M/S Al Faheem Meetex Private Ltd. vs State Of U.P. And Others
2011 Latest Caselaw 3018 ALL

HIGH COURT OF JUDICATURE AT ALLAHABAD
 
 

RESERVED
 
Chief Justice's Court
 

 

 
Civil Misc. Writ Petition No. 71568 of 2010
 

 
M/s Al Faheem Meetex Pvt. Ltd.
 
Vs. 
 
State of U.P. & Others
 

 

 

 
Hon'ble Ferdino Inacio Rebello, C.J.
 
Hon'ble Vineet Saran, J.

(Delivered by Hon. Vineet Saran, J)

In response to an advertisement dated 1.7.2010 for construction of a Slaughter House in Meerut on a public private partnership model (hereinafter after referred to as the 'P.P.P. model'), the bid of the petitioner had been considered along with that of other applicants and was accepted by the Bid Evaluation Committee (B.E.C.) in its meeting held on 8.9.2010. A fresh decision was thereafter taken by the B.E.C. on 22.11.2010 holding that the bid of the petitioner was financially improper. It was thus recommended that fresh bids be invited by giving proper and wide publicity. In response thereto, a fresh advertisement was issued on 1.12.2010 by the Nagar Palika Parishad inviting fresh bids up to 15.12.2010. Challenging the said decision of the B.E.C. dated 22.11.2010 and consequential advertisement issued by the Municipal Commission, Nagar Nigam, Meerut dated 30.11.2010 (published on 01.12.2010), this writ petition has been filed.

On 9.12.2010 this Court had passed the following interim order:

"Notice waived on behalf of the respondents.

The case of the petitioner is that pursuant to applications invited by the respondents, his bid was opened and it was held to be the highest bidder. Its further case is that without adequate reasons and arbitrarily the same has been scraped and fresh bidders have been invited, hence the present petition. The last date for submitting applications is 15.12.2010.

In the light of that, following directions are being issued:-

1. It will be open to the petitioner to apply along with others pursuant to the fresh advertisement.

2. The bank guarantee given earlier by the petitioner insofar as earlier bid is concerned, will also be treated as the bank guarantee for the purpose of fresh applications and further need not to submit fresh bank guarantee if the same is subsisting.

3. Respondents are directed not to open the fresh bids, without further orders from this Court.

Respondents to file a counter affidavit within three weeks from today. Rejoinder affidavit, if any, within one week thereafter.

Place the matter on board on 13th of January, 2011 in the additional cause list."

It has been informed that in response to the fresh advertisement dated 1.12.2010, only one bid was received.

We have heard Sri S.D. Kautilya, learned counsel for the petitioner as well as Sri Zafar Naiyyer, Additional Advocate General along with Sri Ravi Shanker Prasad, Additional Chief Standing Counsel appearing for the State respondents and Sri Pankaj Srivastava for the Nagar Nigam, Meerut at great length and have perused the record. Pleadings between the parties have been exchanged and with their consent, this writ petition is being disposed of finally at the admission stage.

Facts and History of Litigation

The history of this litigation begins from 30.1.2003 when the State Government, under Section 422 of the Municipal Corporation Act, 1959 approved the proposal of the Nagar Nigam, Meerut for modernization of its Slaughter House. The said proposal was not implemented and after an advertisement dated 9.11.2003 was issued by the Nagar Nigam, Meerut for grant of fresh annual licence, the licence for running the Slaughter House was granted to the petitioner on 9.1.2004, which expired on 8.1.2005. An advertisement dated 6.12.2004 was issued by the Nagar Nigam, Meerut inviting applications for grant of fresh contract for running the Slaughter House. The validity of the advertisement was challenged by the petitioner in Civil Misc. Writ Petition No. 53782 of 2004, which was allowed by a Division Bench of this Court on 29.3.2006. While allowing the writ petition, the High Court had issued as many as eighteen directions, which included grant of licence to the petitioner for a period of more than one year, subject to the petitioner making certain investments and commitments for running the Slaughter House.

