Werm (India) Limited And Ors. vs The Lokayukta And Ors.
2003 Latest Caselaw 625 Del

JUDGMENT

S.K. Mahajan, J.

1. The present petition raises the question about the scope and ambit of the powers and extent of jurisdiction of the Lokayukta under the Delhi Lokayukta and Upalokayukta Act, 1995 (hereinafter referred to as "the Act"). The petitioner has filed this petition to challenge the report of the Lokayukta on the ground that he had no jurisdiction to inquire into the allegations against the private individuals nor could be widen the scope of inquiry so as to inquire into a matter for which he has not issued notice to the public functionaries. Under Section 7 of the Act, the Lokayukta has jurisdiction to inquire into the allegations made against a public functionary in relation to whom either the President or the Lieutenant Governor is the competent authority. The public functionary is defined in Section 2(m) of the Act and the same does not include any private individual or a company which is not a Government company. The "allegations" into which the inquiry can be initiated by the Lokayukta are defined in Section 2(b) of the Act. The challenge of the petitioner to the report of the Lokayukta, therefore, is that as under the Act he had no jurisdiction to inquire into the alleged allegations against the petitioner, which is a private company and the report submitted by him casting aspersions upon the petitioner is liable to be quashed. It is also the case of the petitioner that even otherwise the procedure followed by the Lokayukta while inquiring into the allegations was in violation of the principles of natural justice and on the basis of this procedure, which is not known to law, the reputation of the petitioner has been tarnished and though by Section 15 of the Act jurisdiction of the Court is barred from questioning the report, the petitioner has still challenged the report on the ground that the judicial review being a part of the basic structure of Constitution cannot be whittelled down in any manner whatsoever and in any case since the report is without jurisdiction, Section 15 of the Act would not bar the filing of the present petition. A few facts relevant for disposal of this writ petition may be summarised as under :-

2. Respondent No. 2, the Delhi Jal Board, awarded three contracts of laying the trunk sewer by trenchless technology to the petitioner. Taking suo moto action on a news item reported in daily English newspaper "The Pioneer", the Lokayukta issued notices to the Chief Minister of Delhi as well as the Officer on Special Duty in her office to file reply to the allegations made in the notice. The order passed by the Lokayukta issuing notice requiring the Chief Minister of Delhi and OSD to file reply, read as under :-

1. The Lokayukta acting under his suo-moto powers take cognizance of news item reported in the English daily newspaper "The Pioneer" dated September20, 2000 in which charges of corruption have been levelled against the OSD to the Hon'ble Chief Minister. The allegations broadly put are these;

(i) That on May 21, a resolution was put up for approval of setting up 58 metres of 2200 mm Dia pipe at the rate of 2.05 lakh per metre calling a tender, and later on the work was awarded to M/s.Chemcon, a French Company.

(ii) That a similar type of work on the Ring Road was awarded to M/s warm India Ltd., a sister concern of M/s. Chemcon, at the rate of Rs. 1.92 lakh per metre, the total estimated cost of that work was Rs. 11 crores, and that this contract also was awarded without calling any tender.

(iii) That on a protest of favoritism raised by an Indian firm, a work contract at a lower tender rate of Rs. 92,000/- per metre was awarded to M/s. Advance Ocean Ltd., the total cost of the project was Rs. 12 crores.

(iv) That in the last tender in Division IV, "Werm India" had quoted the rate of Rs. 56,000/- per metre for the same work which the firm had executed at the rate of Rs. 2.05 lakh per metre.

2. The news report is based on a statement made by Sh. Jagdish Anand, Member of Legislative Assembly of the Congress Party. The concluding portion of the report reads:

"The Delhi Jal Board has emerged as a den of corruption. Why a foreign firm, which quoted the rate of Rs. 2,05,000 per metre for a work, lowered the rate of similar work to Rs. 56,000/- per metre.

3. The Chief Minister is the Chairperson of the Delhi Jal Board. The Hon'ble Chief Minister through the Secretary of the Delhi Jal Board is required to file a reply to the allegations contained in the news report, a photo copy of which is annexed. The Secretary shall also clarify the circumstances and facts leading to the award of the contracts mentioned in the news report. The Secretary shall also state whether any other contract was awarded to the two French Companies mentioned in the news item. The Secretary shall also state the name of the Executive Director of M/s. Werm Indian Limited. The Secretary shall also produce the relevant files concerning the contracts mentioned in the news report.

