IN THE HON'BLE HIGH COURT OF CHHATISGARH AT BILASPUR WRIT PETITION (Cl No. PETITIONER \^-\^1 2010 RESPONDENTS ^^ ^' ^y^v ^v' A M/s. Laxmi Construction Company, through: its parta-ier Laxmi Narayan Agrawal S/o late Shri Tarachand Agrawal, aged 46 years, Jawahar Market, Ambikapur, District Sarguja (C.G.) VERSUS ^' 5t«b- ^ ^E®of Chhattisgarh through Secretary Panchayat 8s Rural Development D.K.S. Bhawan, Mantralaya, Raipur (C.G.) 2. The Collector •eSS& Chairman, ^i~ Project Implementation Unit Pradhan Mantri Gram. Sadak Yojana, Ambikapur District Sarguja (C.G.) 3. Chief Executive Officer Chhattisgarh Rural Road Development Authority Civil Lines, Raipur District Raipur (C.G.) 4. Chief Engineer Pradhan MantEa. Gram Sadak Yojana Chhattisgarh Rural Road Development Agency Civil Lines Raipur District Raipur (C.G.) ^ 5. Superintending Engineer cum District Project Implementation Officer, Pradhan Mantri Grarn Sadak Yojana, Ambikapur District Sarguja (C.G.) PETI'HONJLNDER ARTICLE 226 OF CONSTITUTION OF INDIA FOR ISSUE OF MANDAMUS. CERCIORARY PROHIBITION ETC. OR ANY OTHER APPROPRIATE WRIT DIRECTION OR ORDER ~> '% HIGH COURT OF CHHATTISGARH. BILASPUR Division Bench: Hon'ble Shri Sunil Kumar Sinha &. Hon'ble Shri Radhe Shyaffl Sharina, J J i^ ». - l^ - Writ Fetition (C| No. 1212 of2010 M/s. Laxmi Construction Company Vs. State of Chhattisgarh 85 Others Judgnient For consideration Sd/- Sunil Kumar Sinha Judge HON'BLE SHRI JUSTICE RADHE SHYAM SHARMA ^ <^.^a-€_ Sd/- R.S. Sharma Judge Post for Judgment :-©/09/2011 Sd/- Sunil KumarSinha Judge i;"vi:ir" iiliil X. A^^ HIGH COURT OF CHHATTISGARH, BILASPUR Division Bench: Hon'ble Shri Sunil Kuniar Sinha & Hon'ble Shri Radhe Shyani Sharnia, J J PETITIONER Writ Petition tCt No. 1212 of 2010 M/s. Laxmi Constn-iction Company, through: its partner Laxmi Narayan Agrawal S/o late Shri Tarachand Agrawal, aged 46 years, Jawatiat' Market, Ambikapur, District Sarguja (C.G.) RESPONDENTS Versus State of Chhattisgarh through Secretary Panchayat & Rural Development D.K.S. Bhawan, Mantralaya, Raipur (C.G.) The Coltector and Chairman, Project Implementation Unit Pradhan Mantri Gram Sadak Yojana, Ambikapur District Sarguja (C.G.) Chlef Executive Officer Chhattisgarh Rural Road Development Authority Civil Lines, Raipur Distnct Raipur (C.G.) Chief Engineer Pradhan Mantri Gram Sadak Yojana Chhattisgarh Rural Road Development Agency Civil Lines Raipur District Raipur (C.G.) Superintending Engineer cum District Project Implementation Officer, Pradhan Mantri Gram Sadak Yojana, Ambikapur District Barguja (C.O.) (Writ Petitions under Article 226 of the Constitution of India) Appearance: Mr. Rahul Jha, Advbcate for the petitioner. Mr. U.N.S. Deo, Govt. Advocate for the respondents. :\ Writ Petition <C) No. 1212 of2010 JUDGMENT FoUowing judgment of the Court was delivered by Sunil Kuinar Sinha, J. (1) Chhattisgarh Rural Road Development Authority, respondent No.3 herein, took a policy decision for registration of the Contractors by fixing certain norms, and circular/order No. 785/1424/RC-3/OT^TOf^3T/2006 dated 27/1/06 (Annexure-P/6) was issued. Para-3 ofthe circular reads as under:- '3. ^; '^iPFr 31^? RMIJ'HI'; t :- ^RtTO 31^ ^c^r? ^ •WT ^ '•m ^ ^FTT ^/'cpT'ft ^ ^ fei^r ^ ^ ^ iTpfRR/cCTFft ^ 'M'-cild* cf)T ST^ T1HT ^f ?t7TT I" (impugned condition) (2) The petitioner is aggrieved by the last part of Para-3 which says that in case of a Firm or Company seeking registration , the experience of the Partners of the Firm/Directors of the company woiild not be considered as the experience of the Firm/Company. ' \-v-r'- - ^ vS:' ZS~'ysSSV 'v^vS'S&iiSs- sw^'" s^ ^ Tfufll^ q5t ^1aft 1qN ?4 4 1^ft ift i?cp ^ ^ ^SW f^pT wf cpr ^f sftq^ (^tte ^. ^) ^R^/^-^fcrar q?r T?cP STrpET if ^lf f^ TT^ ?pi4 ^ cfpyn (^S %^") T^r-5 5.00 1.67 ^-4 2.50 0.83 ^-3 1.00 0.33 Writ Petition (C) No. 1212 of2010 '\^ (3) Mr. Rahul Jha, leamed counsel appearing on behair petitioner, argued that the impugned condition in the circular dated 27.1.2006 is impracticable, arbitrary, unreasonable and contrary to the judgment of the Supreme Court which is Law of the land, therefore, the same may be struck down and the respondents be directed to consider the application of the petitioner for its registration in respective category (S-5) and impugned communication dated 24.9.2009 (Annexure-P/10) be also quashed. He relied on the decision of New Horizons Limited and Another-Vs- Union oflndia and Others. 