HIGH COURT OF JUDICATURE AT ALLAHABAD CJ's Court AFR Civil Misc. Writ Petition No.68504 of 2010 M/s. Izmma Constructions, Amroha District Jyotiba Phule Nagar and Others Vs. State of U.P. & Others *** Hon'ble Ferdino I. Rebello, CJ. Hon'ble Vineet Saran, J.
The petitioners have approached this Court to quash the order dated 31.3.2010 issued by the U.P. Power Corporation Ltd. By that communication, it was intimated that the mobile tower companies operating in the State were having their electricity connections disconnected for various reasons. Many a times, bills were not received on time, as a result of which the electricity supply is disconnected. The mobile tower companies, whenever they have to take new power connections and to get their load augmented, face several difficulties. To ensure coordination between the mobile tower companies and the distribution Corporations for tackling this problem, a proposal had been sought for appointment of Service Agent, having sufficient experience in this field and already working for the mobile tower companies. A company namely, Quadra Infratel Synergies Pvt. Ltd.-respondent no.4 herein, had applied for these services. The Company fulfilled the requisite qualifications and as such a decision was taken to appoint that Company as a Service Agent and accordingly, it has been authorised to work as a Service Agent for all the mobile tower companies. It was also intimated that the Service Agent, for such working, shall be paid no remuneration by the distribution Corporations or the Power Corporation Ltd. and they will get their remuneration from the Mobile Tower Companies.
2. The petitioners contend that they are registered Firms/Authorised Service Agents on contract for various Mobile Companies for getting sanctioned electricity connections and load enhanced to the Mobile Towers of different companies from the U.P. Power Corporation.
3. According to the petitioners, respondent no.2, without publishing any notice in the Newspaper, and/or without advertising/circulating and without following the rules and guidelines, by private negotiation due to pressure and influence, appointed respondent no.4, as a Service Agent for the entire State of Uttar Pradesh to get sanctioned electricity connection and load enhanced for the Mobile Towers of the Mobile Companies.
It is, therefore, set out that the order dated 31.3.2010 is arbitrary and illegal and has been made without advertisement and after private negotiation at the instance of influential persons. The procedure prescribed was not followed and also the guidelines framed by respondent no.2 was not followed. On account of this, the workers employed by the petitioners would be rendered jobless. It is contended that respondent no.2-Chief Engineer, U.P. Power Corporation Ltd. has acted on the influence and pressure of the U.P. Power Minister.
Various challenges have been raised, contending that the impugned order is violative of Articles 14, 16 and 21 of the Constitution of India. The main challenge as the petition was originally drafted was based on the fact that respondent no.4 has been appointed as a Service Agent without advertisement and without following rules and guidelines.
4. In the rejoinder affidavit filed, an additional ground of Article 19 (1) (g) of the Constitution of India has been raised. It is set out that the action of the Power Corporation in giving contract to one company as Service Provider having the effect of excluding/prohibiting all others working in the field is wholly void and unconstitutional, inasmuch as it does not in any manner lay down any justifiable foundation for giving monopoly contract in favour of a private company to act as a sole Service Provider with the object sought to be achieved. This kind of contract prohibiting all others working in the field can by no stretch be saved under Article 19 (1) (g) and (6) (ii) of the Constitution of India. Thus, the entire exercise is wholly void and unconstitutional in the eyes of law. It is also set out that the D.O. letter of the Government of India directing the Power Corporation to facilitate and help in providing power connections, can by no stretch justifies the action of the Managing Director of the Corporation in undertaking the exercise to appoint universal Service Provider to the exclusion of all others. Such a direction to award contract for appointing universal Service Provider does not lie within the domain of the Managing Director of the Corporation, not being backed up by any law. Under the garb of facilitating electricity connections to the Mobile towers, monopoly of a single company cannot be created as this would be violative of Article 19 (1) (g) read with Articles 14 and 21 of the Constitution of India.
