Madhya Pradesh High Court
Aia Engineering Pvt. Ltd. vs Madhya Pradesh State Electricity Board ... on 5 July, 2004
Equivalent citations: AIR2004MP238, 2005(1)CTLJ450(MP), AIR 2004 MADHYA PRADESH 238
ORDER K.K. Lahoti, J.
1. Petitioner in this petition has sought direction against the respondents Nos. 1 and 2 to reject the pre-qualifying bid of respondent No. 3 for supply of Inserted Grinding Rolls and High Chrome Bull Ring Segments of Milling Plant Super Performance (for short 'MPSP') system for Bharat Heavy Electricals Limited make XRP 763 Bowl Mills (for short 'BHEL-make') of 200/ 210 MW units of (Unit No. 6 to 9), Satpura Thermal Power Station, Sarni during the period 2003-04 to 2006-07.
2. The facts of the case are that the petitioner is in the business of manufacturing Hi-chrome Alloy Steel Castings, and process support for Thermal Power, Cement and Mining industries. The respondent-Madhya Pradesh State Electricity Board (for short 'MPSEB') floated a limited tender enquiry on 3rd November 2003 for supply of MPSP. This tender was floated in the nature of a "Limited Tender Enquiry" and made only to (a) BHEL, (b) the respondent No. 3 Magotteaux industries Pvt. Ltd., (c) GE Power Service India Limited, (d) Alstom Projects India Limited, and (e) the petitioner. The petitioner is having business association with BHEL under which the petitioner supplies Rolls with Insert Technology and Hi-chromium Bull Ring Segments to BHEL. The BHEL in turn supplies this to ultimate customers. There is a Memorandum of Understanding (for short 'MOU') to the effect between the petitioner and BHEL dt. 19-8-2002. The petitioner supplied MPSP system through the BHEL as there is MOU between the petitioner and BHEL. The petitioner did not take part in the said tender offer, though indirectly the petitioner participated in the said tender through BHEL. The offer was made by the BHEL, but it is stated that it was for the benefit of petitioner. The BHEL also informed the MPSEB that the MPSP system is being promoted by the BHEL and the original product is being manufactured as per the terms of MOU. This letter was sent by Annexure P-3 on 5-1-2004. As per tender requirements, bidders have to submit documentary evidence establishing that they have manufactured and supplied the tendered items. Another condition in the tender is that in case it is observed that any firm has inadequate experience in execution of the tendered items/large valued orders, then their offers will not be considered further, without any correspondence in the matter. The terms of the tender are enclosed along with the petition as Annexure P-4. The pre-qualifying bid of BHEL and respondent No. 3 were opened by respondent No. 1 and it is alleged that respondent No. 3 has not been able to show the requisite experience of manufacture and supply of :
(i) Inserted Grinding Rolls, and
(ii) High-Chrome Bull Ring Segments, for BHEL make XRP-763 Bowl Mills. But the respondents accepted the pre-qualifying bid of respondent No. 3 which is challenged by the petitioner in this petition.
3. The challenge of petitioner may be summarised in following manner :--
(1) Respondent No. 3 does not fulfil the mandatory conditions of eligibility arid its tender offer ought to have been rejected, outrightly, (2) The respondent No. 3 has no experience either as manufacturer or supplier. The experience shown by respondent No. 3 in the pre-qualifying bid is for supply only of cement plant, but it has no experience of manufacturing the item of tender, while the condition of tender is, that supplier must be manufacturer.
(3) There is difference between the tendered item by respondents Nos. 1 and 2 and items offered by respondent No. 3, as is apparent from photograph on record as Annexures P-7 and P-8 and difference on comparison as per Annexure P-9.
