•""^ ^ . ^ C ^- -i f^ m THE HON'BLE HIGH COURT OF CHHAmSGARHAT BILASPUR WPfO Number..........:,7...T...l.../2Qo8 ^6tf ii. PETmONER: Rajesh Bissa Aged about 38 years S/o Mr. R. S. Bissa ^ .^.••^^ ^••^^ .. R/o 21, Central Avenue, ^y vy' '^y ^ A..--'<; ^sy' ^v^ ^ West Choubey Colony Raipur (Ctihattisgarh) VERSUS RESPONDEN-I'S: / ^s^' ^^y i. State of Chhattisgarh Throiigh the Chief Secretary D.K.S. Bhawan, Manlralaya Raipur (Chhattisgarh) 2. Di\ Raman Singh Cliief Minister-Chhattisgarii D.K.S. Bhawan, ManlTalaya Raipur (Clihattisgarh) 3. Dr. Shivraj Singh Advisor to the Government of Chhattisgarh The then Principal Secretary Department of Commerce and Industries Govt. of Clihattisgarli D.K.S. Bhawan, Manl:ralaya Raipur (Chhattisgarh) 4. Shri S.K. Behar Managing Director CIDC 1 „ -/' 1 © Chhattisgarh State Industrial Development Corporation CSIDC Raipur, (C.G.) 5; Chhattisgarh Lol< Ayog, Through its Secretary Raipur, (C.G.) PETITION UNDER ARTICLE 226 OF THE CONSTITimON QF INDIA FOR ISSUANCE OF APPROPMATE W1UTS _QF ^IANDAMUS AND CERTIORARI AND FOR OTHER SUITABLE WRJTS AND DIRECTIONS:- ^^^^^ f' &....,. ^. la^^., (^l HIGH COURT OF CHHATTISGARH AT BILASPUR (^O^ /&F4 WRIT PETITION (C} No. 4964 of2008 PETITIONER : RajeshBissa. VERSUS RESPONDENTS : State ofChhattisgarh& Others. Post for pronouncement oforder on ..^.7. day ofApril, 2010. Sd/- Satish K. Agnihotri Judge ^ ^ fflGH COURT OF CHHATTISGARH AT BILASPXJR WRIT PETITION (C} No. 4964 of2008 PETITIONER : RajeshBissa. VERSUS RESPONDENTS : State ofChhattisgarh& Others. PETITION UNDER ARTICLE 226 OF THE CONSTITUTION OF INDIA SB: Hon'ble Shri Satish K. Asnihotri, J. Present: Shri Sourabh Dangi and Ms.Naushina Afrin Ali^ Advocates for the petitioner. Shri Kishore Bhaduri, Additional Advocate General for the State/respondent No. 1. Shri Sanjay K. Agrawal and Shri Ashish Shrivastava, Advocates for the respondent No. 2. Shri P.S.Koshy, Advocate for the respondent No. 3 and 4. ORDER ^ (Delivered on ^.7.^.t?day of April, 2010) By this petition, the petitioner seeks a writ in the nature of certiorari to qush the report dated 23.06.2008 submitted by the Principal Lok Ayukt, Chhattisgarh Lok Aayog, Raipur, to the Govemment of Chhattisgarh. Secondly, declaring the report as illegal on account of the fact that a copy of the reply/comments submitted by the second to fourth respondents were not supplied to the petitioner. Thirdly, an independent agency to investigate into the complaint, may be appointed and fourthly, a criminal prosecution may be lodged against the second to fourth respondents. The facts, in nutshell, as projected by the petitioner is that the petitioner is a soci^l worker and office bearer ofthe Indian National Congress at ^ ^ y. Raipur. He filed a complaint before the office of Lok Ayukt under the provisions of Chhattisgarh Lok Aayog Adhiniyam, 2002 (for short 'the Adhiniyam, 2002f) against the second to fourth respondents on 29.05.2008 (Annexure P/2). The case was registered as complaint case No. 31/2008 by the office of the fifth respondent. Thereafter, the petitioner was not communicated information about any proceedings, enquiry, reply or explanation, if any, offered by the second to fourth respondents. The petitioner surprisingly received the impugned report dated 23.06.2008 (Annexure P/l) holding that no case ofmisconduct has been made out against the second to fourth respondents. The petitioner thereafiter made an application for supply of certified copy of the reply/comments, made by the second to fourth respondents under the provisions ofRight to Information Act, 2005. Thus, this petition. 3. Shri Sourabh Dangi with Ms. Naushina Afrin Ali, leamed counsel appearing for the petitioner would submit that the fifth respondent- Lok Aayog has not appreciated the facts of the case properly. The entire report is based on subjective satisfaction of Lok Aayog and no procedure as required for enquiry has been adopted by the fifth respondent. The basic principles ofnatural justice that the complainant is entitled to an opportunity ofhearing on reply and comments made by the second to fourth respondents, was not afforded to the petitioner. Section 9 of the Adhiniyam, 2002 provides for procedure in respect of inquiry which clearly says that while conducting an inquiry