*THE HON’BLE MR. JUSTICE C.V.NAGARJUNA REDDY + WRIT PETITION Nos.21593 and 26009 of 2010 % 23-9-2011 Writ Petition No.21593 of 2010: # M/s. Intemo Systems Ltd., reptd., by its Managing Director-Sri K.Satyanarayana, B-23/A, 1st floor, APIIC Colony, Kushaiguda Electronic Complex, ECIL(Post), Hyderabad. …Petitioner Vs. $ The Government of Andhra Pradesh, Reptd., by its Principal Secretary, Municipal Administration & Urban Development (F.2) Department, Secretariat Buildings, Saifabad, Hyderabad and others. …Respondents ! Counsel for the Petitioners: Writ Petition No.21593 of 2010: Sri M.S.Ramachandra Rao. Writ Petition No.26009 of 2010: Sri R.Raghunandan. ^ Counsel for the Respondents: GP for Municipal Administration (Both the cases) for R.1 and R.2. Sri C.V.Mohan Reddy, Senior Counsel for R.3. <Gist: >Head Note: ? Cases referred: 1. AIR 1982 SC 149 2. (1993) 4 SCC 441 3. AIR 1991 SC 1902 4. (2000) 2 SCC 465[1] 5. (2000) 7 SCC 552 6. (1993) 2 SCC 703 7. 2010(2) ALT 94 (DB) 8. (2010) 4 SCC 653 IN THE HIGH COURT OF JUDICATURE, ANDHRA PRADESH AT HYDERABAD (Special Original Jurisdiction) PRESENT: THE HON’BLE MR. JUSTICE C.V.NAGARJUNA REDDY FRIDAY, THE TWENTY THIRD DAY OF SEPTEMBER, TWO THOUSAND AND ELEVEN WRIT PETITION Nos.21593 and 26009 of 2010 Writ Petition No.21593 of 2010: Between: M/s. Intemo Systems Ltd., reptd., by its Managing Director-Sri K.Satyanarayana, B-23/A, 1st floor, APIIC Colony, Kushaiguda Electronic Complex, ECIL(Post), Hyderabad. …Petitioner And: The Government of Andhra Pradesh, Reptd., by its Principal Secretary, Municipal Administration & Urban Development (F.2) Department, Secretariat Buildings, Saifabad, Hyderabad and others. Counsel for the Petitioners: Writ Petition No.21593 of 2010: Sri M.S.Ramachandra Rao. Writ Petition No.26009 of 2010: Sri R.Raghunandan. Counsel for the Respondents: GP for Municipal Administration (Both the cases) for R.1 and R.2. Sri C.V.Mohan Reddy, Senior Counsel for R.3. This Court made the following: COMMON JUDGMENT:- Since the subject matter of dispute in both these Writ Petitions being common, they are heard and being disposed of together. Respondent No.2 has published Notification for Expression of Interest (for short “the EOI Notification”), vide: T.N.No.01/WW/GHMC/DB/2007-08, dated 27-4-2007 inviting proposals from the eligible Energy Management Firms/Partnership/Consortium/Joint Ventures for the implementation of street lighting energy efficiency and Automation Project in Greater Hyderabad City limits. It is, inter alia, stated therein that respondent No.2 is planning to manage the street lights in a very effective manner and to save energy by implementing “latest technologies” and contribute to reduction in carbon emissions. Clause (2) of the EOI Notification mentioned that respondent No.2 prefers firms/partnership/consortium/joint ventures that are ready to provide solution for automation energy saving and effective maintenance of street lights for five years in the city; and that the EOI should clearly mention the system of management and capability to execute the project. The EOI Notification has described the names of the works as under: S.No. Name of the works 1. Development base line energy consumption through surveys as per accepted International Performance Monitory and Verification protocol (IPMVP) 2. Develop, design, execute, energy efficiency measures, operation and maintenance. 3 Develop the project into a Clean Development Mechanism (CDM) project and register with United Nation Framework Convention on Climate Change (UNFCCC) CDM executive board. 4 Transfer knowledge and train municipal engineers during the contract period. 5 Implementation of automated and energy saving solution for street lights. It was required that the EOI should be submitted in separate sealed covers to the Additional Commissioner (Electrical) on or before 11-5-2007 at 5 PM and respondent No.2 reserved its right to accept or reject any or all the offers without assigning any reason therefor. In response to the EOI Notification, 16 firms responded and submitted their proposals. These include the petitioner in Writ Petition No.26009 of 2010 and respondent No.3. The petitioner in Writ Petition No.21593 of 2010 has not responded to the EOI Notification and not submitted its EOI. On receipt of EOIs, respondent No.2 constituted a Technical Committee comprising experts from JNTU, ECIL and CPDCL to evaluate the bids. The Committee, after evaluation, short listed five firms, which include respondent No.3. Out of the five short listed firms, three firms viz., Sarvomax India Limited, respondent No.3 and M/s. S.R. Communication Systems, have submitted their financial bids. They were required to install single phase and three phase automation and energy saving equipment for demonstration at the location prescribed by the Executive Engineer, Greater Hyderabad Municipal Corporation, in pursuance of the opinion expressed by the Technical Committee. Out of the three firms, which submitted