IN THE HIGH COURT OF GUJARAT AT AHMEDABAD SPECIAL CIVIL APPLICATION No 3988 of 1999 with CIVIL APPLICAITONS NOS. 14229, 12837 AND 10346 OF 1999 For Approval and Signature: Hon'ble MR.JUSTICE C.K.THAKKAR ============================================================ 1. Whether Reporters of Local Papers may be allowed : YES to see the judgements? 2. To be referred to the Reporter or not? : YES 3. Whether Their Lordships wish to see the fair copy : NO of the judgement? 4. Whether this case involves a substantial question : NO of law as to the interpretation of the Constitution of India, 1950 of any Order made thereunder? 5. Whether it is to be circulated to the Civil Judge? : NO -------------------------------------------------------------- Saurashtra Kutch Pole Industries Association Versus GUJARAT ELECTRICITY BOARD -------------------------------------------------------------- Appearance: 1. Special Civil Application No. 3988 of 1999 MR TUSHAR MEHTA for Petitioners MR MD PANDYA for Respondent No. 1 NOTICE SERVED BY DS for Respondent No. 2 MR PS CHAMPANERI for Respondent No. 3, 7 MR PARESH M DAVE for Respondent No. 4 MR YN RAVANI for Respondent No. 6 -------------------------------------------------------------- CORAM : MR.JUSTICE C.K.THAKKAR Date of decision: /05/2000 CAV JUDGEMENT This petition is filed by the petitioners for a writ of mandamus or any other appropriate writ, order or direction quashing and setting aside the decision of the Gujarat Electricity Board (`Board' for short) respondent No.1 herein, of purchasing readymade PSC poles from respondent Nos. 3 to 7. Originally, the petition was filed by (1) Bhanjibhai N Bhadresha (2) M/s Universal Distribution, proprietary firm and (3) M/s Mahavir Construction Company, a partnership firm . It was instituted on 3rd June, 1999 i.e. during summer vacation. The said petition came for hearing before the learned Vacation Judge on the next day i.e. 4th June, 1999. It appears that on that day, draft amendment was submitted by learned counsel for the petitioners seeking two amendments. Firstly, the petitioners sought to amend the cause title by changing petitioner No.1 from Bhanjibhai N. Bhadresha to Saurashtra Kutch Pole Industries Association through its President Bhanjibhai N Bhadresha having its office near Railway Station, Dhoraji and also cause title of respondent No.1. Secondly, after para 12, para 12A was sought to be added . The draft amendment was granted by the learned Vacation Judge. I will deal with the amendment and contentions raised in connection with the said amendment at an appropriate stage. The case of the petitioners as stated in the petition is that the first petitioner is a voluntary association dealing with pole industry supplying poles to the respondent-Board in Saurashtra and Kutch area. Second and third petitioners are traders in poles. The petitioners have challenged the action of the respondent-Board of purchasing about 2,76,000 poles of a total price of Rs. 25 crores from respondents Nos. 3 to 7. Said action is arbitrary, illegal, unjust and unreasonable. It was also stated that over and above the said decision, commitment was made by the respondent Board to purchase half of the quantity of poles from respondents Nos. 3 to 7 at additional cost of Rs. 15 crores. It was alleged that the Board had decided to purchase poles at the rate of Rs. 909/- per pole from respondent No.3 and at the rate of Rs. 950/- per pole from respondents Nos.4 to 7. According to the petitioners, the said price is exorbitant and excessively high. Had tenders been invited, the Board could have obtained poles at a very low price. But only with a view to favour respondents Nos. 3 to 7, the action was taken to award contract to them by private negotiation which had caused serious prejudice to public exchequer. No procedure was followed of inviting tenders nor all persons similarly situated dealing in pole industry were offered an opportunity before taking the decision in favour of respondents Nos. 3 to 7. Earnest money / security deposits were not taken from respondents Nos. 3 to 7. The decision was taken on the ground of so-called emergency, need and necessity under the excuse of account of cyclone in Saurashtra and Kutch area in June, 1998. But it was clearly ruse and there was no such need or emergency which is clear from the material on record as also from the fact that poles were not supplied by respondents Nos. 3 to 7 on the basis of emergency. It was stated that when the second petitioner came to know that the Board was contemplating to purchase poles without inviting tenders from respondents Nos. 3 to 7, a representation was made on 15th October, 1998 to the Chief Engineer (Material) who informed