Bombay High Court
M/S. Kohli Advertising (Opc) ... vs The Pimpri Chinchwad Municipal ... on 13 April, 2022
Bench: A.A. Sayed, Abhay Ahuja
WP 9714/21 @ WP 956/22
IN THE HIGH COURT OF JUDICATURE AT BOMBAY
CIVIL APPELLATE JURISDICTION
WRIT PETITION NO. 9714 OF 2021
M/s Kohli Advertising (OPC) Private
Limited through Director
Ekamsingh Kohli .. Petitioner
V/s
The Pimpri Chinchwad Municipal
Corporation .. Respondent
WITH
WRIT PETITION NO. 956 OF 2022
M/s Make Multi Services Group
Through Sole Proprietor Ekansingh Kohli .. Petitioner
V/s
The Pimpri Chinchwad Municipal
Corporation .. Respondent
CORAM : A. A. SAYED &
ABHAY AHUJA, JJ
DATED : 13TH APRIL, 2022
JUDGMENT :- (PER ABHAY AHUJA, J)
1. The petitioners in these two petitions are challenging the order
dated 8th January 2022 by which the Commissioner, Pimpri-Chinchwad
Municipal Corporation has cancelled two E Tender notices viz. E-Tender
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notice no. 1/1 to 138/2019-20 and E-Tender notice no. 4/1 to 185/2018-
19 allowing the bidders refund of EMD and FDR.
2. The Respondent Corporation had issued the two E-tender notices
and invited bids with respect to publication of advertisement by way of
sky signs at various sites within its limit. The two petitioners had put in
14 bids respectively and were also selected as the highest bidders in
respect each of the 14 bids. Thereafter, they were required to submit
security deposits in the form of FDRs as well as submit affidavits and
agreements.
3. Mr Kothari, learned counsel for petitioners would submit that
Petitioners had submitted the documents including the affidavits as well
as the security deposits by way of FDRs in time and had also kept the
agreements ready for sealing and that there has been no delay on their
part, which is disputed by the Respondent Corporation. He further
submits that it is in view of the Anti-Corruption Bureau action leading to
the lodging of the FIR by the Petitioners with the National Crime Bureau
under various provisions of the Prevention of Corruption Act, 1988 and
the Indian Penal Code against the Chairperson of the Standing
Committee of the Respondent Corporation also involving certain
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employees of the Respondent Corporation in connection with the sealing
of the agreements from the standing committee with respect to the
subject tenders where Petitioners were held to be the highest bidders,
that the Respondent Corporation had firstly delayed in the execution of
the agreements and secondly failed to issue work orders and has now
finally cancelled the tenders during the pendency of the petitions only to
frustrate the case of Petitioners. Learned counsel would submit that in
this view of the matter, Petitioners have been isolated and their tenders
cancelled even without hearing them which is completely in breach of
the principles of natural justice.
4. It is submitted that even otherwise the reasons given in the order
cancelling the tenders are totally incorrect as there is been neither any
delay in the process for more than 3 years nor Petitioners have delayed
in submission of agreements or affidavits or in depositing FDRs.
5. It is further submitted that the new outdoor media policy is not
even approved by the general body. It is further submitted that the
reasons for cancellation of the tender that the same is due to the smart
city notification of the Centre and the State is also fallacious as Pune was
made a smart city much earlier.
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6. Learned counsel for Petitioners would also submit that in both the
tender cancellation orders shelter of the tender conditions no. 23/21
and 24 has been taken, which is not permissible in view of the Central
vigilance commission guidelines which requires proper reasons to be
given for cancelling a tender. He would submit that the said orders are
passed only with an intention to frustrate these petitions.
7. Petitioners are therefore seeking a relief that the orders cancelling
the tenders be withdrawn and the Respondent Corporation be directed
to execute the agreements with respect to the tenders where the
petitioners were selected as highest bidders and for issuance of work
orders in respect thereof.
8. The Respondent-Corporation has filed its replies dated 13 th
January 2022 wherein it has opposed the Petitions on following grounds
:
(i) Non Joinder of Chairperson of the Standing Committee of
the Respondent-Corporation, though necessary party to the
Petitions.
