Punjab-Haryana High Court
Puneet Kumar vs Union Of India And Others on 7 July, 2023
Neutral Citation No:=2023:PHHC:085432
CWP No. 13142 of 2023(O&M) -1- 2023:PHHC:085432
In the High Court of Punjab and Haryana at Chandigarh
CWP No. 13142 of 2023(O&M)
Date of Decision: 07.07.2023
Puneet Kumar
---Petitioner
versus
Union of India and others
---Respondent
CORAM: HON'BLE MR. JUSTICE JAGMOHAN BANSAL
Present: Mr. Rishab Gupta, Advocate and
Mr. Abhishek Sanghi, Advocate
for the petitioner
Mr. Ankur Sharma, Senior Panel Counsel
for Union of India
Mr. Ashish Kapoor, Advocate
for respondents No. 2 and 4
****
JAGMOHAN BANSAL, J. (ORAL)
CM No.10685-CWP of 2023
The applicant-petitioner through the instant petition is
seeking placing on record application form submitted by the
petitioner (Annexure P-17).
Allowed as prayed for.
Annexure P-17 is taken on record. Registry is directed to
tag the same at an appropriate place.
CWP No. 13142 of 2023
1. The petitioner through instant petition under Article 226
of Constitution of India is seeking quashing of order dated 15.05.2023
(Annexure P-15) whereby respondent No. 2 has rejected application
of the petitioner seeking grant of contract of service provider for
providing manpower and services at Company Owned Company
Operated outlet (in short "COCO").
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2. The brief facts of the case which are necessary to
adjudicate the matter are that the petitioner on 27.06.2022 filed an
application, pursuant to an advertisement of respondent No. 2 inviting
applications for appointment of service provider for providing
manpower and services at COCO. The petitioner vide letter dated
21.09.2022 (Annexure P-5) was informed that he has qualified for the
interview. He was asked to be present before respondent No. 2 on
07.10.2022 alongwith all original certificates/documents. The
petitioner vide letter dated 18.10.2022 (Annexure P-6) was declared
as selected candidate on the basis of application and interview. The
petitioner was selected on 18.10.2022, however, Letter of Intent (in
short "LOI") was not issued to him. The respondent revised the result
and rejected candidature of the petitioner. The petitioner was initially
granted 30 marks qua financial capability whereas in the revised
result, he was granted 19.51 marks. The respondent awarded contract
to respondent No. 3 on adhoc basis vide letter dated 18.01.2023
(Annexure P-8). The petitioner preferred CWP No. 6813 of 2023
before this Court seeking quashing of order dated 15.02.2023
(Annexure P-10) whereby result declared on 07.10.2022 (Annexure
P-7) was revised and issuance of LOI to petitioner was rejected.
This Court vide order dated 17.04.2023 disposed of
aforesaid writ petition with liberty to the petitioner to provide all
documents which he thinks fit and proper for being considered for the
purpose of taking a fresh decision by respondent-corporation. It was
further directed that respondent-corporation shall pass a fresh order
which has to be well-reasoned and speaking order. In compliance of
order of this Court, the respondent-corporation has passed fresh order
dated 15.05.2023 (Annexure P-15) whereby application of the
petitioner has been rejected. The marks qua financial capability has
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been assessed 9.02, resultantly, total marks of the petitioner has been
substantially reduced.
3. Learned counsel for the petitioner inter alia contends that
petitioner concededly did not disclose assets of his father, however,
respondent vide letter dated 25.08.2022 asked the petitioner to file a
number of documents which included documents/affidavit regarding
financial capability (liquid assets), current year valuation certificate
from chartered accountant etc. This Court while disposing of
aforesaid writ petition has granted liberty to the petitioner to provide
all documents which he thinks fit and proper for being considered for
the purpose of taking a fresh decision by respondent-corporation,
thus, respondent was duty bound to consider assets of his family
members.