the second petitioner to contact him on November 10, 1998. But the letter was received by petitioner No.2 only on 11th November, 1998 i.e. a day after the date on which he was called for discussion. It was also stated that petitioner No.2 received another letter dated 7th November , 1998 by which he was asked to fill in the tender in pursuance of Public notice dated 2nd November, 1998. According to the petitioners , in view of issuance of tender, they were of the opinion that bids will be invited from all interested persons and a decision will be taken on the basis of tenders submitted. Unfortunately, however, on or about 12th/ 13th November, 1998, petitioner No.1 came to know that the Board had placed orders for purchase of ready-made PSC poles to respondents Nos. 3 to 7 of large quantity at an excessive price though last date of submission of tenders was November 24, 1998 as per the advertisement, dated 2nd September, 1998 (Annexure `B' to the petition). It was stated in the petition that apart from petitioner No.2, other persons had also made applications to the Board showing their willingness to undertake supply of ready-made/ fabricated PSC poles on emergency basis to the respondent-Board. They were Bhanjiabhai Bhadresha (President of the Association), nominee of M/s Maruti Pole Industries, Sandeep B. Bhadresha ,proprietor of Bhadresha Pole Industries, etc. It was also stated that 36 persons filled in tenders for supply of poles to the respondent Board. The lowest price quoted per pole was Rs. 781/- per pole (Rajasthan) and Rs. 896/- per pole (Gujarat). In these circumstances, the action taken by the Board in ignoring tenders and giving contract to respondents Nos. 3 to 7 clandestinely causing substantial loss to public exchequer was arbitrary and unreasonable. Petitioners have also stated that a representation was made by the Association on 15th February, 1999 before the Chairman of the Board, copies of which were also sent to Honourable the Chief Minister, Honourable the Energy Minister, Honourable the Finance Minister and others. Petitioner No.1 waited for one month and thereafter on 15th March, 1999, met the Chairman of the board . A fresh memorandum was submitted on that day and thereafter, again two representations were made on 24th May, 1999, but nothing was done by the respondent Board. Existing factories were not given orders by the Board which was also illegal as they manufacture/ fabricate poles which can be used only by the Board. Non-purchase of poles by the respondent Board from them would result in serious financial crisis to such manufacturers / producers. As the action was clearly illegal, arbitrary and unreasonable, the petitioners were constrained to approach this Court by filing the petition. On 4th June, 1999, the petition was placed for admission before the learned Vacation Judge . It may be stated at this stage that a petition being SCA No.1924 of 1999 was filed by Somnath Pole Industry on 16th March, 1999 making almost a similar grievance and praying similar and other additional reliefs. In that petition, respondent Nos 1 to 7 in the present petition were also made respondents . There also, the grievance of the petitioner was that the action of the respondent Board in giving contract to respondent Nos. 3 to 7 was illegal, arbitrary, unreasonable and contrary to law. Certain prayers were sought in para 6 of the petition. It is necessary to reproduce that para as on the basis of prayers made in that matter, arguments were advanced on behalf of the respondents that petitioners of both the petitions wanted undue benefits in their favour. Para 6 read as under : "6. For the reasons stated hereinabove and those which may be urged art the time of hearing,. the petitioner prays that this Honourable court may be pleased to- (a) a writ of mandamus or a writ in the nature of mandamus or any other appropriate writ, order or direction may kindly be granted quashing and setting aside the work orders given to respondents Nos.3 to 7 for readymade poles; (b) a writ of mandamus or a writ in the nature of mandamus or any other appropriate writ, order or direction may kindly be granted directing the respondent Nos.1 and 2, their agents and servants to place with the petitioner the order for sufficient number of quantities for fabrication of poles at the approved rates prevailing in Porbandar circle and for manufacturing readymade poles at the rate of Rs. 949 per pole as offered in the tender submitted on 7th December 1998; (c) pending admission hearing and final disposal of this petition an interim injunction may kindly be granted restraining the respondents, their agents and/or servants from implementing the work orders for manufacturing