-1- IN THE HIGH COURT OF JUDICATURE AT BOMBAY ORDINARY ORIGINAL CIVIL JURISDICTION WRIT PETITION NO. 1889 OF 2007 Vijay Kumar Gupta ) M/s. Sanjay Transport Service, ) Well Water Suppliers, Shanti Vihar, ) C-5/6, Shop No.4, Near Hardik Palace Hotel, ) Mira Road (East), Dist.Thane-401 107 )...Petitioner versus 1. State of Maharashtra ) through the Secretary, School Education and ) Sports Department, Mantralaya Annex Bhavan, ) Mumbai-400 032. ) 2. M/s. Lirin Roadlines Private Limited, ) Navroji Road No.9, Plot No.8,Dongri, Mumbai. ) 3. The Hon'ble Minister of Sports, ) Govt. of Maharashtra, Department of Education, ) Cultural Affairs and Sports, Mantralaya ) Mumbai-400 032. )..Respondents Ms. Ritu Singh for the petitioner. Ms.Shindhu Sreedharan, Assistant Government Pleader, for respondent Nos. 1 and 3. Mr. M.S. Singhvi, Senior Advocate, with Ms. J.N. Pandhi for respondent No.2. CORAM: SWATANTER KUMAR, C.J. & J.P. DEVADHAR, J. Judgment reserved on : January 21, 2008 Judgment delivered on: March 13, 2008 JUDGMENT (Per Swatanter Kumar, C.J.): -2- Rule. Rule made returnable forthwith. Heard parties. 1. Prelude Vijay Kumar Gupta, sole proprietor of M/s. Sanjay Transport Service, has filed this petition under Article 226 of the Constitution of India challenging the legality, propriety and validity of the contract awarded to M/s. Lirin Roadlines Pvt. Ltd., respondent No.2, vide Government Resolution No. WPP 2003/CR-177/YSS2 dated 1st September, 2006. This contract, according to the petitioner, has been awarded through private negotiations without inviting tenders and in an arbitrary manner. Such awarding of contract is unconstitutional, violative of principles of governance and contrary to the constitutional mandate contained in Article 299 of the Constitution of India. It denies fair competition amongst similarly placed persons who hold similar qualifications like respondent No.2 for performing the function to lift water from the Government owned wells and distribute the same at a much higher amount than what has been demanded by respondent No.1 from respondent No.2, thus causing huge loss to the exchequer and is colourable exercise of power. Therefore, he has prayed for quashing and setting aside the Government Resolution dated 1st September, 2006. -3- 2. Facts in brief: 2.1 According to the petitioner, there are two wells situated at Azad Maidan, one opposite B.M.C. Building, Mahapalika Marg and the other opposite Metro Cinema, owned by the Government of Maharashtra. The former is a smaller well which has one point for lifting water and has one pump of 5 Horse Power while the latter is a bigger well which has two commercial points and one non-commercial point for lifting water with a capacity of 10 Horse Power each. The larger well has higher water level i.e. 5 to 6 times more capacity than the smaller well. 2.2 On 31st December, 1987, contracts were given to respondent No.2 and one M/s. Zulekhs Mohd. Lorrywala for a period of 10 years which were to expire on 31st December, 1997. On or about 11th July, 1989, both these concerns were not permitted to fetch water from the well. M/s. Zulekhs Mohd. Lorrywala filed a writ petition in this Court which was dismissed vide order dated 20th August, 1999. Respondent No.2, thereafter moved City Civil Court and the matter was decided in favour of the said respondent. The City Civil Court permitted the said respondent to continue to fetch water for a term of ten years which was to expire on 30th December, 1997. The said contract in favour of -4- respondent No.2 was renewed without any reason on 21st December,1994, three years prior to the expiry date, for a period of ten years which was to expire on 31st December, 2004. The contract in favour of respondent No.2 was again renewed vide G.R. No. AZM 1080/692 (6) SYS-2 dated 23rd February, 2004, ten months prior to the date of expiry, for a further period of ten years so as to expire in December, 2014. This was communicated vide letter dated 7th June, 2007, to the Deputy Director and amongst others to respondent No.2. The communication dated 7th June, 2004 reads as under:- “GOVERNMENT OF MAHARASHTRA Urgent G.R. No.WPP-2003/C.R.177/YSS 2 Social Justice, Cultural Programmes, Sports and Special Assistance Department, Mantralaya Annex Bhavan, Mumbai-400 032. Date: 7th June, 2004. To Dy. Director, Sports & Yuvak Seva, Mumbai/Nashik Division, Mumbai. Sub: Regarding contract of pumping the water from the Govt. Well situated at Azad Maidan, Opp. Metro Cinema. M/s. Lirin Road Lines Pvt. Ltd., Mumbai. Ref: (1) G.R. No.AZM-1080/692 (6)/SYS-2 dated 23.2.2004 of this Department. (2) Your letter No. M.A.D./N. No. 10/LRL/D-7/ -5- 422, dated 25.3.2004 addressed to Director,Sports