the Lok Aayog must ensure that the principles of natural justice are satisfied. Shri Dangi would submit that the provisions of Section 8 and 9 Sirepari materia and not in disharmony with each other and therefore, the recourse ought to have been taken to section 10 of the Adhiniyam, 2002. The entire proceeding was exparte. The fifth respondent ought to have first settled the procedure for conduct of enquiry and investigation and thereafter^ an opportunity of hearing should have been provided to the petitioner. The fifth respondent has exercised its discretion arbitrarily and not judiciously. The award of consultancy to a particular person without following the well settled principles of law by inviting tenders from other similarly situated persons, is vitiated. It is well settled principle oflaw as laid down by the Hon'ble Supreme Court in a catena of decisions that contracts by the State, its corporations, instmmentalities and agencies must be normally granted through public auction/public tender by inviting tenders from eligible persons and the notification of the public auction or invitmg tenders should be advertised in well known dailies having wide circulation in the locality with all relevant details such as date, time and place ofauction, subject matter of auction, technical specifications, estimated cost, eamest money, deposit, etc. The petitioner being the complainant should have been supplied a copy of the committee report or other relevant documents placed by the second to fourth respondents before the fifth respondent. The State largesse has been awarded arbitrarily. The kind of work awarded to IL&FS IDC (for short 'IIDC') was in order to benefit him as IIDC was found to be competent enough to cany out the /y:"%\ :l^l ^,%-,jy kind of work in question. The objections raised by the office of the Accountant General was not considered at all. Event he reasons recorded by the officers were also not just and proper. The second respondent, without explaining the reasons, have stated that he came to conclusion that everything was done in accordance with law^ which is contrary to the well settled principles of law as laid down by the Supreme Court in Mohinder Singh Gill's case (AIR 1978 SC 851). The Lok Aayog has failed to recommend disciplinary action against the second to fourth respondents. Conclusion arrived at in the report that it was the first occasion for the Govemment of Chhattisgarh to award a consultancy contract, thus no one including the Accountant General and the fourth respondent had a clue about what in fact was a consultancy contract, and further it was the ignorance that has eventually led to the present state ofaffairs. It is exfacie bad and improper. 4. Shri Dangi would further submit that the circular dated 05.07.2007 (Annexure P/2-D) issued by the Central Vigilance Commission specifically provides that tender process or public auction is a basic requirement for awarding a contract by any govemment agency as any other method., specially award of contract on nomination basis would amount to a breach of article 14 ofthe Constitution guaranteeing right to equality to all interested parties. This was completely ignored in the present case. Shri Dangi places his reliance on a decision rendered by the Supreme Court in Nagar Nigam, Meerut v. Al Faheem Meat Exports Pvt. Ltd. (2006) 13 SCC 382. i^. M^ ^ -/^' ^ ^^yT (rf^) 5. On the other hand, Shri Bhaduri, leamed Additional Adyocate General appearing for the State/first respondent would submit that the present petition is filed under Article 227 of the Constitution of India calling into the question the correctness of the impugned report submitted by the fifith respondent. The Administrative Refonns Commission, constituted by the Govemment of India, made a recommendation for constituting a statiitory body i.e. Lokpal or Lokayukta and procedures for investigating complaints by a person against public servants. Accordingly, fifth respondent has been created under the provisions of the Adhiniyam, 2002 to enquire into specific complaints ofmisconduct against the public servants and other matters connected there with. The provisions of section 9 and 14 of the Adhiniyam, 2002 provides for compliance of the principles of natural justice qua the