1 IN THE HIGH COURT OF JUDICATURE AT BOMBAY CIVIL APPELLATE JURISDICTION WRIT PETITION NO.2394 OF 2008 M/s. Atlas Transport Company .. Petitioner Through its Partner Shri Syed Zakir Ali, s/o. Syed Ibrahim Ali, Aged 42 years, Occupation: Business, Having its business at Hasham Sheth, Market, Deepak Chowk, Akola (Maharashtra State) v/s. 1. State of Maharashtra, Through Principal Secretary, Department of Food, Civil Supply, and Consumer Protection, Mantralaya, Mumbai 400 032. 2. The Deputy Secretary, Department of Food, Civil Supply and Consumer Protection, Manatralaya, Mumbai. 3. Anil Kumar Sharma Partner of M/s. Krishnakumar Gokulchand, Residing at New Radha Kishan Plots, Akola. ALONGWITH WRIT PETITION NO.2414 OF 2008 2 M/s. Atlas Transport Company .. Petitioner Through its Partner Shri Syed Zakir Ali, s/o. Syed Ibrahim Ali, Aged 42 years, Occupation: Business, Having its business at Hasham Sheth, Market, Deepak Chowk, Akola (Maharashtra State) v/s. 1. State of Maharashtra, Through Principal Secretary, Department of Food, Civil Supply, and Consumer Protection, Mantralaya, Mumbai 400 032. 2. The Deputy Secretary, Department of Food, Civil Supply and Consumer Protection, Manatralaya, Mumbai. 3. Anil Kumar Sharma Partner of M/s. Krishnakumar Gokulchand, Residing at New Radha Kishan Plots, Akola. 4. Vishal Vitthal Kakade .. Respondents Partner of M/s. Raj Transport, Latur, Residing at Siddheshwar Nagar, Kurdwadi, Dist. Solapur. Mr. U.P. Warunjikar for the Petitioner. Mr. C.U. Singh, senior advocate with Mr. R.M. Patne, Assistant Government Pleader for the State. 3 Mr. P.C. Madkholkar for the respondent No.3. Mr. T.N. Subramaniam i/by Ms. Deepa Sawant for respondent No.4 in Writ Petition No.2414 of 2008. CORAM : SWATANTER KUMAR , C.J. & V.M. KANADE, J. DATE OF RESERVING THE JUDGMENT : 4TH JULY, 2008 DATE OF PRONOUNCING THE JUDGMENT : 31ST JULY, 2008 JUDGMENT (PER SWATANTER KUMAR, C.J.) The petitioner-partnership firm has stated that it is carrying on the business of transport contractors and amongst others it operates in the field of Government goods transport contracts where it has been working since 1992. Even in the year 2004 to 2006 it was awarded certain contracts which were successfully completed. These contracts mainly relate to transportation of food grains under the Public Distribution System. For awarding these contracts, the Government invites tenders and the successful lowest bidder is given the contract. Tenders for the period 2003-2006 were invited by the Government and the petitioner claimed that he was found to be the lowest bidder of transporting food grains in Public Distribution 4 Scheme for Akola District. However, the said contract was not awarded to the petitioner and notice was issued to him for black- listing. The petitioner then took recourse to process of law and even had to file a contempt petition where ultimately, he was awarded the contract and he successfully completed the said work. In various Government departments, extensions were being granted to the contract period in an arbitrary manner without inviting tenders and the petitioner challenged the Government Resolutions and actions which were set aside and due tenders were ordered to be invited. Respondent No.3 is also a competitor in the same field. The petitioner earlier has filed the writ petition in the Nagpur Bench of this Court as well praying for quashing of the order passed by the Minister dated 12th March, 2004. On 8th May, 2006, the State of Maharashtra issued a Government resolution, by virtue of which extension of transport contracts for next three years was given without calling for tenders with reference to 29 districts in the State of Maharashtra for transportation of food grains. This resolution was challenged by the petitioner as well as various other affected contractors in writ petition 5 No.4413 of 2006 and other companion writ petitions. All of these were disposed of by the order of the court dated 28th July, 2006. These were primarily disposed of on the basis of the statement of the counsel for the State that they were initiating fresh process in 28 districts and new tenders were invited for the period 2006-2009. Fresh tenders were invited on 14th August, 2006 for the four districts. The petitioner had submitted tenders in 4 districts and his bid was lowest in Buldhana, Jalgaon and Vasim districts and was second lowest bidder in Akola district. The Additional Collector, Buldhana is stated to have opened the tender and other bidders could not qualify for want of solvency and bank guarantee except for the petitioner whose bids were found complete in all respects. Despite these tenders, arbitrary extensions were given in district Buldhana. In 13 districts, the bids given were exorbitant i.e. 200 to 400 percent above the scheduled rate. Thereafter, a writ petition was filed being writ petition No.4911 of 2006 in which interim order was granted. Still in another writ petition, the technical