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2008 Supreme(Bom) 999
2008(5) ALL MR 681
IN THE HIGH COURT OF JUDICATURE AT BOMBAY (NAGPUR BENCH)
D.D. SINHA & Smt. VASANTIA. NAIK, JJ.
Shri. Chandrashekhar s/o. Pandurangji Kharwade - Appellant
Vs.
Union of India & Ors. - Respondents
Writ Petition No.928 of 2008
Decided On: 16th July, 2008.
Shri. A.M. GORDEY and Shri. G.C. SINGH, Advocates for the Petitioner.
Shri. S.K. MISHRA, Assistant Solicitor General, for the Respondent No. I.
Shri. RAVI KADAM, Advocate General, assisted by Shri. R.B. PURANIK, Advocate, for the Respondent Nos.2 to 4.
Shri. S.P. DHARMADHIKARI and Shri. S.D. DEWANI, Advocates for the Respondent Nos.5 and 6.
A petitioner must demonstrate sufficient interest, public injury, and bonafide intentions to establish locus standi in a public interest litigation. The non-mentioning of the reserve price in a tender notice does not render the sale transaction invalid, provided that the reserve price is fixed based on expert opinions and the sale price is reasonable. The sale of public property must be conducted in a transparent manner, and the State has the expertise to formulate terms and conditions of the tender document. The Court will intervene only if the conditions of the tender document are apparently against public policy or result in public injury.
Headnote:
TENDER - PUBLIC INTEREST LITIGATION - MAINTAINABILITY - LOCUS STANDI - SALE OF LAND - RESERVE PRICE - TRANSPARENCY - PUBLIC POLICY - PUBLIC INJURY - PUBLIC INTEREST - VALIDITY OF TENDER NOTICE - ELIGIBILITY CONDITIONS - ACCEPTANCE OF BID - TRANSFER OF CONTRACT OF SALE - MARKET PRICE - VALUATION - DELAY - LACHES - PUBLIC CAUSE - BONAFIDES - CREDENTIALS - SOURCE OF INFORMATION - PUBLIC WRONG - PUBLIC GRIEVANCE - JUDICIAL REVIEW - Wednesbury Principle - IRRATIONALITY - CONDITIONS OF TENDER DOCUMENT - STATE'S EXPERTISE - PREVALENT MARKET PRICE - NEWSPAPER REPORTS - CONCLUSIVE EVIDENCE - SALE CONSIDERATION - MONETARY LOSS - PUBLIC AUTHORITY.
Fact of the Case:
Petitioner, claiming to act in public interest, challenged the tender notice issued by the respondent National Textile Corporation (NTC) for the sale of land of the Model Mills, and the subsequent acceptance of the bid by respondent no.6, alleging that the sale was undervalued and resulted in a loss to the public exchequer. The petitioner contended that the tender notice did not mention the reserve price, which led to a lack of transparency and resulted in the sale of the land at a price much lower than the market value. Additionally, the petitioner argued that the acceptance of the bid by respondent no.6 was illegal as it did not satisfy the eligibility conditions specified in the tender notice.
Finding of the Court:
The Court held that the petitioner lacked locus standi to file the petition as a public interest litigation, as he failed to demonstrate sufficient interest, public injury, and bonafide intentions. The Court observed that the petitioner did not disclose the source of the documents annexed with the petition, raising doubts about his credentials and the genuineness of his cause. The Court further held that the non-mentioning of the reserve price in the tender notice did not render the sale transaction invalid, as it was not mandatory to disclose the reserve price. The Court also found that the respondent NTC had fixed the reserve price based on expert opinions and that the sale price was more than double the reserve price, indicating that the sale was not undervalued. The Court also rejected the petitioner's contention that the acceptance of the bid by respondent no.6 was illegal, as it found that respondent no.6 satisfied the eligibility conditions specified in the tender notice.
Issues: 1. Whether the petitioner had locus standi to file the petition as a public interest litigation? 2. Whether the non-mentioning of the reserve price in the tender notice rendered the sale transaction invalid? 3. Whether the sale of the land was undervalued, resulting in a loss to the public exchequer? 4. Whether the acceptance of the bid by respondent no.6 was illegal?
