Bombay High Court

M/S. Shree Rajeshwar Agencies, Thr. ... vs The Chief Electoral Officer, ... on 18 October, 2024

Author: Avinash G. Gharote

Bench: Avinash G. Gharote, M.S. Jawalkar

2024:BHC-NAG:11792-DB



                 Judgment                        1               27wp6010.24+4.odt



                        IN THE HIGH COURT OF JUDICATURE AT BOMBAY,
                                  NAGPUR BENCH, NAGPUR.


                                WRIT PETITION NO. 6010/2024
                                           WITH
                                WRIT PETITION NO. 6009/2024
                                           WITH
                                WRIT PETITION NO. 6233/2024
                                           WITH
                                WRIT PETITION NO. 6234/2024
                                           AND
                                WRIT PETITION NO. 6180/2024

                 WRIT PETITION NO. 6010/2024

                        M/s. IT Services,
                        Having Office at Rajdeep Complex, Near Datey
                        College, Yavatmal - 445001, through its
                        Proprietor Shri Roshan Gadwe,
                        Aged about 52 years
                                                             .... PETITIONER(S)

                                         // VERSUS //

                 (1)    Office of Chief Electoral Officer,
                        Maharashtra Through Joint Secretary
                        and Additional Election Officer,
                        General Administration Department,
                        Hutatma Rajguru Chowk, Mantralaya,
                        Mumbai 400032

                 (2)    District Election Officer and District Collector,
                        Yavatmal
                                                         .... RESPONDENT(S)
                 ∞∞∞∞∞∞∞∞∞∞∞∞∞∞∞∞∞∞∞∞∞∞∞∞∞∞∞∞∞∞∞∞∞
                  Mr. F.T. Mirza, Sr. Adv a/b Ms. S.F. Mirza, Adv for Petitioner
                  Mr. S.V. Manohar, Sr. Adv a/b Ms. N.G. Chaubey, Advocate for
                                       the Respondent No. 1
                   Mr. D.V. Chauhan, GP a/b Ms. S.S. Jachak, Addl. GP for the
                                        Respondent/State
                 ∞∞∞∞∞∞∞∞∞∞∞∞∞∞∞∞∞∞∞∞∞∞∞∞∞∞∞∞∞∞∞∞∞

..ANSARI..
              Judgment                        2               27wp6010.24+4.odt




                                   WITH
             WRIT PETITION NO. 6009/2024

                   M/s. Haresh CCTV Security Systems,
                   Having Office at Krishna Complex,
                   Near Kishan Pipe, Rallies Plot, Amravati - 444601,
                   Through its Proprietor, Shri Haresh Gurdasram
                   Udasi, Aged about 52 years
                                                        .... PETITIONER(S)

                                     // VERSUS //

             (1)   Office of Chief Electoral Officer,
                   Maharashtra Through Joint Secretary
                   and Additional Election Officer,
                   Mada Cama Road, Hutatma Rajguru Chowk,
                   Mantralaya, Mumbai

             (2)   District Electoral Officer and District Collector,
                   Akola
                                                     .... RESPONDENT(S)
             ∞∞∞∞∞∞∞∞∞∞∞∞∞∞∞∞∞∞∞∞∞∞∞∞∞∞∞∞∞∞∞∞∞
              Mr. F.T. Mirza, Sr. Adv a/b Ms. S.F. Mirza, Adv for Petitioner
              Mr. S.V. Manohar, Sr. Adv a/b Ms. N.G. Chaubey, Advocate for
                                   the Respondent No. 1
               Mr. D.V. Chauhan, GP a/b Ms. S.S. Jachak, Addl. GP for the
                                    Respondent/State
             ∞∞∞∞∞∞∞∞∞∞∞∞∞∞∞∞∞∞∞∞∞∞∞∞∞∞∞∞∞∞∞∞∞

                                   WITH
             WRIT PETITION NO. 6233/2024

                   M/s. Haresh CCTV Security Systems,
                   Having Office at Krishna Complex,
                   Near Kishan Pipe, Rallies Plot, Amravati - 444601,
                   Through its Proprietor, Shri Haresh Gurdasram
                   Udasi, Aged about 52 years
                                                        .... PETITIONER(S)