requirements with regard to solvency certificate and bank guarantee with the bid has been challenged and 6 effect of the same was stayed until further orders by order of the court dated 7.11.2006. Certain objections were raised with regard to the bid of the petitioner which was looked into by the Additional Collector, Buldhana and finally on 16.12.2006, Additional Collector, Buldhana did not accept any objection and declared the petitioner as successful bidder. The petitioner even filed an application for intervention in earlier writ petition No.4911 of 2006 to show that he was the lowest bidder in relation to districts Buldhana and Jalgaon and that the contract should be awarded to him. It is averred in the petition that vide message dated 14.11.2006, Government had communicated to various districts as follows: FAX MESSAGE To, The Additional Collector, Raigarh, Pune, Satara, Nashik, Jalgaon, Dhule, Nandurbad, Ahmednagar, Nanded, Jalna, Beed, Latur, Osmanabad, Amravati, Yavatmal and Wardha. No : Contract 1006/1926/Pra Kra 613/Civil Supply 16A, Mantralaya Extension, Mumbai 7 400032. Date : 14th November, 2006. Subject : Regarding the appointment of under the Public Distribution System for the year 2006-2009. For ascertaining the finalization of foodgrains transportation contract in your district, the process of the same having been started since 17.10.2006, the tenders have been opened on 08.11.2006/13.11.2006. 2. M/s. Shri Govindkrupa Goods Carrier has filed Writ Petition No.5414/2006, challenging the Government Resolution dated 05.08.2006 in respect of Condition no.16,17,18 in the same, before the High Court, Bench at Nagpur. In this Writ Petition, The H'ble High Court vide its Order dated 07.11.2006- by interim Order- has granted stay to condition no.16 (Revenue Solvency Certificate and Bank Guarantee) until further order. Following the interim order of The H'ble High Court, it is necessary to complete the tender proceedings and to give relaxation to condition no.16 to all the bidders. Therefore, if those tenderers in your district have been only disqualified due to non fulfilment of condition no.16 (Revenue Solvency Certificate and Bank Guarantee), then all such Tenders be declared as qualified in presence of all the tenderers, and their rate envelopes should be opened, and ultimately out of them the tender of minimumrate 8 should be held as valid. And the report of this execution of action must be produced immediately to the government. Sd/- (G.J. Taharabadkar) Under Secretary, Dept. of food, civil supplies & consumer protection Copy to All Deputy Commissioner (Supply)” 2. The order of the Collector declaring the Petitioner as successful bidder for Jalgaon District was challenged by M/s.Raj Transport, Latur, the second lowest bidder, in Writ Petition No.44 of 2007. However, the said order was not interfered by the Court by the order dated 30th March 2007 which was challenged before the Supreme Court and the same is still pending. The enquiries were made about the solvency certificate submitted by the Petitioner even in Buldhana District. The stay granted by the High Court in Writ Petition No.4911 of 2006 was vacated by the order dated 19th December 2006. Though the stay was vacated, the corrective steps 9 in furtherance thereto were not taken. Though the Petitioner was not a party to the orders passed by the Court dated 4th April 2007, he challenged the same before the Supreme Court and also took up the plea in furtherance to the order of the High Court that the Government had not framed any policy and even the transition arrangements were not being implemented in its true letter and spirit. This in fact resulted in awarding of contract to the Petitioner. The Petitioner claimed to have invested huge sums of money after having been found the lowest bidder in these Districts. The Petitioner refers to various other litigations which were pending before different Benches of the Bombay High Court and were either instituted by Respondent No.3 or were between different transporters questioning various awards of transportation contracts. 3. Vide letter dated 25th May 2007, Respondent No.2 had addressed to all the concerned authorities directing them to start taking necessary steps for making transitory arrangements and the said direction was given in furtherance to the complaints received 10 against the Petitioner. However, Jalgaon and Buldhana Districts were excluded from the scope of that letter. On or about 25th May 2007, the Petitioner received the order passed by Respondent No.2 addressed to the Additional Collector at Jalgaon and Buldhana holding that the final lowest qualified tender of the Petitioner was set aside on the ground that solvency certificate submitted by the Petitioner for District of Buldhana has been obtained by false affidavit. This letter is annexed to the Writ Petition as Exhibit “L”. Another order was also passed on the same day vide Exhibit “M” stating that