IN THE HIGH COURT OF HIMACHAL PRADESH, SHIMLA CWP No. 2435 of 2008 Judgment reserved on: 6.1.2009 Date of decision: 24. 2.2009. Inder Dutt Lakhanpal …Petitioner Vs. H.P.S.E.B. and Ors. …Respondents Coram The Hon’ble Mr. Justice Jagdish Bhalla, Chief Justice. The Hon’ble Mr. Justice Kuldip Singh, Judge. Whether approved for reporting?1 For the petitioner : Mr. Ashok Aggarwal, Sr. Advocate with Mr. Harpreet Singh and Mr. Vivek Negi, Advocates. For the Respondent : Mr. R.K. Bawa, Senior Advocate with Mr. Baldev Singh, Advocate, for respondents No.1 & 2. Mr. Sanjay Jain, Sr. Advocate with Mr. Vinay Kuthiala and Mr. Rahul Mahajan, Advocates, for respondent No.3. Kuldip Singh, Judge This judgement shall dispose of writ petition purportedly filed in public interest by petitioner, praying therein besides other reliefs writ of certiorari quashing the award of tender in respect of Compact Fluorescent Lamps ( for short CFLs) in favour of respondents No. 3 and 4, direction restraining the respondents No. 3 and 4 from making any supplies to respondent No.1 pursuant to the purchase orders dated 27.10.2008 placed on Whether the reporters of the local papers may be allowed to see the Judgment? …2… them and also restraining the respondent No.1 from placing any further purchase orders in respect of the supply of CFLs. 2. The facts in brief are that in July 2008 respondent No.1 had floated a tender enquiry for procurement of 72 lac CFLs under “Atal Bijli Bachat Yojana” scheme. The price bid of the tender was opened on 28.7.2008 but later on the tender enquiry was scrapped. The respondent No.1 thereafter floated second tender on or about 29/30.7.2008 with due date on 18.8.2008, corrigenda were issued and the due date was advanced to 8.8.2008. The second tender was opened on 8.8.2008. The respondents No.4 to 7 were declared qualified so also respondent No.3 though respondent No.3 was not technically qualified. The respondent No.3 was invited for participation in the price bid which was opened on 12.8.2008. The parties were then called for negotiations on 14.8.2008 and on that date the other four successful tenderers were asked to reduce the price from Rs.429.13 as quoted by them, to match the price of respondent No.3 at Rs.387/- but other four successful tenderers refused to reduce the price. The respondent No.1 accepted the offer of respondents No.4 to 7 and issued letter of intent to them on 14.8.2008 for supply of 4.25 lac CFLs packs each. Thereupon after about a month, a letter dated 9.9.2008 was addressed to each of the successful tenderers to put on hold the preparations for manufacture of CFLs. The letter of intent was ordered to be treated as withdrawn. On 16.9.2008 the entire tender process was cancelled. 3. The third tender was floated by respondent No.1 with due date 29.9.2008. In the third tender substantial changes were …3… made, the turnover was reduced to 75 crores, minimum quantity for which quotation was required to be made was reduced to 35%, manufacturing capacity was reduced to 20 lac CFLs per annum. The respondent No.1 in order to facilitate respondent No.3 dropped the requirement of the life test report of 6000 hours, which is must as per IS 15111 (Part-2) standards. On that day respondent No.3 did not have BIS licence to manufacture CFLs of power factor 0.85. A new condition was incorporated in the third tender whereby it was stated that instead of licence, tenderers could either submit a BIS licence or equivalent International Electrotechnical Commission (IEC) certification. The respondent No.1 by a corrigendum dated 19.9.2008 extended the last date for submission of tender to 10.10.2008. On 7.10.2008, a provisional licence was issued to respondent No.3 to manufacture CFLs of power factor 0.85, based on a test report of 2000 hours instead of 6000 hours. 4. The respondents 3 to 7 including M/s. Philips India Ltd. and M/s. Pashwara Electronics Ltd. submitted their tenders which were opened on 10.10.2008. M/s. Philips India Ltd. and M/s. Pashwara Electronics Ltd. were declared technically unqualified for not possessing BIS licence etc., however, respondents No.3 to 7 were declared successful technically. They were asked to remain present on 22.10.2008 at the time of opening of the price bids. Initially the price bids were to open on 16.10.2008 but due to some reasons price bids could not be opened on 16.10.2008. 5. The respondent No.1 in the meantime issued directions to its field staff to carry out inspections of the factory premises of each …4… of the bidders to ascertain their manufacturing capacity, as was required for the supply of the tendered quantity. The supply was to be made within 2 ½ months. The respondent No.3 was capacitated to manufacture 15.00 lac CFLs in 2-1/2 months. As per tender, 72 lac CFLs were required and a minimum 35% quantity had to be tendered. The respondent No.3 did not satisfy the parameters of production capacity. The field staff of respondent No.1 indicated that respondent No.3 had capacity to manufacture 19.00 lac CFLs per month. However respondent No.3 did not possess the requisite plant and machinery to manufacture 19.00 lac CFL Lamps per month. 