THE HON’BLE SRI JUSTICE NOOTY RAMAMOHANA RAO WP No. 17774 of 2011 ORDER: This writ petition has been instituted by four individuals questioning the notice issued by the 1st respondent – Singareni Collieries Company Limited (for short hereinafter referred to as `SCCL’) of the registered civil contractors that w.e.f., 1.6.2011 onwards, the unit rate contracts will be awarded only based upon the area of registration undertaken by the respective contractors and that too after drawing lots. The petitioners submit that they are all civil contractors registered with the respondent – Singareni Collieries Company Limited (SCCL). The SCCL for better and efficient administration has organized its area of operation into several parts and each such area is headed by a General Manager or Chief General Manager as the case may be. Through the notice dated 18.5.2011, the 1st respondent – SCCL has proposed to award the works with reference to area for which the contractors got their names registered. According to the respondent company, this method is adopted as there are several hundreds contractors enlisted with the SCCL and whenever works relating to man power supply have got to be awarded, having such a huge list of contractors is creating lots of administrative problems and the resultant exercise is becoming unwieldy. Therefore, if the enlisted contractors are confined to the respective areas, it will be easier to finalise the contractor and it will also become far more convenient and easier for the respective contractors to respond and supply the man power. This will produce the optimum results for both sides in the sense that the contractors will have a fair chance of securing works in view of a lesser number of competing contractors in each area in comparison to the whole lot of them enlisted with respondent company competing with each other. Further, the respondent company will be able to secure the adequate man power supply when it is taken up on an area confined basis. It will also be convenient for the man power to attend to the duties and costs liable to be performed by them in an area where they are normally residents of. To this extent of the decision of SCCL is not seriously objected to. However, what the petitioners are objecting to is drawal of lots system. This according to the learned counsel for the petitioners Sri Surendra Desai, is providing an opportunity for a `chance success’. It may be that by way of drawal of lots, different contractors may have been picked up by the respondent company, but theoretically the same person can end up as luckier each time when lots were drawn. Instead, according to the learned counsel for the petitioners, if one after the other of the contractors is entrusted with the job, all the contractors enlisted with the respondent company will have a fair chance of getting one work or the other. In that process, till all others are exhausted, no contractor will get a second turn for securing the work. Learned counsel for the petitioners has placed reliance upon the judgment rendered by the Supreme Court in Humanity v. State of West Bengal[1], in support of the above plea. On the other hand, Sri Pattabhi Rama Rao, learned counsel for SCCL has pointed out that the civil contract works like maintenance works in the townships and the house keeping works are man power intensive works. When the respondent company has adopted the open tendering system and kept awarding the works to the successful lowest bidder, it has transpired that some of the contractors have deliberately resorted to quoting discounted rates only for the purpose of garnering the works somehow or the other. Such contractors are found subsequently to be indulging in certain unethical practices of unauthorisedly making deductions in matter of payment of wages to the man power deployed by them. It is pointed that though the actual disbursement of wages is taken place in the presence of the officials of the SCCL but, however, after the payment is effected, some portion of the wages so paid are recovered later on clandestinely from each of the employees. In the process, the man power deployed by them, were not physically receiving what is legitimately due to them. To curb these unethical tendencies, the SCCL has devised the method of decentralizing the civil maintenance contract works and started awarding works to the locally registered contractors. This according to the learned Standing Counsel has helped in achieving the objection of securing execution of works promptly. In the absence of unwarranted and unhealthy competition, reasonable rates are quoted including a minimum of 7.5% over and above the estimated minimum wages payable to the workmen supplied by the contractors. This method has ensured that the minimum wages are being disbursed faithfully to the workmen employed and the contractor is also reasonable assured of a return to him of a minimum of 7.5% of the contract value. But, at the same time, the corporation has been resorting to the method of drawal of lots instead of a cyclic rotation of the contractors. Learned cousel Sri Pattabhirama Rao would submit that if rotation system is to be adopted, a particular civil work of lesser quantity might become available and the contractors may get completely disheartened by the less volume or the value of the contract that came his way. He will have to wait for the entire cycle to run through before he gets another turn and further it would leave scope for the contractors to unnecessarily pick up quarrels amongst themselves depending upon the value of the work that came their way. This inappropriate system will cause any amount of operational difficulties for the company. Instead, in view of the limited number of contractors available in the respective areas, by drawing lots, the interests of the contractors can be