public servants against whom a complaint has been lodged. There is no provision for affording an opportunity of hearing to the complainant, if no order condemning the complainant has been passed. The enquiry conducted by the fifth respondent is not a trial but a simple preliminary enquiry on the basis ofwhich ifthe alleged misconduct is found proved against the public servant, a proper action is required to be taken after affording an opportunity of hearing to them again. There is a provision for impo.sition ofpunishment on the complainant, ifthe complaint is found to be false, under sub section (2) of section 8 of the Adhiniyam, 2002. In that case only, the complainant is entitled to benefit ofthe principles of audi alteram partem. In the case on hand, no action has been L;.'-<''^ 1 \.^J^ .--^y' 6 initiated under the provisions of Rule 8(2) of the Adhiniyam, 2002 against the complainant/petitioner. Thus, it is not required to afford an opportunity of hearing to the petitioner before submitting a report on the basis of complaint made by the petitioner., after examining the replies, comments submitted by the second to fourth respondents. 6. Shri Sanjay K. Agrawal with Shri Ashish Shrivastava, leamed counsel appearing for the second respondent, with the permission of the Court, would adopt the retum filed by the second respondent before the fifth respondent. Shri Agrawal would submit that the complaint was lodged ^ by a political worker against the Chief Minister. It was nothing but an attempt to achieve political mileage and publicity against the Chief Minister^ who belongs to another political party. Thus, such petition for political oblique motive may not be entertained. The averments of the petitioner that the petitioner has lodged a complaint on the basis of the order passed in W.P. (PIL) No. 1887/2008 is contrary to the facts on record as the second to fourth respondents were not a party to the said public interest litigation petition. All the allegations are bald and wild. The report is submitted by former Chief Justice of a High Court who held the office of Pramukh Lok Ayukt. Thus, on the basis of mere selfsame statement ofthe petitioner, the report may not be doubted. The report is just and proper as the contract in question was a consultancy contract not a works contract or supply contract. Therefore, consideration for award of consultancy contract is different than that of the award of other contracts. Due procedure as per the transaction of r %-^ "- K ^^i.t^. 1: ^-^s^^sy '51ci) ..^-' govemnient business mles were followed. Thus., the grievance of the petitioner is baseless and unfounded and the petition deserves to be dismissed with cost. 7. Shri Agrawal would further submit that enquiry as contemplated under the provisions of the Adhiniyam, 2002 is in the nature of fact finding investigation. There is no fe between the complainant and the public servants against whom a complaint has been filed and as such there is no adjudication oflis. In support ofhis contention, Shri Agrawal relies on decisions rendered by the Supreme Court in Real Value Appliances Ltd. v. Canara Bank1 and Dr. Baliram Waman Hiray v. Justice B.Lentin & Others2. 8. Shri P.S.Koshy, leamed counsel appearing for the third and fourth respondent would adopt the submissions made by the second respondent and would submit that on bare pemsal ofthe pleadings in the petition, it is apparent that an attempt has been made to harass and falsely implicate the answering respondents. The petitioner has himself misunderstood and misinterpreted the provisions of the Adhiniyam^ 2002 by claming compliance of the principles of natural justice on the ground that he was the original complainant on the basis of which an enquiry was initiated and in the enquiry, nothing was found against the respondents. The fifith respondent has not .exercised its jurisdiction under section 8(2) of the Adhiniyam, 2002 whereunder a criminal case may be registered against the complainant, who makes a false ' (1998) 5 SCC 554 2 (1988)48cc 419 ^K!'??