Jharkhand High Court

Jagmohan Tanti vs The State Of Jharkhand on 23 September, 2024

          IN THE HIGH COURT OF JHARKHAND AT RANCHI
                             W.P.(C) No. 2397 of 2024
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Jagmohan Tanti, aged about 35 years, s/o Banmali Tanti, Resident of village Jharjhara, P.O. Jharjhara, P.S. Toklo, District West Singhbhum.

... ... Petitioner Versus

1. The State of Jharkhand.

2. The Secretary, Department of Panchayati Raj and N.R.E.P. (Special Division), Government of Jharkhand, P.O. and P.S. Dhurwa, District Ranchi.

3. Deputy Commissioner, West Singhbhum, P.O. and P.S. Chaibasa, District West Singhbhum Chaibasa.

4. District Panchayat Raj Officer, West Singhbhum, P.O. and P.S. Chaibasa, District West Singhbhum Chaibasa.

5. Sub Divisional Officer, Porahat Sub Division, Chakradharpur, P.O. and P.S. Chakradharpur, District West Singhbhum.

6. Block Development Officer cum Secretary, Panchayat Samittee, Chakhradharpur, P.O. and P.S. Chakradharpur, District West Singhbhum.

7. Shahid Birsa Sewa Samitee through its Secretary Sri Mani Ram Das/Mundu, Office at Village Toybo, P.O. Jharjhara, P.S. Toklo, District West Singhbhum.

... ... Respondents

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  CORAM:            HON'BLE THE ACTING CHIEF JUSTICE
                   HON'BLE MR. JUSTICE ARUN KUMAR RAI
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  For the Appellant          : Mr. Atanu Banerjee, Advocate
                               Ms. Nivedita Kundu, Advocate
  For the Respondents        : Mr. Rahul Saboo, GP-II
                               Mr. Kunal Chandra Sharma, AC to GP-II
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04/Dated: 23rd September, 2024
Per Sujit Narayan Prasad, A.C.J.:

Prayer:

1. The instant writ petition has been filed under Article 226 of the Constitution of India seeking therein following reliefs:

"1. That in the instant Writ Petition the Petitioner prays for issuance of appropriate Writ or Writs, direction or directions, order or orders to set aside the Memo No.1137 dated 24-08-2023 (Annexre-5) issued

by the Secretary, Panchayat Samitee Cum Block Development Officer, Chakradharpur whereby and whereunder Secretary, Panchayat Samitee Cum Block Development Officer, Chakradharpur without issuing any Show Cause notice to petitioner, has cancelled the Settlement of Jharjhara Hat Bazar made in favour of Petitioner, although after settlement Concern Authority has executed Agreement with the petitioner on 15-07-2023;

AND Petitioner further prays for issuance of appropriate Writ or Writs, direction or directions, order or orders commanding the concern Respondents to permit the petitioner to collect rent/Masul from the Shop Keepers of Jharjhara Hat Bazar, as per Agreement dated 15-07- 2023 executed between the Petitioner and Secretary, Panchayat Samitee Cum Block Development Officer Chakradharpur;

AND Petitioner further prays for issuance of appropriate Writ or Writs, direction or directions, order or orders commanding the concern Respondents to prevent the Respondent No.7 from collecting the rent/Masul from the Shop Keepers of Jharjhara Bazar who illegally has been collecting rent/masul from the Shop keepers although as per Agreement dated 15-07-2023 Petitioner is entitle to collect the rent/Masul from the Shop Keepers and on Perusal of Joint Enquiry Report of Block Panchayat Raj Officer, Chakradharpur and others dated 19-08-2023 it is clear that Respondent No.7 has been illegally collecting rent/masul from the Shop Keepers of the Jharjhara Bazar without issuing Receipt to Shop Keepers and State Respondents knowingfully well the matter, illegally have been sitting tight over the matter."

Facts:

2. The brief facts of the case, as per the pleadings in the writ petition which requires to be enumerated herein, read as under:

It is the case of the petitioner that the Office of the Block Development Officer, Chakradhapur had issued notification for settlement of Jharjhara Hat Bazar vide memo no. 904 dated 28.06.2023, in which the petitioner along with three others have participated in the open bid dated 07.07.2023 and the petitioner was selected being highest bidder. In pursuance thereof, the Secretary, Panchayat Samitee cum Block Development Officer, Chakradhapur executed agreement dated 15.07.2023 with the petitioner for one year.

It is also the case of the petitioner that the respondent has illegally issued settlement notification dated 04.07.2023 for the same Hat Bazar by mentioning its other name as Toybo Hat although Jharjhara Hat and Toybo Hat are same Hat and that was protested before the Deputy Commissioner, West Singhbhum vide representation dated 08.07.2023

requesting him to cancel the said settlement however, it was stayed by the Secretary, Panchayat Samitee Cum Block Development Officer, Chakradharpur.