                                     // VERSUS //

..ANSARI..
              Judgment                        3                  27wp6010.24+4.odt




             (1)   Office of Chief Electoral Officer,
                   Maharashtra Through Joint Secretary
                   and Additional Election Officer,

             (2)   District Electoral Officer and District Collector,
                   Amravati
                                                     .... RESPONDENT(S)
             ∞∞∞∞∞∞∞∞∞∞∞∞∞∞∞∞∞∞∞∞∞∞∞∞∞∞∞∞∞∞∞∞∞
              Mr. F.T. Mirza, Sr. Adv a/b Ms. S.F. Mirza, Adv for Petitioner
              Mr. S.V. Manohar, Sr. Adv a/b Ms. N.G. Chaubey, Advocate for
                                   the Respondent No. 1
               Mr. D.V. Chauhan, GP a/b Ms. S.S. Jachak, Addl. GP for the
                                    Respondent/State
             ∞∞∞∞∞∞∞∞∞∞∞∞∞∞∞∞∞∞∞∞∞∞∞∞∞∞∞∞∞∞∞∞∞
                                   WITH
             WRIT PETITION NO. 6234/2024

                   M/s. Apex Computers,
                   Having Office at Plot No. 5, Sarkar Nagar,
                   Chavan Colony, Chandrapur 442401,
                   Through it's Proprietor Shri Chandrakant
                   Nandevrao Dhote, Aged about 48 years

                                                        .... PETITIONER(S)
                                      // VERSUS //

             (1)   Office of Chief Electoral Officer,
                   Maharashtra Through Joint Secretary
                   and Additional Election Officer,

             (2)   District Election Officer and District Collector,
                   Chandrapur
                                                    .... RESPONDENT(S)
             ∞∞∞∞∞∞∞∞∞∞∞∞∞∞∞∞∞∞∞∞∞∞∞∞∞∞∞∞∞∞∞∞∞
              Mr. F.T. Mirza, Sr. Adv a/b Ms. S.F. Mirza, Adv for Petitioner
              Mr. S.V. Manohar, Sr. Adv a/b Ms. N.G. Chaubey, Advocate for
                                   the Respondent No. 1
               Mr. D.V. Chauhan, GP a/b Ms. S.S. Jachak, Addl. GP for the
                                    Respondent/State
             ∞∞∞∞∞∞∞∞∞∞∞∞∞∞∞∞∞∞∞∞∞∞∞∞∞∞∞∞∞∞∞∞∞

..ANSARI..
              Judgment                       4               27wp6010.24+4.odt



                                    AND
             WRIT PETITION NO. 6180/2024

                   M/s. Shree Rajeshwar Agencies,
                   Through its Proprietor Shri Satish S/o Gokulji
                   Sarafi, Aged about 47 years, Occ. Business,
                   R/o. Gangadhar Tower, Jaihind Chowk,
                   June Shahar, Akola 444002
                                                        .... PETITIONER(S)

                                     // VERSUS //

             (1)   The Office of Chief Electoral Officer,
                   Maharashtra Through its Secretary
                   1st Floor, Administrative Building,
                   Madam Cama Road, Hutatma Rajguru Chowk,
                   Mantralaya, Mumbai 400032

             (2)   District Collector and District Election Officer,
                   Washim District, Collector Office, Washim

                                                     .... RESPONDENT(S)
             ∞∞∞∞∞∞∞∞∞∞∞∞∞∞∞∞∞∞∞∞∞∞∞∞∞∞∞∞∞∞∞∞∞
                         Mr. A. Mankar, Advocate for Petitioner
              Mr. S.V. Manohar, Sr. Adv a/b Ms. N.G. Chaubey, Advocate for
                                  the Respondent No. 1
               Mr. D.V. Chauhan, GP a/b Ms. S.S. Jachak, Addl. GP for the
                                    Respondent/State
             ∞∞∞∞∞∞∞∞∞∞∞∞∞∞∞∞∞∞∞∞∞∞∞∞∞∞∞∞∞∞∞∞∞

             CORAM : AVINASH G. GHAROTE & SMT. M.S. JAWALKAR, JJ.
                    OCTOBER 18, 2024


             WRIT PETITION NO. 6010/2024
             ORAL JUDGMENT :- (PER: AVINASH G. GHAROTE, J.)