the Petitioner should not be awarded any contract till further orders further directing the Additional Chief Secretary of Revenue and Forest Department to file a criminal complaint against the Petitioner on the same cause of action. The Petitioner on 29th May 2007 made a representation to the Respondents complaining that these orders had been passed without giving an opportunity and there was no justification for passing such orders and they were greatly prejudicial to the interest of the Petitioner. The Petitioner did not receive any reply to the said representation. On the contrary, a letter was issued 11 by the State of Maharashtra on 16th June 2007 regarding procedure to be adopted for black-listing the Petitioner in terms of Circular dated 13th August 1997. According to the Petitioner, the letter dated 16th June 2007 was in fact for black-listing the Petitioner from the field. The order was passed at the behest and on initiation of the proposal by the Secretary of the Administrative Department. As such, even the Petitioner' s right of appeal against the said order was taken away as under the existing Circular, the appeal lies to the administrative Secretary. The letter dated 25th May 2007 was challenged by the Petitioner by filing Writ Petition No. 4348 of 2007 before this Court and vide order dated 6th June 2007 it was directed that contract to third party may not be assigned. Respondent Nos.3 and 4 filed an application for intervention in the said Writ Petition. The said Writ Petition was permitted to be withdrawn vide order dated 2nd July 2007. 4. The petitioner has still filed another writ petition being Writ Petition No.4348 of 2007 before Aurangabad Bench of this court. This writ petition, in terms of the order of the Supreme Court, was 12 ordered to be transferred to the this court and on transfer was registered as writ petition No.3868 of 2007. In this writ petition while averring the same facts and the historical background of the case the petitioner emphasised that the rates quoted by the petitioner are very competitive and, in fact, the other competitor' s rates are so high that the Government has to face loss of nearly Rs.20 lakhs per month approximately in the districts of Jalgaon and Buldhana. It is also averred in this writ petition that in relation to Buldhana, respondent No.3 had obtained exparte interim orders in Writ Petition No.6482 of 2006 and is continuing the transportation work at his old prevailing rates (56% above GSR) whereas for the current tender, he himself adopted 24.99% rates. In this writ petition, the challenge was again to the letter dated 25th May, 2007 vide which it was directed that the work of transportation of food grains under the Public Distribution System should not be awarded to the petitioner in any district coming under the Department of Food and Civil Supplies and Consumer Protection. The Deputy Secretary, Department of Food, Civil supplies and Consumer Protection also wrote to the Additional Collector, 13 Jalgaon and Buldhana that in view of the solvency certificate having been obtained by the petitioner on false pretext, the qualified tender of the petitioner is rejected. Vide letter dated 16th June, 2007, the Deputy Secretary of the Department of Food Civil Supplies and Consumer Protection wrote to the Additional Collector, Pune District, Pune stating that the qualified tender of the petitioner has been canceled and in addition to that also directed as under: “......................... b) No work relating to food grains and other, coming under PDS, related with Food, Civil Supplies and Consumer Protection's, be given to Atlas Transport Company, Akola in any district, till further orders. If such work has been given to this company in any district, then after giving stay to this till further order from the State, such transportation arrangement be made as per the options given in the Government' s Letter dated 17.5.2007 and 25.5.2007. 3. After giving overall thought to this matter, the State Government has taken a decision to put M/s. Atlas Transport Company, Akola in black list on the basis of complaints against them, available reports, as well as documents. Guidelines for black listing are mentioned in the State Government's Industries, Energy and Labour Department Circular dated 14 13.8.1997. As per that, it is expected to conduct further proceedings. In that respect, the State Government has appointed you to conduct further proceedings. It is requested that as per that immediate action be taken in this matter.” 5. Vide order dated 16th June 2007 the Court granted limited stay. However, liberties were given to the State to carry on with the enquiry. The order reads as under :- “1. Heard advocate for the petitioner as well as counsel for respondents concerned. 2. Rule. All respondents waive service. 