(ii)The Petitioners' delay in submitting requisite documents
requisite documents such as agreement, security deposit (FDRs)
along-with Affidavit to the Corporation.
(iii) Petitioners having erected illegal sky signs boards hoardings
at 11 sites.
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9. With respect to the anti corruption complaint to the Anti
Corruption Bureau and subsequent FIR against the Chairperson of the
Standing Committee of the Corporation, it is submitted that the
investigation is going on and is not complete and the charge-sheet is yet
to be filed. It is stated that the decision to cancel the tenders is due to
policy decision of the year 2021 with respect to different outdoor media
policy and to replace the existing policy.
10. It is submitted vide paragraph no. 8 of the reply that pursuant to
the directions from Central and State Governments regarding the
development of Pune as a smart city, the Respondent-Corporation, has
come out with a proposed draft of outdoor media Policy, 2021 with
respect to the media publicity of the hoarding in the municipal limits of
the Corporation which will lead to beautification of the city and also add
to the revenue growth of the Corporation. This policy decision has been
taken to phase out all earlier existing hoardings. It is stated that in view
of the policy and delay on the part of the highest bidder to submit their
documents, FDRs etc., the Corporation has cancelled the tenders. It is
stated that all the balance tenders have been cancelled pursuant to
order dated 8th January 2022 which included 14 tenders of the
Petitioners. Petitioners have not been singled out or isolated and similar
action has been taken against all the tenders and none of the bidders
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have got work order except 64 under the tender notice for 185 tenders,
who had already been given work orders earlier. It is stated that
Petitioners are the only tenderers who have approached this Court.
11. It is submitted that the cancellation of tenders are in accordance
with clause 23/21 and 24 of the terms of tender notices. It is submitted
that Petitioners have not incurred any cost towards the tender and
hence no prejudice will be caused to him by said cancellation. It is
submitted that the cancellation is done in the larger interest of the city,
its citizens and keeping in mind of policy of Smart city and Outdoor
media policy of 2021.
12. It is stated that the old policy of hoardings being erected on
various sites, which remain for several years, deface and hamper the
beautification of the city is done away with and under the new policy,
the vision of smart city project is being implemented.
13. In this view of the matter, it is submitted that no relief be granted
to Petitioners and Petitions be dismissed. It is also submitted that since
Petitioners' activity is a commercial activity, Petitions ought not to be
entertained inasmuch as Petitioners are free to pursue their legal rights
before an appropriate Civil Court.
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14. Mr. Kedar Dighe, learned Counsel for the Respondent-Corporation,
vehemently opposes the Petitions. He relies upon the Affidavit-in-Reply
to submit that Petitioners' have not only committed illegality by
erecting skysigns on the various sites without permission but also
caused inordinate delay in complying with the conditions of the tenders,
in submission of the documents, etc. He would submit that Petitioners
have made false and baseless allegations in respect of an ongoing
investigation without even caring to make the Chairperson of the
Standing Committee as a party to these Petitions.
15. Learned Counsel for the Corporation submits that in any event all
the tenders have been cancelled across the board as policy of the
Corporation which is line with the directions of the Central and State
Governments with respect to Smart City. He submits that new Outdoor
media policy of 2021, clearly stipulates that Corporation themselves
will be putting up sky-signs/ hoarding keeping in mind the smart city
project, beautification of city and revenue growth sought to be achieved
and therefore there is no arbitrariness in cancelling of the tenders. He
submits that Petitioners case áre not being considered in isolation and
cancellation orders are in respect of the balance tenders which include
14 tenders awarded to Petitioners and there is no discrimination. He
would submit that Petitioner had approached this Court with unclean
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hands by suppressing vital facts of delay in submitting documents which
eventually led to delay in issuing work orders and cancellation of the
tenders on 08.01.2022. He submits, not only that, Petitioners have
admitted by letter dated 16th September 2021, of having illegally
erected Sky-signs on 11 sites and earned revenue at the cost of public
exchequer/ general public at large. He submits that granting any relief
to Petitioners would have adverse effect on the whole city and its
citizens and vision of the smart city project and the hoardings will
remain for several years and deface the city. He therefore submits that
no relief be granted to Petitioners and Petitions be dismissed.