The Nagar Nigam, Meerut challenged the said judgement and order of this Court in Civil Appeal No. 5673 of 2006, which was allowed by the Apex Court vide its judgement dated 7.12.2006 holding that it is for the State authorities to take a policy decision and fix the terms and conditions of the contract and not for the High Court to fix the same. While allowing the appeal, the Supreme Court issued the following directions:

"24. For the reasons aforementioned, we have no other option but to hold that the impugned judgement is unsustainable. It is set aside accordingly. The question, however, arises what direction should be passed by us now, considering the fact that the impugned advertisement was issued on 6.12.2004. We think that the interest of justice would subserved if the appellant-Corporation is directed to issue an advertisement in well known newspapers having wide circulation again calling for bids on such terms and conditions which it may find to be reasonable within six weeks from the date of communication of this order. The bids offered pursuant thereto must be opened and a final decision must be taken within eight weeks thereafter.

25............................

26. Although the State of U.P. had rejected the proposal of the Municipal Corporation, we direct the State to have a fresh look at matter and to consider the feasibility/desirability of grant of a licence to run the Slaughter House for a longer period than one year on the condition that the plant should be modernized by the licensee. In our opinion, such a policy decision may be required to be taken keeping in view the health and welfare of a large number of inhabitants of the vicinity where such abattoirs are functioning, as also vis-a-vis the health of the inhabitants of the locality, which is a fundamental right under Article 21 of the Constitution of India. If a policy decision is taken by the State, it goes without saying that the appellant-Corporation in future may act in terms thereof, unless otherwise provided for by the Statute."

In compliance of the aforesaid judgement, the State Government took a policy decision on 29.6.2007 (which was to be enforced by all Principal Secretaries of the respective departments of Government of U.P.) directing for maintenance of absolute transparency in infrastructure development projects made on public private partnership model. The said policy decision provided for three stages, namely, (i) for making absolute transparency, a reputed advisor be appointed to give expert opinion and monitor the process of selection of public private partnership model project; (ii) process for selection of parties for public private partnership model project; and (iii) proper selection of private participants with regard to investment/privatization.

Under the said policy, what was required at the pre-tender stage was that there should be a proper selection by the reputed expert, process of request for qualification (R.F.Q.) and process of request for proposal (R.F.P.). Exhaustive guidelines regarding the implementation of the policy had been framed by the State Government.

The State Government thereafter issued a Government Order dated 6.8.2008, which relates to setting up and functioning all the animal Slaughter House owned by Urban Local Bodies in the entire State of U.P. on the basis of P.P.P. model. By the said Government Order, licence on P.P.P. model was to be granted for a minimum period of five years and maximum period of ten years. Certain other conditions relating to transparency in granting the licence by public auction/tenders as well as obtaining the mandatory permission from the State Pollution Control Board etc. had also been mentioned. The said policy decision was later amended by the State Government on 26.6.2009 only to the extent that the term of licence mentioned in the Government Order dated 6.8.2008 was amended as minimum period of five years and maximum period of twenty years (instead of maximum period of ten years mentioned in the earlier Government Order). The other terms of the Government Order dated 6.8.2008 were to remain the same. By another notification dated 29.9.2009, the constitution of Bids Evaluation Committee (B.E.C.) was notified in terms of the Government Orders dated 6.8.2008 and 26.6.2009, which consisted of the Infrastructure and Industrial Development Commissioner as Chairman and six other members.

At this stage, it may be relevant to mention that during the intervening period, a contempt petition was filed before the Apex Court for implementation of its directions issued in the judgment dated 7.12.2006 passed in Civil Appeal No. 5673 of 2006. In the said proceedings, the Principal Secretary of the Government of U.P. submitted a proposal of modern Slaughter House as also the status report was placed by the Nagar Nigam, Meerut before the Supreme Court mentioning that land had been acquired in village-Ghoshipur, Meerut for establishment of a modern Slaughter House on P.P.P. model and the project cost was of over Rs. 100 crores. After considering the report of the Nagar Nigam, Meerut as well as affidavit of the Principal Secretary, the contempt notice was discharged on 23.10.2009.

In compliance of the directions of the Apex Court for construction of modern Slaughter House as well as the policy decision taken by the State Government, an expert consultant firm, namely, Abascus Legal Group of India was appointed for making the complete project report of Slaughter House in District Meerut. On 11.1.2010 further decision was taken by the State Government to the effect that the Board of the Nagar Nigam, Meerut shall pass resolution for the construction of modern Slaughter House, which should be strictly in accordance with the U.P. Municipal Corporation Act and the same was to be informed to the Cabinet of Ministers of the State Government and after the approval by the Cabinet, the Nagar Nigam was to publish the advertisement for request for qualification (RFQ) and request for proposal (RFP).