6. The price bids were opened on 22.10.2008 and the bidders quoted different rates from Rs.396/- to Rs.480/- inclusive of VAT and against form ‘C’ etc. The respondent No.3 was asked to reduce the price at Rs.387/- per box in view of the fact that in second tender the respondent No.3 had quoted rate at Rs.387/- per box. The respondent No.3 agreed to supply CFLs at Rs.387/- per box. The respondent No.1 by back door entry awarded to respondents No.3 and 4 supply of 40 lac and 25.20 lac CFLs respectively. 7. The submission of a valid test report, conforming to IS 15111 ( part 1 & 2 ) was mandatory condition of the tender. In absence of such report, no bidder could be considered eligible. The respondent No.1 deviated from the mandatory condition and not only considered respondent No.3 as eligible but has also placed purchase orders dated 27.10.2008 both on respondents No.3 and 4 vide annexures P-14 and P-15 respectively. The submission of complete and satisfactory reports at the time of pre-dispatch …5… inspection was ignored for respondent No.3 and therefore, respondent No.1 illegally relaxed mandatory tender condition for awarding tender to respondent No.3. 8. The ineligibility of respondent No.3 for want of valid test report was brought to the notice of respondent No.1 by way of a legal notice dated 22.10.2008 which was sent on behalf of respondent No.4, which was ignored by respondent No.1. The quantity was to be divided into colours 6500° K and 2700° K, but the entire award was made for 6500° K as neither respondent No.3 nor respondent No.4 had submitted report for colour 2700° K. In absence of test report for colour 2700° K neither respondent No.3 nor respondent No.4 could have been declared technically qualified. It has been lastly submitted that action on the part of respondent No.1 authority is discriminatory and arbitrary and therefore, supply orders annexures P-14 and P-15 be quashed. 9. The petitioner has also alleged that when the process was going on, the matter was reported by various newspapers, through which the petitioner basically derived knowledge. He gathered all the documents from the respondents. The suspicion, extraneous considerations and ulterior motives are writ large on the face of the record, necessitating judicial intervention. The matter called for a deep probe and an independent investigation inasmuch as ineligible tenderers were awarded tender compromising on the quality. The statutory requirements have been ignored. In the tender huge public money is involved, honest tax payers money is being wasted and therefore, petitioner has prayed for quashing of the …6… award of tender in favour of respondents No.3 and 4. The petitioner in the supplementary affidavit dated 25.11.2008 has given his personal details without touching the merits of the case 10. The respondents No.1 and 2 contested the petition by filing reply. It has been submitted that the petitioner is not a ‘pro bono publico’ and the petition has been filed to gain political mileage. The petition is not bonafide . The petitioner has no locus standi to file the petition, no public interest is involved in the litigation. The petitioner is espousing the cause of private companies who have failed to bag the orders for the supply of CFLs. The petitioner is a shadow and proxy litigant on behalf of unsuccessful bidders. 11 The tenders and bids received were scrutinized and examined by an expert body and thereafter by full Board. The decision making authority had acted bonafide without element of malice, malafide and irrationality. The Govt. has announced “Atal Bijli Bachat Yojna” scheme in order to save energy and to encourage use of energy efficient lamps. The Govt. had granted Rs.70 crore to respondent No.1 to distribute CFLs free of cost to nearly 16 lac domestic consumers in the State. It is estimated that about 270 million units of energy will be saved annually by using CFLs. The maximum demand is likely to be reduced during peak hours and the domestic consumers would be benefited by having reduction in their monthly energy bills. The distribution of the CFLs under the scheme has started on 23.11.2008. It has not been denied that three tender enquiries were floated. In the first tender enquiry, seven firms participated. M/s. Paswara Electronics Pvt. Ltd. was not found …7… eligible and therefore, their bid was not opened. The techno- commercial bids of remaining six firms were opened and four firms namely M/s. Havells, M/s. Asian, M/s.Phoenix and M/s. Surya Roshani were found eligible for opening their price bids. The rates quoted by the four firms were found extremely high, therefore, first tender enquiry was cancelled. 