HON’BLE SRI JUSTICE P.S. NARAYANA +W.P.No.18824 of 2007 %12-12-2004 # Sri Durga Industries, Vijayawada, a partnership firm rep. by its Partner, kosuri Nookaraju Achary, Vijayawada. ..Petitioner and $ Tirumala Tirupathi Devastanams, rep. by its Executive Officer, Tirupathi and others. ..Respondents. < GIST: > HEAD NOTE: ! Counsel for petitioner : Sri K. Sarvabhouma Rao. ^ Counsel for Respondent No.1: Sri Y.V.Ravi Prasad, SC for TTD. ^Counsel for Respondent No.2: Sri V.T.M Prasad. ^Counsel for Respondent No.3: None appeared. ? Cases referred 1 (1996) 6 SCC 22 2 (1994) 4 SCC 104 3 (2000) 6 SCC 293 4 (2004) 12 SCC 327 5 AIR 1954 SC 592 6 (1973) 3 SCC 864 7 (1979) 3 SCC 489 8 (1983) 3 SCC 379 9 (1986) 1 SCC 264 10 (1996) 6 SCC 22 11(2002) 1 SCC 216 THE HON’BLE SRI JUSTICE P.S.NARAYANA W.P.No.18824 of 2007 Dated: .12.2007 Between: Sri Durga Industries, Vijayawada, a partnership firm rep. by its Partner, Kosuri Nookaraju Achary, Vijayawada. ..Petitioner. and Tirumala Tirupathi Devastanams, rep. by its Executive Officer, Tirupathi and others. ..Respondents. THE HON’BLE SRI JUSTICE P.S.NARAYANA W.P.No.18824 of 2007 ORDER: It is represented that the 3rd respondent had been served. W.V.M.P.No.2290 of 2007 is filed by R2- Sri Durga Malleswara Swamy Varla Devastanam, Indrakeeladri, Vijayawada, represented by its Executive Officer, Vijayawada. R1 also filed counter-affidavit. This Court issued rule nisi on 06.09.2007 and granted interim stay of all further proceedings until further orders, in W.P.M.P.No.24186 of 2007. At the request of the counsel on record, the matter is being disposed of finally. 2. Sri K. Sarvabhouma Rao, learned counsel representing the petitioner had taken this Court through the affidavit filed in support of the writ petition and would maintain that in the facts and circumstances of the case, the action impugned cannot be sustained. 3. Per contra, Sri Y.V.Ravi Prasad, learned standing counsel representing the 1st respondent and Sri V.T.M.Prasad, learned counsel representing the 2nd respondent had taken this Court through the respective stands taken in the counter-affidavits and would maintain that in the facts and circumstances of the case, the writ petition is not a bonafide one and the same is liable to be dismissed. 4. Heard the counsel 5. Sri Durga Industries, Vijayawada, a partnership firm, represented by its partner Kosuri Nookaraju Achary filed the present writ petition for a writ of mandamus declaring the action of respondents 1 and 2 in issuing re-tender notification vide ROC.No.PR4/14867/ADVT.190/2007 dt.17.8.2007 for the work calling for tenders “to remove the existing copper plating and to refixing it an to fix copper plate to the remaining area and to gold plate the entire copper ornamental sheets” without canceling the successful lowest bid of the petitioner firm in the earlier tender notification in ROC.No.PR4/13287/ADV.172/2007 dt.3.8.2007 and without giving any reasoning for not accepting such successful bid as illegal, arbitrary and against the principles of natural justice and in violation of Articles 14 and 19 of the Constitution of India, and consequently to direct the respondents to award the work order to the petitioner firm and to pass such other suitable orders. 6. It is averred by the deponent in the affidavit filed in support of the writ petition that he is a partner of the firm and other partners are his father and brother. Hence, he is authorized and competent to file this writ petition representing the firm. It is averred that the petitioner firm is engaged in traditional jewellery work and also metal works particularly related to Temples in making ornaments, idols, chariots and plating of temples. It gained expertise in temple works having executed many such works in the major temples of Andhra Pradesh, particularly it had the unique expertise in plating temple “Gopurams”, Arches, Thresholds etc. Its partners are traditional gold smiths for generations together. 7. It is further averred that under the tender notification dt.15.4.2002, the firm was given the plating works of Sri Ammavari Temple to the 3rd storey, Vimana Gopuram etc. The work involves plating of Gold to the Copper plates prepared by the petitioner. The gold plating to the copper plates was to be done with the gold supplied by the 2nd respondent Devastanam. But there was a hitch on the part of the Devastanam in supplying the gold due to its administrative problems. However, they did all the copper work and did gold plating work of about 30% spending gold of about 25 kilograms. The rest of the work could not be done due to non supply of gold by the 2nd respondent. There arose a dispute, on which they filed a suit O.S.No.947 of 2007 on the file of the III Additional Junior Civil Judge, Vijayawada, for permanent injunction and other reliefs. However, the