16. The Petitioners have also filed rejoinders seeking to include
further documents in support of their contentions.
17. We have heard Mr. Sumit Kothari, learned Counsel for the
Petitioner as well as Mr. Kedar Dighe, Learned Counsel for the
Respondent-Corporation. We have with their assistance perused the
papers, proceedings and the material placed before us.
18. It is trite law that judicial review of administrative action is
intended to prevent arbitrariness, irrationality, unreasonableness, bias
and favoritism. In matters of challenge to tenders, the scope of judicial
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review is to only examine as to whether the decision has been made
lawfully or not, and not whether the decision is sound. Evaluating
tenders and awarding contracts are essentially commercial functions
and if the decision with respect to a contract is bonafide and in public
interest, courts are well advised not to exercise power of judicial review
or interfere even if a procedural aberration or error in assessment or
prejudice to tenderer is made out. Such a power is not to protect private
interest at the cost of public interest or private contractual disputes.
The tenderer or contractor or bidder with a grievance is always at
liberty to seek such reliefs in a civil court.
19. The Hon'ble Supreme Court in the case of Tata Cellular V/s. Union
of India [1994 SCC (6) 651] has lucidly enunciated the scope of judicial
review of administrative action in tender matters. The following
paragraphs 70, 74, 77 and 81 are apt and are quoted as under :-
"70. It cannot be denied that the principles of judicial
review would apply to the exercise of contractual powers
by government bodies in order to prevent arbitrariness or
favoritism. However, it must be clearly stated that there
are inherent limitations in exercise of that power of
judicial review. Government is the guardian of the finances
of the State. It is expected to protect the financial interest
of the State. The right to refuse the lowest or any other
tender is always available to the Government. But, the
principles laid down in Article 14 of the Constitution have
to be kept in view while accepting or refusing a tender.
There can be no question of infringement of Article 14 if
the Government tries to get the best person or the best
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quotation. The right to choose cannot be considered to be
an arbitrary power. Of course, if the said power is
exercised for any collateral purpose the exercise of that
power will be struck down.
74. Judicial review is concerned with reviewing not the
merits of the decision in support of which the application
for judicial review is made, but the decision-making
process itself.
77. The duty of the court is to confine itself to the question
of legality. Its concern should be :
(1) Whether a decision-making authority exceeded its
powers?
(2) committed an error of law,
(3) committed a breach of the rules of natural justice,
(4) reached a decision which no reasonable tribunal
would have reached or,
(5) abused its powers.
Therefore, it is not for the court to determine whether a
particular policy or particular decision taken in the
fulfilment of that policy is fair. It is only concerned with
the manner in which those decisions have been taken.
The extent of the duty to act fairly will vary from case to
case. Shortly put, the grounds upon which an
administrative action is subject to control by judicial
review can be classified as under:
(i) Illegality : This means the decision- maker must
understand correctly the law that regulates his decision-
making power and must give effect to it.
(ii) Irrationality, namely, Wednesday unreasonableness.
(iii) Procedural impropriety.
The above are only the broad grounds but it does not rule
out addition of further grounds in course of time. As a
matter of fact, in R. v. Secretary of State for Home
Departt., ex p Brind, Lord Diplock refers specifically to
one development, namely, the possible recognition of the
principle of proportionality. In all these cases the test to
be adopted is that the court should, 'consider whether
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something has gone wrong of a nature and degree which
requires its intervention'.
81. Two other facets of irrationality may be mentioned.
(1) It is open to the court to review the decision-
maker's evaluation of the facts. The court will intervene
where the facts taken as a whole could not logically
warrant the conclusion of the decision-maker. If the
weight of facts pointing to one course of action is
overwhelming, then a decision the other way, cannot be
upheld. Thus, in Emma Hotels Ltd. v. Secy. of State for
Environment, the Secretary of State referred to a
number of factors which led him to the conclusion that a
non-resident's bar in a hotel was operated in such a way
that the bar was not an incident of the hotel use for
planning purposes, but constituted a separate use. The
Divisional Court analysed the factors which led the
Secretary of State to that conclusion and, having done so,
set it aside. Donaldson, L.J. said that he could not see on
what basis the Secretary of State had reached his
conclusion.