Thereafter, Joint Enquiry Report dated 19.08.2023 has been submitted mentioning therien that there is only one Hat in the name of Jharjhara and there is no Hat in the name of Toybo Hat. But even then, the Secretary, Panchayat Samitee Cum Block Development Officer, Chakradharpur has issued memo no. 1137 dated 24.08.2023 cancelling the settlement order of Jharjhara Hat Bazar made in favour of the petitioner.

Thereafter, the petitioner vide notice dated 26.09.2023 requested the Secretary, Panchayat Samitee Cum Block Development Officer, Chakradharpurt to permit the petitioner to collect masul/rent from the shop keepers of Jharjhara Hat Bazar and thereafter, made complaint vide representation dated 10.01.2024 to the Deputy Commissioner, West Singhbhum, Chaibasa in respect of illegal cancellation of settlement but till date the said representation is pending against which the present writ petition has been filed.

3. It is evident from the facts as referred hereinabove that in pursuance of the notice inviting tender dated 28.06.2023, the petitioner along with three others had participated for settlement of Jharjhara Hat Bazar in which the petitioner has been declared successful and accordingly, agreement was entered in between the Secretary, Panchayat Samitee Cum Block Development Officer, Chakradharpur and the petitioner.

Subsequently, the authorities have conducted an enquiry with respect to the issue of identity of Jharjhara Hat since it came to the notice of the authority that the Jharjhara Hat which is in the Jharjhara Panchauat wherein 30 shops have been accommodated and the second Hat is having 300 accommodation of the shops.

The authorities have found that two markets are there, Toybo and Jharjhara but the name of the market (Hat) is Jharjhara, as such, the

said report has been referred to the competent authority and based upon that the decision has been taken on 24.08.2023 that if in such circumstances two tender will be issued, with respect to the territory of two markets on the basis of collection of rent, etc., there is chances of dispute and hence, both the bazars have been decided to be treated as one and the authorities have taken decision to go for fresh tender.

The petitioner being aggrieved with the aforesaid decision, has filed writ petition on 12.04.2024.

4. It is not in dispute that the agreement has been entered in between the petitioner and the Secretary, Panchayat Samitee Cum Block Development Officer, Chakradharpur.

5. The petitioner has taken the ground in challenging the memo no. 1137 dated 24.08.2023 that such decision cannot be allowed to be taken and the same is absolutely arbitrary and illegal reason being that once the settlement has been made in favour of the petitioner and in pursuance thereof, agreement has also been entered then there was no occasion for the authority to go for fresh tender after cancellation of the first tender, therefore, the present writ petition.

Argument on behalf of the Writ Petitioner:

6. Mr. Atanu Banerjee, learned counsel assisted by Ms. Nivedita Kundu, learned counsel for the petitioner, while pressing the present writ petition has submitted that the authority while issuing the order dated 24.08.2023 based upon the joint enquiry report dated 19.08.2023 has committed illegality for the reason that the said decision has been taken after issuance of the tender based upon that the settlement has been made in favour of the petitioner and in pursuance thereof, agreement has also been entered.

7. The contention has been raised that the agreement has been entered, as such, right has been accrued in favour of the petitioner and in that view of the matter, no such decision can be allowed to be taken but even then the said decision has been taken, therefore, the present writ petition has been filed for quashing the said decision with a further direction upon the

respondents to allow the petitioner to carry out the terms and conditions of the contract for one year since the petitioner has been deprived illegally from carrying out the said business in terms thereof.

Argument on behalf of the Respondents:

8. Mr. Rahul Saboo, learned GP-II appearing for the respondent-State has seriously disputed the submission made on behalf of the petitioner based upon the stand inter alia taken by the State in the counter affidavit.

9. It has been contended that it cannot be said that the right has been accrued in favour of the petitioner. Such submission has been made based upon the ground that the authority when has found for both the areas, there be one bid to avoid dispute with respect to the territory of both the markets (Hats) and as such, if in such circumstances, decision has been taken to go for fresh tender after cancellation of the first one, the same cannot be said to suffer from error.

10. It has been contended that the contention so raised on behalf of the petitioner that he may be directed to carry out the business for the remaining period of the agreement, the same cannot be said to be acceptable reason being that the agreement has already expired on 14.07.2024 while the writ petition has been filed on 12.04.2024.

11. The validity of the period as per the contention made on behalf of the petitioner will be from 15.07.2023 till 14.07.2024, as such, petitioner should participate in the fresh bid instead of seeking relief as has been prayed in the writ petition.