subject matter of the said suit is not relating to the present dispute in this writ petition. It had no significance to be referred to in this petition. Only to disclose the facts, he was mentioning about the same here. 8. It is further averred that the 2nd respondent Devastanam found it expedient to handover the project of gold plating to the 1 & 2 storey of the Pradhana Sikharam of the Ammavari Temple to the 1st respondent TTD Devastanam for the reason that it had more expertise and administrative skill in executing such works. Accordingly, the 1st respondent Devastanam issued a tender notification in ROC.No.PR4/13287/ADV.172/2007, dt.3.8.2007 calling for tenders to remove the existing copper plating and to refixing it and to fix copper plate to the remaining area and to gold plate the entire copper ornamental sheets from the licenced gold smiths and experienced artisans. Since the firm had got all the eligibility criteria, they purchased the tender schedules and put in their tenders in the name of the petitioner firm enclosing all the required documents including a D.D. for Rs.6,00,000/- towards the Earnest Money Deposit (EMD). By that time itself their suit was pending and both the respondents were aware of the pendency of such suit and the dispute regarding the earlier work between the petitioner and the 2nd respondent Devastanam. 9. It is pertinent to mention here that there is clause No.4 of the terms and conditions of the above stated tender schedules to the effect that the contractor who attempted the same subject work earlier and left it incomplete is not eligible to participate in the tender. However, since the present work is different and since the respondents were aware that the hitch in execution of earlier work was not due to any latches on the part of the petitioner, they sold the tender schedules to it and also allowed it to participate in the tender proceedings. If at all, the petitioner incurred any disqualification under the above clause 4 of the tender schedules, the respondents would not have allowed the petitioner to participate in such tenders. Accordingly, the firm submitted its tenders duly following all the requirements. Ultimately in response to the tender notification there were only two participants including the petitioner firm. They quoted Rs.38/- per gram of gold plating labour charges where as the other participant, the 3rd respondent quoted Rs.120/- per gram for the same. The firm quoted 60 kilograms of gold for the entire work where as the 3rd respondent quoted 70 kilograms of gold. They quoted 2% wastage whereas the 3rd respondent quoted 5% wastage. The difference is enormous which works out to an approximate amount of Rs.60,00,000/-. Their technical competence had never been in dispute. Their expertise and competence is far superior to that of the 3rd respondent. The above quotations clearly show that they were the lowest bidder. The work should have been invariably be entrusted to the firm. There were no separate financial and technical bids. As such there are no further formalities or negotiations to award the work. The lowest bidder had to be necessarily given the work. The said facts were very much disclosed on the date of opening of the tenders on 13.08.2007. That was done in the presence of both the bidders including the petitioner. Thus, they were awaiting the work orders. The respondents also told them that they would be given the work order after obtaining the administrative approvals. The 3rd respondent also requested the other respondents to return his EMD amount. 10. It is further averred that while the matter stood as above, to their shock and dismay they came across a re-tender notification in Hindu Daily News Paper dated 18.08.2007 again calling for tenders for the same work vide ROC.No.PR4/14867/ADVT.190/2007 dt.17.8.2007 issued by the 1st respondent. In the said tender notification, it was not stated as to why the earlier notification was cancelled. Further, though they stood to be the lowest bidder, they were not issued any notice of canceling the earlier tender proceedings nor did they intimate any reason for not accepting their bid. Thereafter, they made a representation dt.21.08.2007 quoting the provisions of Right to Information Act and enclosing a D.D. for Rs.20/-seeking information as to why their successful bid was not accepted. But the respondents did not respond to the same. As such, they approached the 1st respondent officials on the date of the re-tender proceedings on 29.08.2007 and enquired about the reasons for issuing the re-tender notification. But, they did not give them any acceptable reasons and represented that they had already sent back their D.D. for Rs.6,00,000/- towards EMD along with the reasons for not accepting their successful bid. 11. It is further averred that in spite