4. Mr. Ashish Kapoor and Mr. Ankur Sharma, learned
counsel for respondents submit that brochure issued by respondent-
corporation lucidly directed the applicants to disclose their financial
capability which was to be considered while awarding marks. Under
the heading "Financial Capability", it was specifically pointed out that
valuation certificate of all assets should be of a date which is after the
date of advertisement and on or prior to date of application. It was
further clarified that evaluation would be done only on the basis of
declaration of financial assets in the application form. Even it was
also clarified that funds mentioned in the application should be
available with the applicant as on the date of application which should
be mandatorily filled by the applicants. The petitioner in the
application concededly disclosed liquid assets of himself as well his
mother. Partial financial details of himself & mother and complete
details of father of the petitioner were declared at a later point of time
which could not be considered. By mistake, the assets declared at
later stage by petitioner were considered while calculating marks. The
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petitioner cannot take benefit of any mistake on the part of
corporation which is prima facie and apparent on record.
5. I have heard learned counsel for the parties and perused
the record with their able assistance.
6. The dispute lies in the narrow compass. The claim of the
petitioner is, though, he has not fully declared assets in the original
application dated 27.06.2022 (Annexure P-17), yet, partial assets
disclosed on 30.08.2022 and partial after order of this Court should be
considered for the determination of his financial capability.
7. The conceded position emerging from the record is that
the petitioner pursuant to advertisement inviting appointment of
service provider at COCO preferred application on 27.06.2022. The
petitioner did not disclose liquid assets of his father in the application
though he had disclosed partial liquid assets of his mother besides his
own assets. The respondent-corporation vide letter dated 25.08.2022
pointed out various deficiencies which included documents/affidavit
regarding financial capability. The petitioner on 30.08.2022 disclosed
total liquid assets of himself and his mother to the extent of Rs. 31.20
lakh. At this stage also, assets of father were not disclosed. The
assets of father of the petitioner were included after order dated
17.04.2023 passed by this Court in CWP No. 6813 of 2023.
8. The petitioner is seeking writ jurisdiction of this Court in
a contractual matter. The contract to be executed was between a
public sector undertaking and a private party. The tender as well
contract were not a statutory in nature whereas it was purely a
commercial matter. It is a settled proposition of law that there is no
bar in interfering in commercial contracts by invoking writ
jurisdiction under Article 226 of the Constitution of India, however, it
is further settled proposition of law that scope of interference is very
limited.
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9. A three judge Bench of Hon'ble Supreme Court in Tata
Cellular versus Union of India 1994 (6) SCC 651 has adverted with
maintainability of writ jurisdiction in contractual matters. Hon'ble
court after considering its precedents has culled down its conclusion
as follows:
94. The principles deducible from the above are:
(1) The modern trend points to judicial restraint in
administrative action.
(2) The Court does not sit as a court of appeal but
merely reviews the manner in which the decision was
made.
(3) The Court does not have the expertise to correct the
administrative decision. If a review of the administrative
decision is permitted it will be substituting its own
decision, without the necessary expertise which itself
may be fallible.
(4) The terms of the invitation to tender cannot be open
to judicial scrutiny because the invitation to tender is in
the realm of contract. Normally speaking, the decision to
accept the tender or award the construct is reached by
process of negotiations through several tiers. More often
than not, such decisions are made qualitatively by
experts.
(5) The Government must have freedom of contract. In
other words, a fair play in the joints is a necessary
concomitant for an administrative body functioning in an
administrative sphere or quasi administrative sphere.
However, the decision must not only be tested by the
application of Wednesbury principle of reasonableness
(including its other facts pointed out above) but must be
free from arbitrariness not affected by bias or actuated
by mala fides.
(6) Quashing decisions may impose heavy administrative
burden on the administration and lead to increased and
unbudgeted expenditure.
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10. A two judge Bench of Hon'ble Supreme Court in a recent
judgment in M.P. Power Management Co. Ltd. v. Sky Power Southeast
Solar India (P) Ltd., (2023) 2 SCC 703 after considering a long list of
earlier judgments has concluded:
82.We may cull out our conclusions in regard to the points,
which we have framed:
82.1.It is, undoubtedly, true that the writ jurisdiction is a public
law remedy. A matter, which lies entirely within a private realm
of affairs of public body, may not lend itself for being dealt
with under the writ jurisdiction of the Court.