and Yuvak Seva, Pune. With reference to the letter as referred at above reference No.2 this is to inform you that vide the G.R. As referred in above ref. No.1 the extension for further 10 years from December, 2004 is given to M/s. Lirin Road Lines Pvt. Ltd., Navroji Hill Road No.9, Plot no.8, Dongari, Mumbai-400 009 for drawing off water from Government well situated at Azad Maidan, Near Metro Cinema subject to the terms and conditions of said G.R. 2. As per the provisions of the said Government Resolution execute an agreement with the concerned society on the stamp paper of Rs. 500/- and the government hereby grants approval to the draft prepared by your office with minor changes (copy enclosed). Sd/- (S.V. Chavan) Under Secretary, Maharashtra Government.” 2.3 In the year 2005, the Minister for School Education and Sports inspected the site at Azad Maidan and found serious irregularities being carried out by respondent No.2. Respondent No. 2 was unauthorisedly using point “B” of the bigger well which was sealed after the expiry of the term of contract and continued to withdraw water right from January, 1998 to 3rd December, 2005. Vide letter dated 14th September, 2005, notice for termination of contract in favour of respondent No.2 was issued by the Deputy Director, Sports, Yuvak Seva, Mumbai and after the expiry of the period of two months i.e. 19th November, 2005, the contract was terminated. The Deputy Director is -6- stated to have imposed a penalty of Rs. 9,95,578/- on respondent No.2 for drawing water unauthorisedly from one extra point for the period from 12th May, 1998 to 3rd December, 2005. The copy of the said letter is at Exhibit-F to the writ petition. Thereafter both the points of bigger well were sealed. Respondent No.2 then moved the City Civil Court and prayed for an interim injunction against the termination of his contract which was rejected. Respondent No.2 approached this Court against the rejection of the said application. The appeal filed by respondent No.2 was also dismissed vide order dated 8th December, 2005, with liberty to move the trial Court for expeditious disposal. 2.4 Despite no injunction had been granted either by the City Civil Court or by this Court in favour of respondent No.2, the contract was again awarded to respondent No.2 vide order dated 1st September, 2006. This contract was awarded through private negotiations and without following any procedure for awarding the contract. 2.5 It is specifically averred by the petitioner in the writ petition that tenders had been issued for other two points i.e. Point “A” of the smaller well and point “B” of the bigger well on 25th April, 2007 for a period of three years and the contract has been awarded to M/s. Hans -7- Transport on a payment of Rs. 41,000/- per month for point “A” and to M/s. Saileela Jankalyan on a payment of Rs. 85,000/- per month for point “B” of the bigger well. The contract to respondent No.2 for point “C” has been awarded for a meagre amount of Rs.50,000/- per month which is causing huge loss to the State exchequer. 2.6 The petitioner being an interested person had filed various representations to respondent No.1 on 5th October, 2006, 6th December, 2006 and 3rd April, 2007. Despite such representations and without affording any opportunity to the petitioner of fairly contesting for the allotment of the said points, the petitioner has been compelled to file the present writ petition. The grant/extension of the contract is challenged, inter alia, on the grounds that the contract had been awarded through private negotiation and without inviting tender and that the action of the State Government is wholly unjustified, mala fide and abuse of power by discriminatory action. The State of Maharashtra cannot enter into a private contract by negotiations as it distributes state largess and must follow fair and equitable procedure for allotment of tenders. The State Government had taken a policy decision on 1st December, 2005 that the contract should be awarded by inviting tenders. It will be useful to reproduce the note of the Desk Officer -8- dated 28th December,2005 and subsequent notings on the subject. “School Education and Sports Dept./KYS-2 Submitted according to the notes on previous page issued by Secretary to Chief Minister: 2. That the contract of drawing off water from the Govt. well situated at Azad Maidan, Op. Metro Cinema was given to M/s. Lirin Roadlines for further 10 years vide the G.R. Dated 23rd February, 2004. However, but when Hon'ble Minister, School Education inspected the said site found some irregularities being carried out by the said contractor and therefore the instructions were issued from the Government level