5. In the supplementary affidavit filed by the petitioner, it is set out that the petitioners are providing service to various tower companies, like, AIRCEL, AIRTEL, GTL etc. in relation to execution of Works Contract, especially catering to the requirement of electricity connection/enhancement of load etc. in installation of their towers. The petitioners it is pleaded are engaged in the business of providing service in relation to Works Contract between the Mobile Companies and the Power Corporation. It is their fundamental right to carry on any occupation, trade or business within the meaning of Article 19 (1) (g) of the Constitution of India and the same is only subject to reasonable restriction as envisaged under Article 19 (6) of the Constitution of India.
6. In reply to the petition, counter affidavit has been filed on behalf of the U.P. Power Corporation Ltd. It is specifically set out that an advertisement was floated by the Power Corporation, which was duly published in two National Newspapers, namely, Pionner and Aaj in the edition of 16.2.2010 and it is based upon that, that the offers were received. Respondent no.4 was appointed pursuant to an offer made by them. The petitioners did not apply.
The logic and reason for appointment of the Service Agent is then set out. The Mobile Companies it is pleaded are providing infrastructure by way of establishment of mobile towers, which require availability of land and electricity connection to make the mobile towers functional. An issue was raised by the Mobile Companies before the Union Minister of Telecommunication. The Minister of Telecommunication and Information Technology, Govt. of India wrote a D.O. letter to the Chief Minister of the State on 20.1.2008, requesting to provide full support to the infrastructure provider and service provider in particular to help in providing the power connection to the tower companies. Thereafter the State Government issued an order directing the Managing Director of the U.P. Power Corporation Ltd. on 16.7.2008 to issue necessary directions to provide electricity connection. As it was not feasible for the tower companies to personally pursue the matter in respect of grant of electricity connection and enhancement of load and other related problems, they engaged local service providers. A lot of complaints were received against some service providers, who were working as intermediary between the Mobile Tower Companies and the Power Corporation. Many times, such service providers had taken the payments from the tower companies but not deposited with the Power Corporation. The tower companies operating in the State of U.P. have made a request to the Power Corporation to appoint a Service Agent, who shall work between the tower companies and the Power Corporation for proper coordination and execution of the required works. In that context, an advertisement was issued. The eligibility criteria was also fixed.
7. Pursuant to the advertisement as also the application received from respondent no.4 and considering his experience in the field, respondent no.4 was selected as Service Agent, vide order dated 31.3.2010.
By the aforesaid appointment, the right to obtain electricity connection/enhancement of load by the tower companies have not been taken away by the Power Corporation and the mobile tower companies are free to take the connection directly from the Power Corporation, but if they want to take the services of any Agent, they have to take the services of respondent no.4 only, since he is authorised for execution of such work. It is, therefore, set out that there is no merit in the writ petition, which accordingly should be dismissed.
8. As in the supplementary affidavit, it was contended that Article 19 (1) (g) of the Constitution of India was infracted, it is pointed out that the petitioners did not apply pursuant to the advertisement dated 16.2.2010. There is no alleged violation of Article 19 (1) (g) of the Constitution of India.
9. A reply has also been filed on behalf of respondent no.4. It is pointed out that there are several tower companies functioning in the State of U.P. Out of them, BSNL (East), Indus (East) and Viom Networks (East and West) had appointed respondent no.4 as their Service Agent and other tower companies are doing their work directly with the Power Corporation. The advertisement itself would show that there were qualifying conditions. It is specifically set out that the petitioners were selected as they fulfilled all the qualifications and pre-conditions fixed by the Power Corporation. It is denied that the Power Minister has played any role in the matter of appointment. It is also submitted that Article 19 (1) (g) of the Constitution of India is not attracted, as no monopoly has been created nor the right of the petitioners to do business or trade, is infringed even after the appointment of respondent no.4 as a Service Agent and the tower companies are free to deal with the Power Corporation.
10. At the hearing of this petition, on behalf of the petitioners, it is submitted (i) that the communication/notification of March 31, 2010 is violative of Article 19 (1) (g) read with Article 19 (6) of the Constitution of India as the restriction imposed is not by 'law' and consequently, the action of respondent no.2 in excluding the petitioners from doing the work as Service Providers for the Mobile Towers Companies is without authority of law and unconstitutional and (ii) it is submitted that it is not open to respondents to create monopoly in favour of a non-State authority like respondent no.4, which is affecting their right to carry on trade or business without a 'law'. It is, therefore, submitted that the action of respondent no.2 in creating monopoly in favour of Respondent No.4 is without authority of law. It is also submitted that the same is violative of Article 14 of the Constitution of India.