82.2.The principle laid down in Bareilly Development
Authority[Bareilly Development Authority v. Ajai Pal Singh,
(1989) 2 SCC 116] that in the case of a non-statutory contract
the rights are governed only by the terms of the contract and
the decisions, which are purported to be followed, including
Radhakrishna Agarwal [Radhakrishna Agarwal v. State of
Bihar, (1977) 3 SCC 457] , may not continue to hold good, in
the light of what has been laid down in ABL[ABL International
Ltd. v. Export Credit Guarantee Corpn. of India Ltd., (2004) 3
SCC 553] and as followed in the recent judgment in Sudhir
Kumar Singh [State of U.P. v. Sudhir Kumar Singh, (2021) 19
SCC 706 : 2020 SCC OnLine SC 847] .
82.3. The mere fact that relief is sought under a contract which
is not statutory, will not entitle the respondent State in a case
by itself to ward off scrutiny of its action or inaction under the
contract, if the complaining party is able to establish that the
action/inaction is, per se, arbitrary.
82.4. An action will lie, undoubtedly, when the State purports
to award any largesse and, undoubtedly, this relates to the
stage prior to the contract being entered into (see Ramana
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Dayaram Shetty [Ramana Dayaram Shetty v. International
Airport Authority of India, (1979) 3 SCC 489] ). This scrutiny,
no doubt, would be undertaken within the nature of the judicial
review, which has been declared in the decision in Tata
Cellular v. Union of India [Tata Cellular v. Union of India,
(1994) 6 SCC 651] .
82.5. After the contract is entered into, there can be a variety
of circumstances, which may provide a cause of action to a
party to the contract with the State, to seek relief by filing a
writ petition.
82.6. Without intending to be exhaustive, it may include the
relief of seeking payment of amounts due to the aggrieved party
from the State. The State can, indeed, be called upon to honour
its obligations of making payment, unless it be that there is a
serious and genuine dispute raised relating to the liability of
the State to make the payment. Such dispute, ordinarily, would
include the contention that the aggrieved party has not fulfilled
its obligations and the Court finds that such a contention by
the State is not a mere ruse or a pretence.
82.7. The existence of an alternate remedy, is, undoubtedly, a
matter to be borne in mind in declining relief in a writ petition
in a contractual matter. Again, the question as to whether the
writ petitioner must be told off the gates, would depend upon
the nature of the claim and relief sought by the petitioner, the
questions, which would have to be decided, and, most
importantly, whether there are disputed questions of fact,
resolution of which is necessary, as an indispensable prelude to
the grant of the relief sought. Undoubtedly, while there is no
prohibition, in the writ court even deciding disputed questions
of fact, particularly when the dispute surrounds demystifying of
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documents only, the Court may relegate the party to the remedy
by way of a civil suit.
82.8. The existence of a provision for arbitration, which is a
forum intended to quicken the pace of dispute resolution, is
viewed as a near bar to the entertainment of a writ petition
[see in this regard, the view of this Court even in ABL[ABL
International Ltd. v. Export Credit Guarantee Corpn. of India
Ltd., (2004) 3 SCC 553] explaining how it distinguished the
decision of this Court in State of U.P. v. Bridge & Roof Co.
(India) Ltd.[State of U.P. v. Bridge & Roof Co. (India) Ltd.,
(1996) 6 SCC 22] , by its observations in SCC para 14 in
ABL[ABL International Ltd. v. Export Credit Guarantee Corpn.
of India Ltd., (2004) 3 SCC 553] ].
82.9. The need to deal with disputed questions of fact, cannot
be made a smokescreen to guillotine a genuine claim raised in
a writ petition, when actually the resolution of a disputed
question of fact is unnecessary to grant relief to a writ
applicant.
82.10. The reach of Article 14 enables a writ court to deal with
arbitrary State action even after a contract is entered into by
the State. A wide variety of circumstances can generate causes
of action for invoking Article 14. The Court's approach in
dealing with the same, would be guided by, undoubtedly, the
overwhelming need to obviate arbitrary State action, in cases
where the writ remedy provides an effective and fair means of
preventing miscarriage of justice arising from palpably
unreasonable action by the State.