(2) A decision would be regarded as unreasonable if it
is impartial and unequal in its operation as between
different classes. On this basis in R. v. Bernet London
Borough Council, ex p Johnson the condition imposed by
a local authority prohibiting participation by those
affiliated with political parties at events to be held in the
authority's parks was struck down."
20. Let us examine the impugned orders dated 8 January 2022
issued by the Respondent Corporation cancelling the tenders with
respect to the subject tender notices. For the sake of convenience
one such order with respect to 138 tenders is reproduced as
under:
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"Read 1)E-Tender Notice No.1/1 to 138/2019 -20
2)Term No. 23 and 24 in E-Tender Notice
No. 1/1 to 138/2019-20
3)Maharashtra Municipal Corporation Act
Section 244 and 245
4)Proposal dated 08/01/2022 before the
Hon'ble Commissioner
................................................................
Pimpri Chinchwad Municipal Corporation
Pimpri 411 018
Sky-sign and License Department
No. AAP/7/KAVI/8/2022
Dated 08/01/2022
Subject - Cancellation of pending 66 Tenders
from E-Tender Notice No. 1/1 to
138/2019-20
Order -
By E-Tender Notice No. 1/1 to 138/2019-20 the
Skysign and License Department of Pimpri Chinchwad
Municipal Corporation had called upon Bids for
erecting Advertisement on the lands owned by the
Corporation. Out of 138 tenders, 79 bids were received
and out of those 79 bids 13 bids were already
cancelled. The bidders of remaining 66 tenders have
delayed the process. Therefore, the Municipal
Corporation has incurred financial loss. Recently the
PCMC has been declares as a Smart City. Municipal
Corporation has come up with a new Advertisement
Scheme for road safety of people and beautification of
city. New Advertisement scheme is for beneficial of
beautification of the city.
Accordingly, for the growth of income of the Municipal
Corporation, the Municipal Corporation are calling for
E Tenders by erecting the attractive and strong
Advertisement board on its own on their property.
This will help in beautification of the city. This will also
help in growth in income of the Corporation and benefit
of the Advertising agencies.
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I have reached to the following conclusion in respect of
the remaining 66 pending tenders,
1. The said tender process has taken more than 3
years.
2. The bidders have delayed in submitting Agreements,
Affidavits and depositing FDR's.
3. It is possible that the Advertisement boards would
be in against the new Advertisement Policy.
4. Municipal Corporation are calling for E Tenders by
erecting the attractive and strong Advertisement
board on its own on their property. The same will be
available for the Bidders.
After considering the above, I am of the opinion that
considering the public safety and the beautification of
the City and for the growth of income of the
Corporation, the process of the remaining Tenders is
hereby stopped as per the term no. 23 and 24 of the
Tender.
I, undersigned the Commissioner of the Pimpri
Chinchwad Municipal Corporation, Pimpri 411 018 by
this order, hereby cancel remaining 66 bids/tenders
bearing No.s 1/1,2,3,4,6,14,15,16,19,
23,26,28,29,32,33,35,38,40,42,43,44,45,46,47,48,50,
51,52,53,54,55,57,59,63,67,68,87,88,90,92,93,94,94,
95,101,107,111,112,113,114,115,116,117,118,119,1
21,122,123,124,125,127,128,130,134,136,137/2019-
20 out of E-Tender Notice No. 1/1 to 138/2019-20 the
Skysign and License Department of Pimpri Chinchwad
Municipal Corporation as per terms no. 23 and 24 of
the E tender and the bidders are entitled for the refund
of EMD and FDR.
Rajesh Patil
Commissioner
Pimpri Chinchwad Municipal
Corporation
Pimpri 411 018
Cc - Concerned Bidders"
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21. With respect to the tender notice relating to 138 tenders, 79 bids
were received and out of the 79 bids, 13 bids were already cancelled.