vide letter dated 14.9.2005 issued two months notice to the said contractor as per the act and to terminate the said contract. Pursuant to that Dy.Director, Sports and Yuvaksena, Mumbai, Nashik Division, Mumbai, vide notice dated 19th September,2005, issued to the said company. And pursuant to the said notice the said contract is terminated on 19.11.2005 and the said company has filed the Civil Suit No. 4984/2005 in the Civil Suit against the said act of termination of the said agreement. Pursuant to the said suit the said contractor further filed Notice of Motion in the same court bearing No. 4290/2005 for stay to the said action of termination of the contract. The said matter is heard from time to time and the Hon'ble Court on 3rd December, 2005, rejected the said application for stay vide its detailed order. Against the said order the Appeal (No. 28050/2005) was filed by the said company in Hon'ble High Court. The said appeal is heard on 8.12.2005 and the said appeal is also rejected. Presently the suit filed by the said company in civil court is pending before the Court. Hon'ble Court has granted time till 31.1.2006 to file the affidavit in the said matter. However, the said company has filed its new application in City Civil Court for early hearing of the said suit and till no decision is taken on the same. 3. At the time of hearing in the Civil and High Court Mumbai the following points were mainly raised for and on behalf of the said society. -9- 1) That the said society has not violated any terms and conditions of the said agreement. 2) The society is using more than one pump since long and now no increase is made in the same by the society and hence there is no breach of term No.9. Both the Courts have rejected the said points. Specially the said contract is made between the Government and the Contractors for drawing off the water as the said contract is totally of commercial nature, both the Courts has given their opinion that the action taken for cancelling the said contract by giving the two months notice is proper. In result, therefore, no stay order is granted by the said Courts. 4. Considering the judgment of the court in this matter it is clear that the decision taken by the Court for terminating the said contract is legal. It is further noted that the contract given to the one other contractor (Kurban Lorrywala) is terminated in the year 1998 and the pump which were used by the said contractor were sealed. However, said M/s. Lirin Roadlines used to use the said pump unauthorisely and when the said fact was observed and noticed, notice was issued to the said society calling upon to pay the penalty amount of Rs. 4,85,48/- for the period of 1998 to 2003 for water drawn off illegally and used the same. Even after repeated notices the said company has not paid the said amount to the government. Possession of the said well is taken back on 3.12.2005 and it is found that till the date of taking back possession the said society has drawn off and used the water by that pump unauthorisedly. And, therefore, the process on the level of Dy. Director is under process to issue notice to the said society to pay the penal amount for the period from 2004-2005. 5. In between one proposal was submitted before Hon'ble Minister, Education and Sports in respect of the wells situated in Mumbai under the jurisdiction of this division and in the said proposal it was decided to conduct survey of water of the wells including the well at Azad -10- Maidan and to invite tenders for the drawing off the water and to grant contract of the same to the high biding contractor. Pursuant to that necessary orders are issued by Dy. Director, Sports and Yuvakseva on 1.12.2005 and this fact has been brought to the notice of Hon'ble High Court at the time of hearings held before Mumbai City Civil Court. 6. Considering the refusal of the Mumbai City Civil Court for granting interim stay order and the judgment of Mumbai High Court passed in the appeal filed against the said refusal, orders given to Director vide letter dated 1.12.2005 for inviting tenders for drawing off water, and the pending suit before City Civil Court it feels that it will not proper to give new contract to said M/s. Lirin Roadlines adding or inserting new terms, and on publishing the tenders in respect of the said well the said company could take part in the same and hence stated that it will not proper to assign the contract of drawing water directly. Pursuant to the notes given by the Secretary to Chief Minister the said matter be placed before Hon'ble Chief Minister for contemplation. Submitted for approval. Sd/- Desk Officer, 28.12.2005.” 