^<. E /s"^ ^h. I tejA i' complaint. Thus, the petitioner cannot claim to be aggrieyed by the fact that he was not afforded an opportunity ofhearing before passing ofthe adverse order against him. 9. The order dated 08.08.2002 (Annexure . R-3/1) issued by the Environment and Urban Administration authorized the existing Capital Area Development Authority, now New Raipur Development Authority, to make a provision for appointment ofa consultant either by inviting tender or by mutual discussion. Such decision was taken as the State of Chhattisgarh is a newly formed State and infrastmcture development is one of the thmst area of the State Govemment. A committee on Technical Consultancy Services (for short 'TCS') ofthe Planning Commission of India has recommended engagement of consultancy and fixing oftheir fees in accordance with the intemational practice adjusted to the Indian conditions. Price cutting and competitive bids was to be avoided. Contracts should be awarded to the consultants based on their capability and experience and reasonableness ofthe bids. The consultants should follow the same standards and practices as are observed by the medical practitioners and Chartered Accountants. The methodofcalling tenders for appointment ofconsultants should be used only sparmgly. Accordingly, a renowned consultant who has rendered services to other State Govemments also, was engaged. 10. The averments of the petitioner that the objection of the Accountant General was overlooked, leamed counsel relies on a letter dated 7.6.2008 (Annexure R-4/6) in order to support his contention that ^T^ .c^ i 'il^.. '^ i I i ^. ^^ffl^1' .-^ "^sy 9 6-/- ^ \ .^ proper reply was filed to the office ofthe Accountant General wherein it was stated that IIDC was engaged as consultant directly for infrastructure projects by the Govemment ofTamil Nadu, Govemment of Gurjrat, R&B Department, Andhra Pradesh Industrial Infrastmcture Corporation Ltd, Kamataka State Industrial Infrastmcture Development Corporation (KSIIDS), Andhra Pradesh Industrial Infrastmcture Corporation Ltd, Govemment of Kerala, Punjab Infrastmcture Development Board, Govemment of Gujarat for Vibrant Govemance Programme, Oil & Natural Gas Corporation Ltd. and MMTC Ltd. 11. Having regard to the experience, reputation, caliber and further engagement by different State Govemments and State Companies, it was not found advisable, as per TCS report, to call for tender and the consultancy was awarded to the IIDC. In respect of objection of the Accountant General that selection oftechnical consultant was not fair. All the queries were replied by the fourth respondent and thereafter, no direction was issued by the office of the Accountant General, being satisfied with the explanation/reply submitted by the fourth respondent. 12. Heard leamed counsel appearing for the parties, pemsed the pleadings and documents appended thereto. 13. The petitioner made a complaint on 29.05.2008 (Annexure P/2) to the fifth respondent on the basis that Chhattisgarh Injfrastmcture Development Corporation had entered into a consultancy contract on 10.08.2005 (Annexure P/9) with IIDC for development of the infrastructure in the State of Chhattisgarh without inviting [v "";^£^ 10 kn. tenders/applications from other similarly situated companies/ persons. Thus, the second to fourth respondents have committed serious misconduct. They have violated the provisions of Article 14 of the Constitution of India to benefit IIDC on accepting its proposal without following the due process of law. Award of Rs. 1.5 crores as consultancy fee was also with the same motive and purpose. The fifth respondent registered a complaint case being complaint case No. 31/2008. The leamed Pramukh Lokayukt issued notices to the second to fourth respondents and examined their affidavits/comments and after due consideration, came to the conclusion that the CVC circular dated 5.7.2007 which was issued after agreement of contract with the IIDC, was not applicable in respect of the consultancy contract but for other works contract and other types of contract. The leamed Pramukh Lokayukt relied on a committee report submitted by Planning Commission, Govemment oflndia on TCS and came to the conclusion that in case of consultancy contract, no tender is required. The method of callmg tenders for consultancy works should therefore be used sparingly, and afiter examinmg the competence and reputation of IIDC^ the method of selection, consultancy charges, held that for want of experience in appointment oftechnical consultants, agreement was like a professional engagement having technical expertise. No misconduct on the part of second to fourth respondents was found proved. Accordingly, the learned Pramukh Lokayukt submitted a detailed report with reasons on 23.06.2008 to the State Govemment holding that the ^es^. •/^^ 11 charges leveled against the second to fourth respondents were baseless. The same are not tantamount to misconduct. 