Suresh Goel & Associates vs Union Of India And Another
2009 Latest Caselaw 149 Del

*         HIGH COURT OF DELHI : NEW DELHI


+         Writ Petition (Civil) No.9105 of 2008


                      Judgment reserved on: January 14, 2008

%                     Judgment delivered on: January 19, 2009


Suresh Goel & Associates
Through its Proprietor
Mr. Suresh Goel
Officer: S-83, Panchsheel Park
New Delhi-110017.                                    ...Petitioner

                                 Through   Mr.Abhinav Vasishth with
                                           Ms.Garima Prashad and
                                           Ms.Neha Goyal, Advs.

                      Versus

1.   Union of India
     Through Secretary
     Ministry of Defence
     New Delhi.

2.   The Chief Engineer Air Force, WAC
     Military Engineering Services
     Palam, Delhi Cantt.-110010.                     ...Respondents

                                 Through   Ms.Jyoti Singh, Adv.

Coram:

HON'BLE MR. JUSTICE MADAN B. LOKUR
HON'BLE MR. JUSTICE SIDDHARTH MRIDUL



WP (C) No.9105/2008                                         Page 1 of 12
 1. Whether the Reporters of local papers may
   be allowed to see the judgment?                                Yes

2. To be referred to Reporter or not?                             Yes

3. Whether the judgment should be reported
   in the Digest?                                                 Yes


MADAN B. LOKUR, J.

On 23rd April, 2005, the Respondents issued an

advertisement in the daily newspaper inviting expressions of interest

from architects, architectural firms, architectural institutes, IITs and

RECs to promote an architectural competition and submission of a

design for an Air Force museum in a two stage competition. It was

stated that the estimated cost of the project would be Rs.50 crores and

the object of the competition was to obtain architectural designs for the

project in accordance with which, after further elaborations, the project

would be developed. The competition conditions and registration form

were made available with the Chief Engineer (Air Force) at Palam.

2. In response to the advertisement, the Petitioner participated

by submitting his proposal. While the terms and conditions of the

competition are not on record, it appears that the two stage competition

involved the submission of architectural drawings as Part-1 and a

financial bid as Part-2.

3. After an evaluation of the concepts and designs received by

the Respondents from various participants, it appears that a Board of

Assessors evaluated the design submitted by the Petitioner as being the

best. This was duly intimated to the Petitioner by the Respondents by a

letter dated 7th June, 2007 in which it was also mentioned that the

Petitioner had been selected and approved for consultancy towards the

construction of the new Aerospace Museum.

4. As regards the consultancy charges, by a letter dated 20th

June, 2007 the Petitioner stated that two preliminary estimates had been

prepared in respect of the project - one for Rs.129 crores and the other

for Rs.99 crores.

5. It appears that in the meanwhile (and even later) the

Petitioner had made project presentations to the Respondents as well as

to senior officers of the Air Force and there does not seem to be any

dispute about the fact that the concept design furnished by the Petitioner

was the best.

6. It appears that the Petitioner continued to discuss

improvements in the project and also continued to give presentations to

the Respondents and the last such presentation was made on or about

11th February, 2008. Thereafter, there was no communication from the

Respondents to the Petitioner, although the Petitioner addressed a

couple of letters to the Respondents.

7. According to learned counsel for the Petitioner, since his

client had been informed that his concept design was the best and that

he had been selected and approved for consultancy, there was no doubt

that the consultancy contract ought to have been awarded to the

Petitioner. However, it appears that the Respondents had a completely

different intention and they issued an advertisement in the daily

newspaper on 13th December, 2008. The advertisement stated that the

Chief Engineer in the Air Force (acting on behalf of the President of

India) invited applications for consultancy services for an Air Force

Museum at Air Force Station, Palam. The estimated cost of the project

was Rs.90 lakhs.

8. Feeling upset with this turn of events, the Petitioner filed a

writ petition in this Court under Article 226 of the Constitution praying

for an appropriate writ, order or direction quashing the advertisement

dated 13th December, 2008 and for a direction to the Respondents to

honour their selection and appointment letter dated 7 th June, 2007 and to

execute a consultancy agreement with the Petitioner.

9. The Respondents filed their counter affidavit in which it was

stated that what was advertised on 23rd April, 2005 was only a

competition in which payments were to be made by the Air Force

authorities from within their own fund (non-public funds) without any

liability on the Government. The intention of the competition was to

finalize the concept of an Air Force Museum and to obtain preliminary

estimates in order to ascertain the feasibility of the project. The

Respondents have stated in the counter affidavit that an honourarium of

Rs.50,000/- was paid to all the participants for their efforts.

10. Significantly, the Respondents have stated (and this appears

to be correct from a reading of the terms of the advertisement dated 23 rd

April, 2005) that the appointment of a consultant was never within the

scope of the competition and there was no sanction in this regard from

any of the concerned authorities, more particularly the Ministry of

Defence of the Government of India. It was stated by the Respondents

that the entire exercise was an in-house exercise only to obtain a concept

design and that the sanction for the appointment of a consultant was

received by the Respondents only on 6th October, 2008 as per which the

consultant was to be appointed through an open tender method. It is in

pursuance of this that the subsequent advertisement dated 13 th

December, 2008 was issued. The sanction letter dated 6 th October, 2008

is of importance and this reads as follows: -

"Air HQ/36018/324/1/W(WAC)534/F/D(Air-II) Government of India Ministry of Defence New Delhi, the 6th Oct 2008

The Chief of the Air Staff

SUBJECT: ENGAGEMENT OF A CONSULTANT FOR THE PROPOSED CONSTRUCTION OF AEROSPACE MUSEUM AT AIR FORCE STATION, PALAM

Sir,

I am directed to convey the sanction of President for engagement of a consultant in terms of Para 57(a) (iv) read with Para 24 of DWP-07 for preparation of detailed plan/scheme for various services and to obtain necessary mandatory clearances from various

prescribed authorities/bodies for the work of Aerospace Museum at Air Force Station Palam, New Delhi. The consultant will be selected through open tender to the lowest bidder.