On the aforesaid grounds petitioner has prayed that the pre-qualifying bid of respondent No. 3 may be quashed and petitioner who stands in second row may be considered for the tendered item. The petitioner has placed his reliance to the following judgments of Apex Court :--
(A) Gadde Venkateswara Ran v. Government of Andhra Pradesh, (AIR 1966 SC 828);
(B) Bar Council of Maharashtra v. M. V. Dabholkar, (1975) 2 SCC 702 : (AIR 1975 SC 2092);
(C) Jasbhai Motibhai Desai v. Roshan Kumar, Haji Bashir Ahmed, (AIR 1976 SC 578);
(D) National Textile Workers' Union v. P. R. Ramakrishnan, (1983) 1 SCC 228 : (AIR 1983 SC 75);
(E) Tata Cellular v. Union of India, (1994) 6 SCC 651 : (AIR 1996 SC 11);
(F) Dutta Associates Pvt. Ltd. v. Indo Merchantiles Pvt. Ltd., ((1997) 1 SCC 53);
(G) W. B. State Electricity Board v. Patel Engineering Co. Ltd., (2001) 2 SCC 451 : (AIR 2001 SC 682);
(H) Monarch Infrastructure (P) Ltd. v. Commissioner, Ulhasnagar Municipal Corporation, ((2000) 5 SCC 287) : (AIR 2000 SC 2272);
(I) M. S. Jayaraj v. Commissioner of Excise, Kerala, (2000) 7 SCC 552 : (AIR 2000 SC 3266).
4. The respondent Nos. 1 and 2 opposed the petition by filing reply in this case. In nutshell the reply filed by respondents Nos. 1 and 2 may be summarised as under :--
(1) The Milling Plant Super Performance system (MPSP) which comprises of Inserted Grinding Rolls, Hi-Chrome Bull Ring Segments and Air Port Ring Assembly was introduced to MPSEB by M/s. AIA Magotteaux Ltd., Ahmedabad along with the proposal and not by the petitioner i.e. M/s. AIA Engineering (P) Ltd., Ahmedabad. Based on this, a trial order vide No. 07-09/REN/330/3174 dt. 6-11-97 was placed on M/s. AIA Magotteaux Ltd., Ahmedabad for supply and installation of MPSP system in unit No. 8 at Satpura Thermal Power Station, Sarni. It is also denied that petitioner M/s. AIA Engineering Pvt. Ltd., Ahmedabad has been supplying the said MPSP system to respondent Board's mill of unit No. 8 as the same was supplied by M/s. AIA Magotteaux Ltd., Ahmedabad.
(2) The offers were Invited by Chief Engineer (B and R) from BHEL and M/s AIA Magotteaux, Ahmedabad vide fax message dt. 22-5-99 for undertaking the modification of 30 Nos. BHEL make coal mills installed at Satpura TPS unit Nos. 6, 7 and 9 and Korba West TPS unit Nos. 1 and 2. Subsequently order for above modification work along with the rate contract for supply of spares for three years of operation of MPSP system was placed on M/s. AIA Magotteaux Ltd., Ahmedabad vide No. 07-09/REN/330-A/2262, dt. 30-7-99 and not on the petitioner M/s. AIA Engineering Ahmedabad.
(3) The MOU entered between the petitioner and BHEL, and the terms thereof are not admitted since they were not within the knowledge of the respondents. The MOU between the petitioner and the BHEL is irrelevant and insignificant. It is not disputed that the petitioner vide letter dt. 24-12-2003 informed about the MOU entered with the BHEL, but it is stated therein that the matter may be directly discussed with BHEL. The petitioner vide letter dt. 3-2-2004 clearly stated that it is not submitting offer against the enquiry, in view of the existing MOU between the petitioner and BHEL. A copy of the said letter is" annexed as Annexure R-1. That the petitioner with open eyes voluntarily withdrew from participation in the tender.
(4) That the joint venture between M/s. AIA and M/s. Magotteaux was formed in the late eighties and joint venture company was named as M/s. AIA Magotteaux Ltd., Ahmedabad in which 51% of share were owned by M/s. Magotteaux international S.A. Belgium and balance 49% share were held by Indian promoter Mr. Bhadresh K. Shah.