Analysis:

12. We have heard learned counsel for the parties and gone across the pleadings made in the writ petition.

13. The contractual dispute is the subject matter of the present case since the main argument of the learned counsel for the petitioner is that the terms and conditions of the agreement entered in between the petitioner and the Secretary, Panchayat Samitee cum Block Development Officer, Chakradhapur will be concluded one.

Further, the ground which has been taken on behalf of the petitioner is that there is no fault said to be committed on behalf of the petitioner and as such, for the period he has been deprived from carrying out his business as per the terms and conditions of the contract, the petitioner is having substantial right to have the time extended so that the terms and conditions of the agreement be executed.

14. Learned counsel for the petitioner has relied upon a judgment rendered by the Hon'ble Apex Court in Beg Raj Singh vs. State of U.P. and Ors., (2003) 1 SCC 726.

15. The position of law is well settled that so far as the contractual dispute is concerned, the extraordinary jurisdiction as conferred under Article 226 of the Constitution of India is least to be exercised depending upon the situation that where the decision taken by the authority suffers from error or it is arbitrary being not acceptable to any reasonable person in absence of lack of prudence in the decision taken by the authority. Reference in this regard be made to the judgment rendered by the Hon'ble Apex Court in Tata Cellular Vs. Union of India, reported in (1994) 6 SCC 651 has been pleased to hold that the scope of judicial review can be exercised in such a matter in a case where there is lack of reasonableness is administrative law which means to distinguish between proper use of power so as to eliminate the possibility of arbitrariness. Such power is to be exercised to find out the right balance between the administrative discretion to decide matters whether contractual or political in nature or include a policy is contrary to the statutory provision.

16. In such circumstances, the duty of the Court is to confine itself the question of legality and its concern should be:

(i). Whether the decision-making authority exceeded its powers?

(ii). committed an error of law,

(iii). committed a breach of rules of natural justice,

(iv). reached a decision with no reasonable tribunal could have reached or,

(v). abused its power.

17. Further, in the case of Raunaq International Ltd. Vrs. I.V.R. Construction Ltd. & Ors., [(1999)1 SCC 492], the Hon'ble Apex Court while dealing with the issue of scope of judicial review has laid down by holding therein that the decision-making process suffers from bias of arbitrariness the same will be scrutinized under the power of judicial review.

18. The law relating to award of contract by the State and public sector corporations was reviewed by the Hon'ble Apex Court in the case of Air India Ltd. v. Cochin International Airport Ltd., reported in (2000) 2 SCC 617 wherein it has been observed that the award of a contract, whether by a private party or by a State, is essentially a commercial transaction and it can choose its own method to arrive at a decision and it is free to grant any relaxation for bona fide reasons, if the tender conditions permit such a relaxation.

19. It was further held that the State, its corporations, instrumentalities and agencies have the public duty to be fair to all concerned. Even when some defect is found in the decision-making process, the court must exercise its discretionary powers under Article 226 with great caution and should exercise it only in furtherance of public interest and not merely on the making out of a legal point. The court should always keep the larger public interest in mind in order to decide whether its intervention is called for or not. Only when it comes to a conclusion that overwhelming public interest requires interference, the court should interfere.

20. In Master Marine Services (P) Ltd. v. Metcalfe & Hodgkinson (P) Ltd., (2005) 6 SCC 138 the Hon'ble Apex Court has observed that while exercising power of judicial review in respect of contracts, the court should concern itself primarily with the question, whether there has been any infirmity in the decision-making process. By way of judicial review, the court cannot examine details of terms of contract which have been entered into by public bodies or the State.

21. In the case of Jagdish Mandal Vrs. State of Orissa & Ors. [(2007) 14 SCC 517], it has been laid down by the Hon'ble Apex Court that the power of judicial review in the contractual matters is permissible only if,

(I) the process adopted or decision made is mala fide or intended to favour someone or the same is so arbitrary and irrational that the court can say: 'the decision is such that no responsible authority acting reasonably and in accordance with law could have reached.' (II) public interest is affected. For ready reference, the relevant paragraph of the aforesaid judgment is being quoted as under:-

"22. Judicial review of administrative action is intended to prevent arbitrariness, irrationality, unreasonableness, bias and mala fides. Its purpose is to check whether choice or decision is made "lawfully" and not to check whether choice or decision is "sound". When the power of judicial review is invoked in matters relating to tenders or award of contracts, certain special features should be borne in mind. A contract is a commercial transaction. Evaluating tenders and awarding contracts are essentially commercial functions. Principles of equity and natural justice stay at a distance. If the decision relating to award of contract is bona fide and is in public interest, courts will not, in exercise of power of judicial review, interfere even if a procedural aberration or error in assessment or prejudice to a tenderer, is made out. The power of judicial review will not be permitted to be invoked to protect private interest at the cost of public interest, or to decide contractual disputes. The tenderer or contractor with a grievance can always seek damages in a civil court. Attempts by unsuccessful tenderers with imaginary grievances, wounded pride and business rivalry, to make mountains out of molehills of some technical/procedural violation or some prejudice to self, and persuade courts to interfere by exercising power of judicial review, should be resisted. Such interferences, either interim or final, may hold up public works for years, or delay relief and succour to thousands and millions and may increase the project cost manifold."