of the readymade poles given to respondent Nos.3 to 7 as per the details given in para 2.12 of the petition. (d) pending admission and final hearing of this petition, an interim direction may kindly be given directing the lst and 2nd respondents to place the orders for fabrication of poles or manufacturing of readymade poles with the existing factories from which the first and second respondents had purchased fabricated poles or readymade poles prior to 2.11.1998." That petition (SCA No. 1924 of 1999) came up for hearing before the learned Single Judge on 28th April, 1999. Notice was issued which was made returnable on 11th May, 1999. On the returnable day, Mr. Chamapaneri appeared on behalf of respondent Nos. 3,5 and 7 and as observed in the order, he sought time to file Vakilatnama for those respondents and sought time to file counter affidavit . Time was granted and the matter was adjourned to 23rd June, 1999. Liberty was, however, reserved to the petitioners to move learned Vacation Judge in case of urgency. No interim relief was, however, granted by the Court. It may be stated that the present petition was filed on 3rd June, 1999 by Bhanjibhai Bhadresha and others. It was solemnly affirmed on the previous day i.e. on 2nd June, 1999 by Bhanjibhai,petitioner No.1, (as at that time ). It was not stated in the present petition that any other petition was filed. No doubt, para 15 of the present petition reads as under: "15. The petitioners submit that they have not filed any other application or appeal either before this Honourable court or before any other courts in India including the Honourable Supreme Court of India with regard to the subject matter of this petition." It is, however, pertinent to note that when the petition was taken up for hearing on June 4, 1999,( petition was filed on 3rd June, 1999), draft amendment was submitted by getting para 12A inserted which read as under: "12A. The petitioners state and submit that one shree Somnath Pole Industries which is a member of petitioner No.1 association has filed Special Civil Application No.1924 of 1999 before this Honourable court challenging the work order given to the parties which are favoured by respondent Nos.1 and 2. It is submitted that the said petition pertains to the personal interest of the said petitioner in which it is prayed by the petitioner, inter alia, that the respondent Nos.1 and 2 herein be directed to place the order for sufficient number of poles at the rate of Rs. 949/- per pole. It is submitted that the present petition challenges the very action of the respondents in seeking to distribute the government largess in the most arbitrary manner solely on the basis of favouritism and extraneous considerations which are manifestly demonstrated by perusing the way in which the respondents have acted in collusion with one another for selfish gain at the cost of public money. In the said petition, this Honourable court (coram: D. C. Srivastav, J.) is already pleased to issue notice to the respondents therein and the said petition is pending for adjudication before this Honourable court." Learned Vacation Judge issued notice and granted interim relief. The order read as under : "When the matter was called out, learned Senior counsel Mr. Vakharia with Mr. Tushar Mehta is present and he presented a draft amendment. Leave to amend as per the draft amendment. Mr. Vakharia makes a statement that respondent Nos.3 to 7 have not started supplying PSC poles to the first respondent till today as per the works order given to them by respondent No.1. Therefore, if ad-interim relief or status quo with respect to supply of the PSC poles is granted, no prejudice is going to cause to the respondents. Notice returnable on 1.7.1999. Till then, ad-interim relief in terms of para 17 (b) is granted. D. S. permitted." The said relief was continued from time to time. I have heard Mr. K.G.Vakharia instructed by Mr. Tushar Mehta for the petitioners , Mr. M.D.Pandya for respondents Nos. 1 and 2, Mr. B.P.Tanna, senior advocate instructed by Mr. P.S.Champaneri for respondent No.3, Mr. Paresh Dave for respondent No.4, Mr. Y. N.Ravani for respondents No.6 and Mr. P.S.Champaneri for respondents Nos. 5 and 7. Mr. Vakharia for the petitioners raised several contentions. He submitted that it is well settled principle of law that whenever a public authority is taking any action either of sale or purchase on a large scale, it is obligatory on the part of instrumentality of State to invite tenders and to award contract on the basis of comparative bids. It is a rule which ought to have been followed in the instant case also. As tenders are not invited and comparative bids are not considered, the impugned action