(1) Heard.

..ANSARI..

Judgment 5 27wp6010.24+4.odt

(2) Mr. F.T. Mirza, learned Senior Counsel appearing for the

Petitioner in Writ Petition No. 6010/2024 seeks to replace the

existing Rejoinder by a new one on account of the inaccuracies

which according to him have crept up. The request is accepted.

The Rejoinder dated 17/10/2024 is permitted to be replaced by

the Rejoinder dated 18/10/2024.

(3) RULE. Rule made returnable forthwith.

(4) The Petition question the communication dated

09/09/2024 issued by the Respondent No. 1 - Chief Electoral

Officer (Page 79) by which it has been communicated to all the

Collectors in the Districts that the rate of webcasting per

polling booth would not be more than Rs. 6,253/- and so also,

the tender notice dated 03/10/2024 (Page 86-A) on the ground

that, in pursuance to the earlier tenders issued on 22/02/2024

(Page 31), which was combined tender for the Lok Sabha and

Vidhan Sabha Elections calling of offers for webcasting in the

polling booths, the Petitioner was duly selected being the

lowest, in pursuance to which, an agreement was entered into

on 15/03/2024 between the Petitioner and the Collector,

Yavatmal, in terms of which, the Petitioner was to supply

..ANSARI..

Judgment 6 27wp6010.24+4.odt

webcasting services for 50% poll booths identified by the

Collector in Yavatmal District. It is contended that the

agreement has been acted upon and webcasting services have

been provided by the Petitioner in terms of the aforesaid

agreement at the rates accepted therein, for the Lok Sabha

Elections which are over. The same services in terms of the

agreement dated 15/03/2024 are to be provided for the ensuing

Vidhan Sabha Elections.

(5) It is contended that in view of the communication dated

09/09/2024 (Page 79) of the Respondent No. 1, the Respondent

No. 2 by the communication dated 17/09/2024 (Page 80) called

upon the Petitioner to intimate its consent for providing

webcasting services at Rs. 6,253/- per polling booth. A tender

has also been issued on 03/10/2024 (Page 86-A) by the

Respondent No. 2 calling offers for the same work of providing

webcasting services in the Yavatmal District at 50% of the

polling booths.

(6) Mr. Mirza, learned Senior Counsel appearing for the

Petitioner submits that once the Respondent No. 2 has entered

into an agreement with the Petitioner for providing webcasting

..ANSARI..

Judgment 7 27wp6010.24+4.odt

services for the Parliamentary and Assembly Elections and the

same has been acted upon, it is not permissible for the

Respondent No. 2, for any reason whatsoever, to resile from the

same, by asking the Petitioner to provide the services at a lower

rate than what was agreed upon. He, therefore, submits that

the action of the Respondent No. 2 in issuing the

communication dated 09/09/2024 (Page 79) as well as issuance

of the tender notice dated 03/10/2024 (Page 86-A) is clearly

arbitrary and cannot be sustained and is required to be quashed

and set aside. He further relies upon Subodh Kumar Singh

Rathour vs. Chief Executive Officer and others, 2024 SCC

Online SC 1682 (Paragraph Nos. 110, 111 and 112) to contend

that mere possibility of the State receiving a service at a lower

rate cannot be a ground to resile from the contract already

entered into. It is, therefore, contended that the aforesaid

actions are clearly unreasonable and arbitrary and are required

to be quashed and set aside.

(7) Mr. Manohar, learned Senior Counsel appearing for the

Respondent No. 1, while supporting the impugned action,

contends that the original tender dated 22/02/2024 (Page 31)

..ANSARI..

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itself contained Clauses 11, 12 and 13 which conferred power

upon the Collector even of cancelling the tender and

modification of its terms. He further relies upon Clauses 1 and 11

of the agreement dated 15/03/2024, which reserve the power in

the Collector to modify or cancel any part or condition of the

tender, and therefore, submits that since the Respondent No. 1

found that the rate of Rs. 6,253/-, was a rate reasonable

calculated on the basis of rates in all the States, the issuance of

the communication dated 09/09/2024 cannot be faulted with,

which would also be the reason to sustain the issuance of the

subsequent tender notice dated 03/10/2024 by the Respondent

No. 2. He, therefore, submits that there is a reasonable cause

for the action taken by the Respondent No. 1, on account of

which, the Petition ought to be rejected.