4. The Secretary, Delhi Jal Board shall file the reply and produce the required files on 29th September, 2000, at 11 am. The Secretary shall appear either himself or be represented by a senior officer who is fully conversant with the facts."

3. A reading of the notice shows that the Lokayukta had initiated inquiry into the allegations about the award of the work to the petitioner company. The Lokayukta, however, during the course of inquiry into the aforesaid allegations started making inquiries into the execution of the contract by the petitioner. While making inquiries into the execution of the work, he came to a finding that under the contract the petitioner was required to use the liner designed and manufactured of patented GRP liner from Channeline, U.K., however, the petitioner had used the indigenously manufactured liner. The Lokayukta was, therefore, of the view that the parties were bound by the terms and conditions of the contract and if the contract provided that the lining units were to be designed and manufactured of patented GRP liner from Channeline, U.K., these lining material had to conform to the contract. Another observation of the Lokayukta in the report is that under the contract the petitioner was required to do desilting work with the use of super sucker, however, it had allegedly come in evidence before him that desilting work was being done manually and with a winch the sludge is taken out of the main-hole pit and thrown outside. The Lokayukta was, therefore, of the view that the clause in the agreement that super sucker would be used for desilting work and for which the company had already entered into technical collaboration agreement with a foreign company and the super sucker was to be shifted from Pitsburg, U.S.A., was just to serve their own end and Delhi Jal Board should have insisted on arranging the super sucker before the start of desilting work. It was observed by the Lokayukta that desilting work was in progress completely in violation of the contract and without any protest from the Delhi Jal Board. The Lokayukta, therefore, in his final report gave findings as to how the petitioner were executing the contract in clear breach of the conditions of the contract. Some of the findings of the Lokayukta were as under:-

A. That the import documents prove only the import of siliceous based sewer lining material by M/s. Cemcon Builders P. Ltd. There are no import documents on record evidencing import of GRP liner type II, designed and manufactured in England, UK for use at Bhairon Road works as per the contract.

B. That 5.5 linear metres of siliceous based sewer lining material imported as per Invoice No.99.00.29 dated 16.8.1999 was received in Delhi only on 16th November, 1999. The evidence is that the rehabilitation work of sewer trunk at Bhairon Road was completed on 13th November, 99, therefore, 5.5. linear metres of siliceous based sewer lining material received on 16.11.99 could not have been used in the work.

C. That the rehabilitation work of trunk sewer at Bhairon Road was to be don by trenchless technology with imported GRP lining type II, designed and manufactured in England, UK but there is no evidence that;

" The GRP lining type II designed, manufactured in England was imported and used at Bharion Road".

D. The contract for the sewer rehabilitation work measuring 474 metres was awarded to M/s. Werm India Ltd., on 15.10.99. The work, as per contract, was to be completed by 28.2.2000. The Super Sucker arrived in Delhi sometime in first week of April, 2000. Admittedly, the desilting and clearning of the sewer pipes at Urdu academy was not done with Super Sucker.

E. That the contract clearly provides that GRP liner designed and manufactured of patented from M/s. Channeline, UK is to be used in the additional trunk sewer rehabilitation work measuring 474 metres at Urdu Academy, Pragati Maidan and at Zoo whereas only indigenously manufactured segmental liners were used.

F. That AOSPL possessed no specialisation, technical know-how, and arrangements to provide specialised technical services and equipment, and was not at all qualified for the job of rehabilitation of trunk sewer lines by trenchless technology. The answer of Sh. R.K. Jain, Chief Engineer and Mr. B.K. Jha, Director (Finance), always was, 'lowest tender and to create more competition'. These would be relevant considerations if the party possessed basic essential qualifications, in the field of rehabilitation of trunk sewer by trenchless technology.