14. In Re; objection raised by the office ofthe Accountant General, have remained un-replied, the fourth respondent has replied to the objections raised by the office ofthe Accountant General, inter alia, as under: "In regard to this observation the position is that Infrastmcture Leasing and Financial Services, Infirastmcture Development Corporation (IL&FS IDC), a subsidiary of Infrastmcture Leasing and Financial Services Ltd. (IL&FS), vide their letter dated 9.12.2004 (Annex. 1), submitted a proposal to the Industries Department for accelerated Industrial Infrastmcture development in the State by associating IL&FS IDC. In their letter, IL&FS IDC proposed a Special Purpose Company (SPC) to be formed jointly by IL&FS IDC and an agency of Govemment of Chhattisgarh (GoC) for development of indystry related infrastmcture in the State. Other options like Public Private Partnership (PPP), Build Operate and Transfer (BOT), Build, Own, Operate and Transfer (BOOT), Build, Own, Operate and Sale (BOOS) were also mentioned in the said letter. On receipt of this letter IL&FS IDC was asked to make a presentation before the Hon'ble Minister of Commerce & Industries Department ofthe State Govemment. On 22.12.2004 IL&FS IDC Ltd. made a presentation before the Minister of Commerce & Industries. Durmg this presentation IL&FS IDC inter-alia presented a credentials and the infrastmcture development activities undertaken by them for the Central Govemment Organizations and in other States. IL&FS IDC during this presentation offered the following two options - (I) Project Development & Promotion Partnership (PDPP) option under which IL&FS were to work as consultant for project development. (II) Constitution of Special Purpose Company (SPC) of Chhattisgarh State Industrial Development Corporation Ltd. (CSIDC) / Chhattisgarh Infrastmcture Development Corporation Ltd. (CIDC) and IL&FS IDC for infrastmcture development. In line with the discussion held during the presentation, IL&FS IDC submitted a proposal on 23.12.2004 (Annex 2) to the State Govemment for the development of following projects under PDPP option under which IL&FS IDC was to work for project development and marketing followed by the selection ofproject developer(s) for the following projects - 12 y 1 Herbal & Medicinal Park 2 Aluminium / Metal Park 3 Food Park The proposal was accepted by the State Govemment and approval was conveyed to CIDC vide letter no. F 20- 109/04/11/6 dated 28.03.2005. Later on Aluminium/Metal Park project was substituted by Gems and Jewellery SEZ project for the reason that while firm location for the former had not been fmalized, location to the latter in the New Raipur township had been fixed. The MoA between CIDC and IL&FS IDC was signed 10.08.2005. It was ratified by the board of directors of CIDC in its 19th meeting held on 25.01.2006 (minutes armexed as Annex. 3). It is thus clear that offer of the IL&FS IDC was discussed at appropriate level in the State Govemment / CIDC after which decision was taken. Audit is requested to accept the above explanation and file the observation. With the objective of attracting mvestments in the food processing, herbal and medicinal plants based processing and jewellery making & gems processing industries, the State Govemment had, in the year 2004 decided to develop special industrial parks for attracting investments in these fields. Since CSIDC did not have the expertise and experience in these areas, it. was felt that the work of project development/project making should be undertaken by some reputed consultant. Appointment ofreputed consultant wihtou bidding process has been in vogue for many years and the departments of Central/State Govemments have been doing so. IL&FSIDC is a wholly owned subsidiary ofthe IL&FS, the pioneer