(5) That Board had placed the orders for upgradation of XRP mills and its spares of unit Nos. 6, 7, 8 and 9 of Satpura TPS Sarni and Korba West unit No. 1 and 2 (Now in CSEB) to M/s. AIA Magotteaux Ltd. Ahmedabad.
(6) That M/s. Magotteaux Industries Pvt.Ltd., is a subsidiary of M/s. Magotteaux, Belgium, who have promoted/developed/ supplied the above items in joint venture with M/s. AIA, therefore the question of their experience in the field is beyond doubt.
(7) That the respondents were duly satisfied with the particulars and details submitted by respondent No. 3 regarding their manufacturing experience and supplies made to various concern. The BHEL being a competitor and a rival, and its price being much higher (approx, 10 lacs per set). Whereas the offer made by the respondent No. 3 was approx. 6 lacs per set. Thus there was a big difference between the price quoted by BHEL who is no one else but associate of the petitioner. That the price offered by BHEL and the respondent No. 3, in total valuation of the order, if the order is placed to the BHEL, Board would have suffered a loss of Approx. Rs. 3.6 crore. The Board has now benefitted to that extent.
Respondent No. 3 also contested the matter on similar grounds.
5. During the course of argument, learned counsel appearing for respondents raised a preliminary objection that the petitioner was not a tenderer in the matter and cannot challenge the pre-qualifying bid of respondent No. 3. Even if this petition is allowed, then no order in favour of petitioner may be passed by this Court. The BHEL being a tenderer ought to have filed the petition challenging the pre-qualifying bid of respondent No. 3 and this petition filed by petitioner challenging the pre-qualifying bid of respondent No. 3 is not maintainable.
To meet out the aforesaid preliminary contention of respondents, learned counsel for petitioner has placed his reliance to the Apex Court judgment in Jasbhai Motibhai (supra) and submitted that, who is an "aggrieved person"? And what are the qualifications requisite for such a status? The expression "aggrieved person" denotes an elastic and an elusive concept. It cannot be confined within the bounds of a rigid, exact and comprehensive definition. At best its features can be described in a broad tentative manner. Its scope and meaning depends on diverse, variable factors such as the content and intent of the subject of which contravention is alleged, the specific circumstances of the case, the nature and extent of petitioner's interest, and the nature and extent of the prejudice or injury suffered by him. In this case petitioner has direct interest in the supply of tender through BHEL and this petition challenging the acceptance of pre-qualifying bid of respondent No. 3 is maintainable. He has also placed his reliance to a judgment of Lord Greene, M.R. in English Sewing Cotton Co. Ltd. v. Inland Revenue Commissioners (1947 (1) All ER 679) and contended that this petition cannot be dismissed on the ground of maintainability.
6. In reply to the aforesaid, Shri M. L. Jaiswal, learned Sr. Adv., also placed his reliance to the judgment of Apex Court in Jasbhai Motibhai (supra) and contended that in view of law laid down by Apex Court in the judgment this petition is to be dismissed only on the ground of maintainability. He has placed reliance to paragraphs 26 to 38 of the judgment and contended that without going into the merits of this case this petition may be dismissed.
7. To consider the rival contention of parties on preliminary issue it is necessary to refer certain paragraphs of the judgment of Apex Court in the case of Jasbhai Motibhai (supra). The Apex Court considering the issue held :--
"27. "In Bar Council of Maharashtra v. M. V. Dabholkar, (1975) 2 SCC 703 : (AIR 1975 SC 2092) a Bench of seven learned Judges of this Court considered the question whether the Bar Council of a State was a 'person aggrieved' to maintain an appeal under Section 38 of the Advocates' Act, 1961. Answering the question in the affirmative, this Court, speaking through Ray C.J. indicated how the expression "person aggrieved" is to be interpreted in the context of a statute, thus :
"The meaning of the words "a person aggrieved" may vary according to the context of the statute. One of the meanings is that a person will be held to be aggrieved by a decision if that decision is materially adverse to him. Normally, one is required to establish that one has been denied or deprived of something to which one is legally entitled in order to make one "a person aggrieved". Again a person is aggrieved if a legal burden is imposed on him. The meaning of the words "a person aggrieved" is sometimes given a restricted meaning in certain statutes which provide remedies for the protection of private legal rights. The restricted meaning requires denial or deprivation of legal rights. A more liberal approach is required in the background of statutes which do not deal with property rights but deal with professional conduct and morality. The role of the Bar Council under the Advocates' Act is comparable to the role of a guardian in professional ethics. The words "person aggrieved" in Sections 37 and 38. of the Act are of vide import and should not be subjected to a restricted interpretation of possession or denial of legal rights or burdens or financial interests."