82.11. Termination of contract can again arise in a wide
variety of situations. If for instance, a contract is terminated,
by a person, who is demonstrated, without any need for any
argument, to be the person, who is completely unauthorised to
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cancel the contract, there may not be any necessity to drive the
party to the unnecessary ordeal of a prolix and avoidable
round of litigation. The intervention by the High Court, in such
a case, where there is no dispute to be resolved, would also be
conducive in public interest, apart from ensuring the
fundamental right of the petitioner under Article 14 of the
Constitution of India. When it comes to a challenge to the
termination of a contract by the State, which is a non-statutory
body, which is acting in purported exercise of the
powers/rights under such a contract, it would be over
simplifying a complex issue to lay down any inflexible rule in
favour of the Court turning away the petitioner to alternate
fora. Ordinarily, the cases of termination of contract by the
State, acting within its contractual domain, may not lend itself
for appropriate redress by the writ court. This is, undoubtedly,
so if the Court is duty-bound to arrive at findings, which
involve untying knots, which are presented by disputed
questions of facts. Undoubtedly, in view of ABL[ABL
International Ltd. v. Export Credit Guarantee Corpn. of India
Ltd., (2004) 3 SCC 553], if resolving the dispute, in a case of
repudiation of a contract, involves only appreciating the true
scope of documentary material in the light of pleadings, the
Court may still grant relief to an applicant. We must enter a
caveat. The Courts are today reeling under the weight of a
docket explosion, which is truly alarming. If a case involves a
large body of documents and the Court is called upon to enter
upon findings of facts and involves merely the construction of
the document, it may not be an unsound discretion to relegate
the party to the alternate remedy. This is not to deprive the
Court of its constitutional power as laid down in ABL[ABL
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International Ltd. v. Export Credit Guarantee Corpn. of India
Ltd., (2004) 3 SCC 553]. It all depends upon the facts of each
case as to whether, having regard to the scope of the dispute to
be resolved, whether the Court will still entertain the petition.
82.12. In a case the State is a party to the contract and a
breach of a contract is alleged against the State, a civil action
in the appropriate forum is, undoubtedly, maintainable. But
this is not the end of the matter. Having regard to the position
of the State and its duty to act fairly and to eschew
arbitrariness in all its actions, resort to the constitutional
remedy on the cause of action, that the action is arbitrary, is
permissible (see in this regard Shrilekha Vidyarthi v. State of
U.P. [Shrilekha Vidyarthi v. State of U.P., (1991) 1 SCC 212 :
1991 SCC (L&S) 742] ). However, it must be made clear that
every case involving breach of contract by the State, cannot be
dressed up and disguised as a case of arbitrary State action.
While the concept of an arbitrary action or inaction cannot be
cribbed or confined to any immutable mantra, and must be laid
bare, with reference to the facts of each case, it cannot be a
mere allegation of breach of contract that would suffice. What
must be involved in the case must be action/inaction, which
must be palpably unreasonable or absolutely irrational and
bereft of any principle. An action, which is completely mala
fide, can hardly be described as a fair action and may,
depending on the facts, amount to arbitrary action. The
question must be posed and answered by the Court and all we
intend to lay down is that there is a discretion available to the
Court to grant relief in appropriate cases.
82.13. A lodestar, which may illumine the path of the Court,
would be the dimension of public interest subserved by the
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Court interfering in the matter, rather than relegating the
matter to the alternate forum.
82.14. Another relevant criteria is, if the Court has entertained
the matter, then, while it is not tabooed that the Court should
not relegate the party at a later stage, ordinarily, it would be a
germane consideration, which may persuade the Court to
complete what it had started, provided it is otherwise a sound
exercise of jurisdiction to decide the matter on merits in the
writ petition itself.
82.15. Violation of natural justice has been recognised as a
ground signifying the presence of a public law element and can
found a cause of action premised on breach of Article 14. (See
Sudhir Kumar Singh [State of U.P. V. Sudhir Kumar Singh,
(2021) 19 SCC 706 : 2020 SCC OnLine SC 847] ).