3. Interim relief is granted in terms of prayer clause (C) to the extent that operation and implementation of letter dated 25.5.2007 issued under No.Contract-1007/432/P.K. 729/N.P. 16-A, stands stayed with clarification that the investigation directed by the concerned authority against the petitioner shall continue. However, no coercive steps shall be taken without further orders from this court. It is clarified that composite letter of the same date, i.e. 25.5.2007 cancelling the petitioner's tender however, is not stayed. So far as letter dated 16.6.2007 is concerned, the operation and implementation of the said letter stands stayed pending the petition 15 with further clarification that enquiry/investigation or any steps, which are being proposed to be taken against the petitioner with regard to the said allegations for black-listing shall be continued, if the State desires and this order shall not come in the way of the State authorities in that regard. 4. It is further clarified that this order shall not affect in any manner the contract dated 2.6.2007 entered into by respondent No.4 in this regard. 5. At this stage, Mr. Aney, counsel for the State seeks clarification with regard to the conduct of the enquiry in respect of proposal of black listing of the petitioner and submits that they propose to issue corrigendum in that regard. They shall be at liberty to do so. 6. It is further clarified that the petitioner has also arrayed respondent No.3, whose cause of action individually arises from District Buldhana, which falls under the jurisdiction of Nagpur Bench of this court and therefore, we propose not to entertain the petition to that extent. However, the petitioner to pay cost of this petition to respondent No.3. The petitioner shall be at liberty to take action, if any, against respondent No.3 within the court of his jurisdiction. 7. In view of the above order being passed, civil application No.6176 of 2007 stands disposed of. 16 8. Parties to act on the copy of this order duly authenticated by the Sheistedar of this court. Sd/- Sd/- (P.R. Borkar,J) (P.V. Kakade,J.)” 6. Even before the Aurangabad Bench of this Court, Respondent No.3 raised question of jurisdiction. Against the order dated 6th December 2007, the Petitioner had approached the Supreme Court and the Supreme Court passed the following order :- “The order passed in the Civil Appeal arising out of SLP (C) No. 17052 of 2007 shall govern this case also. It is open to the parties to move the Hon'ble Chief Justice of the Bombay High Court to place all the connected matters before one Bench for convenience of the parties. The special leave petition is disposed of accordingly.” 7. Resultantly, this Writ Petition along with other Writ Petition has been heard by the Bench at Bombay. 17 8. The Petitioner, thus, challenges the issuance and consequences of the letters dated 25th May 2007 and 16th June, 2006 in the present Writ Petition as well as the correctness of the communication dated 6th September 2007. The Petitioner states that the Respondents having realized their mistake, issued letter dated 6th September, 2007 correcting their errors to some extent. The relevant part of the letter reads as under :- “Considering the above facts, the Hon'ble High Court, Aurangabad bench has not restricted the Government's proposed action against M/s Atlas Transport Company, Akola, although the Hon'ble High Court, Aurangabad bench made it clear that there being no restriction to the government to make corrections in the matter mentioned in the government's letter dated 16/06/2007, they are at liberty to do so. Hence as per the order of the Hon'ble High Court, Aurangabad bench, dated 10/08/2007, the sentence of paras 1 to 3 of the clause No 3 of the government's letter dated 16/06/2007 being changed, it should be read as under. “The action about the investigation to put M/s Atlas Transport Company, Akola in Black List, on the basis of the complaints against them, available reports as well as other documents, should be done 18 as per the governments circular of Industries, Energy and Labour Department dated 13/08/1997.” 4. Considering the above background, immediate action be taken in the matter of M/s Atlas Transport Company, Akola.” As is evident from the language of the letter, which ultimately is issued in furtherance to the letter dated 16th June 2007 that the earlier order dated 16th June, 2007 stand modified by this letter. 