12. The second tender enquiry was floated by changing six technical and commercial conditions, again seven firms submitted their techno-commercial bids on 8.8.2008. M/s. Paswara Electronics and Philips Electronics India Ltd. could not qualify the techno- commercial conditions of the tender. Only three firms namely M/s. Phoenix Lamps, M/s. Surya Roshni and Havells India were found qualified for both 0.5 power factor and 0.85 power factor CFLs. M/s. Asian Electronics for 0.85 power factor and M/s. HPL Socomec for 0.5 power factor CFLs. The price bids of the five firms were opened on 12.8.2008. M/s. HPL Socomec had also quoted rates for 0.85 power factor CFLs though the firm was not qualified for 0.85 power factor. The letters of intent were issued to M/s.Phoenix, M/s.Havells, M/s. Surya Roshani and M/s. Asian Electronics. The purchase orders were not issued and letters of intent were later on withdrawn on 9.9.2008. 13. The Chief Secretary to the Govt. of Himachal Pradesh on 23.8.2008 in view of the news reports held a meeting. The main issue was whether to buy CFLs with 0.5 power factor or 0.85 power factor. The Chief Secretary held second meeting on 15.9.2008, it was decided to invite fresh tenders for CFLs in a compressed …8… supply schedule. It was also decided to reduce the minimum quantities to be offered to 35% and turnover from Rs.100 crore to Rs.75 crore, 0.85 CFL being a new product in the Indian market therefore decision was taken that there was no need to keep minimum manufacturing capacity per annum for the product in view of requirements of turnover and manufacturing capacity, BIS certification was replaced by BIS or equivalent International Electrotechnical Commission certification, in order to protect the interest of the Board and the Govt bank guarantee was enhanced from 5% to 10%. The matter was remitted to the whole time members of the Board on 16.9.2008, it was decided to cancel the tender and reinvite fresh tender with changed conditions. 14. In the aforesaid background third tender enquiry was invited for the procurement of CFLs with 0.85 power factor and amended tender conditions. The opening of techno-commercial bids of the tender was changed from 29.9.2008 to 10.10.2008. In all seven firms participated in the third tender. The Board on 20.10.2008 decided to open the price bids of five firms only and accordingly the price bids of five firms were opened on 22.10.2008 which were in the range of Rs.396/- to Rs.479.55/- per pack. On 24.10.2008 letter of intent was issued to respondent No.3 for supply of 10 lac packs at the rate of Rs.387/- per pack which was confirmed by respondent No.3 vide letter dated 25.10.2008. The second letter of intent was placed on respondent No.4 on 25.10.2008 for supply of 6.30 lac packs at the rate of Rs.387/- per pack which was confirmed by respondent No.4 vide letter dated 27.10.2008. Thereafter …9… purchase orders were placed to respondents No.3 and 4 on 27.10.2008. In pursuance of purchase orders placed on respondents No.3 and 4, the supplies and consequent distribution of the CFLs have commenced and the purchase orders have been acted upon. 15. On merits the respondents No.1,2 have denied that the petitioner met their any officer or employee to enquire or obtain any document of CFLs tenders. It has been alleged that the standards fixed under Bureau of Indian Standards Act 1986 were adhered. In response to tender enquiries it has been alleged that on earlier two occasions same seven firms responded to the tender enquiries. Therefore, it was decided that stringent terms and conditions be further softened to enlarge the scope of participation, hence, the conditions of turnover and manufacturing capacity etc. were reduced in the third tender enquiry. BIS vide letter dated 7.10.2008 had authorized respondent No.3 to manufacture CFLs with 0.85 power factor in addition to 0.5 power factor under the licence dated 26.6.2007 held by them. BIS licence or equivalent IEC was incorporated with a view to enlarge more competition as despite repeated tenders the competitors remained the same. The respondent No.3 had qualified on the basis of BIS licence and not on the basis of IEC. BIS had granted licence to respondent No.3 to manufacture and supply 0.85 power factor CFLs, the test reports accepted by the BIS were considered acceptable by respondents No.1,2. It has been denied that BIS had granted provisional licence to respondent No.3 to manufacture CFLs of 0.85 power factor. The respondent No.3 was qualified for manufacturing 0.85 power factor …10… CFLs on the basis of BIS licence already issued, yet as a matter of abundant caution the respondent No.1 had put the relevant clause in the purchase order. The respondent No.3 in the tender document has intimated manufacturing capacity 168 lac lamps per year or approximately 14 lac CFLs per month and not as alleged in the petition. The inspecting team vide letter dated 23.10.2008 had reported that two units were in operation and third unit was under trial run and would start commercial production within week’s time and thereafter the total plant capacity of respondent No.3 would be around 19 lac per month. 