11. A two judge bench of Hon'ble Supreme Court in a recent
judgment in GAIL v. Indian Petrochemicals Corpn. Ltd., (2023) 3 SCC
629 has turned down objection of the party qua maintainability of writ
though it was a commercial dispute between the parties. The relevant
extracts of the judgment read as:
13. At the outset, Mr Tushar Mehta, learned Solicitor General,
appearing for GAIL, contested the very maintainability of the
writ petition filed by IPCL. He contended that the parties had
provided for arbitration before the Permanent Machinery of
Arbitrators in the Bureau of Public Enterprises under Clause
13.1 of the contract. Further, the matter was stated to be purely
contractual in nature, involving the enforceability and validity
of the terms of the contract, and no case was made out for
violation of fundamental rights. The presence of a public law
element was a sine qua non for the exercise of writ jurisdiction,
as elucidated in Joshi Technologies International Inc. v. Union
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of India [Joshi Technologies International Inc. v. Union of
India, (2015) 7 SCC 728]. The endeavour of IPCL, by invoking
such writ jurisdiction, was alleged to be an attempt to bypass
the law of limitation, as the contract had been signed way back
in 9-11-2001. In any case, the writ petition was also barred by
limitation, having been filed on 9-3-2006 i.e. after a period of
five years. Reliance was placed on Lipton India Ltd. v. Union
of India [Lipton India Ltd. v. Union of India, (1994) 6 SCC
524] to contend that communications between the parties
about levy of transportation charges following the signing of
the contract could not extend the period of limitation.
21. Although the dispute arises from a commercial contract,
we find that the writ petition challenging the clauses was
maintainable. It is not disputed that GAIL is a public sector
undertaking and thus qualifies under the definition of "State"
as per Article 12 of the Constitution. At the time of entering
into contract, GAIL was enjoying a monopolistic position with
respect to the supply of natural gas in the country. IPCL,
having incurred a significant expense in setting up the
appropriate infrastructure, had no choice but to enter into
agreement with GAIL. Thus, there was a clear public element
involved in the dealings between the parties. Further, writ
jurisdiction can be exercised when the State, even in its
contractual dealings, fails to exercise a degree of fairness or
practises any discrimination. We are fortified in our view by
this Court's decision in ABL International [ABL International
Ltd. v. Export Credit Guarantee Corpn. of India Ltd., (2004) 3
SCC 553] and Joshi Technologies [Joshi Technologies
International Inc. v. Union of India, (2015) 7 SCC 728].
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22. In the present case, GAIL's action in levying "loss of
transportation charges" was ex facie discriminatory, insofar as
IPCL was mandated to build its own pipeline in terms of the
allocation letter and was not using GAIL's HBJ pipeline at all.
Thus, it cannot be said that merely because an alternative
remedy was available, the Court should opt out of exercising
jurisdiction under Article 226 of the Constitution and relegate
the parties to a civil remedy."
12. From the perusal of above quoted judgments, it is quite evident
that there is no bar in interfering in commercial contracts where one of the
parties is State or its instrumentality. State cannot deflect from scrutiny of
its action or inaction under the contract if the complaining party is able to
establish the action/inaction is, per se, arbitrary. An action would lie when
the State purports to award any largesse and this relates to the stage prior to
the contract being entered into.
13, In the case in hand, the brochure categorically jotted down
marks for financial capability. Expression "Financial Capability" was duly
defined. It was also clarified that financial capability would be considered
as on date of application and it must be disclosed in the application. Paras
5.2 and 5.2.1 of the brochure are reproduced as below:-
"5.2 Liquid assets:
The funds can be in the following forms:-
Funds in savings accounts, Deposits with
any Bank/Registered Companies/Postal
Schemes: Copy of Pass book/account
statement/deposit receipts to be provided. In
case of deposits, the applicant has to
additionally submit a certificate obtained
from the concerned Bank/Registered
Company/Post Office indicating the value of
the deposit on the date of application. In the
absence of such certificate, the deposit
amount only shall be considered.