the bids, only Sarvomax India Ltd., and respondent No.3 have installed the equipment on the field for demonstration and submitted reports on energy saving. After inspecting the installed equipment, considering the information furnished to and the data collected by the Technical Committee, it has recommended respondent No.3 as the suitable company and, accordingly, its financial bid was opened. Respondent No.2 held several rounds of negotiations with respondent No.3, during which as many as five alternative proposals were submitted. Respondent No.2 has initiated the process for evaluation of proposals submitted by respondent No.3 from technical and financial angles through a competent consultant agency. Having identified M/s.Deloitte Touche Tohmatsu India Pvt., Limited (for short “M/s. Deloitte”), an eminent Government of India Consultant, which offered the lowest quotation of Rs.26.77 lakhs, respondent No.2 has decided to cancel and has, accordingly, communicated its decision to cancel all further proceedings in connection with EOI Notification, vide: its letter No.2607/C&S.O/GHMC/Hyd/2009-10, dated 27-11- 2009. Respondent No.3 has approached respondent No.1 with representations, upon which the latter permitted respondent No.2 to implement the fifth proposal of respondent No.3 in the entire Greater Hyderabad Municipal Corporation area, as pilot/guide in the State to save high value energy, duly entering into an agreement with respondent No.3 subject to obtaining Bank guarantee equivalent to three months (street lights saving amount) of electrical maintenance charges from the said respondent. It is this decision, which is assailed in these two Writ Petitions. At the hearing, Sri M.S.Ramachandra Rao, learned counsel for the petitioner in Writ Petition No.21593 of 2010 advanced the following submissions: 1) The interference by respondent No.1 is beyond the scope of the provisions of Section 679 of the Greater Hyderabad Municipal Corporation Act, 1955 (for short “the Act”); 2) The offer made by respondent No.3 is not in conformity with the EOI Notification, which only invited EOIs., for providing street lighting for a period of five years as against which respondent No.3 offered for 15 years and that; therefore, acceptance of the EOI of respondent No.3 amounts to selecting an agency on nomination basis; 3) Respondent No.2 having dropped all further proceedings in pursuance of the EOI Notification, respondent No.1 should not have awarded the contract in favour of respondent No.3; 4) The pilot project is supposed to be for a smaller area and the contract ought not to have been awarded to respondent No.3 under the garb of a pilot project; 5) The decision of respondent No.1 is influenced by extraneous considerations; and 6) Acceptance of offer for a period of 15 years is not in the interest of public as technology keeps changing and such a long duration contract will deprive the public of the changed technology. Sri R.Raghunandan, learned counsel for the petitioner in Writ Petition No.26009 of 2010 supported the submissions of Sri M.S.Ramachandra Rao. Sri C.V.Mohan Reddy, learned Senior Counsel appearing for respondent No.3, and the learned Government Pleader for Municipal Administration opposed the above submissions of the learned counsel for the petitioners. It was contended that both the petitioners do not have locus to file the Writ Petitions as the petitioner in Writ Petition No.21593 of 2010 has not even submitted the EOI, while the petitioner in Writ Petition No.26009 of 2010 has not questioned the decision of respondent No.2 in eliminating its offer while short listing the bidders; and that having lost out in the race, it has acquiesced in questioning the decision of respondent No.1 to award the contract in favour of respondent No.3. The learned counsel further submitted that having accepted the recommendation of the Technical Committee for opening the price bid of respondent No.3 and having proposed to refer the bid to the Consultant - M/s.Deloitte for feasibility report, respondent No.2 has suddenly taken the decision to drop all further proceedings, which clearly indicate that extraneous considerations have influenced the decision of respondent No.2; that the very proposal itself for installation of energy saving equipment for street lighting, having emanated from respondent No.1, its decision impugned in the Writ Petitions is traceable to the provisions of Section 679(E) of the Act and, therefore, the impugned G.O., cannot be said to be without jurisdiction or beyond the powers of respondent No.1; that a perusal of EOI Notification would show that respondent No.2 has no idea whatsoever on the technology to be used for automation energy saving and, therefore, it has invited the EOIs., for providing solution in that regard while indicating the period as five years; that having regard to the nature of the project, respondent No.3 offered the best feasible solution by taking 15 years as the period; and