16. It has been denied that tender conditions were deviated. The warranty clause of the purchase order takes care of the life aspect of the CFLs. Any failure of CFL within 18 months is to be replaced by the firm free of cost. The damages more than 5% at divisional level are to be replaced by the supplier free of cost with penalty of 1%. The respondents No.1,2 had considered and analyzed all aspects regarding test reports and thereafter accepted the test reports on the basis of which respondent No.3 had been granted ISI mark for 0.85 power factor CFLs by the BIS. There was no reason to declare respondent No.3 ineligible . The respondents No.3 and 4 had submitted the report for colour 2700° K and 6500° K for CFLs. It has been denied that statutory requirements were ignored while placing purchase orders on respondents No.3 and 4. The respondents No.1,2 prayed for dismissal of the writ petition. 17. The respondent No.3 has also contested the writ petition by filing reply. In the reply respondent No.3 has taken several …11… preliminary objections such as writ petition has been filed as proxy litigation by the competitors of respondent No.3, the petitioner has no locus standi to file and maintain the writ petition. The petitioner is not a ‘pro bono publico’ and the petition has been filed just to gain political mileage. The petition has become infructuous inasmuch as after the purchase order nearly 1,49,524 packs of four CFLs each worth Rs.5,78,65,788/- were already supplied by respondent No.3 to respondent No.1. The petitioner has concealed true and material facts from this court, therefore, petition is not maintainable. The petitioner has failed to disclose the source from where he has obtained all the relevant information and documents. The petitioner has impleaded unsuccessful bidders as respondents, with the sole intention of giving them an opportunity to plead their case. The petition suffers from delay and laches. The supply period is only 75 days. The respondent No.3 has procured almost entire raw material for executing the supply order and has incurred expenses amounting to crores of rupees. The petition involves disputed questions of facts and the petitioner has an alternative remedy of a civil suit. The petitioner during the process of third tender enquiry never approached the authorities and raised any grievance and therefore, the petitioner is estopped from raising any grievance through the writ petition in this Court. The respondents No.1 and 2 have broken the cartel of other competitors and saved more than Rs.15 crores of public money. The price quoted by respondent No.3 was competitive. The respondent No. 3 had fulfilled all tender conditions. On merits, the respondent No.3 has denied the claim of the petitioner. …12… It has been pleaded that HPL Protection Technologies Ltd. and HPL Socomet Pvt. Ltd. had filed petition under sections 391 and 394 of the Companies Act, 1956 before the Delhi High Court for amalgamation of HPL Protection Technologies Ltd. (transferor company) with HPL Socomec Pvt. Ltd. (transferee company). A scheme of amalgamation of transferor and transferee companies was prepared with appointed date 1.4.2008. These facts were brought to the notice of respondents No.1,2 by respondent No.3 and thereafter respondents No.1,2 permitted respondent No.3 to participate in third tender enquiry. The Delhi High Court on 22.10.2008 has approved the scheme of amalgamation. The supply order was placed on respondent No.3 on 27.10.2008. BIS licence to manufacture 0.85 power factor CFLs was issued in favour of HPL Protection Technologies Ltd an amalgamated company of respondent No.3. In brief the respondent No.3 has pleaded that no illegality was committed by respondents No.1,2 in permitting respondent No.3 to participate in the third tender enquiry, the respondent No.3 was fully eligible for competing in third tender enquiry. It has been denied that respondents No.1,2 changed the tender conditions in order to facilitate respondent 3 to participate in the third tender enquiry. The respondent No.3 had submitted the report for 2700° K and 6500° K CFLs. The respondent No.3 has prayed for dismissal of the writ petition. 