(8) Mr. Chauhan, learned Government Pleader appearing for

the Respondent No. 2 justifies the issuance of the tender notice

dated 03/10/2024 on the basis of the communication dated

09/09/2024 by the Respondent No. 1 (Page 79) and reiterates

the submissions made by Mr. Manohar, learned Senior Counsel

for the Respondent No. 1.

..ANSARI..

Judgment 9 27wp6010.24+4.odt

(9) A perusal of the tender notice dated 22/02/2024 would

indicate that the offers for providing webcasting services to

50% of the polling booths in each District were invited, in

pursuance to which, the offer of the Petitioner being lowest, was

accepted and an agreement for providing the services came to

be entered between the Petitioner and the Respondent No. 2

(Page 49). It cannot be disputed that the tender notice dated

22/02/2024 was for providing the webcasting services for the

ensuing Parliamentary and Assembly elections, as that is what

is indicated in the nature of work as described in the said NIT

(Page 32). This is also indicated from the agreement dated

15/03/2024 (Page 49). It is thus apparent that the NIT dated

22/02/2024 and the consequent agreement dated 15/03/2024 in

pursuance thereto were both for the Parliamentary and

Assembly Elections. It is equally a matter of fact that the

agreement has been acted upon and webcasting services have

been provided by the Petitioner to the Respondents for the

Parliamentary Elections which are over, which would indicate

that part of the agreement has already been acted upon.

Though the terms of the NIT as well as the agreement reserve a

right in the Respondent No. 2 to modify the tender or any part

..ANSARI..

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of it or any terms and conditions therein, that by itself would

not mean that the Respondent No. 2 would have the power to

reduce the rates at which the tender was accepted and acted

upon. What is also material to note is that, though a plea of the

same services being available for lesser rate in terms of the

communication dated 09/09/2024 by the Respondent No. 1 to

the Respondent No. 2, is being cited as the reason for issuing

the tender dated 03/10/2024, however, a perusal of the same

does not indicate existence of any condition, capping the upper

price limit at Rs. 6,253/-. Had there been any substance in this

reason, there is no reason why such a Clause has not been

inserted in the NIT dated 03/10/2024. The absence of such a

clause, in substance, speaks for itself. It is also necessary to

note that the agreement still continues to be in existence, on

account of which, the Respondent No. 2, being an

instrumentality of the State and having an obligation to act

fairly and in a non-arbitrary manner, cannot be permitted to

resile from the agreement in such a fashion.

..ANSARI..

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(10) In Subodh Kumar (supra), while considering a plea of

incurring a financial loss on account of the rate, this is what

has been held:-

"110. Thus, the respondent's reasoning in the Notice of Cancellation dated 07.02.2023 that it was incurring financial losses from the aforesaid tender does not hold well either. It has been contended by the respondent that due to the ambiguity in tender as regards placement of advertisements, many interested bidders might not have been able to submit their bids. Thus, the respondent formed the view that if the ambiguity is corrected a higher license fee could be fetched.

111. However, we are not impressed with the above submission. As discussed in the preceding paragraphs of this judgment, nothing to this effect is even remotely indicated from the internal file notings of the respondent or the materials on record. There is nothing to suggest that there was a technical fault in the tender resulting in financial losses or that there was a possibility of fetching higher license fees. On the contrary, it can be seen that the respondent itself was of the opinion that the tender for work was financially beneficial to it. This further undermines the claims of technical faults or potential financial losses, and suggests that the decision to cancel

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Judgment 12 27wp6010.24+4.odt

the tender was not based on genuine financial concerns but rather on other, possibly extraneous factors.

112. Even assuming for a moment that there was a technical fault in the tender, which if rectified had the possibility of generating more revenue, the same by no stretch could be said to be a cogent reason for cancelling an already existing tender. In this regard reference may be made to the decision of this Court in Vice Chariman & Managing Director, City & Industrial Development Corporation of Maharashtra Ltd. & Anr. v. Shishir Realty Pvt. Ltd. & Ors. reported in 2021 SCC OnLine SC 1141 wherein it was held that mere possibility of more money in public coffers does not in itself serve 'public interest'. A blanket claim by the State claiming loss of public money cannot be used to forgo contractual obligations, especially when it is not based on any evidence or examination as the larger interest of upholding contracts is also in the play. The relevant observations read as under:-

"58. When a contract is being evaluated, the mere possibility of more money in the public coffers, does not in itself serve public interest. A blanket claim by the State claiming loss of public money cannot be used to forgo contractual obligations, especially when it is not based on any evidence or examination. The larger public interest of upholding contracts and

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the fairness of public authorities is also in play. Courts need to have a broader understanding of public interest, while reviewing such contracts."