G. That the sewer rehabilitation work contract to M/s.AOSPL was awarded mainly because of the alleged collaboration agreement with Howard E. Stuber Inc., (USA) but without their being any binding contract with the collaboration and the firm AOSPL. The alleged collaborator has provided no specialised technical services, technical personnel, and equipment in the execution of the works by AOSPL. The contract provides that the desilting and cleaning work will be done with a super sucker but no super sucker has been brought.

H. The contract was to be completed by 28.2.2001, but till date not even 10% of the work has been completed.

I. Suddenly, with effect from 19th November, 2001 M/s. AOSPL has stopped the work, causing incalculable loss and damage to DJB.

J. The Lokayukta is pained to put on record that Mr. Anil Kumar Sharma, JE and Mr. Narinder Kumar, AE in collusion with the contractor fabricated false record `Liner Register' (Exhibit CW-14/A) and gave false evidence to support the case of the firm that 61.5 linear metres of GRP sewer lining material was receved at site before 14th October, 1999 and used in the rehabilitation of the sewer at Bhairon Road. The Measurement Book No.12077, on page 07, records the date of completion of work at Bhairon Road to be 13.11.1999. Mr. Anil Kumar Sharma, JE also gave evidence to the same effect. The evidence on record establishes conclusively that 5.5 linear metres of siliceous based sewer lining material was received in Delhi on 16th November, 1999 and, therefore, it could not have been used in the rehabilitation of the sewer before 13th November, 1999. The statement of Mr. Anil Kumar Sharma, JE and Mr. Narinder Kumar, AE in the replies dt. 26th March and 28th March, 2001 filed Along with the reply affidavit dt. 9th April, 2001 (filed by CEO, DJB) that 5.5 linear metres of sewer lining material was received at site on 4th October, 1999 and the Super Sucker arrived in Delhi on 28th March, 2000 are his affidavit dt. 15.1.2001 and in the statement on oath before the Lokayukta on 16.1.2001 that the Super Sucker arrived in Delhi on 28th March, 2001 is false. Mr. Narinder Kumar, AE and Mr. Anil Kumar Sharma, JE admitted that they saw the Super Sucker at the site only on 3rd April, 2000. Sh. Talwar stated that Super Sucker reached Delhi on 31st March, 2000 (The Lokayukta has discussed the facts and evidence, in detail, in his Orders dated 6th July, 2001 and 7th December, 2001 and they be read as part of this Report). The Lokayukta may add that Mr. Anil Kumar Sharma, JE and Mr. Narinder Kumar, AE are the very officers whom Delhi Jal Board sent for one week training in January, 2000 to London and spent over Rs. Nine Lacs on each one of them."

4. The Lokayukta, therefore, observed that he had pointed out some serious infirmities in the award and execution of the work and in fact what should have been done by the Senior Engineers and Officers of the Delhi Jal Board was done by the Lokayukta and he was from time to time discussing and pointing out to the Chief Engineer and Director (Finance) about the defects and infirmities seen in the execution of the work. It was observed that it was the Lokayukta who had pointed out to the Delhi Jal Board that desilting work was being done manually which was contrary to the terms of the contract and also questioned why the super sucker was not being imported. He also observed that it was the Lokayukta who had pointed out that the contractors had not imported GRP liner and the import documents showed import of siliceous based sewer lining material.

5. The contention of Mr. Bhatia, learned senior counsel appearing on behalf of the petitioner, is that the scope of inquiry initiated suo moto by the Lokayukta was only about the irregularities in the award of the work to the contractors and the Lokayukta, therefore, could not venture into an inquiry into the execution of the work. It is submitted that assuming it to be a case of breach of contract by the petitioners in the execution of the work, it could not be inquired into by the Lokayukta when the scope of inquiry before him was confined only to the award of work. Moreover, it is the contention of Mr. Bhatia that the Lokayukta did not have any jurisdiction to inquire into the allegations alleged to have been made against the private parties and it has jurisdiction only to inquire into the allegations against the public functionaries. It is submitted that since the Lokayukta did not have any jurisdiction over the petitioners, he could not comment into the conduct or the execution of the work by the petitioner.

