judicial review, the Supreme Court has held that the principle of judicial review would apply to exercise of contractual power by the government bodies in order to prevent arbitrariness or favouritism; however, certain limitations have to be observed that the Government is the guardian of the finances of the State and the Government is to protect the financial interest of the State. 40 Relevant para 85 to 90 and 113 of the said judgment read as follows :
"85. It cannot be denied that the principles of judicial review would apply to the exercise of contractual powers by Government bodies in order to prevent arbitrariness or favouritism. However, it must be clearly stated that 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 is exercised for any collateral purpose the exercise of that power will be struck down.
86. Judicial quest in administrative matters has been to find the right balance between the administrative discretion to decide matters whether contractual or political in nature or issues of social policy; thus they are not essentially justiciable and the need to remedy any unfairness. Such an unfairness is set right by judicial review.
87 Lord Scarman in Nottinghamshire 41 County Council v. Secretary of State for the Environment, 1986 AC 240 at 251 proclaimed :
"'judicial review' is a great weapon in the hands of the Judges; but the Judges must observe the constitutional limits set by our parliamentary system upon the exercise of this beneficent power."
88. Commenting upon the Michael Supperstone and James Goudie in their work on "Judicial Review" (1992 Edition) at page 16 say :
"if anyone were prompted to dismiss this sage warning as a mere obiter dictum from the most radical member of the higher judiciary of recent times, and therefore to be treated as an idiosyncratic aberration, it has received the endorsment of Law Lords generally. The words of Lord Scarman were echoed by Lord Bridge of Harwich, speaking on behalf of Board when reversing an interventionist decision of the New Zealand Court of Appeal in Butcher V. Petrocorp Exploration Ltd. 18 March 1991."
89. Observance of judicial restraint is currently the mood in England. The judicial power of review is exercise to rein in any unbridled executive functioning. The restraint has two contemporary manifestations. One is the ambit of judicial intervention; the other covers the scope of the Court's ability to quash an administrative decision on its merits. These restraints bear the hallmarks of judicial control over 42 administrative action.
90. Judicial review is concerned with reviewing not the merits of the decision in support of which the application of judicial review is made, but the decision making process itself.
113 The principles deducible from the above are :
(1)The modern trend points to judicial restraint in administrative action.
(2)The Court does not sit as a court of appeal but merely reviews the manner in which the decision was made.
(3)The Court does not have the expertise to correct the administrative decision. If a review of the administrative decision is permitted it will be substituting its own decision, without the necessary expertise which itself may be fallible.
(4)The terms of the invitation to tender cannot be open to judicial scrutiny because the invitation to tender is in the realm of contract.
Normally speaking, the decision to accept the tender or award the contract is reached by process of negotiations through several tiers. More often than not, such decisions are made qualitatively by experts. (5)The Government must have freedom of contract. In other words, a fairplay in the joints is a necessary concomitant for an administrative body functioning in 43 an administrative sphere or quasi administrative sphere. However, the decision must not only be tested by the application of Wednesbury principle of reasonableness (including its other facts point out above) but must be free from arbitrariness not affected by bias or actuated by mala fides.
(6)Quashing decisions may impose heavy administrative burden on the administration and lead to increased and unbudgeted expenditure."
Upon perusal of the above judgment of the Apex Court, it is abundantly clear that judicial review of the government decision in acceptance or refusal of tender by the Courts cannot be made ordinarily. Here, in this case also, a technical objection has been raised by the petitioners that though their applications were considered and put to lottery but number of applications of respondent No.5 were put to lottery on the basis of instrument which is not expressly mentioned in the terms/conditions and the petitioner has complied with said condition in all respects; meaning thereby, with regard to the petitioners' contention for violation of Article 14 of the Constitution of India, it can be said that there is no violation of Article 14 because, as per judgment of this Court dated 24.02.2009 in S.B. 44 Civil Writ Petition No.2052/2009 (at Jaipur Bench), number of applications can be filed by one applicant and while doing so, the petitioners' applications along with applications which were filed by the various applicants supported by instrument other than demand draft were put to lot. Unfortunately, the petitioner was not selected in the lottery, therefore, now, he is raising voice and raising a technical ground. More so, the Department took decision in the financial interest of the State because upon every application the State is getting non- refundable 1% of the licence fee as application fee and if the petitioners' contention is accepted, then, the State will suffer financial loss.
Here, in this case, it is admitted position of the Department that all the pay orders filed by the private respondent with regard to application fee have been encashed and amount has been deposited with the department. Likewise, the earnest money has also been encashed and the department shall adjust the same towards security deposit. Therefore, the plea of violation of Article 14 of the Constitution of India is totally unfounded, and, accordingly, decision has been taken by the Department in the interest of the State, therefore, no interference is required to be made in the decision of the Department. 45
Aside from other aspects of the matter, in this case, without impleading Adarsh Credit Cooperative Society Ltd. as party respondent, while citing certain judgments, it is objected that the said society is not a banking institution. In my opinion, without impleading that institution as party, the petitioner cannot be permitted to raise voice because, in the rejoinder filed by the petitioner, he has specifically stated that the petitioner is not challenging the credibility, competence and authority of the aforesaid society but is challenging the action of the State Government whereby the State Government has accepted the pay-orders issued by the said society. In my opinion, when the petitioner is not challenging the credibility, competence and authority of the said society, then, he cannot be permitted to raise any objection with regard to business status of Adarsh Credit Cooperative Society Ltd. from which the Department encashed the pay-orders on behalf of the private respondent, therefore, the plea of the petitioner which is though not taken in the writ petition that Adarsh Credit Cooperative Society Ltd. is not a financial institution is hereby rejected.
In view of the above discussions, it is abundantly clear that the petitioners cannot be permitted to raise the ground in the event of 46 accepting their applications along with other persons who submitted the instrument other than demand draft. Obviously, as per the discussions above, terms and conditions of tender notice can be classified into two categories - one is the essential condition of eligibility and the others which are ancillary or subsidiary to the main object to be achieved by the condition. So far as the conditions of eligibility are concerned, they cannot be waived and must be complied with strictly and while the other conditions which are ancillary and subsidiary need not to be literally complied with. In this case, the Department was to get first satisfaction with regard to encashment of money and after due satisfaction, the condition of filing demand draft is waived upon which the money was encashed by the Department. Therefore, I hold that eligibility condition enumerated at Sl. No.2 of the application form was essential condition whereas Condition No.4.2, which provides to accept the instrument demand draft is hereby treated as ancillary and subsidiary condition. Therefore, the petitioners have no case for interference in view of the judgment of Hon'ble Supreme Court in case of Poddar Steel Corporation (supra). Further, the Department has all the powers to waive any ancillary condition and can take decision in the administrative side in the 47 financial interest of the State, which cannot be questioned. But on the ground of discrimination and violation of the essential conditions, the matter can be judicially reviewed. In the present facts and circumstances of the case, the petitioner's application was also put to lottery along with all the applications filed by the applicants, either one or more than one, the Department consciously took decision to accept the financial instrument other than demand draft for the purpose of deposit of 1% of the licence fee as application fee which is not refundable after due satisfaction of its realization, which cannot be questioned. Therefore, these writ petitions which are filed on a technical ground that no other instrument then the demand draft can be accepted by the respondent-Department have no substance. Hence, all the writ petitions are hereby dismissed with no order as to cost.
(Gopal Krishan Vyas) J.
Ojha, a.