must be held to be illegal, arbitrary and contrary to law. In the case on hand, according to the learned counsel, purchase was substantial and amount of several lacs of rupees was to be paid. Moreover, initially, legal action was taken and tenders were invited. Suddenly and abruptly, however, the said course was given up and with a view to favour respondent Nos. 3 to 7, contract was awarded which deserves to be quashed. He also submitted that petitioner No.1 Association was not taken in confidence. All the tenderers who had submitted their bids were not called for discussion and negotiation. Their say in the matter was ignored. So much so that some persons were asked to remain present on a particular date but the letter had reached them after the said date had gone (for instance, petitioner No.2). Mr. Vakharia also contended that in the concerted process, minimum figures of Rs. 781/- and 896/- per pole were totally ignored by the Board and contract was given to four respondents at the rate of Rs. 950/- per pole and to one respondent at the rate of Rs. 909/-. There is no earthly reason why instead of Rs. 781/- or Rs. 896/- per pole, the Board had decided to purchase per pole for Rs. 909/- and for Rs 950/-. Again, there is no apparent reason or ground to distinguish case of respondent No.3 who will supply poles at the rate of Rs. 909/- per pole and respondents Nos. 4 to 7 who will supply similar poles at the rate of Rs. 950/-. Considering even that difference, the Board has caused loss of lacs of rupees to public exchequer. The learned counsel for the petitioners also stated that the petitioners were and are ready and willing to supply readymade PSC poles at the rate of Rs. 896/- per pole and the action of the respondent Board is thus arbitrary, unreasonable and causing substantial loss to the Board. Learned counsel made a grievance that as the respondent Board wanted to favour respondent Nos. 3 to 7, usual procedure was given go-bye and security deposit which was a condition precedent before award of contract was not insisted upon from them. He also made a complaint that in an action to benefit respondent Nos. 3 to 7, the Board has acted to the detriment of several members of petitioner No.1 Association who are dealing in/ manufacturing/ fabricating PSC poles and who have set up their factories only to supply poles to GEB Board. If the action of the first respondent Board is upheld, some of them will be seriously affected and they might have to wind up their business. The petitioners did their best before approaching this Court to convince the officers of the Board as well as executives at the highest level . They have also moved the highest authority of the Government. But as nothing was done by them, they were constrained to approach this Court. Mr. Pandya for the Board, on the other hand, supported the action of the Board. He submitted that before dealing with and deciding the contentions raised by the petitioners in this petition, this Court may keep in mind the most material and vital fact that the present litigation is not in the nature of Pro bono Publico but by "rivals in trade". He contended that petitioner No.1 is not a recognised Association. That apart, it is really Bhanjibhai Naranbhai Bhadresha (who has been referred to as one of the petitioners by the Board in the affidavit in reply ) who wanted to continue supply of electricity poles to the Board by maintaining his monopoly and with a view to achieve that oblique motive, the present petition has been filed by him. There is no public element in it. Moreover, there is gross delay and laches on the part of the part of the petitioners in approaching this Court inasmuch as the decision was taken by the Board to award contract to respondent Nos. 3 to 7 in November 1998 and that fact was known to the petitioners in February, 1999 and yet, they waited upto June, 1999. Mr. Pandya also contended that there is no statutory obligation on the Board to invite tenders before taking action of purchase of PSC poles. There are several modes of entering contracts with suppliers of PSC poles and when one of such modes was adopted by the Board, no objection can be raised against it. The counsel submitted that the action was taken in larger interest of common public and considering extraordinary situation and emergency in certain parts of the State. Relying on the affidavit in reply filed by the Chief Engineer (Material) and Annexures to the said reply as also further affidavit, it was contended that the petitioners have no right to make any grievance and the petition is liable to be dismissed. Respondent Nos. 3 to 7 have also supported Mr. Pandya on all those points. Mr. Tanna , senior advocate for