2. The expenditure involved is debitable to Major Head 4076 (Capital Outlay on Defence Services) Sub Major Head 03 (Air Force), Minor head 202(Construction Works), Detailed Head 2(ii).

3. This issues with the concurrence of Min of Def (Fin/Air) vide their I.D No. 953/P&W/AF dated 06 th October, 2008.

Yours faithfully

Sd/-

(SK Jha) Under Secretary to the Government of India"

11. It was submitted by learned counsel for the Respondents that

the financial offer given by the Petitioner was way beyond the estimate.

Even otherwise, there was no question of awarding any consultancy

project to the Petitioner for the Air Force Museum. It was also

submitted that the Manual of Policies and Procedure of Employment of

Consultants issued by the Ministry of Finance of the Government of

India on 31st August, 2006 clearly requires the entering into a contract

with the consultant. In the present case, no contract was entered into

with the Petitioner and, therefore, no right had either accrued or vested

in favour of the Petitioner.

12. On these broad facts, it was submitted by learned counsel for

the Petitioner that since his client had given the best concept design and

was selected and approved as a consultant in terms of the letter dated 7th

June, 2007 there was no question of the Respondents going back on

their proposed appointment. Secondly, it was submitted that the

Petitioner had a legitimate expectation that it would be appointed as a

consultant and it was encouraged to believe this since it was entertained

time and again by the Respondents and even requested to make

presentations. In our opinion, none of these contentions can be

accepted.

13. It is quite clear that what was advertised on 23 rd April, 2005

was only a competition for submitting an architectural design for an Air

Force Museum. It is true that the advertisement also required the parties

to submit a financial bid but it appears that it was only for the purposes

of getting an idea of the cost involved, particularly since this was the

first time that the Air Force was coming out with the concept of an Air

Force Museum. The advertisement may have had the trappings of a

notice inviting tender but its terms and conditions were certainly not

those of a notice inviting tender but were more in the nature of a

competition leading to further discussions between the participant

submitting the best concept design or perhaps the lowest financial bid.

14. In any event, the Petitioner could not have continued to

harbour an impression that it would be appointed as a consultant

notwithstanding the letter dated 7th June, 2007 simply because there was

no follow-up contract entered into between the parties, as postulated by

the Manual of Policies and Procedure of Employment of Consultants. It

is true that the letter dated 7 th June, 2007 mentioned that the Petitioner

was selected and approved for consultancy but that did not culminate

into a written contract between the parties. It is for this reason that the

Petitioner did not acquire any consultancy rights.

15. Learned counsel for the Petitioner submitted that the

Respondents were wrong in contending that the officers with whom the

Petitioner had discussions or negotiations were not authorized to

conduct these discussions and bind the Respondents. In our opinion, it

was not necessary to go into this submission made in the counter

affidavit because ex-facie even if the officers were competent and

authorized to discuss and negotiate with the Petitioner, the deliberations

did not fructify into a contract.

16. It was submitted by learned counsel for the Petitioner that his

client had a legitimate expectation that it would be awarded the

consultancy. In support of his submission he relied upon Punjab

Communications Ltd. v. Union of India and others, (1999) 4 SCC 727.

In our opinion, this decision does not advance the case of the Petitioner.

In every tender, a qualified bidder has a legitimate expectation that he

would be awarded the contract but that does not mean that every bidder

must be awarded a contract. The award of a contract is a commercial

venture and it needs to be looked at from a commercial point of view.

17. In so far as the present case is concerned, there is not even a

semblance of a commercial venture as is apparent from the

advertisement dated 23rd April, 2005. What was advertised was a

competition which might lead the most successful participant to be

awarded a consultancy for an Air Force Museum. However, there is

nothing to suggest that a firm or conclusive decision was taken by the

Respondents in this regard. Even if such a decision was taken by the

Respondents, it would have been subject to necessary financial

sanctions to be granted by the Government of India. It has come on

record that the competition was carried out by the Respondents through

an in-house procedure involving non-public funds. But when it came to

the utilization of public funds (in terms of giving a contract for an Air

Force Museum), the rules and regulations formulated by the

Government of India for award of such a contract came into play. As

mentioned in the sanction letter dated 6th October, 2008 a particular

procedure had to be followed and that procedure was the selection of a

consultant through an open tender in favour of the lowest bidder. The

sanction given to the Respondents by the Government of India came

only in October, 2008 which was more than three years after the

advertisement inviting expressions of interest was issued on 23rd April,

2005. These facts lead us to accept the contention of the Respondents

that they had only undertaken an in-house exercise for their own benefit

and to enable them to get an idea how to cope with setting up of a high

quality Air Force Museum.

18. In our opinion, the Petitioner has not made out any case for

grant of any relief, as prayed for. Accordingly, the writ petition is

dismissed.

19. It appears that the Petitioner spent a considerable period of

time, knowledge and expertise in preparing the drawings for the Air

Force Museum. In our opinion, it would have been advisable for the

Respondents to have played its cards upfront rather than to exploit the

architectural and designing abilities of the Petitioner and leaving it in

the lurch midway. The Petitioner has reason to feel upset though not a

good enough reason in law for the award of a consultancy.

Consequently, we refrain from awarding any costs while dismissing the

writ petition.

                                        MADAN B. LOKUR, J



January 19, 2009                        SIDDHARTH MRIDUL, J
kapil

Certified that the corrected
copy of the judgment has
been transmitted in the main
Server.