protected. It is also further contended by the learned Standing Counsel that the contractors themselves have submitted a representation asking for the decentralization of awarding works area wise and they sought for rotation system. The said representation has been considered by SCCL and the proposal for decentralization is accepted. However, the proposal for rotation of the works amongst the contractors was not agreed to for the reasons set out supra. It would be appropriate to notice that adopting the system of drawal of lots, several works came to be allotted from 1.6.2011 and there were no complaints received from any source. Further, as three out of the four petitioners have in fact got works awarded pursuant to the lottery system put in place, they also did not make out any grievance before SCCL. When the experience of the respondent company indicated that it will be advantageous for it to confine the choice of the contractors to those who have been registered in a particular area and when it has produced the desired result, such a choice of the measure should not be construed as either arbitrary or whimsical. It has helped in limiting the number of contractors for competing to those who are registered in the respective areas. In the process, unhealthy competition is avoided. As a consequence thereof, the unethical practices of competing for an absurdly unbelievable price have gone out of reckoning. Therefore, the policy choice exercised by the respondent company to confine awarding works to the locally registered contractors cannot be faulted. Above all, the civil maintenance works which the respondent company awards are highly man power intensive. If the contractor is to supply man power to attend to these local works, it becomes easier to get the works executed by the locally available man power. On the other hand, if a contractor has to mobilize the work force from one area or locality to another far off area or locality at a distance, it might create a problem for securing adequate number of people. Hence, this far, there is no difficulty, in the decision of the SCCL to decentralize these works. Is it open to the court to suggest a better alternative choice if the respondent – SCCL considers that drawal of lots would avoid not only unhealthy competition amongst the contractors, but it would also help in the works being executed by the contractor who has been picked up in the lots? Generally and normally, it is not for the courts to suggest as to which is the better method for getting works executed through contractors. So long as transparent and fair practices are adopted, there may not be any difficulty. If the respondent company feels that some of the works could be low intensive of man power and consequently of lesser value, then the particular contractor whose turn has matured might get disappointed that he has not got work of a higher value. It might show up on the quality of performance. On the other hand, by drawing lots, every locally listed contractor will have an equal chance to be picked up for being awarded the work. If the same contractor is proved to be luckier more than once, it’s a pure chance and it shall not be assumed to happen every time. Therefore, I am not in a position to agree with the contention of the learned counsel for the petitioners that draw of lots is a totally bad method. It has as much a chance to prove effective as it has to be otherwise. It is no doubt true that the respondent company being a State should have devised a better method. But, that is no reason for the court to interfere with the decision now taken by them. The prospects of availability of a better method cannot be a factor to strike at the choice exercised by the respondent – SCCL. Instead of calling open tenders, the SCCL has chosen the method of inviting limited number of contractors who have already been enlisted with it locally/area wise for awarding works. Therefore, according to the petitioners, availability of a better choice of awarding works cannot be a factor to declare what is being done by the respondent company as bad in law. In Humanity v. State of West Bengal (supra 1), the Supreme Court was called upon to consider the issue relating to awarding a large sized site in favour of a meritorious sports person, for establishing a school, whereas the site in question should have been put to public auction to fetch more revenue to the State and fair competition. In that context, the Supreme Court, has pointed out the following: “31. Admittedly, no advertisement was issued and no offer was sought to be obtained from the members of the public in respect of the new allotment of a much bigger plot. In view of the principles laid down by this court, the impugned allotment is clearly in breach of the principles of Article 14 explained by this Court in Ramana Dayaram Shetty v. International Airport Authority of India [(1979) 3 SCC 489, M/s. Kasturi Lal Lakshmi Reddy v. State of Jammu and Kashmir and another [(1980) 4 SCC 1] and other subsequent cases.” While, one cannot have any quarrel with the said legal principle, I cannot see any such objection for throwing open the works to all the locally registered contractors, for securing fair and ethical ways of execution of works. It does not amount to picking or choosing one to confer a favour. But, in the instant case, by drawal of lots, if three of the four petitioners have already been awarded works, it will be difficult to firm up any opinion saying that all the contractors may not have a fair chance of being awarded one work at least by the respondent corporation. I therefore do not see any merits in the writ petitioner and accordingly the same is dismissed. However, without costs. Dt : 14.9.2011 ------------------------------------------------- Knk JUSTICE N.RAMAMOHANA RAO [1] (2011) 5 SCJ 314