Andhra HC (Pre-Telangana)
S.Y. Nawab vs Municipal Corporation Of Hyderabad on 26 April, 2001
Equivalent citations: 2001(4)ALD146, 2001(3)ALT619, AIR 2001 ANDHRA PRADESH 403, 2001 A I H C 3906, (2001) 4 ANDHLD 146, (2001) 3 ANDH LT 619
Author: S.B. Sinha
Bench: Satya Brata Sinha, B. Subhashan Reddy
ORDER S.B. Sinha, C.J.
1. The discretion exercised by the Municipal Corporation of Hyderabad in distributing its largesse to the 2nd respondent herein without issuing any advertisement therefor is in question in this writ appeal which is directed against a judgment dated 15-6-1995 passed by a learned single Judge of this Court in Writ Petition No.22227 of 1994.
2. The basic fact of the matter is not in dispute. The 1st respondent herein purported to be suffering from want of funds for the purpose of erection of arches and display of advertisements thereon issued a press note advertisement to the effect that there could be sponsorship by the companies and the costs for installation of the arches and sign boards as also their maintenance could be met thereby. The 2nd respondent allegedly made a survey in that regard at the request of the 1st respondent whereafter a project report was submitted. The 1st respondent thereafter allowed the 2nd respondent to put up certain arches in the twin cities. A public notice was thereafter given requesting any other persons interested to provide for any further idea in the matter whereafter allegedly several advertisers attended but no one came forward to take up the project. Admittedly the writ petitioner-appellant did not attend the said meeting.
3. Before the learned single Judge as also before this Court, it was inter alia submitted that a bare perusal of the terms and conditions of the grant would clearly show that valuable right has been conferred upon the 2nd respondent by the 1st respondent on a pittance. The learned Counsel would urge that having regard to the settled principles of law that the State while awarding contract or distributing largesse must conform to the provisions of Article 14 of the Constitution of India, the impugned contract must be held to be arbitrary. Drawing our attention to clause (8) of the terms and conditions of the permission to erect street sign boards issued in favour of the 2nd respondent in terms of the letter dated 12/14-9-1999 whereby and whereunder the said contract was granted, it was submitted that ex facie the same is contrary to all norms of administrative action. Basing on the well known decision reported in Ramana v. IA Authority of India, , the learned Counsel would urge that it was obligatory on the part of the 1st respondent herein being a 'State' within the meaning of Article 12 of the Constitution of India to issue wide publicity in this regard so as to enable all persons to participate therein. The learned Counsel would urge that such concession granted in favour of a private person by the State is unheard of. Our attention has been drawn to the fact that the work of 24 locations in the twin cities was allotted without reference to the advertisement and similar work orders and similar concessions have been given with respect to the second work order No.2266, dated 14-9-1994 which clearly demonstrates undue favour shown to the 2nd respondent.
4. The learned Counsel appearing on behalf of the, respondents on the other hand inter alia submitted that it is not a case where a statutory contract was granted. It may be, contends the learned Counsel, that the work was awarded on the basis of the private negotiation but the same by itself cannot be said to be arbitrary in nature. Our attention has been drawn to Section 421 ofthe Hyderabad Municipal Corporation Act and it was submitted that on the basis thereof the contract in question is not governed by any statutory rules. A press notification was issued on 21-11-1994 which is in the following terms:
"The Municipal Corporation of Hyderabad has taken up the rationalisation of house numbering in twin cities of Hyderabad. The present system of wards-block-house number is very confusing and causing lot of confusion to common man, visitors, as well as to use departments in their day to day urban administration. Instead the Municipal Corporation proposes to assign house numbers in a continuous series in each locality as house number-street number-locality. It proposes to erect boards, indicating name of the locality, street number, house numbers (from - to on each board depending on its location. The boards are designed such that there is space for private advertisements which the sponsor can utilise. The Municipal Corporation invites the private advertiser to come forward and participate in the programme and avail the opportunity. A meeting is being convened at Municipal Corporation office at 11.00 p.m. on 25th November, 1994 for this purpose advertising agencies may participate. The areas available for allolment ward-wise are of Circle Nos.l, 2, 4, 5 and 6 of MCH."
5. Admittedly, the writ petitioner herein did not attend the meeting held pursuant to the said press notification. In the counter-affidavit it is accepted that by a letter dated 6-12-1994 the petitioner complained to the 1st respondent herein regarding grant of sanction of construction of 200 arches and sign boards and 1000 direction boards without having any relative concept of his capacity to erect so many boards running into approximately several crores of rupees. Allegedly in the meeting which was held pursuant to the press notification it was emphasised that the street sign boards project and the erection of boards should go hand in hand wherefor concrete proposals were asked for. All participants, although had been asking for direction boards but nobody allegedly had shown any interest on sign boards. According to the learned Counsel as no profit motive is involved, it cannot be said that its action is either arbitrary or unfair so as to attract the wrath of Article 14 of the Constitution of India.