28. In Rex v. Butt Ex Parte Brooke, (1922) 38 TLR 537 a person who was merely a resident of the town, was held entitled to apply for certiorari. Similar is the decision in Regina v. Brighton Borough Justices Ex Parte Jarvis, (1954) 1 WLR 203.
29. Typical of the cases in which a strict construction was put on the expression "person aggrieved", is Buxton v. Minister of Housing and Local Govt. (1961) 1 QB 278. There, an appeal by a company against the refusal of the Local Planning Authority of permission to develop land owned by the company by digging chalk, was allowed by the Minister. Owners of adjacent property applied to the High Court under Section 31(1) of the Town and Country Planning Act, 1959 to quash the decision of the Minister on the ground that the proposed operations by the company would injure their land, and that they were 'persons aggrieved' by the action of the Minister. It was held that the expression 'persons aggrieved' in a statute meant a person who had suffered a legal grievance; anyone given the right under Section 37 of the Act of 1959 to have his representation considered by the Minister was a person aggrieved, thus Section 31 applied, if those rights were infringed; but the applicants had no right under the statute, and no legal rights had been infringed and therefore they were not entitled to challenge the Minister's decision. Salmon J. quoted with approval these observations of James LJ in Re Sidebothem, (1880) 14 Ch. D 458 at p. 465.
"The words 'persons aggrieved' do not really mean a man who is disappointed of a benefit which he might have received if some other order had been made. A 'persons aggrieved' must be a man who has suffered a legal grievance, a man against whom a decision has been pronounced which has wrongfully deprived him of something or wrongfully refused him something, or wrongfully affected his title to something."
30. Ex Parte Stott, (1916) 1 KB 7 is another illustration of a person who had no legal grievance, nor had he sufficient interest in the matter. A licensing authority under the Cinematograph Act, 1901, granted to a theatre proprietor a licence for the exhibition of cinematograph films at his theatre. The license was subject to the condition that the licensee should not exhibit any film if he had notice that the licensing authority objected to it. A firm who had acquired the sole right of exhibition of a certain film in the district in which the theatre was situated entered into an agreement with the licensee for the exhibition of the film at his theatre. The licensing authority having given notice to the licensee that it is objected to the exhibition of the film, the firm applied for a writ of certiorari to bring up the notice to be quashed on the ground that the condition attached to the licence was unreasonable and void, and that they were aggrieved by the notice as being destructive of their property. It was held that whether the condition was unreasonable or not, the applicants were not persons who were aggrieved by the notice and had no locus standi to maintain the application.
31. Similarly, in King v. Middlesex Justices, (1832) 37 RR 594 : 3 B & Ad 938 it was held that the words "person who shall think himself aggrieved", appearing in the statute governing the grant of licenses to innkeepers mean a person immediately aggrieved as by refusal of a licence to himself, and not one who is consequently aggrieved, and that though the Justices had granted a licence to a party to open a public house not before licensed, within a very short distance of a licensed public house, the occupier of the latter house could not appeal against such grant.
32. Other instances of a restricted interpretation of the expression "persons aggrieved" are furnished by R. v. Bradford-on-Avon Urban District Council; Ex Parte Boulton, (1964) 2 All ER 492; Gregory v. Camden London Borough Council, (1966) 1 WLR 899; R. v. London O. S.; Ex parte Westminster Corporation (1951) 2 KB 508; Regina v. Cardiff Justices; Ex parte Cardiff Corporation, (1962) 2 QB 436.