22. In the case of Michigan Rubber (India) Ltd. v. State of Karnataka (2012) 8 SCC 216] the Hon'ble Apex Court has observed that if the State or its instrumentalities acted reasonably, fairly and in public interest in awarding contract, interference by court would be very restrictive since no person could claim fundamental right to carry on business with the Government. Therefore, the courts would not normally interfere in policy decisions and in matters challenging award of contract by the State or public authorities.

23. Further, the Hon'ble Apex Court in the case of Afcons Infrastructure Ltd. v. Nagpur Metro Rail Corpn. Ltd., (2016) 16 SCC 818 it was held that a mere disagreement with the decision-making process or the decision of the administrative authority is no reason for a constitutional

court to interfere. The threshold of mala fides, intention to favour someone or arbitrariness, irrationality or perversity must be met before the constitutional court interferes with the decision-making process or the decision. The owner or the employer of a project, having authored the tender documents, is the best person to understand and appreciate its requirements and interpret its documents. It is possible that the owner or employer of a project may give an interpretation to the tender documents that is not acceptable to the constitutional courts but that by itself is not a reason for interfering with the interpretation given.

24. Adverting to the factual aspect of the present case, it appears that the agreement was entered in between the petitioner and the Secretary, Panchayat Samitee cum Block Development Officer, Chakradharpur on 15.07.2023 for a period of one year in terms of the decision of settlement taken by the authority by which the settlement of the Hat being Jharjhara Hat has been made in favour of the petitioner. But, subsequent thereto, based upon the joint enquiry report, decision has been taken by the authority that in the same locality, there are two Hats, namely, Jharjhara Hat and Toybo Hat having 30 shops and 300 shops respectively.

25. The authority, on its own wisdom, has taken decision that if the two settlements would be there, there is likelihood of dispute in between the settlees, as such, decision has been taken to come out with the fresh bid by incorporating also the name of Toybo Hat where 300 shops are located. The authority, based upon the said decision, has come out with the decision to cancel the first tender and in consequence thereof, the order of settlement made in favour of the petitioner has been cancelled. The said order is under challenge in this writ petition.

26. The question of such prudence is to be taken into consideration for the purpose of coming to the conclusion as to whether the decision so taken by the authority can be said to be unjustified?

27. The fact about the locality of two areas having 30 shops and 300 shops in Jharjhara Hat and Toybo Hat respectively has not been disputed by the petitioner since there is no averment to that effect in the writ petition.

28. The State in the first bid which has been issued for Jharjhara Hat has been settled in favour of the petitioner exclusively for 30 shops and the authority after taking into consideration the fact that for the same locality, i.e., at the side of the Jharjhara market there is another market having 300 shops and as such, decision has been taken for settlement of both the Hats in favour of one bidder so as to avoid the dispute between two settlees.

29. The said reason cannot be said to suffer from error as there will always be chances of dispute if the distance in between the two market areas is in very close vicinity and that is the fact herein.

30. Learned counsel for the petitioner contends that there is no fault on his part, as such, the period of agreement be extended and in order to strengthen his argument, he has relied upon a judgment rendered by the Hon'ble Apex Court in Beg Raj Singh vs. State of U.P. and Ors. (supra).

31. We have gone through the factual aspect of the said judgment and found therefrom that the said view has been taken on the premise where there was no third party right.

But here, as would appear from the statement made at paragraph-19 of the counter affidavit wherein the State has made specific statement that the fresh bid has been issued and there is no response to the said counter affidavit.

32. Further, the period of agreement of one year which starts from 15.07.2023 had been closed on 14.07.2024 and the writ petition has been filed on 12.04.2024, i.e., after lapse of about 09 months.

Furthermore, reference of advertisement has been made as would appear from paragraph-19 of the counter affidavit. The respondent no.7 has also been impleaded as party.

Conclusion:

33. This Court, taking into consideration the specific stand taken by the respondent-State in the counter affidavit, particularly at paragraph-19 that notice for bid has been issued and there is no rebuttal to that effect.

Page 10 W.P.(C) No. 2397 of 2024 Further, the bid has also not been challenged, therefore, is of the view that no positive direction can be passed in favour of the petitioner.