that, therefore, such EOI submitted by respondent No.3 cannot be termed as being contrary to the terms of the EOI Notification. Before traversing the submissions made by the learned counsel for the petitioners, it is appropriate to deal with the issue relating to the locus standi of the petitioners raised by the learned counsel for the respondents. The facts referred to above would show that the petitioner in Writ Petition No.21593 of 2010 has not responded to the EOI Notification and not submitted its EOI. In paragraph 6 of the affidavit filed in support of the Writ Petition it is averred that it has approached “the respondents” through representations dated 6-1-2007, 11-4-2007, 16-4-2007, 14-8- 2009, 18-11-2009, 20-11-2009, 21-11-2009, 17-3- 2010, 11-6-2010 and 17-6-2010 for giving it an opportunity to provide its energy savings products. It is not in dispute that the said representations were made either prior to the EOI Notification or during the consideration of the offer made by respondent No.3 and subsequent to the cancellation of the bid process by respondent No.2. Obviously, conscious of the fact that in strict legal sense this petitioner, who failed to submit its EOI, may not have locus, the learned counsel pleaded that once respondent No.2 decided to cancel the bid process, respondent Nos.1 and 2 should provide level playing field for all the intending suppliers by inviting fresh bids, which not only gives an opportunity to all the bidders, but also is in public interest. In my opinion, while examining the locus standi of a party, it is necessary to keep in view the nature of the dispute raised by it. In stricto sensu, the cases on hand do not relate to adversarial litigation because more of public interest is involved in the decision making by respondent Nos.1 and 2 than the personal or private interest of the petitioners. Even though these two Writ Petitions are not filed in public interest, the element of public interest is definitely involved in these cases because not only that huge public money is involved in the contract, but also the aspect relating to energy saving and environmental protection is involved. In recent times, the doctrine of locus standi is receiving liberal consideration, especially in cases filed in public interest and also involving the element of such public interest. (See: The decisions of the Supreme Court in S.P.Gupta and others Vs. President of India and others[1], S.C. Advocates-on- Record Association Vs. Union of India[2], Bangalore Medical Trust Vs. B.S.Muddappa[3], Chairman, Railway Board Vs. Chandrima Das[4], M.S.Jayaraj Vs. Commissioner of Excise[5], Dr.Kashinath G.Jalmi Vs. The Speaker[6] and a decision of the Division Bench of this Court i n Dr.Rao V.B.J. Chelikani Vs. Government of Andhra Pradesh[7]). Looking from this broader perspective, I am of the opinion, that the petitioner in Writ Petition No.21593 of 2010 cannot be non- suited by a narrow construction of the doctrine of locus standi. The petitioner in Writ Petition No.26009 of 2010 stands on a better footing, because, admittedly, it has filed its EOI even though it has failed to file its bid within the prescribed time. There can, therefore, be no doubt that this petitioner can be said to be an aggrieved party by the decision of respondent No.1, but for which fresh bids would have been invited giving opportunity to every one, including the petitioners, to submit their fresh EOIs. For the aforementioned reasons, the objection raised by the learned counsel for the respondents on the lack of locus standi of the petitioners is rejected. Let me now deal with the submissions of the learned counsel for the petitioners. As regards the first submission, Sri M.S.Ramachandra Rao, learned counsel for the petitioner in Writ Petition No.21593 of 2010, contended that Section 679 of the Act deals with the revisional powers of respondent No.1; that under sub-Section (1) thereof respondent No.1 is empowered to examine the correctness, legality, propriety or regularity of any proceeding or order passed by the Commissioner or any officer subordinate to him, and pass such orders with reference thereto as it thinks fit; and that as the decision to cancel the bid process was taken by the Commissioner in his capacity as Special Officer appointed under Section 70-G of the Act on behalf of the Corporation and not in his capacity as the Commissioner, this sub-section has no application. The learned counsel further submitted that respondent No.1 can interfere in exercise of its revisional powers under Clause (a) of sub-Section (2) of Section 679 of the Act with the decision taken by the Corporation only if it is of the opinion that the execution of any resolution or order passed by the Corporation or doing of any act which is about to be done or is being done by or on behalf of the Corporation is in contravention of or in excess of powers conferred by the Act or of any law for the time being in force or is likely to lead to a breach