After completing the formalities and having appointed Abascus Legal Group of India as the expert consultant and getting its report, the Nagar Nigam, Meerut published an advertisement/notice on 1.7.2010 inviting tenders of request for qualification (R.F.Q.) for establishment of a new modern Slaughter House in village-Ghoshipur, Meerut on Build Operate and Transfer (B.O.T.) basis. In the said advertisement, the estimate cost of the project was shown as Rs. 101.76 crores and the project was to be implemented within 24 months. The pre-application conference was to take place on 6.7.2010 and the last date of submission of application was 13.7.2010 at the office of Municipal Commissioner, Nagar Nigam, Meerut.

In response to the same, three applications were received, which included that of the petitioner. After examining the applications, the expert consultant 'Abascus Legal Group of India' examined the R.F.Qs. and expressed its opinion to the B.E.C. that all the three parties were ineligible. Consequently, a fresh advertisement for R.F.Q. was made, in response to which five applications were filed, out of which two firms were found to be the same and thus four applicants were invited for discussion by the High Powered Committee of the State Government. Pursuant thereto, discussions and deliberations were held on several dates. The Bids Evaluation Committee thereafter fixed 8.9.2010 for considering R.F.Q. and R.F.P. of the three short-listed firms, namely, (i) Figro Ilana Limited, Ghaziabad; (ii) Hind Agro Industry Limited, Aligarh; and (iii) Al Faheem Meetex Pvt. Ltd., Meerut (petitioner). The form of the first firm was found to be incomplete. The second firm Hind Agro Industry Limited offered a concession period of 19 years and the Al Faheem Meetex Pvt. Ltd (petitioner) offered a concession period of 12 years. After considering all the applications, the Bid Evaluation Committee in its meeting on 8.9.2010 accepted the bid of the petitioner for developing and constructing the modern Slaughter House on P.P.P. model on the ground of having minimum concession period of 12 years.

Thereafter, another meeting of the Bid Evaluation Committee was held on 22.11.2010, which examined the decisions taken in the meeting of the Bid Evaluation Committee held on 8.9.2010. After holding that in its earlier meeting the Bid Evaluation Committee had found only two bids which were valid, hence considering Rule 21 of the Financial Hand Book Vol. V of Part I and holding that usually decision should be taken on the basis of three or more bids and in case lesser number of bids are received, it should be presumed that there was lack of wide publicity for inviting the tenders, the decision taken in the meeting of the Bid Evaluation Committee dated 8.9.2010 was cancelled. The English translation of the operative portion of the decision of B.E.C. dated 22.11.2010 is as under:

In the meeting of Bid Evaluation Committee convened for discussion on 22.11.2010 in continuation with the above suggestion of the Finance Department, the following decision were taken after due discussion, on finding the issues raised by the Finance Department in the present matter to be technically important:

1. The decisions taken in the meeting of Bid Evaluation Committee on 08.09.2010 be cancelled; in view of shortage of tenders and in light of the Rules related to the tender process in Appendix-19 of Financial Hand Book Vol.-5 Part-1, R.F.Q/R.F.P. tenders be re-published for construction of modern Slaughter House on P.P.P. model in Village-Ghosipur, District-Meerut. The date of publication was fixed as 25.11.2010.

2. The pre-bid meeting of R.P.Q. be fixed for 07.12.2010 under the chairmanship of Establishment & Industrial Development Commissioner, and the date of R.P.Q. submission as 15.12.2010.

3. After discussion on the issue raised by the Finance Department regarding determination of the competent authority to take a final decision, it was resolved that the scheme has to be implemented by the Nagar Nigam, but no project is being run in the Nagar Nigams on P.P.P. model nor do the Nagar Nigams have any experience of the same. Hence, in view of unanimity, decisions in projects being implemented under the P.P.P. model will have to be taken at Government level.

Pursuant thereto, a fresh advertisement was issued on 1.12.2010 inviting fresh applications for R.F.Q. on 15.12.2010 and the pre-application conference was to be held on 7.12.2010.

In the light of the aforesaid facts, we are to examine the correctness of the decision of the B.E.C taken in its meeting held on 22.11.2010 and the consequent advertisement issued on 1.12.2010, which are under challenge in this petition.

It may be noted that the aforesaid facts have been summarized from the pleadings of the parties as well as the facts of the case given in the judgement of the Apex Court in Civil Appeal No. 5673 of 2006 (Nagar Nigam, Meerut vs. Al Faheem Meat Exports Pvt. Ltd. and others), (2007) 1 UPLBEC 398.