11. On the other hand, on behalf of the respondents, learned counsel submits that the petitioners are alleging violation of their fundamental rights. The petition has been filed by the petitioners, suing not as individuals, but in the trade name of their partnerships or of the proprietorship. It is, therefore, submitted that the petition alleging violation of fundamental rights of the petitioners as filed would not be maintainable. On this count alone, it is submitted that the writ petitions should be dismissed.
It is next submitted that nowhere have the petitioners pleaded and proved as to the business that they are carrying on and that by the action of respondent no.2, their right to carry on business is affected. Merely because a part of the business, if any is lost, it cannot be contended that the right to carry on trade or business has been affected. Therefore, there is no violation of Article 19 (1) (g) of the Constitution of India. It is also submitted that respondent no.4 was appointed pursuant to an advertisement issued. The petitioners did not apply. Respondent no.4 applied and was considered and selected. It is, therefore, submitted that the petitioners cannot plead that their right to carry on trade or business is affected or that a monopoly has been created in favour of Respondent No.4 and the action of respondent No.2 is violative of Article 19 (1) (g) and/or Article 14 or 21 of the Constitution of India.
12. From the submissions, the questions that arise for consideration are (i) whether the action of respondent no.2 in issuing the order dated 31.3.2010, affects the rights of the petitioners to carry on any occupation, trade or business; (ii) whether the order dated 31.3.2010 creates monopoly in favour of respondent no.4 and consequently, is violative of Article 19 of the Constitution of India, Respondent No.4, being a non-State party; (iii) whether the right created in favour of respondent no.4 affects the petitioners' right to life and liberty protected under Article 21 of the Constitution of India, (iv) whether the action of Respondent No.2 is arbitrary and (v) whether the petitioners have locus to maintain this writ petition.
13. We may first deal with the question as to (i) whether the impugned order dated 31.3.2010 affects the petitioners' right to carry on trade or business as the impugned order is not law considering Article 13 (3) of the Constitution of India, as the notification is not law.
14. While considering whether a restriction is a reasonable restriction, one has to test the reasonableness of the restriction imposed upon the right guaranteed by Article 19 (1) (g) in an objective manner and from the stand point of interests of the general public and not from the stand point of interests of persons upon whom the restrictions have been imposed or upon abstract considerations. A restriction cannot be said to be unreasonable merely because in a given case it operates harshly. Under Article 13 (3) of the Constitution of India, for the purpose of Part-III of the Constitution, law includes any Ordinance, order, bye-law, rule, regulation, notification, custom or usage having in the territory of India the force of law. It would thus be clear that apart from the primary legislation, it also includes various forms of subordinate legislation. It is in that context that we can examine the contentions as raised on behalf of the petitioners. The petitioners, apart from setting out that they were the Agents for some of the Mobile Companies, have not pleaded expressly as to what was their occupation, trade or profession that they were carrying on and to what extent, the act of respondent no.2, in awarding the contract in favour of respondent no.4 has affected their right to carry on trade or business. The only material placed on record is that the petitioners were doing work as Agents for the mobile tower companies. Respondent no.2 had invited an advertisement. The petitioners themselves had not participated. In other words, in the absence of petitioners participating, it is difficult to accept the contention that their right to carry on trade or profession is affected. Respondent no.2, by the act of inviting applications, had disclosed that they would be giving exclusive right to one service provider for the purpose of providing service to Mobile Companies. At the same time, respondent no.2 had also made it clear that the mobile tower companies are also free to approach it directly for their requirement. The need and necessity for providing a Service Provider are disclosed in the counter affidavit filed on behalf of respondent no.2. Can it, therefore, be said that respondent no.2 has taken away the right of the petitioners in the matter of carrying on trade or business? Can a State Corporation, carrying on business, in the matter of running its business take a decision purely on commercial consideration that 'one person' will serve its needs or that one person will act on its behalf for a class of its consumers. Respondent No.2 is one type of licencee under the Electricity Act. Insofar as imposition of reasonable restrictions is concerned, we may refer to the judgment in Gainda Ram and others Vs. Municipal Corporation of Delhi and others [(2010) 10 SCC 715]. The Supreme Court held that the reasonable restrictions on the fundamental right under Article 19 (1) (g) can be imposed either by existing law or by a law made by a State in the interest of general public. Therefore, nothing short of law can impose reasonable restrictions. We may thereafter reproduce para 49 of the said judgment, which reads as under:-
"49. In Bijoe Emmanuel v. State of Kerala [(1986) 3 SCC 615] this Court held: (SCC pp. 624-25, para 16) "16. ...The law is now well settled that any law which may be made under clauses (2) to (6) of Article 19 to regulate the exercise of the right to the freedoms guaranteed by Articles 19 (1) (a) to (e) and (g) must be 'a law' having statutory force and not a mere executive or departmental instruction."