6. Allegations have been defined in Section 2(b) of the Act to mean "allegation" in relation to a public functionary means by affirmation that such public functionary in capacity as such -

(i) has failed to act in accordance with the norms of integrity and conduct which ought to be followed by the public functionaries or the class to which he belongs;

(ii) has abused or misused his position to obtain any gain or favor to himself or to any other person or to cause loss or undue harm or hardship to any other person;

(iii) was actuated in the discharge of his functions as such public functionary by improper or corrupt motives or personal interest;

(iv) is or has at any time during the period of his office been in possession pecuniary resources or property disproportionate to his known sources of income whether such pecuniary resources or property are held by the public functionary personally or by any member of his family or by some other person on his behalf;

7. Section 2(m) of the Act defines public functionaries to mean a person who is or has been at any time

(i) the Chief Minister or a Minister;

(ii) a Member of Legislative Assembly;

(iii) a person having the rank of Minister but shall not include Speaker and Deputy Speaker of the Legislative Assembly;

(iv) a Chairman, Vice-Chairman or Managing Director or a Member of a Board of Directors (by whatever name they be called) in respect of-

(1) an Apex Co-operative Society or any Co-operative Society constituted or registered under the Delhi Co-operative Societies Act, 1972, which is subject to the control of the Government;

(2) a Government company within the meaning of Section 617 of the Companies Act, 1956, engaged in connection with the affairs, and is under the control of the Government;

(3) a Local Authority established under any law in relation to Delhi;

Provided that the provisions of this Act shall not be applicable to any authority of a Local Authority constituted under an enactment relatable to Entry No.18 of the State List of the Seventh Schedule of the Constitution:

(4) a Corporation engaged in connection with the affairs, and under the control of the Government;

(5) any Commission or body set up by the Government which is owned and controlled by it;

(v) a Member of the Municipal Corporation of Delhi as defined in clause 2(27) of the Municipal Corporation Act, 1957 (as amended in 1993).

8. Section 7 defines matters which may be inquired into by the Lokayukta and it provides that subject to the provisions of the Act, the Lokayukta may proceed to inquire into allegations made against a public functionary in relation to whom either the President or the Lieutenant Governor is the competent authority. Section 17 of the Act provides that nothing in the Act shall be construed to authorise the Lokayukta to inquire into the allegations against (a) any member of the judicial service who is under the administrative control of the High Court under Article 235 of the Constitution; and (b) any person who is a member of a Civil Service and the Union or an all India service or Civil Service of a State or holds any other post in the Union or a State in connection with the affairs of Delhi. Under Section 16 of the Act, Lokayukta if in the discharge of his functions under the Act notices a practice or procedure which in his opinion offered an opportunity for corruption or mal-administration, he may bring to the notice of the Government and may suggest such improvement in the said practice or procedure as he may deem fit.

9. A conjoint reading of the aforesaid provisions of the Act shows that the Lokayukta has the jurisdiction to inquire into the allegations made against public functionary alone and he cannot inquire into the allegations made against a person who is not covered by the definition of public functionary. Admittedly, the petitioners are not "public functionary" within the meaning of the Act. Moreover, the Lokayukta has to inquire into the allegations for which notice has been issued by him and on which he is making an inquiry. Suo moto inquiry initiated by the Lokayukta was as to whether there was any element of corruption impropriety or mal-administration in the award of the contract to the petitioner. While inquiring into the allegations of corruption or mal-administration in the award of contract, the Lokayukta, in my opinion, could not inquire as to whether or not the work awarded to the petitioner was being executed in accordance with the terms and conditions of the contract. If, there was a breach of contract in the performance or execution of the work, action can be taken against the petitioners only under the terms of the contract. Moreover, the petitioners not being public functionaries, they were not amenable to the jurisdiction of the Lokayukta. Petitioners were not even parties before the Lokayukta and no cognizance was taken by the Lokayukta against them while issuing notice to initiate inquiry into the matter of award of contract. It was during the course of inquiry against public functionaries that notices were issued by the Lokayukta to the petitioners to produce certain documents. On such notice being received, the petitioners made an application for being imp leaded as party before the Lokayukta. This application was rejected by the Lokayukta. Writ petition was filed by the petitioner challenging the order of Lokayukta. In reply to the Writ Petition, Lokayukta himself filed an affidavit stating, inter alia, that the petitioners did not fall within the jurisdiction of Lokayukta and, therefore, it was not necessary to make the petitioners party to the inquiry initiated by the Lokayukta. On such affidavit being filed, the Writ Petition was dismissed as withdrawn on 20th December, 2000. On 8th January, 2001, however, the Lokayukta passed an order directing the petitioner to produce certain documents. The order passed on 8th January, 2001 by the Lokayukta reads as under:-