Contention of the Parties

The submission of Sri S.D. Kautilya, learned counsel for the petitioner is that once the bid of the petitioner had been approved by the Bids Evaluation Committee (B.E .C.) in its meeting dated 8.9.2010, there was no occasion for the same to be cancelled in subsequent meeting of the B.E.C. dated 22. 11.2010. It is contended that the decision of the B.E.C. has been taken by a non-speaking order without application of mind and against the principle of fairness and justice. It is further contended that there is nothing in the Financial Hand Book about the rejection of tenders if there are less than three tenders and as such, the only reason given for cancellation of the decision of B.E.C. dated 8.9.2010 is without any basis and wholly unwarranted. It has been vehemently argued by the learned counsel for the petitioner that the very purpose of inviting tenders in sealed cover was to maintain secrecy of the bids and once the tenders of the applicants, including that of the petitioner, had been opened in its meeting dated 8.9.2010, the bid of the petitioner is now known to all and if fresh tenders are allowed to be invited, the petitioner would be handicapped and immensely prejudiced as the term/period of offer made by the petitioner would be known to all the competitors. It is thus submitted that on this ground alone, the decision for calling fresh tenders ought to be set aside. It has also been contended that the decision of B.E.C. dated 8.9.2010 was taken in its meeting attended by the thirty officials and if at all there was any objection regarding there being less number of tenderers, the same should have been taken before opening of the tenders and not subsequently in the meeting of the B.E.C. dated 22.11.2010, which was attended by only seven members. It was vehemently urged by the learned counsel for the petitioner that under the U.P. Municipal Corporation Act, 1959, by virtue of Sections 422 and 423, the power is conferred on the Municipal Commissioner of the Nagar Nigam to take decision in the matter of finalization of tender and not the Bids Evaluation Committee. It is thus urged by the learned counsel for the petitioner that the decision of the B.E.C. dated 22.11.2010 is bad in law and ought to be set aside by this Court and the entire proceedings of re-tender ought to be nullified. It has also been submitted that in terms of the interim order granted by this Court on 9.12.2010, fresh tenders had been allowed to be filed but not opened. It is stated that only one tender was received in response to the impugned advertisement dated 1.12.2010 and as such, if the guidelines of the Financial Hand Book are to be followed, the same also warrants cancellation.

Sri Zafar Naiyyer, learned Additional Advocate General has, however, submitted that the entire proceedings have been undertaken by the State Government in terms of the judgement of the Supreme Court dated 7.12.2006 passed in Civil Appeal No. 5673 of 2006, in pursuance of which, Government Orders have been issued framing guidelines. On 6.8.2008, Government Order was issued (subsequently amended by Government Order dated 26.6.2009) relating to all the animal Slaughter Houses owned by Urban Local Bodies in the entire State of U.P. on the basis of P.P.P. model. A detailed policy for construction of modern Slaughter House on P.P.P. model had been framed by the State Government. The entire proceedings with regard to the construction of Slaughter House at Meerut were undertaken in terms of the policy decision framed by the State Government from time to time and as the bids, which were opened in the meeting of the B.E.C. dated 8.9.2010, it was found that the same were not in consonance with the provisions of the Financial Hand Book as there were not sufficient number of tenders filed, the decision was cancelled by the B.E.C. on 22.11.2010 so that there may be transparency in the entire process and fresh bids had been invited. It was contended that there were not many bids received in response to the subsequent advertisement because of the pendency of this writ petition and the interim order granted by this Court in this writ petition.