In coming to the aforesaid formulation in Bijoe Emmanuel this Court relied on two Constitution Bench decisions of this Court in Kameshwar Prasad Vs. State of Bihar and another Constitution Bench decision of this Court in Kharak Singh Vs. State of U.P."
15. Restrictions to prevent a person from carrying on his trade or business, can be imposed only by law as set out in Article 13 (2) of Part-III of the Constitution of India. We may also gainfully refer to the judgment of the Supreme Court in Krishnan Kakkanth Vs. Government of Kerala and others [(1997) 9 SCC 495], where the Court observed that infringement of fundamental right under Article 19 (1) (g) must have a direct impact on the restriction on the freedom to carry on trade and not ancillary or incidental effects on such freedom to trade arising out of any governmental action. In that case, the purchases could be made from the approved dealers and that was a subject matter of challenge. Considering that, the Court observed that the obligation to purchase from approved dealer has been fastened only to such farmer or agriculturist who has volunteered to accept financial assistance under the scheme on various terms and conditions. In the instant case, as pointed out earlier, nothing has been placed before us to indicate as to what the petitioners business was and that by giving a contract to respondent no.4, the petitioners' right to carry on trade or business has been affected. When a challenge is made that the impugned order is violative of Article 19 (1) (g) of the Constitution, it is for the petitioners to demonstrate based on the material, impact of the restrictions on their business and in the absence of any material, it is difficult for the Court to countenance the said argument. It is not the case of the petitioners that the order dated 31.3.2010 has the effect of totally prohibiting them from carrying on any business. At the highest, some field of activity may have been taken away. This will not amount to full prohibition. (See State of Gujarat Vs. Mirzapur Moti Kureshi Kassab Jamat and others [(2005) 8 SCC 534].
Respondent no.2 has a right to carry on business like any other person. For the better management of its business, it can provide that certain services can be given through a Service Agent selected by it. This was done by inviting applications from all eligible persons. The petitioners did not apply. Further the action of Respondent no.2 in managing its affairs or running its business, if some persons like the petitioners were allowed to do business with it, which thereafter is canalised in one person, cannot be said to 'affect the right of the petitioners to carry on trade or business'. In our opinion, therefore, it cannot be said that the petitioners' right to carry on trade or business has been affected. The first contention, therefore, must fail.
16. We then come to the next question, whether the impugned order dated 31.3.2010 creates a monopoly in favour of respondent no.4. Before answering the said issue, we may gainfully refer to paragraph 16 of the judgment in the case of Indian Drugs & Pharmaceuticals Ltd. and Others Vs. Punjab Drugs Manufacturers Association and Others. [(1999) 6 SCC 247], which reads as under:-
"16. It is clear from the various judgments referred to above that a decision which would partially affect the sale prospects of a company, cannot be equated with creation of monopoly. In Ram Jawaya Kapur and Naraindas cases the Constitution Bench also held that the policy restrictions, as discussed above, can be imposed by exercise of executive power of the State under Article 162 of the Constitution. Therefore, the contention of the appellants in regard to creation of monopoly and violation of the fundamental right under Articles 19 (1) (g) and 19 (6) should fail. The judgments cited above also show that preference shown to cooperative institutions or public sector undertakings being in public interest, will not be construed as arbitrary so as to give rise to a contention of violation of Articles 14 of the Constitution. We have noted above that this Court in the cases of Oil & Natural Gas Commission v. Assn. of Natural Gas Consuming Industries of Gujarat, Krishnan Kakkanth and Hindustan Paper Corpn. Ltd. Vs. Govt. of Kerala has held that the preference shown to cooperative institutions or public sector undertakings being in public interest, will not be construed as arbitrary so as to give rise to a contention of violation of Article 14 of the Constitution."