"On 5th January, 2001 the case was taken up at 11 am and since there was no presence on behalf of M/s. Cemcon & M/s. Werm India Limited an order was passed requiring Sh. Ajay Talwar to answer the queries and produce documents mentioned in the Orders dt. 29th November and 4th December, 2000, on 9th January, 2001. Sh. Ajay Talwar, Director (Operations) appeared at 2 pm on the same date and filed an application Along with a number of enclosures running into 106 pages plus the annexures. On perusal of the documents the Lokayukta finds that the document (annexure IV) purporting to be an affidavit is not notarised nor it is attested by a Oath Commissioner. The documents regarding the import of GRP liner and the payment of duty have also not been produced. The Lokayukta further finds that Sh. Talwar has claimed confidentially in para 9 of the application regarding the information, records, documents etc., furnished before the Lokayukta. The Lokayukta has not required either M/s. Cemcon or M/s. Werm India Limited to furnish any documents which may contain technical, commercial, technological and allied aspects of the details that may have been employed by te contracting parties in the execution of the contracts. If they have filed any such documents they are at liberty to withdraw those documents. Sh. Talwar has mentioned in para 7 of the application that the matter was adjourned to 1th December, 2000 which was a Sunday. The Lokayukta has checked the calender and 19th December was not a Sunday, it was Tuesday and a working day.

On 5th January, 2001, the Lokayukta had told Sh. Talwar that if he is not available on 9th January, 2001 he can just send someone with a request for adjournment which will be granted. Sh. Talwar may appear on 16th January, 2001 at 11 am and produce documents (not already produced) mentioned in the Orders dt. 29th November, and 4th December, 2001. Sh. Talwar may also please produce the incorporation certificate regarding the company Advanced Composite Technologies P. Ltd. An affidavit duly notarized should be filed.

A copy of the Order passed in the morning on 5th January, 2001 was given to Sh. Talwar. The Order in the afternoon was passed in the presence of Sh. Talwar and before it could be typed and a copy given to him Sh. Talwar had left. A copy of that order is being sent to him now. The Lokayukta assures that all principal of natural justice shall be observed and also he shall ensure that adverse publicity is not given in the media."

10. The tenor of the order passed by the Lokayukta shows that the documents which were sought to be got produced by the petitioner were not relating to the award of work but they all related to execution of work by the petitioner and these documents were required to inquire into the conduct of the petitioner. Whether or not GRP liner had been imported so as to be used in the execution of the work and as to when the customs duty was paid was not relevant for purposes of inquiry into the allegations of award of contract to the petitioner. The imported GRP liner is required for use during the execution of the work. The same had no relevancy to the award of the contract. Inquiry into the execution of the work by the Lokayukta was thus clearly beyond the scope and jurisdiction of the Lokayukta.

11. In a judgment passed on 30th September, 2002 in Civil Writ No.4012/2002 Jaspal Singh Vs. Lieutenant Governor of Delhi, a Division Bench of this Court while dealing with the powers of the Lokayukta, has observed that in relation to suo moto proceedings intiated by the Lokayukta in respect of the property about which he had already concluded that he could not make an effective inquiry, he did not have any jurisdiction to make recommendations. It was observed by the Division Bench that findings of the Lokayukta having regard to the fact that he himself felt handicapped because the civil services did not fall within his jurisdiction, he should not have made any recommendations whatsoever. It was observed that the tenor of his recommendations do not partake the character of suggestions as contained in Section 16 of the Act as the said provisions operate in absolutely a different field. The Division Bench was, therefore, of the view that the recommendations made by the Lokayukta did not partake the character of the recommendations under the Act and if any action was required to be taken against the petitioner by the Lt. Governor, the same must be done on his application of independent mind. To the argument that under Section 15 of the Act, the Court cannot interfere with the recommendations of the Lokayukta , it was observed by the Division Bench that the contention of the respondents to the effect that this Court had no jurisdiction to interfere with the report of the Lokayukta was rejected. The Lokayukta being a statutory authority, the Court has the power of judicial review over the said authority.

