Jewels Of India vs Union Of India And Ors.
1995 Latest Caselaw 890 Del

JUDGMENT

M.K. Sharma, J.

(1) The petitioners through this writ petition have sought for a direction to allow the petitioners to take part in the jewellery exhibition to be organized by the respondents at Abu Dhabi/Dubai from 1.10.1995 to 13.10.1995 and also at Kuwait from 16.11.1995 to 22.11.1995 with a further prayer for quashing the orders communicated by letters dated 28.7.1995 and 4.8.1995 declining the request of the petitioners to participate in the exhibition to be held at Abu Dhabi/Dubai and also at Kuwait.

(2) The petitioners are dealing in jewellery for the past many years and are exporting Indian jewellery to various countries since 1981. The petitioner No.2 holds a valid jewellery license under the Gold Control Act. The respondent No.2, against whom the directions have been sought for in the present writ petition is a Government Corporation being an Undertaking of Government of India and is under the Ministry of Textiles. The Ministry of Commerce, Government of India, issued a public notice on 29.6.1992 laying down a scheme for export of gold ornaments and articles for sale at the exhibitions approved by the Ministry of Commerce and organized in the Middle-East Countries by respondent No.2. In pursuance of the said notice the respondent No.2 has been organising various exhibitions at different places of Middle-East Countries. The respondent No.2 has offered business-associate ship to the petitioner firm and in that respect the parties have entered into an agreement. The respondent No.2, through its letter dated 9.6.1995 intimated the petitioners and other business associates of respondent No.2 that the respondent No.2 is holding three jewellery exhibitions - (i) at Abu Dhabi/Dubai from 1.10.1995 to 13.10.1995; (ii) at Kuwait from 10.11.1995 to 22.11.1995 and (iii) at Doha (Qatar) from 31.12.1995 to 7.1.1996 and stipulated that for participation Rs.10,000.00 should be deposited by each participant for each of the aforesaid exhibitions as earnest money. In pursuance of the said communication the petitioners sent their consent Along with their initial participation fee of Rs.30,000.00 (Rs.10,000.00 each for 3 exhibitions). The petitioners were thereafter informed by respondent No.2 that they have been selected only for participation in the exhibitions to be held at Doha (Qatar) and that they have not been selected for such exhibitions to be held at Abu Dhabi/Dubai and Kuwait. The grievance of the petitioners, raised in this writ petition is that no reason has been assigned by the respondent No.2 for denying them the opportunity to participate in the exhibitions to be held at the aforesaid two places, and have challenged before us their non- selection for such participation in the aforesaid two exhibitions.

(3) On 17.8.1995, this court issued notice on the aforesaid writ petition. However, the interim reliefs prayed by the petitioners were rejected by this court. After receipt of notice issued by this court the respondent No.2 has contested this writ petition by filing a counter affidavit stating therein that 20 associates consented for participation in exhibitions at Abu Dhabi/Dubai, 22 associates gave their applications for participation in exhibitions at Kuwait and Doha in pursuance of their invitation issued through circular dated 9.6.1995. It is further stated in the said counter affidavit that as per the capacity of the hotel halls where the exhibitions are to be held, while 15 associates only could be accommodated at Abu Dhabi/Dubai, 16 associates could be accommodated at Kuwait and 20 associates could be accommodated in Doha and thus there are more applicants and lesser space for which the respondent No.2 had to prune the applications given in order to accommodate only permissible number of participants. It is also stated that the participants in the exhibition held at Cairo (Egypt) were initially not interested to participate in the said exhibitions but subsequently agreed to participate in the said exhibitions. Accordingly, in order to compensate the said 8 participants it was decided that they would all be allowed to participate in the three exhibitions namely at Abu Dhabi/Dubai, Kuwait and Doha. The respondent No.2 further stated that for the remaining berths the other applications were considered by adopting a criteria of the sales made in the earlier exhibitions. The respondent No.2 categorically asserted in their counter affidavit that the applications received by the respondent No.2 were considered on their respective merit by adopting objective criteria which is reasonable and bonafide.