33. This Court has laid down in a number of decisions that in order to have the locus standi to invoke the extraordinary jurisdiction under Article 226, an applicant should ordinarily be one who has a personal or individual right in the subject-matter of the application, though in the case of some of the writs like habeas corpus or quo warranto this rule is relaxed or modified. In other words, as a general rule, infringement of some legal right or prejudice to some legal interest inhering in the petitioner is necessary to give him a locus standi in the matter -- (See State of Orissa v. Madan Gopal, 1952 SCR 28 : (AIR 1952 SC 12); Calcutta Gas Co. v. State of West Bengal, 1962 Supp 1 SCR 1 : (AIR 1962 SC 1044); Ram Umeshwari Suthoo v. Member, Board of Revenue, Orissa, (1967) 1 SCA 413; Gadda Venkateswara Rao v. Government of Andhra Pradesh, AIR 1966 SC 828; State of Orissa v. Rajasaheb Chandanmall, AIR 1972 SC 2112; Dr. Satyanarayana Sinha v. S. Lal & Co., AIR 1973 SC 2720).
34. The expression "ordinary" indicates that this is not a cast-iron rule. It is flexible enough to take in those cases where the applicant has been prejudicially affected by an act or omission of an authority, even though he has no proprietary or even a fiduciary interest in the subject-matter. That apart, in exceptional cases even a stranger or a person who was not a party to the proceedings before the authority, but has a substantial and genuine interest in the subject-matter of the proceedings will be covered by this rule. The principles enunciated in the English cases noticed above, are not inconsistent with it.
35. In the United States of America, also, the law on the point is substantially the same. "No matter how seriously infringement of the Constitution may be called into question," said Justice Frankfurter in Coleman v. Miller, (1939) 307 US 433 "this is not the tribunal for its challenge except by those who have some specialized interest of their own to vindicate apart from a political concern which belongs to all". To have a "standing to sue", which means locus standi to ask for relief in a Court independently of a statutory remedy, the plaintiff must show that he is injured, that is, subjected to or threatened with a legal wrong. Courts can intervene only where legal rights are invaded. "Legal wrong" requires a judicially enforceable right and the touchstone to justiciability is injury to a legally protected right. A nominal or a highly speculative adverse effect on the interest or right of a person has been held to be insufficient to give him the "standing to sue" (for judicial review of administrative action. Again the "adverse effect" requisite for "standing to sue" must be an "illegal effect". Thus, in the undermentioned cases, it was held that injury resulting from lawful competition not being a legal wrong cannot furnish a "standing to sue" for judicial relief.
36. It will be seen that in the context of locus standi to apply for a writ of certiorari, an applicant may ordinarily fall in any of these categories; (i) 'person aggrieved'; (ii) 'stranger'; (iii) busybody of meddlesome interloper. Persons in the last category are easily distinguishable from those coming under the first two categories. Such persons interfere in things which do not concern them. They masquerade as crusaders for justice. They pretend to act in the name of Pro Bono Publico, though they have no interest of the public or even of their own to protect. They indulge in the past-time of meddling with the judicial process either by force of habit or from improper motives. Often, they are actuated by a desire to win notoriety or cheap popularity; while the ulterior intent of some applicants in this category, may be no more than spoking the wheels of administration. The High Court should do well to reject the applications of such busybodies at the threshold.
37. The distinction between the first and second categories of applicants, though real, is not always Well-demarcated. The first category has, as it were, two concentric zones; a solid central zone of certainty, and a grey outer circle of lessening certainty in a sliding centrifugal scale, with an outermost nebulous fringe of uncertainty. Applicants falling within the central zone are those whose legal rights have been infringed. Such applicants undoubtedly stand in the category of 'persons aggrieved'. In the grey outer-circle the bounds which separate the first category from the second, intermix, interfuse and overlap increasingly in a centrifugal direction. All persons in this outer zone may not be "persons aggrieved".