12. In view of the aforesaid, I am of the opinion that the Lokayukta could not proceed to make inquiry in the execution of the work by the petitioner not only on the ground it was beyond the scope of inquiry initiated suo moto by him but also on the ground that he had no jurisdiction over the petitioners who are admittedly not public functionaries.

13. Having thus held that the Lokayukta did not have jurisdiction to either inquire into the matter of execution of contract by the petitioner or to make any recommendations about the same, the only question remains to be examined is whether the report itself is liable to be quashed or it is only the recommendations made against the petitioner that need to be quashed and whether the recommendations/observations made by the Lokayukta in his report can be taken into consideration for initiating any action against the petitioners for their alleged breach of the contract in the execution of the work. While it is the submission of Mr. Bhatia that if this Court comes to a finding that the entire exercise undertaken by the Lokayukta was without jurisdiction, the entire report is liable to be quashed. Mr. Bhatia has relied upon the judgment of the Supreme Court in Institution of A.P. Lokayukta/Upa-Lokayukta A.P. And Others Vs. T. Rama Subba Reddy and Another, , to contend that once the Court comes to a finding that the petitioners were outside the purview and jurisdiction of the Lokayukta, the report of the Lokayukta has to be quashed. However, Mr. Chandhiok, learned senior counsel appearing as amices curiae, has submitted that under Section 16 of the Act, if in the discharge of his functions under the Act, the Lokayukta notices a practice or procedure which in his opinion offered an opportunity for corruption or mal-administration, he may bring the same to the notice of the Government and may suggest such improvement in the said practice or procedure as he may deem fit. Contention of Mr. Chandhiok is that while inquiring into the allegations of award of work against public functionary, the Lokayukta having noticed certain practices and procedures in the execution of the work which in his opinion offered an opportunity for corruption and mal-administration, he has rightly brought the same to the notice of the Government and has suggested ways and means to make improvement in the same. He submits that no fault can be found in the Lokayukta making suggestions for making improvement in the practices and procedures in the execution of the work.

14. In Institution of A.P. Lokayukta/Upa-Lokayukta A.P. And Others Vs. T. Rama Subba Reddy and Another (Supra), the facts were that a complaint was filed against the functioning of the Chief Executive Officer of the A.P. State Co-operative Union Limited by one A.Pratap Reddy. The complaint was entertained by the Lokayukta and when proceedings were sought to be initiated on the basis of the said complaint, the Chief Executive Officer filed an application before the Lokayukta challenging his jurisdiction to entertain the complaint. This application was rejected by the Lokayukta and the order rejecting the application was challenged by the Chief Executive Officer by filing a Writ Petition before the High Court of Andhra Pradesh. A Division Bench of the High Court of Andhra Pradesh took the view that the Lokayukta had no jurisdiction to entertain the said complaint and, accordingly, the petition was allowed and proceedings before the Lokayukta were quashed. The appeal filed against the order of the Division Bench of the High Court allowing the writ petition was dismissed by the Supreme Court. The aforesaid judgment, in my view, will not be applicable to the facts of the present case inasmuch as inquiry in the case before the Andhra Pradesh High Court was initiated against a private individual and it was in that context that the High Court quashed the proceedings before the Lokayukta. In the present case, the inquiry has been initiated against the public functionaries and not against the private individuals. Lokayukta had the jurisdiction to initiate suo motto inquiry into the allegations of award of work against the public functioning. To start with the inquiry initiated by the Lokayukta was not without jurisdiction. It is only during the course of inquiry against public functionaries over whom he had jurisdiction that certain observations and report has been made against the private individuals in respect of a matter which was not the subject matter of inquiry by him. It is only that part of the report which deals with the private individuals over whom the Lokayukta had no jurisdiction may be ignored, however, the entire report, in my opinion, cannot be quashed. If during the course of inquiry into the allegations made against the public functionaries, the Lokayukta notices practices or procedures which in his opinion offered an opportunity for corruption and mal-administration, he can definitely bring the same to the notice of the Government and may suggest improvements in the practice and procedure as he may deem fit. During the course of inquiry, the Lokayukta has noticed certain practice and procedure which in his opinion offered an opportunity for corruption and mal-administration. In my opinion, there was nothing wrong if he brought the same to the notice of the Government and suggested ways and means as he may deemed fit in the matter. There cannot and should not be any objection to any party including the petitioner in the Lokayukta making suggestions for the efficient performance of the work.