of it, they insisted the respondents to sell the present re-tender schedules so as to enable them to participate in the re-tender proceedings. But, they refused to sell the schedules to them without giving any reasons. In the meanwhile, the 3rd respondent having had a cue from their earlier bid quoted Rs.39/- per gram gold plating towards labour as they could understand from the subsequent events. Since their presence as a bidder was deliberately and designedly disallowed by the 1 and 2 respondent, there remained only the 3rd respondent as the sole bidder without any competition. They had every reason to believe that the respondent officials malafide and with ulterior motives and to give an undue advantage to the 3rd respondent designedly and illegally eliminated them from the competition. 12. Further, it is averred that when they returned to Vijayawada, they found D.D. of Rs.6,00,000/- returned to them which was deposited by them during the earlier tender proceedings. But, it did not contain any reasons for not accepting their earlier successful bid. Thus, in spite of their insistence the respondents did not disclose the reasons for not accepting their bid. In fact, there are no reasons at all except to give an undue advantage to the 3rd respondent and thereby eliminating the competition. The action of the respondents 1 and 2 in putting the work to the re-tender notification is highly illegal and arbitrary. Hence, the writ petitioner approached this court praying for the reliefs specified above. 13. In the counter-affidavit of the 1st respondent, sworn to by the Executive Officer of Tirumala Tirupathi Devasthanams, Tirupathi, it is specifically averred that the allegations that the petitioner failed to complete the gold plating work due to non-supply of gold and the suit O.S.No.947 of 2007 pending on the file of the III Additional Junior Civil Judge, Vijayawada, are not connected with the dispute in the present writ petition. It is stated that the petitioner had to be allotted with the work since he was lowest tenderer and that the 1st respondent told that the work will be entrusted to the petitioner and that the 1st respondent refused to sell the tender schedules without any reasons and that the respondent officials with malafide and ulterior motives and to give undue advantage to the 3rd respondent designedly and illegally eliminated the petitioner from the competition and therefore, the action of respondents 1 and 2 in issuing fresh tender notification by canceling the earlier tender notification is illegal and arbitrary. 14. Further, it is stated that originally the petitioner was entrusted with work relating to fabrication of gold coated copper sheets covering the Vimana Gopuram of Sri Durga Malleswara Swami Varla Devasthanam (2nd respondent herein) under an agreement dt.6.7.2002. Since the petitioner committed some irregularities, the contract was cancelled by the 2nd respondent on 9.5.2006. The said cancellation order dt.9.5.2006 was assailed in W.P.No.11113 of 2006, which was dismissed on 27.6.2006 and the same was confirmed in W.A.No.832 of 2006. It seems, a civil litigation with regard to the very same subject matter in O.S.No.947 of 2007 is also still pending. In W.A.No.832 of 2006, the learned Division Bench observed at page 16, which reads as hereunder: “We have given serious thought to the arguments of the learned counsel, but have not felt impressed. It is trite to say that in exercise of power under Article 226 of the Constitution, the High Court can interfere even in contractual matters to which State or its instrumentality or its agency or any public authority is a party and if the action of the State or its instrumentality/agency is found to be arbitrary or contrary to public interest, then the Court can annul the same, but it is equally well-settled that in such matters the Court will be extremely slow to interfere in such matters. In State of U.P. v. Bridge & Roof Co.(India) Ltd.[1], the Supreme Court was called upon to consider whether the rates quoted by the contractor were inclusive of the sales tax, if any, on the constructional plants, materials and supplies required for the purpose of execution of the contract. The respondent, who was awarded contract for rehabilitation and improvement of certain stretch of road in Uttar Pradesh applied to the Commissioner of Sales Tax, Uttar Pradesh for composition of tax liability. The Deputy Commissioner, Sales Tax, in exercise of the power delegated to him by the Commissioner, passed order dated 27-5-1992 that sales tax should be deducted at the rate of 1% at the time of payment of balance amount. After three years, the respondent filed writ petition in Allahabad High Court questioning the deduction of sales tax. The High Court did not go into the issue of maintainability of the writ petition, but disposed of the same by observing that the Government shall deduct only 1% of the bill in question up to 31-3-1995. While setting aside the High Court’s order on merits, the Supreme Court held: “15. In our opinion, the very remedy adopted by the respondent is misconceived. It is not entitled to any relief in these proceedings, i.e., in the writ petition filed by it. The High Court appears to be right in not pronouncing upon any of the several contentions raised in the writ petition by both the parties and in merely reiterating the effect of the order of the Deputy Commissioner made under the proviso to Section 8- D(1). 