Mr. Champaneri for respondent No.3 highlighted certain circumstances and contended that the petitioners have not approached this Court bona fide with clean hands. There is mala fide intention and oblique motive on their part inasmuch as , Bhanjibhai Naranbhai Bhadresha who is connected with several factories/ industries/ units wanted that no outsider should enter the field if such person is not associated with his factories/ industris/ units. Such outsider must be ousted as early as possible and should not be allowed to compete with him.The counsel also submitted that by obtaining ad-interim relief from 4th June, 1999, the petitioners have caused substantial loss not only to the respondent-Board but also to respondent No. 3,5 and 7, who have acted to their detriment . He stated that after the contract was given to respondent No.3, he invested huge amount and made readymade poles . But as interim relief was granted by the Court, poles could not be supplied and the respondents have sustained loss of lacs of rupees. Hence, Civil Application No. 12837 of 1999 is filed by respondent Nos. 3,5 and 7. Similar application is also filed by respondent No.4 being CA No. 10346 of 1999. Applicants of both Civil Applications have prayed to issue appropriate direction ordering the petitioners to pay damanges/ compensation due to loss caused to them and also to pay exemplary costs. M/s Parsh Dave and Y. N.Ravani supported Mr. Tanna. Having heard the learned advocates for the parties, in my opinion, no case has been made out by the petitioners to exercise extraordinary jurisdiction of this Court under Article 226 of the Constitution in their favour. In my opinion, Mr. Pandya is right when he submitted that the present petition is not in the nature of Pro bono Publico. I do not wish to state that a vigilant citizen or public spirited organization, keeping in mind larger public good and worrying for public exchequer has no right to approach this Court by inviting attention of the Court against illegality being committed by an instrumentality or agency of the State. And the Court may not dismiss such petition only on the ground that it is not maintainable. Hence, even if it is conceded that petition is filed not by Bhanjibhai Naranbhai Bhadresha and others in their individual capacity (as it was originally filed) but by Bhanjibhai Naranbhai Bhadresha and others as Association and its members, a relevant fact that it is instituted by members of an Association who are "rivals" in the trade with respondent Nos. 3 to 7 and others cannot be ignored. It is not that the Court will not consider the points raised by the petitioners or arguments advanced by their counsel at the time of hearing of the petition . But the court is expected to consider the questions and decide them keeping in mind the parties before it. It was also the grievance of the respondents particularly respondent Nos.3 to 7 that present petition is an abuse of process of Court as in the previous petition viz. SCA No.1924 of 1999, no interim relief was granted by this Court. It was also contended by them that both the petitions viz. SCA No.1924 of 1999 and 3988 of 1999 were filed by one and the same office (SCA No.1924 of 1999 was filed through advocate Mr Mehul Vakharia and present petition SCA No.3988 of 1999 was filed through advocate Mr. Tushar Mehta) but the fact regarding filing and pendency of the previous petition was nowhere mentioned in the subsequent petition. It was further submitted that interim relief prayed in clause (D) of para 6 of SCA No. 1924 of 1999 was also significant , in that, pending admission and final disposal of the petition, interim direction was sought by the petitioners that the respondent Board should be directed to "place orders for fabrication of poles with the existing factories from which the first and the second respondent had purchased fabricated poles or readymade poles prior to 2.11.1998". Regarding suppression of fact and filing of second petition, Mr. Vakharia submitted that when two advocates are different , it is quite possible that filing of a petition by one may not be known by the other. He also stated that if intention on the part of the petitioners was to suppress the fact of filing of a previous petition (SCA No.1924 of 1999), draft amendment on the first day of the hearing before the learned Vacation Judge would not have been moved. According to the counsel, the previous petition was not filed on behalf of the Association but in an individual capacity and as soon as the Association came to know of that petition, on the first date itself, amendment was sought and it was granted by the Court. In the facts and circumstances, I am of the opinion that it is not proper