9. Dissatisfied by action of the respondent, the petitioner had filed two different writ petitions in relation to transactions at Jalgaon and Buldhana before Aurangabad Bench and in relation to transaction at Akola at Nagpur Bench, as they fall within the territorial jurisdiction of those Benches. Reply affidavits have been filed in these writ petitions separately by respondent No.4 M/s. Raj Transport Company and respondent Nos.1 and 2. The official respondents placed on record copy of the letter dated 6th September, 2007 without referring to or dealing with the facts by affidavit dated 11th October, 2007. Thereafter an affidavit dated 30th November 2007 was also filed 19 wherein it was not disputed that the Petitioner was successful lowest bidder and was awarded the contract of transport of food grains for the period 2003-2006. Fresh tenders were invited for 2006-2009 and he was one of the bidders. The solvency certificate obtained by the Petitioner Company was found to be false and, therefore, the tender was rejected. Preliminary enquiry was conducted by the Divisional Commissioner, Amravati Division and report was submitted to the Principal Secretary, Revenue vide letter dated 25th April 2007 where after the letters in question were issued. The Court had granted interim stay with the clarification that investigations directed by the concerned authority will continue. However, no coercive steps would be taken without the leave of the Court. The proceedings for black- listing had been continued. According to the Respondents, the enquiry in respect of institution of action of black-listing of the Petitioner for various defalcation and irregularities committed by it is in progress by the Additional Collector, Pune and the Petitioner would be given sufficient opportunity and final order would be passed with the leave of the Court in terms of the Order dated 10th August 2007. 20 Thus, they pray for the dismissal of the Writ Petition. 10. Besides raising his own grievance that he was wrongfully excluded in Jalgaon district, respondent No.4 in his affidavit-in-reply has also averred that the cancellation of contract of the work awarded to the petitioner is correct and justified. The documents submitted by the petitioner were not genuine and the respondents had raised various objections. There was violation of condition Nos.14,17 and 27 of the tender but these were incorrectly ignored by the Additional Collector, Jalgaon. They also questioned the very eligibility of the petitioner to bid for contract. 11. It is substantially averred in the affidavit filed in Writ Petition No.3868 of 2007 that the Order dated 25th May 2007 was an interim order passed on prima facie satisfaction and keeping in view of the seriousness of the default of the Petitioner, it will be not fair and in the interest of the State to award contract to him. Government had not black-listed him so far and as stated due proceedings will be taken 21 against him. 12. The facts are disputed and various controversies have been raised in the present writ petition with regard to the eligibility of the various parties who participated in the tender process and also regarding the action of the respondents canceling the tenders in favour of the petitioner as well as ignoring respondent No.3 in regard to certain contracts. We do not propose to go into the disputed question of facts which can hardly be determined by this court in writ jurisdiction. The main contention raised before us on behalf of the petitioner is that the orders contained in letters dated 25th May, 2007, 16th June, 2007 and 6th September, 2007 have been passed in violation of principles of natural justice and the procedure contemplated by the respondents in terms of their Circular No. SPO- 1097/33926/GR-2300/Ind-6 dated 13th August, 1997. This infirmity shall vitiate the entire action of the respondents and the petitioner, thus, would be entitled to be considered for all tenders for all districts without any stigma and the contracts where the petitioner was 22 successful lowest bidder should be awarded to him immediately. The argument on behalf of the respondents is that the department has already initiated proper proceedings in accordance with the prescribed procedure under the Government circular and in consonance with the principles of natural justice as is clear vide letter dated 6th September, 2007 and the enquiry is in progress but the petitioner is not cooperating and is delaying the said proceedings intentionally while on the other hand, he is trying to take disadvantage of the proceedings pending before the court. According to them, the petitioner had obtained the solvency certificate on false documents and has obtained the contracts by misrepresentation, and therefore, in equity or otherwise, he cannot claim any benefit or vested rights in the awarded contracts. In this regard, reference has also been made to the letter dated 27th March, 2008 written by the counsel for the petitioner to Additional Collector, Pune indicating that the petitions are pending before the High Court and in view of the pendency of the writ petition before High Court, it will be appropriate that orders are not passed by the authorities to precipitate the matters further and in a 23 way should defer the matters. From this letter, it is obvious that show- cause notice dated 14th March, 2008 has already been issued by the Additional Collector, Pune to the petitioner. The petitioner did not reply the said show-cause notice but during the pendency of this petition, we had observed that the respondents, if desired, should