It was also submitted on behalf of the State that under the provisions of the U.P. Municipal Corporation Act, 1959, Section 136 provides that for projects where the estimated cost exceeds Rs. 30 lacs, it is the State Government then which is to approve the project with or without modifications in the project report submitted by the Corporation. It has been submitted by Sri Naiyyer that in terms of the Government Orders dated 6.8.2008 and 26.6.2009, Seven Member Committee was constituted by the Government on 29.9.2010, of which the Chairman was the Infrastructure and Industrial Development Commissioner. As required under the policy decision, an expert body (Abascus Legal Group of India) was appointed as a consultant, which prepared and submitted its report. Pursuant thereto, process of request for qualification (RFQ) was initiated. However, because of delay caused in enforcement of the directions of the Supreme Court vide its judgement dated 7.12.2006 in Civil Appeal No. 5673 of 2006 and the State Government being subjected to contempt proceedings, the State Government invoked powers conferred under Section 533 of the Act and directed the Nagar Ayukt to get the tender documents, request for qualification (RFQ) and request for proposal (RFP) and concession agreement provided by the consultant expert body to be placed before the Municipal Board for its approval and further proceedings. The matter was thereafter placed before the Municipal Board, Meerut. In its meeting held on 20.3.2010, it refused to grant the sanction for construction of Multi Species Modern Slaughter House. It has been contended that in such a situation, the State Government was left with no option but to invoke the powers conferred under Section 537 of the Act and suspend the resolution of the Municipal Board and also grant approval for P.P.P. model for construction of Multi Species Modern Slaughter House at Meerut. Such decision was taken by the Cabinet on 7.5.2010, in pursuance of which, Government Order was issued on 14.5.2010 appointing a nodal agency for construction of P.P.P. model Multi Species Modern Slaughter House in village Ghosipur District Meerut. It was only in such circumstances, the State Government on 28.6.2010 directed the Municipal Commissioner, Nagar Nigam, Meerut to make an advertisement for proposal of bidders by way of sealed tenders. Pursuant thereto, the Municipal Commissioner, Meerut issued the advertisement on 29.6.2010. The tenders were opened in which only three bids were accepted, out of which, one was found to be incomplete. The B.E.C. in its meeting dated 8.9.2010 though accepted the bid of the petitioner provisionally as it had given the shortest concession period but as per the flow chart in terms of the policy decision, the papers were submitted to the different departments of the State Government. The finance department raised serious objection with regard to the insufficiency of the number of bids, because of which, the B.E.C., vide its decision dated 22.11.2010 cancelled its earlier decision taken in its meeting dated 8.9.2010 and for providing complete transparency, directed for re-advertisement inviting fresh tenders. It was thus submitted on behalf of the State Government that all that has been done by the State Government was within the prescribed parameters of law and the decisions have been taken in the best interest of the Government, Nagar Nigam as well as public at large so that there may be complete transparency in the entire proceedings. It has thus been urged that the decisions taken by the B.E.C. on 22.11.2010 do not call for interference and the writ petition is liable to be dismissed.

Sri Pankaj Srivastava, learned counsel appearing for the Nagar Nigam, Meerut has supported the stand taken by the State Government. He has, however, submitted that Chapter XVI (Sections 421 to 453) of the Act provides for regulation of Slaughter Houses. It was submitted that since the project was of over Rs. 100 crores, the steps were to be taken as per the provisions of Section 136 of the Act. The project being on the model of P.P.P., the Nagar Nigam, Meerut had to proceed as per the State Government policy of P.P.P. model projects for Slaughter Houses. It has been stated that as per the decision of the Supreme Court in Civil Appeal No. 5673 of 2006, the State Government as well as the Nagar Nigam had to play a joint role for the enforcement of the said judgement. As per the policy decision, the Nagar Nigam, Meerut through the expert body (Abascus Legal Group of India) got a detailed report for construction of Multi Species Modern Slaughter House, which was approved by the Government of India as well as Government of U.P. The said report provided the procedure of "identification of developers", "Request For Proposal" (RFP) and "Request For Qualification" (RFQ). The said report was submitted before the General House of the Nagar Nigam, Meerut for its approval under Section 92 of the Act and was rejected by majority votes in its meeting held on 20.3.2010. The main ground for rejection was that the sitting M.L.A. (father of the Managing Director of the petitioner-Company), who was present in the meeting, had forcibly taken the written consent of the members at their residence. The State Government thereafter invoked the powers conferred under Section 537 of the Act and directed the Municipal Commissioner, Nagar Nigam, Meerut to proceed with the process of construction of modern Slaughter House, for which High Power Committee had been constituted by the State Government and at every stage the Municipal Commissioner, Nagar Nigam, Meerut was involved and participated in the process along with a number of Principal Secretaries of various departments. The petitioner and the other two firms, which had filed their tenders, had also participated. The High Power Committee was formed to enable for single window clearance, in which all the necessary Government Officials were members including the Municipal Commissioner, Nagar Nigam, Meerut. It was contended that the petitioner participated in every meeting of the High Power Committee at all stages till it took a favourable stand towards the petitioner and only when the Committee took an unfavourable decision, the petitioner turned around and is challenging the entire Constitution of the Committee and its decisions, which is not favourable to it. Sri Srivastava has vehemently contended that in the entire process, the Nagar Nigam had been involved and was always part of the decision making process and all the decisions (including the one dated 8.9.2010 and also dated 22.11.2010) were taken in terms of the policy decisions taken by the State Government. It has been submitted that the petitioner cannot be permitted to blow hot and cold at the same time by accepting the decision of the B.E.C. dated 8.9.2010 and thereafter challenging the decision of the B.E.C. dated 22.11.2010 on the ground that it is Municipal Commissioner, Nagar Nigam, Meerut who alone is empowered to take decision and not the B.E.C. It is thus contended that the Nagar Nigam, Meerut as well as the State Government had proceeded as per the guidelines framed and the policy decisions taken by the State Government and there was no irregularity and illegality committed at any stage and that the writ petition thus deserves to be dismissed.