2.7 The above noting, according to the petitioner, clearly shows that the respondents have acted arbitrarily, discriminatorily and without following its own policy decisions. Respondent No.2 was a party which had unauthorisedly drawn water from the extra point and had committed breach of the terms of the agreement. It would even otherwise be unjust and unfair to grant the contract to such a party. -11- 3. Stand of Respondents . 3.1 Respondent No.2 filed a reply affidavit justifying the extension of the contract in their favour. It is denied that the contract at point “C” of bigger well had been awarded for a meagre sum. On the contrary, according to the terms of the contract, respondent No.2 has to pay Rs. 50,000/- per month and there is provision in the contract for enhancement of the said payment by 10 per cent each year or till the contract is subsisting. According to respondent No.2, they are drawing water only for 12 hours a day whereas under the previous contracts for the period from 1987 to 1994 and 1994 to 2004 respectively, they were entitled to draw water for all the 24 hours. It is also averred that the tender was invited on 25th April, 2007 in respect of point “B”of the well and the petitioner and respondent No.2 had submitted their tenders. The bid of the petitioner was rejected as the documents submitted by the petitioner were not in order. In the entire reply, respondent No.2 has not denied the fact that a penalty of Rs. 9,95,578/- had been imposed upon respondent No.2 for unauthorisedly drawing the water from one of the wells. -12- 3.2 A separate reply affidavit was filed on behalf of the State where the facts mainly stated by the petitioner have not been disputed. However, it is averred that there had been increase in the State revenue of two and half times than the original rate which was Rs. 20,000/- to Rs. 50,000/- per month now. The Government has imposed various conditions about time limit to lift the water upto 12 hours and restricted the utility of any electric motor pump upto 10 Horse power. The contract is stated to have been extended for a period of ten years vide order dated 23rd February, 2004 where the rent was increased from Rs. 7,200/- to Rs. 20,000/- per month. Pursuant to the show cause notice dated 19th September, 2005, the contract was terminated and the well points were sealed. In paragraph 10 of the reply, it is averred as under: “10. With reference to para 3 (j) of the petition, I say that as already stated hereinabove, the Respondent No.2 had agitated his rights for the said contract by filing a Civil Suit in the City Civil Court after receipt of the Deputy Director of Sports and Youth Services, Mumbai notice dated 19th September, 2005. The Respondent No.2 did not secure any interim relief against this Respondent and thereafter he filed an appeal challenging the orders of the Hon'ble City Civil Court in Hon'ble High Court. Taking into consideration the revenue loss due to closure of the site, these respondents have awarded the contract to Respondent No.2.” In these circumstances, the contract has been awarded to respondent -13- No.2 as per terms and policy of the Government by increasing the rent and putting restrictions and as such there is no colourable exercise of power by the authorities. 4. Submissions The learned counsel appearing for respondent No.2 has strenuously contended that : (i) the petitioner had withdrawn the petition before this Court and as such no lis is pending and the court may not pronounce any order; (ii) the present petition suffers from the defect of delay and laches and, in any case, the petitioner has no locus standi to file this petition before this Court. -14- (iii) the action of the Government is neither arbitrary nor discriminatory. It is not necessary for the Government to always invite tenders for giving contracts to the public. The Government, in exercise of its discretion, can award private contracts particularly for a limited period even by negotiations. No rule or policy has been violated. The action of the Government being normal and proper, it does not offend any constitutional protection available to the petitioner. The rent for drawal of water has been increased in terms of the agreement. 5. First of all, we may deal with contention 4 (i), whether the Court can dismiss the writ petition as no lis subsists or the Court should deal with the matter on merits. 