11995) 1 SCC 478. (4) On the other hand, Mr. U.N.S. Deo, learned Govt. Advocate appearing on behalf &f the respondents, opposed these arguruents. (5) We have heard learned counsel for the parties at length and have also perused the records of the writ petition. (6) In New Horizons (supra), the Supreme Court deliberating on joint venture and partnership observed that "It is possible to visualize a situation where a person having past experience has entered into a partnership and the tender has been submitted in the name of the partnership firm which may not have any past experience in its own name. That does not mean that the earlier experience of one of the partners of the firm cannot be taken into consideration. Similarly, a company incorporated under the Companies Act having past experience may undergo reorganization as a result of merger or amalgamation with another "1<! ';"——. r; srm ps^sn-qua sq o^ ST oqM uosjsd aip jo siBpuapa-tO atp ^noqB jissuiiq ajnssa o^ S3{3as aq paui-iojjsd sq 0'} 8i ^JOAV amos -tspunajaqAV ^OBJ^UOQ B o^m sjs^us LreuisssuTsnq B usqAV 'uBrasssmsnq ^uspnjd B jo ^urodpLre^s ai-p 111033: psma^smcCT aq 05 3A^q ^usuinoop v qons jo suopipuoo pire suija^ aqj^ "uopoBSirej^ {Bpjauiuioo B joj sjajjo gui^TAUT ^uamnoop B ui paure^uoo si ^uaraaJinbaj pres 3ip V3V^ puim ui aiuoq sq o^ saq ^i aouauadxa §uipjB§aj ^usuis-tinbaj: aip Suuapisuoo snqAV 'PIS3 3VR vl} sousuadxs SuiA'eq suosjad seq ^t L[§noq^ aureu S^T UT sousuadxa SABq ^ou saop ^.i asnBosq ^UBdmoo MSU ai.p. jo JSJJQ aq: 3jou§ipue IT Tppa suosjad paoHaiaadxa aA^q ^ou s®ep^i qgnoip sKreu s^; HI aaHausdxa sBq ^i asnBoaq ps-rspisuoo aq ^snui ^CiJBdiaoo pui§uo aip JO J3JJO 3V[^ ^BLp UB3IU ^ou saop 33U3U3dx3 SuipjBgaj ^U3ui3jinba-[ aqj, •souausdxa q^TM suosjad S?[OB{ aureu S^T ui aousuadxa §UIABL[ ^Ciredmoo IBUI§UO aip aiiqM aareu s^i UT sousuadxs ou saq 'ppy aq^ m aousuadxa LpiA suosjad SuiABq qgnoq^ 'A'iredmoo ASU 3vll 'V §tHAB3{JsyB AuBdmoo MSU B UUOJ A'UBdu.EOO 3:Ep jo sssuisnq aq^ ja ppg j©[noc|..iEd.B jaqjB -Suiqoo]: suosjsd puB AiBduioo v ui ^nds B aq Atem ajaq^ ApsjaAuoo -sureu s^i ui saususdxa 3ABi[ ^ou saop qoiqAv Aireduioo paziLregjosj aip jo sureu aq} ui psnimqns uasq s^q pire sureu s^i m ps^iiaqns ussq ^ou s^q jspus^ aq^ asn^osq uopBjapisuoo O^UT ua?[B^ aq ^OUUBO Aireduioo paziireSjosj avp. O^UT psgjara steq qoiqA ^ireduioo sip jo aousuadxs avff 'yevff aoHsusdxs ^noq^ ^uauiajinbaj aq^ jo ^jod-n-id sqi sq ;ou pinoo y •A'tredmoo paziireSjoaj av^ jo sureu aqi m pawiraqns ST japua^ aq^ pire aouauadxa ^s^d qons ou SAB^ ABUI qoiqM Xueduioo OIOZJO 7,17.1 'OROraowsd tpA Writ Petition rCINo. 1212 of2010 with the performance of the work. Such credentials are to be examined from a commercial point of view which means that if the contract is to be entered with a com.pany he will look into the background of the company and the persons who are in control of the same and their capacity to execute the work. He would go not by the natne of the company but by the persons behind the company. While keeping in view the past experience he would also take note of the present state of affairs and the equipment and resources at the disposal of the company." The Supreme Court further observed that "The joint venture connotes a legal entity in the nature of a partnership engaged in the joint undertaking of a particular transaction for mutual profit or an association of persons or companies jointly undertaking some commercial enterprise wherein all contribute assets and share risks." (7) On the above principles, fhe Supreme Court held in New Horizons (supra) that in the distribution of the State largesse, the State action should be in consonance with standards or norms which should not be arbitrary, in-ational or irrelevant. It was held that in joint venture company, experience of constituents of the joint venture company shoiild be treated as its own experience. In case on hand, the petitioner, a registered partnership firm, is having 5 partners and, according to the petitioner, its partner is having requisite experience and on this basis the petitioner applied for registration as S-5 contractor with respondent No.3. The application for registration of the petitioner ..ai-""'' .