National Savings Certificates: Redemption
value - Valuation certificates along with
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copy of certificates to be provided. In the
absence of such valuation certificate, the
deposit value shall be considered.
Bonds: Redemption value: Valuation
Certificates along with copy of bonds to be
provided. In the absence of Valuation
certificate no marks would be awarded
against bonds.
Shares of listed Companies in Demat form:
Valuation certificates along with copy of
Demat statement to be provided. In the
absence of Valuation certificate no marks
would be awarded against shares.
Mutual Funds: Valuation certificates along
with copy of mutual fund certificates or
Demat statements to be provided. In the
absence of Valuation certificate no marks
would be awarded against mutual funds.
Valuation certificates of all assets should be of a
date, which is after the date of advertisement and
on or prior to the date of application. The
valuation certificate is to be obtained either from a
Chartered Accountant or Depository Participant,
as applicable.
Only 60% of the certified value (for Shares,
Mutual funds & Bonds) will be considered for the
purpose of evaluation.
Note
Evaluation would be done only on the basis of
applicant's declaration of financial capability in
the application form.
The financial capability details given in the
application form by the applicant must be
supported by copies of relevant documents for
evaluation of marks.
If the applicant is not able to produce relevant
documents in support of financial capability,
he/she shall be disqualified at the time of
verification of documents.
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Also if the applicant is not able to give the Bank
Guarantee within stipulated time, the LOI shall
stand automatically withdrawn and a letter to the
effect will be sent to the selected applicant.
5.2.1 Other Notes for evaluation under head
"financial capability"
Finance/liquid assets owned by the "family
unit" of the applicant can be considered for
award of marks subject to the written
consent on notarized affidavit on
appropriate stamp paper from the family
member, along with supporting documents
to establish the capability (Appendix I). For
this purpose, in case of married person/
applicant the "family unit" consists of self,
spouse and unmarried son(s)/ unmarried
daughter(s) and in case of unmarried
person/ applicant the "family unit" consists
of self, father, mother, unmarried brother(s)
and unmarried sister(s).
Balance in current account will not be
considered.
Cash, jewelry or any other assets not listed
in 5.2 will not be considered for award of
marks.
The funds mentioned in the application form
should be available with the applicant as on
the date of application which should be
mandatorily filled by the applicants."
13. From the perusal of above quoted paragraphs of the
brochure, it is quite evident that an applicant was supposed to declare
his liquid assets in the application. Anything which is not declared in
the application could not be considered by respondent-corporation.
The terms and conditions laid down in the brochure are always
binding on both sides. These are treated as sacrosanct. In the
brochure, it has been categorically mentioned that applicant is
supposed to mention his/her assets in the application. The assets
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declared at later point of time could not be considered. If it is
permitted to consider assets not disclosed in the application, it would
certainly prejudice other applicants as well people who have not
applied on account of their financial constraints. The Court cannot ask
the respondent-corporation to deviate from terms and conditions.
14. This Court vide order dated 17.04.2023 has not permitted
the petitioner to disclose assets which were not disclosed in the
application form. This Court has simply permitted the petitioner to
bring on record documents for the purpose of taking a fresh decision
by the respondent-corporation. The order cannot be read in a way that
Court has permitted to file those documents which were neither
disclosed in the application nor formed part of the application. The
respondent has rightly awarded marks, qua financial capability, on the
basis of liquid assets disclosed in the application form. The assets
which were not disclosed alongwith affidavit in the application could
not be considered by respondent. The court cannot ask to respondent-
corporation to act against terms and conditions of brochure. There is
no allegation of mala fide or bias on the part of respondent. The
respondent has acted in accordance with terms and conditions of
brochure and this Court does not find any arbitrariness in the action of
respondent, amounting to violation of Article 14 of the Constitution.
15. In view of the above stated facts and findings, this Court
does not find merit in the present petition. The petition being devoid
of merit deserves to be dismissed and accordingly dismissed.
16. Pending Misc. application(s), if any, stands disposed of.
07.07.2023 ( JAGMOHAN BANSAL )
paramjit JUDGE
Whether speaking/reasoned : Yes
Whether reportable : Yes
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