6. In International Airport's case (supra) the Apex Court has clearly stated that the terms and conditions issued in the advertisement cannot be altered to the advantage of a particular person having regard to the fact that if such favourable terms and conditions had been known to all other participants, they would have participated in the tender notice. It was held in Ramana 's case (supra):
That takes us to the next question whether the acceptance of the tender of the 4th respondents was invalid and liable to be set aside at the instance of the appellant. It was contended on behalf of the 1st and the 4th respondents that the appellant had no locus standi to maintain the writ petition since no tender was submitted by him and he was a mere stranger. The argument was that if the appellant did not enter the field of competition by submitting a tender, what did it matter to him whose tender was accepted; what grievance could he have if the tender of the 4th respondent was wrongly accepted. A person whose tender was rejected might very well complain that the tender of someone else was wrongly accepted, but, it was submitted, how could a person who never tendered and who was at no time in the filed, put forward such a complaint? This argument, in our opinion, is misconceived and cannot be sustained for a moment. The grievance of the appellant, it may be noted, was not that his tender was rejected as a result of improper acceptance of the tender of the 4th respondent, but that he was differentially treated and denied equality of opportunity with the 4th respondent in submitting a tender. His complaint was that if it were known that non-fulfilment of the condition of eligibility would be no bar to consideration of a tender, he also would have submitted a tender and competed for obtaining a contract But he was precluded from submitting a tender and entering the field of consideration by reason of the condition of eligibility, while so far as the 4th respondent was concerned, their tender was enlertained and accepted even though they did not satisfy the condition of eligibility and this resulted in inequality of treatment which was constitutionally impermissible. This was the grievance made by the appellant in the writ petition and there can be no doubt that if this grievance were well founded, the appellant would be entitled to maintain the writ petition. The question is whether this grievance was justified in law and the acceptance of the tender of the 4th respondent was vitiated by any legal infirmity.
7. The law in this regard is well known and does not require any reiteration having regard to the decisions of the Apex Court in G.J. Fernandez v. Stale of Karnataka and others, , Tata Cellular v. Union of India, (1994) SCC 651, Andi Mukta Sadguru v. V.R. Rudani and others, .
8. We may, however, note that the Supreme Court recently in various judgments including M.P. Oil Extraction v. State of M.P., ., Asst. Excise Commissioner v. Issac Peter, , Common Cause, A Registered Society v. Union of India, (1996) 6 SCC 530, AIR India v. Cochin International Airport Limited, 2000 (1) SCALE 346, AIR India v. Cochin International Airport Limited, 2000(1) Scale 346, Siemens Limited v. WBSEB, 2000 (2) CHN 108, Raunaq International Limited v. IVR Construction Limited, , Asia Foundation and Construction Limited v. Trafalgar House, , Sterling Computers Limited v. M and N Publications Limited, , Delhi Science Forum v. Union of India, , and TVL Sundaram Granites v. Imperial Granites Limited, 1998 (8) SCC 150, had also laid down the law that the Court shall exercise its jurisdiction having regard to the doctrine of self-restrain and grant of contract should be viewed having regard to the circumstances obtaining in each case.
9. A bare perusal of the press notification dated 21-11-1994 would clearly show that advertising agencies were asked to participate in a programme so that boards may be erected indicating the name of the locality, street numbers, house numbers, etc., and designing such boards in such a fashion that there is space for private advertisement. Before us the offer of the 2nd respondent has not been produced. It stands that even prior to issue of the said press notification, private negotiation had started between the respondents herein as would appear from the 2nd respondent's letter dated 25-11-1993. On what basis and on what consideration such negotiation had been held is not known.
10. Yet again the proposal of the 2nd respondent as contained in its letter dated 25-11-1993 was agreed in principle by the 1st respondent as would appear from the letter of the Additional Commissioner dated 30-3-1994 in terms whereof the 2nd respondent was allowed to take up the work in two circles namely Circle No.3 and the Secunderabad Division. On 22-6-1994, the 2nd respondent herein requested for grant of similar facility in relation to other areas.
11. It is evident that the press notification was issued by way of camouflage and in effect and substance the matter had already been settled by and between the respondents herein. The learned Counsel appearing on behalf of the respondents submitted that the aforementioned arrangement had been entered into for the benefit of the first respondent herein inasmuch as it did not have to spend any amount from its coffer. That may be so. But the same does not mean that the second respondent herein has also entered into the said contract with a view to giving service to the public. It of course must have spent some amount for carrying out the job, but having regard to clause (8) of the terms and conditions of the letter dated 14-9-1994 which is as follows:
"You can let out the space provided for advertising purpose to any of your clients at your own terms and conditions for 15 years from the date of this letter, after which the same may be extended on mutually agreed terms and conditions."
12. It will be evident that the second respondent has also denied pecuniary benefit therefrom inasmuch as it was entitled to let out the space provided for the advertisement to any of its clients with its own terms and conditions that too for a long period. Such grant of largesse is not expected to be given to any person like the present one.
13. The question which now arises for consideration is how equities between the parties ought to be adjusted. There cannot be any doubt whatsoever that this Court in exercise of its jurisdiction under Article 226 of the Constitution of India may refuse to grant any relief to the petitioner even if it is lawful to do so provided thereby the public interest would suffer. But in the case of this nature, this Court cannot lose sight of the fact that the first respondent has gone out of its way to help the second respondent and had thrown all the norms to the winds. Had such conditions been advertised including the condition No.8 aforementioned, several other people could have taken part in the bid. The action of the first respondent is arbitrary. Such action being deplorable, we have no hesitation in issuing a direction that such contracts shall stand terminated from this date. It is further directed that in future, the first respondent shall issue advertisement clearly laying down the norms thereof in order to enable all the eligible persons to take part in the auction, having regard to the decision of the Apex Court in Ramana v. I.A. Authority of India (supra) wherein a law has been laid down in the following terms :
"If the functions of the Corporation are of public importance and closely related to Governmental functions, it would be a relevant factor in classifying the corporation as an instrumentality or agency of Government. This is precisely what was pointed out by Mathew, J., in Sukhdev. v. Bhagatram, , where the learned Judge said that institutions engaged in matters of high public interest or performing public functions are by virtue of the nature of the functions performed by Government agencies. Activities which are too fundamental to the society are by definition too important not to be considered Government functions.
14. The writ appeal is allowed to the extent afore mentioned. But there will be no order as to costs.