Consideration by Court

In the light of the facts as enumerated above, the submissions of the learned counsel for the parties as well as the provisions of the Act, we proceed to examine the merits of the case and the relief prayed for by the petitioner.

The policy framed by the State Government for establishment of the Slaughter Houses on PPP model is not under challenge in this petition. The parties do not dispute that the petitioner as well as the Nagar Nigam had participated at every stage of the proceedings which took place as per the policy framed by the State Government. The fact of the matter is that in terms of the policy decision of the State Government framed as per the decision of the Supreme Court in Civil Appeal No. 5673 of 2006, the Nagar Nigam, through an expert body, got a detailed report prepared for construction of Multi Species Modern Slaughter House, which was duly approved by the Government of India as well as the State Government. When the said report was submitted before the General House of the Nagar Nigam for its approval under Section 92 of the Act, the same was rejected by majority votes in its meeting held on 20.3.2010. Thereafter, invoking the powers under Section 537 of the Act, the State Government directed the Municipal Commissioner, Nagar Nigam, Meerut to proceed in the matter and a High Power Committee was also constituted by the State Government for the said purpose. In the meetings of such Committee, Municipal Commissioner, Nagar Nigam, Meerut as well as the petitioner participated along with the Principal Secretaries of the various departments.

We now come to the core issue which is with regard to the decision of the B.E.C. taken in its meeting held on 22.11.2010 whereby the earlier decision of the B.E.C. dated 8.9.2010, which approved the bid of the petitioner for establishment of its Slaughter House, has been cancelled. In the meeting of the B.E.C. dated 8.9.2010 all the tenders/proposals of the parties had been placed. As already mentioned above, there were five applicants out of which two firms were found to be same and thus four applicants were invited for discussion by the High Power Committee of the State Government and consequently only three firms were shortlisted, whose applications were placed for consideration before the B.E.C. in its meeting held on 8.9.2010. Since the form of one of the firms was found to be incomplete, the tenders of only two applicants were considered. As the offer of the petitioner was for concession period of 12 years as against that of 19 years of the other applicant, after considering all the aspects, the B.E.C. in its meeting held on 8.9.2010 accepted the bid of the petitioner for construction of modern slaughter house at Meerut on PPP model, primarily on the ground that the concession period offered by the petitioner was of 12 years.

Once the said decision was taken by the B.E.C. in presence of all its members as well as the representatives of the petitioner and other applicants, the question before us is as to whether the said decision could have been withdrawn by the B.E.C. unilaterally without information or notice to the petitioner in whose favour the decision had already been taken. What is also to be considered by this Court is as to whether the said decision had been taken on cogent and relevant grounds or not.

The decision was taken by the B.E.C. in accordance with the policy framed by the State Government. It is noteworthy that at every stage of the proceedings the petitioner as well as other applicants had participated (including the meeting of the B.E.C. held on 8.9.2010). The meeting held on 22.11.2010 (in which the earlier decision of 8.9.2010 was recalled) was held in the absence of the petitioner, in whose favour the decision had already been taken on 8.9.2010. Admittedly, the petitioner had neither been invited nor participated in the subsequent meeting held on 22.11.2010. Though strictly speaking the principles of natural justice may not come into play in the present case but still in the facts of the present case, when the applicants were invited to participate in all meetings of B.E.C., the subsequent decision of the B.E.C. taken without notice to or in the absence of the petitioner does not appear to be justified, not being in accordance with the principles of fair play and justice.