The balance 66 bids have been cancelled citing reasons of the
Respondent Corporation being a smart city, is coming up with new
advertisement schemes for road safety of people and for beautification
of city in addition to revenue growth for the Corporation; it has also
been stated that the tender process has taken more than 3 years; that
the bidders have delayed in submitting agreements, affidavits and in
depositing the FDR's; and that after considering all these reasons and
public safety and beautification of the city in addition to income growth,
the tenders have been cancelled under clauses 23 and 24 of the tender
conditions but entitling the tenderers to refund of the EMD and FDRs.
With respect to the tender notice relating to the 185 tenders, 82 tenders
were not responded and therefore cancelled. Out of the remaining 103,
64 bidders had submitted the documents in time and therefore work
orders were issued in respect thereof. With respect to the remaining 39
tenders since the process was ongoing for the past 3 years and due to
similar reasons as mentioned in the case of 138 tenders, in view of
clause 21, the tenders in respect of the remaining 36 tenders, were
cancelled.
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22. The said conditions 23/21 and 24 are quoted as under :
"23½dks.kR;kgh ,d fdaok loZ fufonk fLodkj.;kpk vFkok dks.krsgh
dkj.k u nsrk ukdkj.;kpk vf/kdkj ek-vk;qDr ;kauh jk[kwu Bsoyk vkgs-
24½ fufonk dkyko/khr egkuxjikfydsl lnj tkxsph vko';drk vlysl
fdaok brj dkgh dkj.kkLro Qyd jn~n dj.kspk vf/kdkj ek-vk;qDr ;kauk
jkghy-"
As can be seen from term 23/21, all the rights to accept or
reject a tender have been reserved with the Commissioner of the
Respondent Corporation. As per term 24, during the pendency of
the tender, in the event the Respondent Corporation would need the
space or for any other reason, the right to cancel the tender would
be with the Commissioner.
23. In our view, it is not on the basis of the conditions above that
the tenders have been cancelled. We are not concerned with the
soundness of the decision but the decision-making process i.e
whether while deciding to cancel the pending tenders, the
Respondent Corporation had acted arbitrarily or unreasonably or
with a malafide intent. In writ jurisdiction, we are not required to go
into the sufficiency or the adequacy of those reasons but whether
any reason has been furnished or not. The fact that reasons such as
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new advertisement schemes for the road safety of people or for the
beautification of the city in addition to revenue growth coupled with
the delay in finalising the pending tenders have been cited to cancel
all the pending tenders, would be sufficient to deter us from
interfering with the decision to cancel the tenders. Further
Petitioners have not been singled out nor have petitioners case been
treated in isolation to the others. The Respondent Corporation, in
our view, has taken a decision to cancel all the tenders for reasons it
considered in its wisdom appropriate to do. The reasons, in our view
fall in the realm of public interest/public law. The decision of the
Respondent Corporation therefore cannot be said to be arbitrary or
unreasonable or malafide. Petitioners have not been able to place
before us any material which demonstrates fraud or malafides or
perversity. On the basis of mere allegations, decisions in respect of
tenders of this nature cannot be interfered with. Also the
investigation with respect to the FIR pursuant to the anti-
corruption action is pending completion and the chargesheet is yet
to be filed, which facts are not disputed by petitioners. In any event,
in the facts of the present case, we find that there are serious
corruption charges made in the tender process and we would
refrain from interfering in the decision of cancellation of tenders
rather than issue of mandamus for awarding the tenders. If
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corruption charges are proved in the process of tenders, it would
anyways vitiate the entire tender process. We say this and no more
as firstly the investigation is still going on and secondly as observed
earlier, we have a limited jurisdiction only with respect to the
decision-making process in the cancellation of the tenders.
