Chairman cannot extend office once retired as a member of Standing Committee as per S.21 Maharashtra Municipal Corporations Act, 1949: Bombay High Court

 on 09 06 2021 on 22 03 sg1 911. wp951 21.doc IN THE HIGH COURT OF JUDICATURE AT BOMBAYCIVIL APPELLATE JURISDICTIONWRIT PETITION NO.951 OF 2021O.K. Marine Through its Sole Proprietor Mr. Munawar Amirali Mukadam..Petitionerv s.Oil And Natural Gas Corporation Ltd. And Ors...Respondents….Mr. R.D. Soni i b. Irvin D’souza for the Petitioner.Dr. Abhinav Chandrachud a w. Mr. Nishit Dhruva Mr. Prakash Shinde Ms. Khushbu Chhajed Mr. Abhishek Bhavsar and Ms. Alisha Shah i b.MDP & Partners for Respondent Nos. 1 and 3.Mr. Kunal Gaikwad for Respondent No.4.Mr. Karl Tamboly a w. Mr. Ramiz Shaikh and Mr. Akshay Bafna i b. BafnaLaw Associates for Respondent No.5. ….CORAM: S.C. GUPTE & M.S. KARNIK JJ.DATE : 8 JUNE 2021.ORAL JUDGMENTwith each other which would restrict competitiveness orintroduce cartilisation in the bidding process thereby offending Section 2of the Integrity Pact. 3.Section 2 of the Integrity Pact is quoted below: on 09 06 2021 on 22 03 sg3 911. wp951 21.doc Section 2 Commitments of the Bidder contractor2. The Bidder Contractor will not enter with otherBidders into any undisclosed agreement orunderstanding whether formal or informal. Thisapplies in particular to prices specifications certifications subsidiary contracts submission or non submission of bids or any other actions to restrictcompetitiveness or to introduce cartelisation in thebidding process.4.It is the Petitioner’s case that whilst it is correct that thePetitioner and the proprietor of Royal Traders are a son and father duo that circumstance by itself does not imply any undisclosed agreement orunderstanding between the two whether formal or informal or amountto any action so as to restrict competitiveness or introduce cartilisation inthe bidding process.5.After this matter was heard earlier by this Court this Court by its order dated 29 April 2021 permitted the Petitioner to file arepresentation with the competent authority of Respondent ONGC and thelatter was directed to pass a reasoned order on that representation.Pursuant to this order the Petitioner did file a detailed representation tothe competent authority of ONGC who by its detailed order dated 5 May2021 rejected the representation on a composite statement of reasons. Inthe meantime it appears that the subject contract was awarded toRespondent Nos. 4 and 5 who were successful bidders upon opening ofcommercial bids the award was notified on 12 February 2021 and pursuant to the award formal contracts were executed on 8 March 2021and 22 March 2021 respectively. on 09 06 2021 on 22 03 sg4 911. wp951 21.doc 6.Learned Counsel for the Petitioner challenges the impugnedaward of contract to Respondent Nos. 4 and 5 by denying opportunity tothe Petitioner on the following grounds:(a)It is firstly submitted that the Petitioner’s bid does notinvolve any breach of the Integrity Pact. It is submitted thatthere is no prohibition on relatives participating in thetendering process. It is submitted that the original clauseprohibiting relationship of a bidder with another directly orthrough common parties that put them in a position to haveaccess to each other’s information about or to influence theother bid has been expressly done away with. It is submittedthat the modified provision simply prohibits entering intowith other bidders of an undisclosed agreement orunderstanding whether formal or informal suchunderstanding being in particular reference to prices specifications certifications subsidiary contracts submissionor non submission of bids or any other actions so as torestrict competitiveness or to introduce cartilisation of thebidding process.(b) It is submitted that the conclusion of the Respondentemployer of breach of the Integrity Pact is a matter ofinference and presumption. It is submitted that thePetitioner’s tender cannot be rejected simply on the basis ofsurmises especially when his bid has been found to betechnically responsive. on 09 06 2021 on 22 03 sg5 911. wp951 21.doc 6 SCC 651 on 09 06 2021 on 22 03 sg6 911. wp951 21.doc 7.None of the grounds urged by the Petitioner in support of hischallenge to the acceptance of the bids of Respondent Nos. 4 and 5 by theemployer ONGC commends itself to us. Firstly it has been borne out bythe record that the Petitioner and his father though shown as proprietorsof different concerns operate from the same premises. The letterheads ofthe two bear the same address though after this matter was broughtbefore this Court changes have been made in their respective letterheadsin hand suggesting that whereas the Petitioner operates from Room Nos.1 and 2 on the first floor of the building his father operates from RoomNos. 3 and 4 on the same floor. The address of the two is borne out bytheir respective MSME