(4) Mr. Jaitley, the learned counsel for the petitioners submitted before us that if a reservation in favor of a particular category has to be made the same should be communicated in the invitation to participate itself and in failure to do so, such a criteria could not be resorted to while making selection for participation in the aforesaid exhibition by the respondent No.2. In support of his submission the learned counsel for the petitioner relied on the proposition laid down in the case of ÿHarvinder Singh Vs. Union of India; reported in 1986 (1) Slr 63. He further submitted that if the past sales are to be taken as criteria for future selection then the criteria must be reasonable so as to enable an equitable distribution of limited accommodation/spaces and in the instant case such criteria was unreasonable and arbitrary inasmuch as if the said criteria is followed in that case the associate with greater past sales will only be selected in future and no new person would be able to come in at any point of time. He substantiated his aforesaid submission by further stating that the petitioner, if now excluded from participation in the exhibitions to be held at Abu Dhabi/Dubai and Kuwait the same would necessarily mean that the petitioner would have lesser sales than other participants even in future selections. It was also submitted by him that the criteria followed in the instant case by respondent No.2 in selecting the participants is arbitrary and irrational and that the decision making process of the respondent is vitiated by their whims and fancies.

(5) Mr. Sikri appearing for the respondent No.2 justified the action and also the criteria laid down by respondent No.2 in selecting the names of the participants for the Abu Dhabi/Dubai and Kuwait exhibitions. According to him the criteria followed was reasonable and fair. He further submitted that it was the sole discretion of the respondent No.2 to make selection of the participants and that the said discretion has been exercised by the respondents properly and objectively. Mr. Sikri also raised a preliminary objection to the maintainability of the writ petition contending inter alia that the respondent No.2 is not discharging any public function or statutory duty in organising such exhibitions and that is purely a commercial and simple activity and that nobody as a matter of right could claim his participation in such exhibitions and this court should not entertain the writ petition in the absence of any such statutory or public function being discharged by respondent No.2.

(6) Before we deal with the other contentions raised by the counsel for the rival parties we propose to deal with the preliminary objection raised by the learned counsel for respondent No.2 with regard to the maintainability of the writ petition. It is too late in the day to make a submission that the court has no jurisdiction to test the reasonableness and fairness of the actions of the State in the matter of commercial activity. Various pronouncements of the Supreme Court have conclusively laid down that the court does possess such a power to test whether even an administrative action of the State is free from arbitrariness or favoritism and also free from bias. In the case of Tata Cellular Vs. Union of India; , it has been held that the principles of judicial review would apply to the exercise of contractual powers by Government bodies in order to prevent arbitrariness or favoritism. It is true that there are inherent limits in exercise of that power of judicial review. It has been further held that 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. Elaborating the said concept the Supreme Court held that it is not for the courts to determine whether the particular policy or particular decision taken in the fulfillment of that policy is fair and that it is only concerned with manner in which those decisions have been taken.

(7) In view of the aforesaid proposition of law laid down by the Supreme Court the preliminary objection raised by the learned counsel for respondent No.2 has no merit and is accordingly rejected.

(8) We accordingly, propose to test the rival contentions of the parties restricting ourselves within the aforesaid parameters as laid down in the case of Tata Cellular (Supra). The respondent No.2 has produced the official records connected with the present case concerning selection of the names of the participants in the aforesaid three exhibitions. We have carefully perused the said records and we find there from that the respondent No.2 decided to adopt a criteria for selection of the names of the participants for the aforesaid three exhibitions in view of the fact that the applications received for participating in the said exhibitions were more than the capacity of the hall.