24. In Rishi Kiran Logistics Private Limited V/s. Board of
Trustees of Kandla Port Trust and Others [(2015) 13 Supreme
Court Cases 233], the Hon'ble Supreme Court while dealing with the
subject of Government contracts / tenders had the occasion to
consider not only competing claims of private interest versus public
interest, but also how under Article 226 of the Constitution only
public law remedy could be invoked and contractual dispute would
be outside such purview. The Hon'ble Supreme Court cited its own
decision in the case of M.P. Mathur V/s. DTC, (2006) 13 SCC 706]
where it was held that "once public interest is accepted as the
superior equity which can override individual equity, the principle
would be applicable even in cases where a period has been indicated
for operation of the promise. If there is a supervening public equity,
the Government would be allowed to change its stand and has the
power to withdraw from representation made by it which induced
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persons to take certain steps which may have gone adverse to the
interest of such persons on account of such withdrawal." It was held
in that case that merely because the resolution was announced for a
particular period, it did not mean that the Government could not
amend and change the policy under any circumstances and if a
party acted on the basis of the principle of "promissory estoppel" on
the basis of the notification, it should have known that such
notification was liable to be amended or rescinded at any point of
time, if the Government felt that it was necessary to do so in public
interest.
25. In our view, this decision of the Hon'ble Supreme Court would
support the case of the Respondent Corporation which has cancelled the
pending tenders which include Petitioners' 14 tenders in respect of each
of the tender notices. Also from the facts, it does not appear that there
was any concluded contract as the agreements were not signed. In our
view, considering the decision of the Hon'ble Supreme Court in the case
of Rishi Kiran Logistics Private Limited (supra) as well as the decision
of the Hon'ble Supreme Court in the case of M.P. Mathur V/s. DTC
(supra) the Respondent Corporation was well within its rights to cancel
the tenders. Even otherwise, under this jurisdiction, in the facts of the
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present case, we would not be able to adjudicate on reliefs for breach of
contract as that would purely be in the realm of contract to be dealt with
by a Civil Court. The public law remedy by way of a Writ Petition under
Article 226 of the Constitution, is not available to seek specific
performance or damages. It is also trite law that petitioners cannot
claim a fundamental right to do business with the Respondent
Corporation.
26. As observed by us, the decision of the Respondent Corporation to
cancel the tenders was neither arbitrary nor unreasonable nor malafide.
The Respondent Corporation has come up with a new Outdoor Media
Policy whereby it seeks to implement the Smart City Project, beautify
the city by using its own space and for revenue growth for which, it
proposes to float fresh e-tenders, in which view of the matter, it
cancelled the said tenders. There can hardly be any argument,
therefore, that the decision of the Respondent Corporation is arbitrary.
In our view, it is based on valid considerations. It is also trite law that
while dealing with the administrative law aspects, the contractual
elements are not necessary to be dealt with as those are matters to be
examined separately by a Civil Court. Therefore, the same cannot be
said to be unreasonable. This Court in judicial review cannot sit in
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judgment over the decision of a public body which is of the view that it
need not go further ahead with the tender process. In the present case
as we have observed, there are reasons for cancellation of the tenders.
In this context, Paragraphs 22, 27, 31, 37, 38, 45 of the decision in the
case of Rishi Kiran Logistics Private Limited (supra) are usefully quoted
as under :
"22. When competing claims are private interest v. public
interest, then in the case of disposal of public property the
question would be whether the right of the person, who has
earned the right to the public property in a public auction,
is to be preferred over the right of the public in ensuring
that valuable public assets were not disposed of except for
a fair price and in a fair and transparent manner. Whether
this Court should, in judicial review, sit in judgment over
the decision of a public body which is of the view that it
need not go further ahead with the tender process. It is
true if such a decision is taken without any reasons to
support it or mere ipse dixit it would be arbitrary. In this
case there are reasons. The High Court analysed the
reasons and has taken the view that those reasons are
valid. In our view in matters particularly to the disposal of
valuable assets by the State when the State seeks to
explore the possibility of getting higher price (sic).
27. In so far as argument of malafides is concerned, apart
from bald averment, there are no pleadings and there is not
even a suggestion as to how the aforesaid
decision was actuated with malafides and on whose part.