It would thus be clear that a decision, which partially affects the sale prospects of a company, cannot be equated with creation of monopoly. We may also refer to the observations in paragraph 8 of the judgment in Cooverjee B. Bharucha Vs. Excise Commissioner and the Chief Commissioner, Ajmer and others [AIR 1954 SC 220). Para 8 of the said judgment reads as under:-
"8. The contention that the effect of some of these provisions is to enable Government to confer monopoly rights on one or more persons to the exclusion of others and that creation of such monopoly rights could not be sustained under Art. 19 (6) is again without force. Reliance was placed on the decision in - 'Rashid Ahmad v. Municipal Board of Kairana', AIR 1950 SC 163 (B). That decision is no authority for the proposition contended for. Elimination and exclusion from business is inherent in the nature of liquor business and it will hardly be proper to apply to such a business principles applicable to trades which all could carry. The provisions of the regulation cannot be attacked merely on the ground that they create a monopoly. Properly speaking, there can be a monopoly only when a trade which could be carried on by all persons is entrusted by law to one or more persons to the exclusion of the general public. Such, however, is not the case with the business of liquor."
17. In the instant case, respondent no.2 operates as a licensee. It supplies power to the consumers and for that purpose, it has permitted a Service Agent for a class of consumers. In the present case, respondent no.2 invited bids in the matter of providing service to mobile tower operators through a single service provider and at the same time, allowed the mobile tower operators to also independently apply to it. In other words, this is in the nature of a facilitation for providing electricity connection. Respondent no.2 has placed on affidavit the problems that were faced by the Power Corporation and mobile tower companies. In these circumstances, in our opinion, it cannot be said that a monopoly has been created in favour of respondent no.4. The mobile tower companies can independently apply to respondent no.2 or they can do it through its Service Provider, which in that event, would be respondent no.4. It cannot be said to be a monopoly created in favour of respondent no.4. The agency only assists the Respondent no.2 in carrying out its business. We find, therefore, no merit in this submission, and accordingly, the same is rejected.
18.The next question for our consideration is whether by the impugned order of 31.3.2010, has the petitioners' right to life and liberty been affected? Learned counsel placed reliance on the judgment in the case of Gainda Ram and Others (supra). For this Court to intervene, it must be shown that the impugned order of 31.3.2010 is demonstrably arbitrary, capricious, irrational, discriminatory or violative of constitutional or statutory provisions. Otherwise, it cannot be struck down by a court, nor can the Court go into the wisdom of the State policy. In the instant case, as pointed out, subsequent to the policy decision, an advertisement was issued, in which the petitioners did not participate. The concept of life and liberty are two different expressions. What the petitioners has pleaded is that it affects his liberty. In our opinion, creating a right in respondent no.4, does not affect the personal right to life of the petitioners. We proceed on the basis that though the petitioners have used the expression 'liberty', what the petitioners pleaded is really 'right to life'. Trading or carrying on occupation is subject to reasonable restrictions. The fact whether the petitioners are being prevented from carrying on their business consequent to Respondent No.2 appointing Respondent No.4, as a Service Provider cannot be ascertained from the pleadings. Suffice it to say that the material available on record would not disclose that the right to life has been affected, nor here the petitioners being able to establish violation of Article 14. These challenges, therefore, of violation of Articles 14 & 21 of the Constitution of India, must be rejected.
19.In view of the findings recorded to the earlier four questions, it is not necessary to answer the last question.
20. Considering the above, this writ petition is dismissed. Rule discharged. No order as to cost.
Dated:03.03.2011 RKK/-
(F.I. Rebello, CJ) (Vineet Saran, J) Hon'ble F.I. Rebello, CJ.
Hon'ble Vineet Saran, J.
Dismissed.
For orders, see order of date passed on separate sheets.
Dt/-03.03.2011 RKK/-(68504/10) (F.I. Rebello, CJ) (Vineet Saran, J)