(9) Consequent thereupon it was proposed that considering the loss suffered by eight of the participants they could be given preferential treatment and that they could be allotted berth in all the three exhibitions, and for the remaining, two alternatives were suggested - (a) the seats might be so adjusted that the associate who is not accommodated at Abu Dhabi/Dubai should be considered first for the remaining seats of the Kuwait exhibition or in the alternative (b) those parties whose past experiences were not satisfactory they should be ignored and preference should be given to those whose sales were exceptionally high in the past. It has been further found from the record of respondent No.2 that finally a decision was taken that the list of the participants might be approved as discussed. Apparently, therefore, as to what criteria was finally decided to be followed by respondent No.2 in selecting the names of the participants for the aforesaid three exhibitions are not disclosed from the records maintained by the respondent No.2 in its official course of business. The respondent No.2 in its counter affidavit has stated that in the process of selection of the names of the participants for the aforesaid three exhibitions they adopted the criteria of giving preferential treatment to the 8 participants of the exhibition who suffered loss and allotted berth to all of them in all the three exhibitions and that for the remaining six it was so adjusted as to give preference to those whose sales were exceptionally high in the past. Though the aforesaid criteria said to have been adopted by respondent No.2 is not supported by/disclosed from the record maintained by the respondent No.2, yet even if we accept the said criteria to have been adopted by respondent No.2 for the purpose of selection, the same also appears to have not been followed in the present case as Sital Dass Sons whose sale as disclosed from the record was lower in the past than the petitioner, was selected for participation in the Abu Dhabi/Dubai exhibitions in preference to the petitioner whose sale in the past was definitely higher than the said Sital Dass Sons as is disclosed from the chart of comparative rates of the participants produced before us. Mr. Sikri appearing for respondent No.2 faintly tried to support the said decision on the ground that the sister concern of said Sital Dass Sons namely Sital Dass & Sons who had a higher sale in the past than the petitioner, desired that Sital Dass & Sons should be taken in its place. However, the records do not disclose for a moment that any such desire was expressed by M/s. Sital Dass Sons nor any such recommendation was made by M/s. Sital Dass Sons in favor of M/s. Sital Dass & Sons and atleast there is nothing on record to substantiate the said claim.

(10) In our opinion, the respondent No.2 while discharging public duty could not act according to its fancy and whims & must act reasonably and fairly & being free from arbitrariness even when it acts within the realm of commercial activity. All its actions must be reasonable and strictly in terms of the criteria laid down for the purpose. In the instant case, though from the records we did not conclusively find the nature of the criteria laid down yet assuming that such criteria was laid down as stated above, the same was also not followed in the present case by the respondent No.2. In view of the aforesaid facts found on the face of the record of the case, we are of the opinion that the decision making process of respondent No.2 in selecting the names of the participants for the Abu Dhabi/Dubai exhibition and also for that purpose for Kuwait exhibition appear to be vitiated and based on irrational principle. To us, it appears that the petitioners were required to be included in preference to M/s. Sital Dass Sons in the list of participants for the Abu Dhabi/Dubai exhibition, their sale figure being higher than the said M/s. Sital Dass Sons. The learned counsel for respondent No.2 however, took a stand before us during the course of hearing of this petition that it is too late now to include the name of the petitioner in the list of participants for the Abu Dhabi/Dubai exhibition and that at this stage it is not possible to include the name of the petitioner for participation in the said exhibition. He further submitted that it is also not possible to include the name of the petitioner in the list of participants in the Kuwait exhibition inasmuch as they have already included the names of 16 participants for participating in the exhibition to be held at Kuwait and there is no possibility of including any further name in the said list in view of paucity of space and that by no means another stall could be provided to the petitioner. Learned counsel for the petitioner, however, submitted before us that in the past 17 participants have been allowed to participate in the exhibition held at Kuwait in the same Hotel. He has further stated before us that it is the admitted position that the total area of the hall in Kuwait Sheraton hotel where the respondent No.2 organises the exhibitions is about 700 Sq. Meters and that if the petitioner is allowed to participate the total area required for the participants would be about 153 Sq. Mtrs. considering 9 Sq. Mtrs. to be given to each participant, leaving an area of 547 Sq. Mtrs. which could well accommodate the participation of the petitioners. The aforesaid submission made by the learned counsel for the petitioners could not be effectively contested by the learned counsel appearing for the respondent No.2. We also find from the records available before us that in previous years more than 16 participants had participated in similar exhibitions held at Kuwait Sheraton Hotel without any congestion.

(11) Considering the aforesaid facts and also in view of our findings delineated above we are not inclined at this stage to direct the respondent No.2 to delete any name from the list of selected participants for the exhibition to be held at Kuwait, but we are inclined to direct the respondent No.2 to include the name of petitioners in the list of participants and allow them to participate in the exhibition to be held at Kuwait as the 17th member of the participants. We make this order as the name of the petitioner could not be included in the list of participants for the Abu Dhabi/Dubai exhibition due to paucity of time for which the petitioners were arbitrarily and illegally ignored by the respondent No.2.

(12) In the result, we allow this writ petition to the extent indicated above and direct the respondent No.2 to include the name of the petitioners in the list of participants for the exhibition at Kuwait as the 17th participant and allow them all the facilities that will be given to the other 16 participants. We however, make no order as to costs.