18. The petitioner in rejoinder to the reply of respondents No.1 and 2 has denied the preliminary objections. It has been pleaded that it was a mandatory condition of the tender that only …13… manufacturers are eligible to compete. The licence to manufacture 0.85 power factor CFLs was issued in the name of one HPL Protection Technologies Ltd. and not in the name of respondent No.3. On merits the petitioner reiterated his stand and has submitted that as per requirement of tender conditions no life test of 6000 hours was furnished by respondent No.3. In the rejoinder to the reply of respondent No.3 the petitioner has reiterated his stand. The petitioner however, did not file any rejoinder to the amended reply of respondent No.3. 19. We have heard learned counsel for the parties and gone through the record. In fact the matter was heard on different dates. On 30.12.2008 a statement was made on behalf of petitioner by his counsel that respondent No.4 was fully eligible as per tender documents, therefore, petition was not pressed against respondent No.4. It is pertinent to mention here that Rs.387/- per box rate of CFLs agreed between respondent No.4 and respondent No.1 is the same which was agreed between respondent No.3 and respondent No.1. In these circumstances, petitioner cannot be heard to say that rate quoted for supply of CFLs by respondent No.3 and accepted by respondent No.1 is on higher side. Therefore, now on the basis of submissions made on either side the points left for determination are (i) maintainability of petition as public interest litigation (ii) judicial review of purchase order Annexure P14 dated 27.10.2008 placed on respondent No.3 by respondent No.1 for supplying 10 lac packs each containing four CFLs . 20. On behalf of the petitioner, it has been submitted that …14… petitioner is a public spirited person and he has filed the writ petition in larger public interest on the ground that respondent No.3 was not eligible to participate in the tender as per tender documents. The respondents No.1,2 deviated from the tender conditions by placing purchase order on respondent No.3 for purchasing CFLs. It has been contended that after accepting the tender of respondent No.3, the respondents No.1,2 have placed purchase order on respondent No.3 for purchasing sub-standard CFLs at the cost of public and honest tax payer. The petitioner has placed the facts and decision of this Court on the points raised by the petitioner are necessary in larger public interest. On the contrary on behalf of respondents No.1,2 and 3 it has been contended that the petition filed by the petitioner is not bonafide. The past conduct of the petitioner does not show that he is a public spirited person. It has been submitted that petitioner belongs to a particular political party and therefore, to gain political mileage the petitioner has filed the petition. The petition is a proxy litigation which has been filed by petitioner at the instance of competitors of respondent No.3 which has been established from the fact that in the petition those competitors have been impleaded as parties even though they are not necessary parties. The petitioner has opted this course in order to give a chance to those competitors to support his case. It is different matter that this Court did not issue notice of the petition to those competitors. It has also been contended on behalf of the respondents that petitioner has not explained how he has procured the documents filed by him with the petition when it is the case of respondents 1,2 and 3 that petitioner …15… never approached their officers and employees for supplying the documents. The respondents 1,2 and 3 have submitted that in the facts and circumstances of the case the petition filed by the petitioner is not maintainable. 21. The question of maintainability of public interest litigation has been time and again raised in the Apex Court. In Janata Dal vs. H.S. Chowdhary and others (1992) 4 SCC 305, S.Ratnavel Pandian,J. speaking for the bench has observed as follows:- “ It is thus clear that only a person acting bona fide and having sufficient interest in the proceeding of PIL will alone have a locus standi and can approach the court to wipe out the tears of the poor and needy, suffering from violation of their fundamental rights, but not a person for personal gain or private profit or political motive or any oblique consideration. Similarly, a vexatious petition under the colour of PIL brought before the court for vindicating any personal grievance, deserves rejection at the threshold” It has also been observed in the same judgment as follows:- “In the words of Bhagwati, J. ( as he then was) the “courts must be careful in entertaining public interest litigation” or in the words of Sarkaria, J. “the applications of the busybodies should be rejected at the threshold itself” and as Krishna Iyer, J. has pointed out, “the doors of the courts should not be ajar for such vexatious litigants”. 22. In Raunaq International Ltd. Vs. I.V.R.Construction Ltd. and others (1999) 1