Summary: As per section 21 of the Maharashtra Municipal Corporations Act, 1949, the chairman shall vacate the office as soon as he ceases to be a member of the committee. Therefore, there is no legal basis to contend that he shall be deemed to continue as chairman. This judgment was passed in the case of Bhagwan Shankar Bhalerao vs. State of Maharashtra [Writ Petition no.10801/2021] by a Double Bench consisting of Hon’ble Justice Surendra P. Tavade and Hon’ble Justice S.J. Kathawalla. The present writ petition pertains to the reconstitution of the Standing Committee and election of a chairman to the Standing Committee of the Ulhasnagar Municipal Corporation (the Corporation). By a resolution 8 members of the Standing Committee retired and 8 new members were appointed in place of the retiring members. This was consistent with the mandate and section 20 of the Maharashtra Municipal Corporations Act, 1949 (the Act). Thereafter, the Municipal Secretary with the consent of the collector  called for a special meeting to elect the Chairman of Standing Committee as provided by Section 21 of the Act. Due to Covid the state government vide its order directed all Municipal Corporation, collectors, etc. to postpone the election. Later on it also extended the tenure of the retired chairman and members of the Standing committee who retired in view of Covid. The Petitioner prayed for a writ of certiorari and/or any other writ and/or order and/or direction in the nature of certiorari to quash and set aside the notice dated April 8th, 2021. The High Court of Bombay observed that clause (a) of the prayer is infructuous since the state government while issuing notification of 6th May 2021, accepted that it would not apply to the reconstituted Standing Committee of the Corporation. The High Court was of the opinion that, to answer clause (b) they have to decide whether the tenure of Shri Patil as the Chairman of the Standing Committee concluded by reason of him retiring as a member of the Standing Committee?; whether his office can continue only up to his membership?; Whether the Standing Committee constituted as of 1st April, 2021 is barred, under Section 21(5) of the Act from appointing a Chairman of the Standing Committee by reason of thirty days from the date of its reconstitution having elapsed? The Bombay High Court held that on a bare reading of section 20 and section 21 of the Act, a Chairman of the Standing Committee must first and foremost be a member of the Standing Committee. In the present matter Shri Patil was not a member of the same. Section 21(3) of the Act clearly stipulates that the chairman shall vacate the office as soon as he ceases to be a member of the committee. therefore, there is no legal basis to contend that he shall be deemed to continue as chairman. As per section 20(3) read with section 20(4) and 20(5) of the Act the period of one year, which is the term of the Standing Committee before it is reconstituted after 8 persons retiring and 8 fresh appointments, will be from the first day of month in which the first meeting of the Corporation to appoint its Standing Committee took place and every succeeding year thereafter as determined from this date. And as far as postponement of the election is concerned, the term of members cannot be extended beyond 1st April of the next year. Therefore his office will continue only till membership and cannot be extended. The High Court observed, as per section 21(5) of the Act If there is inaction or indecision on the part of the Standing Committee in appointing its own Chairman within 30 days, the position of Chairman is determined by the alternative method of the Corporation appointing a Chairman within 15 days thereafter. Therefore the State Government could have postponed the elections of Chairman by the members of the Standing Committee. Even as per the lockdown notification some activities were allowed and it was for the corporation and standing committee to determine if the election could have proceeded with a physical meeting or virtual meeting. Therefore, time lost in appointing a Chairman cannot result in Section 21(5) being invoked in order for the Standing Committee to lose their entitlement to appoint their own Chairman under Section 21 of the Act.