38. To distinguish such applicants from 'strangers', among them, some broad tests may be deduced from the conspectus made above. These tests are not absolute and ultimate. Their efficacy varies according to the circumstances of the case, including the statutory context in which the matter falls to be considered. These are : whether the applicant is a person whose legal right has been infringed? Has he suffered a legal wrong or injury, in the sense, that his interest, recognised by law, has been prejudicially and directly affected by the act or omission of the authority, complained of ? Is he a person who has suffered a legal grievance, a person "against whom a decision has been pronounced which has wrongfully deprived him of something or wrongfully refused him something, or wrongfully affected his title to something? Has he a special and substantial grievance of his own beyond some grievance or inconvenience suffered by him in common with the rest of the public? Was he entitled to object and be heard by the authority before it took the impugned action? If so, was he prejudicially affected in the exercise of that right by the act of usurpation of jurisdiction on the part of the authority? Is the statute, in the context of which the scope of the words "persons aggrieved" is being considered, a social welfare measure designed to lay down ethical or professional standards of conduct for the community? Or is it a statute dealing with private rights of particular individuals?
In view of settled law by the Apex Court in Jasbhai Motibhai (supra) facts of present case may be seen. It is not in dispute that on the basis of MOU between the petitioner and BHEL, the BHEL submitted its tender including the pre-qualifying bid and price bid for the tendered items. Though the MOU between the petitioner and BHEL is on record showing the terms and conditions of MOU, but fact remains that the petitioner was not directly involved in the tender and BHEL, submitted its tender to respondents Nos. 1 and 2. The petitioner as per MOU Annexure P-1 may get benefit if the tender by BHEL is accepted, but ultimately the respondents Nos. 1 and 2 have to enter into an agreement with BHEL for supply of goods and not with the petitioner. There will be no privity of contract between petitioner and respondents Nos. 1 and 2. The petitioner has not chosen itself to submit its tender including the pre-qualifying bid and price bid. The BHEL has not choosen to challenge the pre-qualifying bid of respondent No. 3. In the aforesaid circumstances, the "aggrieved person" may be BHEL and not the petitioner. The petitioner's legal right has not been infringed. He has not suffered legal wrong or injury, the sense, that his interest recognised by law has been prejudicially and directly affected by the act or omission of the authority. There must be direct effect on the interest of petitioner by the act of respondents.
The petitioner has no legal right under the statutory provision or under the general law vis-a-vis to the respondent. Nothing has been brought on record that the petitioner has any substantive justiciable right in the matter. Even the petitioner is not a co-signatory of tender submitted by the BHEL with respondents Nos. 1 and 2. Merely there is some agreement in the shape of MOU Annexure P-1 between the petitioner and BHEL will not be a ground to permit petitioner to assail the action of respondents Nos. 1 and 2 by which the pre-qualifying bid of respondent No. 3 was accepted by respondents Nos. 1 and 2. Why BHEL has not filed petition, has not been explained, except the BHEL being a public sector industry has not preferred to file writ petition against the respondents Nos. 1 and 2 whose status is Government undertaking. Even if the pre-qualifying bid of respondent No. 3 is cancelled, even then writ in favour of petitioner cannot be issued. The BHEL is not before the Court, nor petitioner has impleaded it as party in this case. In these circumstances, petitioner cannot be said to be "aggrieved person" in this case and the petition filed by the petitioner challenging the pre-qualifying bid of respondent No. 3 cannot be entertained.
8. Apart from this, this is a matter relating to purchase of MPSP which is a technical item. The respondents have decided to accept the pre-qualifying bid of respondents. The net result of it will be that the respondent No. 3 is entitled to participate in the price bid. The item supplied by respondent No. 3 is of use or does not fulfil their condition is to be seen by respondents Nos. 1 and 2. The respondents Nos. 1 and 2 have found that respondent No. 3 fulfils the pre-qualifying bid and have approved it for consideration of price bid.
9. In the aforesaid circumstances, I do not find it appropriate to interfere at the stage of pre-qualifying bid. I do not find any merit in this petition, warranting interference by this Court, this petition is dismissed with no order as to costs.