(Emphasis supplied)

114. We may again refer to the decision of this Court in M.P. Power Management Company Ltd. (supra) wherein this Court observed that merely because the rates embodied in a contract with the passage of time have become less appealing, the same cannot become a determinative criterion for either terminating the contract or for the courts to decline interference in such contractual disputes. The relevant observations read as under: -

"88. Therefore, on a conspectus of the case law, we find that the concept of overwhelming public interest has essentially evolved in the context of cases relating to the award of contract by the State. It becomes an important consideration in the question as to whether then the State with whatever free play it has in its joints decides to award a contract, to hold up the matter or to interfere with the same should be accompanied by a careful consideration of the harm to public interest. We do not go on to say that consideration of public interest should not at all enter the mind of the court when it deals with a case involving repudiation of a claim under a contract or

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Judgment 14 27wp6010.24+4.odt

for that matter in the termination of the contract. However, there is a qualitative State enters into the contract, rights are created. If the case is brought to the constitutional court and it is invited to interfere with State action on the score that its action is palpably arbitrary, if the action is so found then an appeal to public interest must be viewed depending on the facts of each case. If the aspect of public interest flows entirely on the basis that the rates embodied in the contract which is arbitrarily terminated has with the passage of time become less appealing to the State or that because of the free play of market forces or other developments, there is a fall in the rate of price of the services or goods then this cannot become determinative of the question as to whether court should decline jurisdiction. In this case, it is noteworthy that the rates were in fact settled on the basis of international competitive bidding and in which as many as 182 bidders participated and the rate offered by the first respondent was undoubtedly the lowest. The fact that power has become cheaper in the market subsequently by itself should not result in non- suiting of the complaint of the first respondent, if it is found that a case of clear arbitrariness has been established by the first respondent.

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89. In other words, public interest cannot also be conflated with an evaluation of the monetary gain or loss alone." (Emphasis supplied)

115. What can be discerned from the above is that this Court has consistently underscored that any decision to terminate a contract must be grounded in a real and palpable public interest, duly supported by cogent materials and circumstances in order to ensure that State actions are fair, transparent, and accountable. Public interest cannot be used as a pretext to arbitrarily terminate contracts and there must be a clear and demonstrable ramification or detriment on the public interest to justify any such action.

116. Considerations of public interest should not be narrowly confined to financial aspects. The courts must have a more holistic understanding of public interest wherever the fairness of public authorities is in question, giving due regard to the broader implications of such action on the stability of contractual obligations. Merely because the financial terms of a contract are less favourable over a period of time does not justify its termination. Such decisions must be based on a careful consideration of all relevant factors, including the potential harm to the integrity and sanctity of contractual relationships. The larger interest of upholding contracts

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Judgment 16 27wp6010.24+4.odt

cannot be discarded in the name of monetary gain labelled as public interest.

118. Thus, we are of the view that the respondent's stance of a mere possibility of fetching higher license fees was no ground to cancel the tender issued to the appellant for the purposes of rectifying it, especially when the respondent completely failed to demonstrate as to how there was a technical fault in the tender or how potential interested bidders did not participate due to it or how fetching higher license fees was more than a mere possibility.

(11) Thus, mere possibility of any financial loss which may

accrue or the availability of a service at a lesser rate subsequent

in point of time to the NIT and the execution of the contract,

cannot be a ground to cancel the tender, which has already

been acted upon.

(12) We, therefore, find that the action on the part of the

Respondents in attempting to do so, is clearly contrary to what

has been held in Subodh Kumar (supra) and cannot be

permitted in law. In the result, the Writ Petition No. 6010/2024

is allowed. The communications dated 09/09/2024 and

..ANSARI..

Judgment 17 27wp6010.24+4.odt