Even otherwise, the reason given for cancelling the earlier decision dated 8.9.2010 also cannot be said to be justified. The earlier decision of the B.E.C. dated 8.9.2010 had been cancelled on 22.11.2010 on the ground that there was shortage of tenders and not in accordance with the Rules framed under the Financial Hand Book Vol. V. What was argued before us is that the Financial Hand Book provides for minimum of three applicants for finalizing any tender. Nothing of this kind has been brought on record. During the course of argument, when the Court called upon the respondents to produce such provisions of the Financial Hand Book, they were unable to do so. All that was submitted was that the Finance Department raised serious objections with regard to the insufficiency of the number of bids, and thus for providing complete transparency, the decision dated 22.11.2010 had been taken and direction for re-advertisement was made.

From the proceedings of the meeting of the B.E.C. dated 8.9.2010 we find that the Special Secretary of the Finance Department attended such meeting, as his name finds place at serial no. 5 of those present in the meeting. If at all any such objection was to be raised by the Finance Department with regard to insufficiency of number of bids, the same ought to have been done in the meeting held on 8.9.2010 itself, in which meeting the representatives of the petitioner and other applicants were also present. The said meeting of the B.E.C. was attended by the members of the Committee constituted by the State Government and a final decision had been taken, approving the bid of the petitioner. Finality has to be given to the decision of the B.E.C. Cancellation of a decision already taken by a validly constituted B.E.C. on 8.9.2010 in a subsequent meeting held on 22.11.2010, in the manner in which it has been done in the present case, that is, without there being any cogent and sufficient reason and also without giving opportunity to the petitioner in whose favour the decision had already been taken, is wholly unjustified and would call for interference under Article 226 of the Constitution of India.

It is true that transparency in such matters should be maintained but it is also true that after taking final decision in a validly held meeting duly constituted by the State Government, on mere objections of the Finance Department, which was duly represented in the earlier meeting on 8.9.2010, cannot be justified in law. Even otherwise, the respondents have not been able to show any provision of the Financial Hand Book whereby minimum three bids would be required to finalize a contract. Further, the petitioner, whose bid had been given in sealed cover, had been opened. The petitioner would now be seriously prejudiced as secrecy of bid, which was to be maintained by giving bids in sealed cover, would no longer be there. If fresh bids are permitted to be invited, the petitioner would be prejudiced because his bid, which was for a period of 12 years, would be known to all. It is also noteworthy that after the decision taken on 22.11.2010, by an interim order granted in this writ petition, fresh bids were permitted to be entertained. What is to be noted is that only one application was received in response to such advertisement. It is not the case of any of the parties that there was no proper advertisement prior to inviting bids which were finalized on 8.9.2010. A final decision taken by a competent body can be interfered with only for sufficient reasons and if there was any material irregularity found in the process of arriving at such decision. In the present case, we do not find any such material irregularity. Proper advertisement was made before the bids were taken into consideration, in which five applications were received and after being processed by the High Power Committee, three applications were considered by the B.E.C. in which two applicants were found eligible and final decision was taken on 8.9.2010, which, in our opinion could not have been cancelled in the manner as has been done in the present case.

As submitted by the learned counsel for the petitioner, it is no doubt true that as per the provisions of the Act, the Municipal Commissioner would be final authority in the matter of awarding of contract, but he would be bound by the directions issued by the State Government, for which the State Government is duly authorized under the Act. Admittedly, in accordance with the policy framed by the State Government process for grant of contract is not over and it is only after all formalities and procedure under the policy is completed that the contract, if any, can be awarded by the Municipal Corporation as per the prescribed procedure. Thus there is no occasion for issuing any such direction for grant of contract to the petitioner at this stage.

Conclusion:

For the foregoing reasons, we quash the decision of B.E.C. dated 22.11.2010 whereby the earlier decision of B.E.C. dated 8.9.2010 has been set aside. The bid of the petitioner as accepted by the B.E.C. on 8.9.2010 shall be dealt with in accordance with law from the stage of such acceptance. The respondents are directed to proceed in accordance with the policy and the procedure laid down. Further decision and the process of selection be dealt with in accordance with law.

The writ petition stands allowed to the extent indicated as above. However, there shall be no order as to costs.

 
Dt/-  26th July, 2011
 
AA/PS
 

 
 (Vineet Saran, J.)                   (F.I. Rebello, C.J.)