^'h'^^—^?"^^r^*'*ii'*^fr WritPetition_(ClNo^212 of2010 has been dismissed on the ground that the petitioner firm as such was not having requisite experience and experience of the partner of the firm will not be taken as the experience of the firm. (9) Mr. Deo, leamed Govt. Advocate appearing on behatf of the respondents, argued that fhe above policy decision has been taken with a long cited-ness that in case the experienced partner of the firm quits the firm during the pendency of the contract period, the contract awarded to the firm may not suffer. In Sundicccte Bank - Vs- R.S.R. Engineerina Works anarVfhers, t2003]T6 SCC 265, the Supreme Cowt held that "Under Section 32 (2) of the Indian Partnership Act, 1932, the liability.of the retiring partner as against fhird party would be discharged only if there is an agreement made by the retiring partner, with the third party, and the partners of the reconstituted firm. Of course, an agreement could be implied by the course of dealing between such fhird party aad the reconstituted firm, after FetireB'ieBit ef a partraer." Th& above provisions of Section 32 (2) of the Indian Parta&r&hip Act, protects the right onilliability of the firm and the retiring partner and in view of the above, argument raised by Mr. Deo is not acceptable. Moreover, the above argument is on a hypothetical ground which cannot be considered good for imposing such a condition in the registration policy by the public authority. The State or public aiithori^c ace govem.ed by man.date dfArfcLcle 14 of the Constitution and 'the decisions taken by them should not be arbitraiy or irrational. The State or such authorities are to act ti3:sSi-Jss'S:W£"tWf.-.;^'. Writ Petition f0 No. 1212 ofZOlO fairly and reasonably and any decision which is arbitrary and irrational cannot be allowed to continue. (10) In Palitana. Suaar Mills Private Limited and Another —Vs- VilasinibenRamachandran and Others, 12007] 15 SCC 218, it was held fhat "The judgments of the Supreme Court are binding on all the authorities under Article 142 of the Constitution and it is not open to any authority to ignore a binding judgment of the Supreme Court on the ground that the full facts had not been placed before the Supreme Court and/or the judgment of the Supreme Court in the earlier proceedings had only collaterally or incidentally decided the issues raised in the show-cause notices. Such an attempt is to belittle the issues and the orders of the Supreme Court. Judgments of the Supreme Court are binding on all authorities and the Govemment cannot arrogate to its powers to reject the judgment of fhe Supreme Court." (11) In view of all this, the judgment laid down by the Supreme Court in New Horizons (supra) was binding of all the parties including the respondents and decision taken by the respondents by imposing the impugned condition in the circular dated 27.1.2006 (Annexure-P/6) goes against the spirit oflaw laid down by the Supr.eme Court in New Horizons and therefore, the same deserves to be struck down. (12) Accordingly, the writ petition is allowed. The impugned condition in Clause-3 of the circular dated 27.1.2006 (Annexure- vatti Writ Petition fC) No. 1212 of2010 is quashed. Consequently, the communication dated 24.9.2009 (Annexure-P/10) rejecting the application for registration of the petitioner is also quashed. The respondents are directed to consider the application of the petitioner for its registration as contractor in accordance with law and also in accordance with the principles and observations made in this judgment and the judgments of the Supreme Court referred herein. (13) No order as to cost. Sd/- Sunil Kumar Sinha Judge SdA R.S. Sharma Judge