Even at the time of arguments Mr. Vikas Singh did not
even advert to this aspect. In fact, the entire
emphasis of Mr. Vikas Singh was that since there was a
concluded contract between the parties, cancellation of
such a contract amounted to arbitrariness. As already
pointed out above that can hardly be a ground to test the
validity of a decision in administrative law. For the sake of
argument, even if you presume that there was a concluded
contract, mere termination thereof cannot be dubbed as
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arbitrary. A concluded contract if terminated in a bonafide
manner, that may amount to breach of contract and
certain consequences may follow thereupon under the law
of contract. However, on the touch stone of parameters laid
down in the administrative law to adjudge a decision as are
arbitrary or not, when such a decision is found to be
bonafide and not actuated with arbitrariness, such a
contention in administrative law is not admissible, namely,
how and why a concluded contract is terminated.
31. In M.P.Mathur v. DTC it was held that :(SCC p.708)
"Once the public interest is accepted as the superior equity
which can override individual equity, the principle would
be applicable. If there is a supervening public equity, the
Government would be allowed to change its stand and has
the power to withdraw from representation made by it
which induced persons to take certain steps which may
have gone adverse to the interest of such persons on
account of such withdrawal. Merely because the
resolution was announced for a particular period, it did
not mean that the Government could not amend and
change the policy under any circumstances. If the party
claiming application of the doctrine acted on the basis of a
notification, it should have known that such notification
was liable to be amended or rescinded at any point of time,
if the Government felt that it was necessary to do so in
public interest."
37. The questions before the Supreme Court in Kisan
Sahakari Chini Mills Ltd. case were: (i) Whether the High
Court was right in concluding/assuming that there was a
valid contract? and (ii) Whether the High Court was justified
in quashing the order of the Secretary (Sugar)? This Court
answered the aforesaid questions in the negative and set
aside the judgment of the High Court holding that : (SCC pp.
501-02)
"Ordinarily, the remedy available for a party
complaining of breach of contract lies for seeking
damages. He would be entitled to the relief of specific
performance, if the contract was capable of being
specifically enforced in law. The remedies for a breach
of contract being purely in the realm of contract are
dealt with by civil courts. The public law remedy, by
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way of a writ petition under Article 226 of the
Constitution, is not available to seek damages for
breach of contract or specific performance of contract.
However, where the contractual dispute has a public
law element, the power of judicial review under
Article 226 may be invoked."
It is clear that the aforesaid case is closest to the facts of
the present case.
38. It thus stands crystalised that by way of writ petition
under Article 226 of the Constitution, only public law
remedy can be invoked. As far as contractual dispute is
concerned that is outside the power of judicial review
under Article 226 with the sole exception in those cases
where such a contractual dispute has a public law
element.
45. We again emphasise that the issue of the argument of
there being a concluded contract is raised in a petition
filed under Article 226 of the Constitution
and not by way of suit. The issue whether there was a
concluded contract and breach thereof become secondary
and is examined by us with that limited scope in mind. In
such proceedings main aspect which has to be is as to
whether impugned decision of the Port Trust was
arbitrary or unreasonable. It is also important to remark
that in a given case even if it is held that there was a
concluded contract, whether specific performance can be
ordered or not would be a moot question in writ
proceedings. The appellant took the calculated risk in not
going to the civil court and choosing to invoke
extraordinary jurisdiction of the High Court, which is also
discretionary in nature."
27. In our view, the Respondent Corporation cannot be said to
have acted unreasonably and the act of cancelling all the tenders
cannot be said to be discriminatory nor arbitrary nor unreasonable.
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28. In view of the above discussion, the above Writ Petitions are
dismissed with no order as to cost. We make it clear that the
dismissal of these Writ Petition shall in no manner influence the
investigation of corruption charges or outcome of criminal
proceedings, if any. The contention of the Petitioners that the
motive for cancellation of the tenders is to shield the guilty person
cannot be determined by us in our limited writ jurisdiction and this
issue is kept open.
29. We also make it clear that Petitioners are at liberty to agitate their
claim for damages before an appropriate civil court. All contentions are
left open. We also leave it open for the petitioners to seek refund of
EMD/FDR in accordance with the orders dated 8 th January, 2022 of the
Respondent-Corporation.
(ABHAY AHUJA, J.) (A. A. SAYED, J.)
Digitally signed
by NIKITA
NIKITA YOGESH
YOGESH GADGIL
Date:
GADGIL 2022.04.13
14:41:25 +0530
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