Case BriefsHigh Courts

Calcutta High Court: Shampa Sarkar, J. decided on a petition which was filed for a direction upon the respondents 7 and 8 to cancel and/or quash the notice dated April 6, 2022, with regard to handing over the possession of the ferry ghat to the Pradhan of the Mahanandatola Gram Panchayat, upon expiry of the lease of the petitioner.

Petitioner was the operator of Kosi Passengers Ferry Ghat. The lease period of the petitioner had been ended on 31-03-2022. The petitioner submitted that until ferry ghat was settled by way of an open tender, the petitioner must be allowed to operate.

The Court found that the rules with regard to the settlement of the ferry ghat and the circulars issued in this behalf did not permit continuation after expiry of the lease.  The Court clarified that the authority can make a stop-gap arrangement under emergent situation but Court sitting in judicial review under Article 226 of the Constitution of India, cannot direct the authorities to allow the petitioner to operate until the open tender is finalised.

Petitioner also submitted that the Pradhan did not have any right to ask the petitioner to hand over possession of the concerned ferry ghat as the water body over which the ferry services were carried on, spread over more than 5 acres and such settlement cannot be made by the concerned Gram Panchayat.

Advocate appearing on behalf of the Pradhan, submitted that the Gram Panchayat had approached the Block Development Officer to permit a public auction of the said ferry ghat. However, he submitted that no decision had been taken with regard to operation of the ferry ghat in the interim period.

Senior Government Advocate submitted that the ferry ghat was settled in favour of the petitioner by the concerned Gram Panchayat, which meant that the area of the water body must not have exceeded 5 acres.

The Court was of the view that the panchayat authorities themselves, had decided that the ferry ghat should be settled by public auction, such a policy decision cannot be interfered with under Article 226 of the Constitution of India. Transparency and maximisation of the revenue by allowing all eligible persons to participate in such tender is the correct method. The Court believed that it does not have any authority to either set aside the auction or to hold the policy of the authority to be bad in law, for the following reasons:

a) Judicial review of an administrative decision is permitted only when the decision making authority does not act in accordance with law or acts arbitrarily and with mala fide intentions relying on the judgment of Supreme Court in Tata Cellular v. Union of India, (1994) 6 SCC 651 where principles with regard to judicial review of administrative action were laid down.

b) The auction notice has been issued as a policy decision and the court must refrain from interfering with the policies of the Government. There are no allegations of unreasonableness, arbitrariness and favouritism. The petitioner was himself awarded the settlement through a public auction which was held when the pandemic was in the rise relying on the decision in Directorate of Film Festivals v. Gaurav Ashwin Jain, (2007) 4 SCC 737 where it was made clear that it was a settled law that policy decisions of the State were not to be disturbed unless they were found to be grossly arbitrary or irrational.

c) The idea of open auction is to ensure maximization of revenue and the panchayat samity cannot be faulted for having taken a policy decision to go for open auction when the pandemic situation has improved considerably and normalcy has resumed in every aspect of life.

The Court finally relying on Goa Foundation v. Sesa Sterlite Ltd., (2018) 4 SCC 218 and Centre for Public Interest Litigation v. Union of India, (2012) 3 SCC 1  held that the panchayat authorities have decided to go for a public auction, the competent authority under the law, shall go for a public auction, at the earliest, and all eligible bidders including the petitioner shall be entitled to participate. Prayer for extension of the lease of the petitioner during the stop gap period could not be granted by the court.[Azizur Rahaman v. State of West Bengal,  2022 SCC OnLine Cal 921, decided on 13-04-2021]

Mr Gazi Faruque Hossain,Mr Debasish Kundu, Ms Priyanka Mondal: for the petitioner

Mr Lalit Mohan Mahata,Mr Prasanta Behari Mahata: for the State

Mr Sufi Kamal: for the respondent 8

Suchita Shukla, Editorial Assistant ahs reported this brief.

Case BriefsHigh Courts

Bombay High Court: The Division Bench of S.C. Gupte and M.S. Karnik, JJ., expressed that for an employer to come to a conclusion of a possible case of cartelization, it is not necessary that the same can happen only after the opening of commercial bids.

Petitioner claimed to be a sole proprietor of a firm carrying on the business of fresh water supply through barges. Petitioner had been one of the contractors supplying water to respondent 1 ONGC.

Respondent 1 invited Indigenous Open Tender for e-procurement for supply of water to its offshore facilities, including the Nhava Supply Base. The said tender was a two bid system – a technical bid followed by a commercial bid.

Along with the petitioner, there were three others who had submitted the bids.

Respondent ONGC had cleared the technical bids of all 4 bidders, including the petitioner and his father at the stage of consideration of commercial bids, the bids of both petitioner and his father were not opened.

Upon evaluation of offers submitted by petitioner and Royal Traders, it came to the notice of Respondent ONGC that the proprietors of two firms were respectively the son and father. Hence considering that the two would have access to vital information pertaining to the bid submitted by the other, the employer concluded that both the bidders have an undisclosed understanding with each other, which would restrict competitiveness thereby offending Section 2 of the Integrity Pact.

Section 2 of the Integrity Pact is as follows:

Commitments of the Bidder/contractor

  1. The Bidder/Contractor will not enter with other Bidders into any undisclosed agreement or understanding, whether formal or informal. This applies in particular to prices, specifications, certifications, subsidiary contracts, submission or non – submission of bids or any other actions to restrict competitiveness or to introduce cartelisation in the bidding process.

Analysis and Decision

High Court stated that the grounds urged by petitioner in support of their challenge to acceptance of bids did not commend the Court.

Though the petitioner and his father had shown as proprietors of different concerns, but they operate from the same premises.

Further, in an earlier contract involving another employer, the petitioner had not only acted both for himself and his father, but had also issued cheques from the same account towards the contracts of himself and his father.

Above being a purely administrative matter, to fault the respondent employer’s decision there must be a case of either perversity in the decision or a colourable exercise on the part of the employer.

Bench expressed that even if the State cannot act in a matter of commercial contract in wholly unreasonable or arbitrary or capricious manner, its administrative decision cannot be put on the pedestal of a quasi-judicial decision.

Court added that as long as the respondent’s decision was reasonably supported by material on record and there was no case of victimization or colourable exercise, the decision could not be faulted.

There is nothing sacrosanct about finding the technical bid of a bidder responsive in a two bid system so as to make it obligatory on the employer to open the commercial bid. The employer may well come upon knowledge of some relevant information, which disqualifies the particular bidder, and in that case may choose not to open his commercial bid. If his disqualification is supported by some material on record, there is nothing further for this Court to inquire.

High Court found no merit in the grounds of challenge urged by the petitioner. [O.K. Marine v. ONGC, 2021 SCC OnLine Bom 799, decided on 8-06-2021]

Advocates before the Court:

Mr. R.D. Soni, i/b. Irvin D’souza, for the Petitioner

Dr. Abhinav Chandrachud, a/w. Mr. Nishit Dhruva, Mr. Prakash Shinde, Ms. Khushbu Chhajed, Mr. Abhishek Bhavsar and Ms. Alisha Shah, i/b. MDP & Partners, for Respondent Nos. 1 and 3.

Mr. Kunal Gaikwad, for Respondent No.4.

Mr. Karl Tamboly, a/w. Mr. Ramiz Shaikh and Mr. Akshay Bafna, i/b. Bafna Law Associates, for Respondent No.5.