5.1 This writ petition was filed by the petitioner on the facts aforenoticed. The petitioner had pleaded arbitrariness, discrimination and colourable exercise of power by the respondents. The case was heard on different dates. We had asked the respondents to produce the original records in Court. On the very next day of hearing, the learned counsel appearing for the petitioner prayed for time to take instructions and the case was adjourned to 15th January, 2008. On that -15- day, a letter was filed on record by the counsel appearing for the petitioner stating that she had been instructed to withdraw the petition as the petitioner did not want to continue with the matter any further. The records were produced by the State on that date. The Court did not accept the request of the counsel and passed the following order on 15th January, 2008. “1. Learned counsel appearing for the petitioner has placed a letter addressed to her by the petitioner asking her to withdraw this petition. 2. We find this request is mala fide and abuse of the process of the Court. On the previous date, when the writ petition was vehemently argued before us there were certain queries which were raised by us and the respondents were directed to react and seek instructions. The extension of contract to the petitioner in a arbitrary manner is not only violative of Articles 14 and 16 of the Constitution of India but also in direct violation of the Division Bench judgment of this Court in the case of Subhash R. Acharya vs. State of Maharashtra and others in Writ Petition No. 580 of 2007 decided on 16/8/2007 where even grant of extension under the terms of the contract was found to be arbitrary and unconstitutional. Therefore, we decline permission to withdraw the petition. However, the counsel for petitioner is at liberty to argue the matter or not. We direct that the petition will be heard on its own merits. The respondents shall produce the record in the court on the next of hearing. We make it clear that the above observation would in no way prejudice the right of the private party i.e. Respondent No.2 or any other respondents. They will be at liberty to address their arguments. The record which are available in the Court today shall be left in the Court against the receipt to be given by the Court official. -16- 3. Stand over to 21/1/2008.” 5.2 When the case came up for hearing, the learned counsel appearing for the petitioner argued the matter and was present all throughout the hearing. Since the Court had not dismissed the writ petition as withdrawn, she argued the entire matter before the Court whereafter the case was reserved for orders. 5.3 The jurisdiction of the Court under Article 226 of the Constitution of India is not strictly controlled by the procedural law as contemplated under Order 23 of the Civil Procedure Code. In exercise of its equitable jurisdiction, where the Court finds that withdrawal of the writ petition is not bona fide and the request for withdrawal has been made to overreach the order of the Court, the Court would decline such a request. A writ of certiorari is for production of records and the records had been asked for by the Court. The State was under obligation to produce the records particularly in face of the notings in Exhibit-F to the writ petition. In the present case one party was permitted to continue with the contract awarded in the year 1987 on one pretext or the other. This is a case where State largess is being distributed while entering into contract. The water is being withdrawn from the wells on -17- commercial basis and it was admitted before us by all the learned counsel appearing for the parties that this is a pure and simple business and commercial transaction between the State and the private parties. Thus, in our view, there is no reason for excluding the persons who wish to participate in the tender. In fact, the conduct of the petitioner himself is not appreciable. He himself was enjoying the benefit of private contract. It is only when the Government had taken the decision to invite tenders for awarding of contract for the other two other points for withdrawal of water, that he opted to file this petition. For obvious reasons when the matter was exposed before the court he opted to make the request for withdrawal of the petition. This conduct is most unfair conduct not only of the petitioner and respondent No.2 but even of the State. In these circumstances, we had declined the request of the petitioner for withdrawal of the writ petition. Once the request is declined, the lis pending before the Court is required to be decided in accordance with law. The request for withdrawal was a mere camouflage for covering colourable and arbitrary exercise of power as the loss was being caused to the public at large and as well as to the State exchequer. This issue we will proceed to discuss in greater detail hereinafter. -18- 5.4 Suffice it to note that the contention of the counsel for respondent No.2 does not even survive in view of the fact that the learned counsel for the