16. Firstly, the contract between the parties is a contract in the realm of private law. It is not a statutory contract. It is governed by the provisions of the Contract Act or, may be, also by certain provisions of the Sale of Goods Act. Any dispute relating to interpretation of the terms and conditions of such a contract cannot be agitated, and could not have been agitated, in a writ petition. That is a matter either for arbitration as provided by the contract or for the civil court, as the case may be. Whether any amount is due to the respondent from the appellant-Government under the contract and, if so, how much and the further question whether retention or refusal to pay any amount by the Government is justified, or not, are all matters which cannot be agitated in or adjudicated upon in a writ petition. The prayer in the writ petition, viz., to restrain the Government from deducting a particular amount from the writ petitioner’s bill(s) was not a prayer which could be granted by the High Court under Article 226. Indeed, the High Court has not granted the said prayer. 17. Secondly, whether there has been a reduction in the statutory liability on account of a change in law within the meaning of sub-clause (4) of clause 70 of the contract is again not a matter to be agitated in the writ petition. That is again a matter relating to interpretation of a term of the contract and should be agitated before the arbitrator or the civil court, as the case may be. If any amount is wrongly withheld by the Government, the remedy of the respondent is to raise a dispute as provided by the contract or to approach the civil court, as the case may be, according to law. Similarly if the Government says that any overpayment has been made to the respondent, its remedy also is the same. 18. Accordingly, it must be held that the writ petition filed by the respondent for the issuance of a writ of mandamus restraining the Government from deducting or withholding a particular sum, which according to the respondent is payable to it under the contract, was wholly misconceived and was not maintainable in law. (See the decision of this Court in Asstt. Excise Commr. v. Issac Peter[2] where the law on the subject has been discussed fully.) The writ petition ought to have been dismissed on this ground alone. 21. There is yet another substantial reason for not entertaining the writ petition. The contract in question contains a clause providing inter alia for settlement of disputes by reference to arbitration (clause 67 of the contract). The arbitrators can decide both questions of fact as well as questions of law. When the contract itself provides for a mode of settlement of disputes arising from the contract, there is no reason why the parties should not follow and adopt that remedy and invoke the extraordinary jurisdiction of the High Court under Article 226. The existence of an effective alternative remedy — in this case, provided in the contract itself — is a good ground for the court to decline to exercise its extraordinary jurisdiction under Article 226. The said article was not meant to supplant the existing remedies at law but only to supplement them in certain well-recognised situations. As pointed out above, the prayer for issuance of a writ of mandamus was wholly misconceived in this case since the respondent was not seeking to enforce any statutory right of theirs nor was it seeking to enforce any statutory obligation cast upon the appellants. Indeed, the very resort to Article 226 — whether for issuance of mandamus or any other writ, order or direction — was misconceived for the reasons mentioned supra.” I n Kerala State Electricity Board v. Kurien E.Kalathil[3], the Supreme Court considered the issue relating to maintainability of the writ petition in a contractual matter. The facts of that case were that the appellant, State Electricity Board executed an agreement dated 16-9-1981 with the respondent contractor for construction of a dam. After the commencement of the work, the State Government revised, by notification dated 30-3-1983, the minimum wages payable to employees employed in the works mentioned in the notification, w.e.f 1-4-1983. The