of peace. The learned counsel contended that in the first place it is not the pleaded case of the respondents that the resolution or order passed by the Corporation is in contravention of or in excess of the powers conferred by the Act or of any law for the time being in force or that the same is likely to lead to a breach of peace. The learned counsel further contended that even in such cases, the power of the Government is confined to suspending the execution of such resolution or order or prohibit the doing of any such act; and that it has no power whatsoever to issue a positive directive as it has done in the present case to accept the tender of respondent No.3. The learned counsel also contended that even though respondent No.1 has power to give directions under Section 679-E of the Act, the impugned order passed by it is not traceable to the said power as it is not even the pleaded case of respondent No.1 that it has exercised the said power under the said provision; and that, on the contrary, in the counter-affidavit it is specifically pleaded that it has exercised the power under Section 679 of the Act. Even otherwise, contends the learned counsel, by directing respondent No.2 to accept the tender of respondent No.3, no purpose under the Act will be carried out and as such the said provision is not attracted. Sri C.V.Mohan Reddy, learned Senior Counsel appearing for respondent No.3, and also the learned Government Pleader for Municipal Administration appearing for respondent Nos.1 and 2, submitted that the proposal for introducing modern methods in street lighting has emanated from respondent No.1 and it is only at its initiative that the EOI Notification was issued by respondent No.2; and that, therefore, the issue needs to be examined from a broader perspective where in order to save energy and expenditure on consumption of electricity, which undoubtedly is one of the purposes of the Act, the proposals were mooted by respondent No.1, in pursuance of which respondent No.2 has initiated the bid process. Therefore, the learned counsel contend, the decision taken by respondent No.1 is traceable to the provisions of Section 679-E of the Act. At the outset, it needs to be pointed out that in the counter-affidavit filed by respondent No.1 it has sought to justify its interference by relying on Section 679 of the Act. But the law is well settled that mere reliance on a wrong provision does not vitiate the decision so long as the power of decision making is conferred on the authority concerned. After examining the case law on this aspect, the Supreme Court, in a recent judgment in Mohd. Shahabuddin Vs. State of Bihar[8], made a lucid exposition of this proposition as under: “207. In N. Mani Vs. Sangeetha Theatre - (2004) 12 SCC 278 - a three judge Bench of this Court succinctly observed as follows: "9. It is well settled that if an authority has a power under the law merely because while exercising that power the source of power is not specifically referred to or a reference is made to a wrong provision of law, that by itself does not vitiate the exercise of power so long as the power does exist and can be traced to a source available in law." 208. It is a well-established law that when an authority passes an order which is within its competence, it cannot fail merely because it purports to be made under a wrong provision if it can be shown to be within its power under any other provision or rule, and the validity of such impugned order must be judged on a consideration of its substance and not its form. The principle is that we must ascribe the act of a public servant to an actual existing authority under which it would have validity rather than to one under which it would be void. In such cases, this Court will always rely upon Section 114 Illustration (e) of the Evidence Act to draw a statutory presumption that the official acts are regularly performed and if satisfied that the action in question is traceable to a statutory power, the courts will uphold such State action. [Reference in this regard may be made to the decisions of this Court in P. Balakotaiah Vs. Union of India, AIR 1958 SC 232; Lekhraj Sathramdas Lalvani Vs. Custodian cum- Managing Officer, (1966) 1 SCR 120; Peerless General Finance and Investment Co. Ltd. Vs. Reserve Bank of India, (1992) 2 SCC 343; and B.S.E. Brokers' Forum Vs. SEBI, (2001) 3 SCC 482]” The files placed before this Court by the learned Government Pleader and the learned Standing Counsel for respondent No.2 are perused. They reveal that a Company, by name, Real Energy, addressed letter, dated 15-2-2007, to the Honourable Chief Minister, wherein it has stated that they have acquired expertise in installing energy saving system for street lighting on ESCO basis; that they were successful bidders for Vijayawada Municipal Corporation, for which they have implemented the Pilot Project and achieved 45% savings in energy; that the said Project was inaugurated by the Chief Minister