15. Reference is also made by Mr. Bhatia to the observations of this Court in Smt. Indira Gandhi and Another Vs. Shri J.C. Shah, Commission of Inquiry, 2nd (1980) 1 Delhi 552 that the purported decision of an authority which has no jurisdiction to embark on an inquiry would be a nullity and consequently this Court should quash the entire report made by the Lokayukta. In the aforesaid judgment, this Court had quoted with approval the observations of the House of Lords in Anismipic Limited Vs. The Foreign Compensation Commission and another, (1969) 1 All E.R. 208 where it was observed as under:-

"Lack of jurisdiction may arise in various ways. There may be an absence of those formalities or things which are conditions precedent to the tribunal having any jurisdiction to embark on an enquiry. Or the tribunal may at the end make an order that it has no jurisdiction to make. Or in the intervening stage, while engaged on a proper enquiry, the tribunal may apart from the rules of natural justice; or it may ask itself the wrong questions; or it may take into account matters which it was not directed to take into account. Thereby it would step outside its jurisdiction. It would turn its enquiry into something not directed by Parliament and fail to make the enquiry which Parliament did direct. Any of these things would cause its purported decision to be a nullity. Further it is assumed, unless special provisions provide otherwise, that the tribunal will make its enquiry and decision according to the law of the land. For that reason the courts will intervene when it is manifest from the record that the tribunal, though keeping within its mandated area of jurisdiction, comes to an erroneous decision through an error of law. In such a case the courts have intervened to correct the error."

16. A perusal of the aforesaid observation shows that it is only those parts of the observations about which the Tribunal did not have any jurisdiction may held to be a nullity. In my opinion where the tribunal initiates an inquiry into a matter over which it had jurisdiction, the entire report cannot be said to be without jurisdiction. The Lokayukta had the jurisdiction to initiate inquiry into the allegations against public functionaries and, therefore, only that part of the report which deals with matters beyond the scope of his inquiry can be said to be without jurisdiction. This judgment, in my view, will not be applicable to the facts of the present case inasmuch as the Lokayukta did have jurisdiction to inquire into the allegations against the public functionaries about the award of work to the petitioner. If while making inquiry into the allegations over which he had jurisdiction, the Lokayukta noticed certain practices and procedures which may have a tendency to give rise to corruption and mal-administration, in my opinion, the suggestions given to avoid such corruption and mal-administration cannot be said to be without jurisdiction. As already observed by this Court above, it is only the observations and recommendations made against the petitioners over whom the Lokayukta had no jurisdiction about the execution of the work which was not the scope of inquiry before the Lokayukta that the recommendations and report can be ignored but the entire report relating to the award of work or relating to the suggestions for improvement in the performance of the work, in my view, cannot be ignored or quashed.

17. For the foregoing reasons, I partly allow this petition and direct that any part of the report which cast aspersions upon the petitioners relating to the execution of work awarded to them by the Delhi Jal Board shall be ignored and will not be taken into consideration by the respondents for any purpose. The respondents will not initiate or proceed to take any action against the petitioners on the basis of the recommendations or observations made by the Lokayukta in his report. This, however, will not in any way come in the way of the respondents Delhi Jal Board to apply its independent mind to take an action against the petitioners if they have committed breach of any of the conditions of contract while executing the work.

18. While departing, this Court would like to place on record its deep sense of appreciation for Mr. A.S. Chandhiok, Senior Advocate who has very ably assisted this Court as amices Curiae.