respondent contractor claimed that he began making the revised payments to his workers as required for the period 1-4-1983. Till December 1984, the Board reimbursed the respondent contractor. However, from January 1985 the Board stopped making the payments for labour escalation, contending that construction of a dam was not covered by the notification dated 30-3-1983. This disagreement was settled when the Industrial Tribunal made an award on 14-10-1993, holding that the notification was applicable to dam construction (in case of workers employed for construction or maintenance of roads, or building operations and for stone-breaking or stone-crushing). The award became final. On 23- 12-1994 the Board wrote the respondent demanding recovery with interest of Rs.3.65 crores, which had been paid in the form of advances for various heads of work. The respondent filed a writ petition seeking to have the letter of demand quashed and also praying for payment of the amounts paid in revised wages. While the petition was pending, the Board, by an order dated 26-2-1997 terminated the contract, which the contractor challenged by filing another petition. The High Court disposed of both petitions holding that the termination of the contract was arbitrary, unjust and not in public interest and directed the Board to pay the amounts claimed by the respondent along with interest at 18%. The Supreme Court partly allowed the appeal of the Board and held: “The interpretation and implementation of a clause in a contract cannot be the subject-matter of a writ petition. Whether the contract envisages actual payment or not is a question of construction of contract. If a term of a contract is violated, ordinarily the remedy is not a writ petition under Article 226. A contract would not become statutory simply because it is for construction of a public utility and it has been awarded by a statutory body. ……………..A statute may expressly or impliedly confer power on a statutory body to enter into contracts in order to enable it to discharge its functions. Dispute arising out of the terms of such contracts or alleged breaches have to be settled by the ordinary principles of law of contract. The fact that one of the parties to the agreement is a statutory or public body will not by itself affect the principles to be applied. The disputes about the meaning of a covenant in a contract or its enforceability have to be determined according to the usual principles of the Contract Act. Every act of a statutory body need not necessarily involve an exercise of statutory power. Statutory bodies, like private parties, have power to contract or deal with property. Such activities may not raise any issue of public law. In the present case, it has not been shown how the contract is statutory. The contract between the parties is in the realm of private law. It is not a statutory contract. The disputes relating to interpretation of the terms and conditions of such a contract could not have been agitated in a petition under Article 226 of the Constitution of India. Whether any amount is due and if so, how much and refusal of the appellant to pay it is justified or not, are not the matters which could have been agitated and decided in a writ petition. The contractor should have relegated to other remedies.” I n State of Jammu & Kashmir v. Ghulam Mohd. Dar[4], the Supreme Court reiterated the settled rule that a writ of mandamus should not ordinarily be issued for enforcing the terms and conditions of a contract. In the present case, we find that the appellant has neither pleaded in the writ petition nor any evidence has been produced before the Court to show that order dated 09.05.2006 was passed by respondent No.2 without complying with the rule of audi alteram partem. Rather, the factual matrix of the case clearly shows that order cancelling the contract was passed by respondent No.2 after giving notice and effective opportunity of hearing to the petitioner. Therefore, the learned Single Judge did not commit any error by refusing to annul order dated 09.05.2006 on the ground of violation of the rules of natural justice. The argument of the learned counsel that exercise for cancellation of the contract was undertaken by respondent No.2 with an oblique motive appears attractive, but lacks merit and deserves to be rejected. In the affidavit filed by Sri Kosuri Nuka Raju, managing partner of the petitioner, there is no enumeration of the allegation of any personal ill-will or mala fides against the person holding the post of Executive Officer. It has also not been suggested that proceedings for cancellation of contract were initiated because the officer concerned wanted to favour someone else. Not only this, it was not even argued before the learned Single Judge that the cancellation of contract has been