company in the country in the field of infrastmcture project development, fmancing, leasing etc. Substantial share holding (more than 43%) of the IL&FS belonged to govemment institutioris namely, UTI, CBI and SBI. Other share holders in the year 2004 were Housing Development Finance Corporation Ltd. (HDFC), ORIX Corporation, Japan, Intemational Finance Corporation, Washington, HSBC Bank, Govemment of Singapore etc. (Annex 4). Therefore being a reputed consultant, owned by govemment companies and reputed fmancial institutions m the field of infrastructure development, IL&FS IDC was selected without bidding process. It is noteworthy that IL&FS IDC has been engaged without bidding process in other states also by the State Govemment organizations as also by the organizations of the Central Govemment. Here is a list of such projects wherein 'l 13 IL&FS / IL&FS IDC were engaged as consultant directly for infrastmcture projects - SN Nameoforganization Type ofproject Year 1 6 7 8 9 10 Govt.ofTamilNadu. Govemment of Gujarat, R&B Deptt. Andhra Pradesh Industrial Infrastmcture Corporation Ltd. Kamataka State Industrial Infrastmcture Development Corp. (KSIIDC) Andhra Pradesh Industrial Infrastmcture Corporation Ltd. Govemment of Kerala Punjab Infrastmcture Development Board. Govemment of Gujarat. Oil & Natural Gas Corp. Ltd. (ONGC) MMTC Ltd. Development & 1994 implementation of Timpur Area Development Programme. Development & 1996 implementation of Gujarat toll roads. Vishakhapatanam 1998 Industrial Water Supply Project. Bangalore Intemational 1999 Airport. Development of green 2000 field Gangavaram Port. Multiple Projects. 2002 Punjab Road Sector 2003 Project. Vibrant Govemance 2003 Programme ONGC Tripura Power 2004 Project. Project development for 2004 setting up offree trade and ware housing zones in India In this connection, it is also worthwhile to mention that the Committee on Technical Consultancy Services set up by the Planning Commission oflndia around the year 1970 had recommended that consultancy services should preferably be hired without bidding process, wherein the main criteria for choosing a consultant should be its reputation, competence etc. Some of the relevant extracts from the conclusion of the said Committee are enclosed as Annex. 5. The said Committee report has been relied upon by the M.P. High Court in M.P. No. 2475/1991 (Bakatawar Singh Vs. State of MP and others) (AIR 1992 MP 318). -]-^s. 14 (yl. For achieving the objective of faster industrial growth in the newly bom State of Chhattisgarh, it was necessary to select a consultant havmg reputation and competence wherem fees were fixed having regard to fees paid to them elsewhere" 15. Thus, the contention of the petitioner that the respondents have not submitted reply to the objections raised by the office ofthe Accountant General is incorrect and contrary to the facts on record. 16. The Chhattisgarh Lok Aayog Adhiniyam, 2002 was enacted by the State legislature with a purpose to make provisions for appointment and functions of certam authorities for the inquiry into specific information of misconduct or complaint against certain public servants and for the matter connected therewith. 17. Misconduct has been defined in section 2(h) ofthe Adhiniyam, 2002,as under: "(h) ttmisconducf by a public servant means and includes that such public servant, - (i) has abused his position as such public servant to obtain any gain or favour to himself or to any other person or to cause undue harm or hardship to any other person; (ii) has actuated in the discharge ofhis functions and as such public servant by personal interest or improper or cormpt motives; (iii) has indulged in cormption, undue favour, nepotism or lack of integrity in his capacity as such public servant; (iv) is in possession of pecmiiary resources or property disproportionate to his known sources of income and such pecuniary resources or property is held by public ser^ant personally or by any member of his family or by any other person on his behalf;" 18. Public Servant has been defined in section 2(i) ofthe Adhiniyam, 2002, which reads as under: "(i) "Public Servanf shall mean and include a person who is- 15 (i) the ChiefMinister; (ii) a Minister; (iii) a Member of Legislative Assembly of the