on 10-2-2007; and that they are now implementing the said Project in the entire city. It was further stated that great potential exists for energy savings for street lighting of Hyderabad Municipal Corporation and a sum of Rs.1440/- lakhs can be saved to the Corporation. A request was, therefore, made to give it an opportunity to provide the Project on Pilot basis in some part of the city as an ESCO Project. This representation was forwarded by the Chief Minister’s office to the Principal Secretary to the Government, Municipal Administration and Urban Development Department, vide: letter No.7387/GEN/2007, dated 1-3-2007, of the Special Secretary to the Chief Minister. The office of the Principal Secretary to Government, in turn, issued Memo No.4837/F.2/2007-1, dated 9-3-2007, through which the representation was forwarded to the Commissioner of respondent No.2 with a request to examine and send remarks to the Government immediately. Considering the above mentioned two proceedings, a note was submitted to the Commissioner of respondent No.2 on 23-3-2007. Further decision to issue EOI Notification inviting EOIs., was taken up on the basis of the said Note File. From the above material I find merit in the submission of the learned counsel for the respondents that the proposal for installation of energy saving system for street lights in Greater Hyderabad Municipal Corporation limits has emanated from respondent No.1 and respondent No.2 was made to initiate the process of inviting EOIs from the interested agencies. On the Note File, AC (Projects) has directed that the Government may be informed of the schedule worked out by respondent No.2 to finalize the bids. This direction reinforces the submission of the learned counsel for the respondents. Keeping this background in view, the rival submissions of the learned counsel require to be examined. As contended by the learned counsel for the petitioners, the provisions of Section 679 are not attracted. Even though respondent No.1 has taken the stand in the counter-affidavit that it is conferred with the power to take the impugned decision under Section 679, at the hearing this stand is not pursued. On the contrary, the learned Senior Counsel as well as the learned Government Pleader for Municipal Administration have submitted that the impugned decision taken by respondent No.1 is traceable to Section 679-E of the Act. Under this provision, the Government can step in on any aspect, which it may consider necessary for carrying out the purposes of the Act and give such directions, as are not inconsistent with the provisions of the Act and the Rules made thereunder, to the Corporation. Whether the issue relating to street lighting is a purpose of the Act to enable respondent No.1 to intervene under Section 679-E of the Act needs to be examined with reference to the relevant provisions of the Act. The Act contains as many as 23 Chapters and 687 sections. The Corporation, which is a body corporate, with right to sue and liable to be sued under Section 3(2) of the Act, is charged with multifarious duties, such as providing civic amenities like watering, scavenging and cleaning of all public streets and places in the City; collection, removal, treatment and disposal of the sewage, offensive matter and rubbish; construction of drains and drainage works after collecting the prescribed fee fixed by the Commissioner; maintenance and cleaning of drains and drainage works; lighting of public buildings vested in the Corporation, public streets and municipal markets; maintenance of public monuments and open spaces and other property vested in the Corporation; naming or numbering of streets and of public places etc. (See: Section 112 of the Act). Undoubtedly, therefore, street lighting and its proper maintenance is one of the purposes of the Act and in course of making provision for street lighting and its maintenance, public interest demands that it should be provided by using modern technology and saving energy and revenue to the public exchequer. So much so, respondent No.1, which is conferred with the power to give directions in this regard, shall be free to interfere and give appropriate directions to achieve the above object. Examining from this perspective, I find merit in the submission of the learned counsel for the respondents that interference by respondent No.1 with the decision of respondent No.2 in the matter of finalizing the bids is definitely traceable to the power under Section 679-E of the Act. The next questions that need to be addressed are: (1) Whether respondent No.2 is justified in cancelling the entire bid process? and; (2) Whether respondent No.1 is justified in directing respondent No.2 to accept the 5th proposal submitted by respondent No.3? A perusal of the records would reveal that after respondent No.3 submitted its EOI, consequent on its short listing by the Technical Committee, business talks took place in the office of the Additional Commissioner