Ratio Decidendi: 1. The Court held that the petitioner lacked locus standi to file the petition as a public interest litigation, as he failed to demonstrate sufficient interest, public injury, and bonafide intentions. The Court observed that the petitioner did not disclose the source of the documents annexed with the petition, raising doubts about his credentials and the genuineness of his cause. 2. The Court held that the non-mentioning of the reserve price in the tender notice did not render the sale transaction invalid, as it was not mandatory to disclose the reserve price. The Court also found that the respondent NTC had fixed the reserve price based on expert opinions and that the sale price was more than double the reserve price, indicating that the sale was not undervalued. 3. The Court rejected the petitioner's contention that the sale of the land was undervalued, resulting in a loss to the public exchequer, as the petitioner failed to provide conclusive evidence to demonstrate that the market value of the land was significantly higher than the sale price. 4. The Court also rejected the petitioner's contention that the acceptance of the bid by respondent no.6 was illegal, as it found that respondent no.6 satisfied the eligibility conditions specified in the tender notice.
Final Decision: The petition was dismissed, as the Court found that the petitioner lacked locus standi, the non-mentioning of the reserve price did not invalidate the sale transaction, the sale was not undervalued, and the acceptance of the bid by respondent no.6 was not illegal.
Rule returnable forthwith. Heard finally by consent of Shri. Gordey, learned Counsel for the petitioner, Shri. Mishra, learned Assistant Solicitor General for the respondent no.1, Shri. Ravi Kadam, learned Advocate General for respondent nos.2, 3 and 4, and Shri. Dharmadhikari, learned Counsel for the respondent nos.5 and 6.
2. Shri. Gordey, learned Counsel for the petitioner, submitted that the petitioner is challenging tender notice dated 22-2-2007 pertaining to sale of land of the Model Mills issued by the respondent no.3 National Textile Corporation (Maharashtra North) Ltd. The petitioner is also challenging letter dated 22-22008 issued by the respondent no.3 whereby offer of respondent no.6 M/s. Golddricks Infrastructure Pvt. Ltd. has been accepted.
3. Shri. Gordey, learned Counsel for the petitioner, contended that in the present petition, the petitioner is espousing the cause in public interest since action of respondent nos.2 to 4 is against public interest and has resulted in causing great loss to the Public Exchequer. According to petitioner, there is a tremendous increase in the price of the landed property in and around the city of Nagpur and in order to secure appropriate market price, tender document ought to have contained upset price to enable public at large to know whether it shows the correct market value of the land in question. It was submitted that earlier Model Mill was owned and run by the private entrepreneur and due to mismanagement, the Government of India nationalised the Model Mill under the provisions of Sick Textile Undertakings (Nationalisation) Act, 1974 (hereinafter referred to as "the Act of 1974") with effect from 1974 and accordingly the property of the said Model Mi 11 was transferred and vested in the Central Government and thereafter in the National Textile Corporation, which is a Government of India Undertaking. It is the case of the petitioner that National Textile Corporation is a Company wholly owned and managed by the Union of India in view of provisions of Section 6 of the Act of 1974. Similarly, as per provisions of the Act of 1974, the respondent nos.2, 3 and 4 are the instrumentalities of Union of India and, therefore, are "State" within the meaning of Article 12 of the Constitution of India. It was submitted that National Textile Corporation (Maharashtra North) Ltd., which is a subsidiary Company of National Textile Corporation, decided to sell properties of Model Mill, which included land admeasuring 28.96 hectares, i.e. 1,17,257 square metres located in the heart of Nagpur city, which is a part of land bearing Sheet Nos.259, 260, 269, 270 and 271, along with building situated thereon, used machinery, etc. The respondent no.3 National Textile Corporation issued impugned tender notice for sale of the said properties.
4. Learned Counsel Shri. Gordey submitted that location of the property in question has been given in Clauses 1.2 and 1.3 of the tender notice. Clause 2.1 lays down the eligibility conditions, which read thus:
"2.1: Eligibility Conditions:
The tenderer should:
(i) be any person, registered trust, registered firm, registered co-operative society, private Limited company registered in India,.
(ii) be legally competent to enter into contract as per prevailing laws,
(iii) Income Tax Assessment Orders for the last three years would be required.
NTC (MN) Ltd. may also consider a bid submitted by a consortium of persons/ companies. It is, however, made clear that there should be no change in the consortium structure during finalisation of the tender right upto the stage of depositing bid amount with NTC (MN) Ltd. If there are any changes in the consortium structure, NTC (MN) Ltd. reserves right to cancel the sale. However, the financial arrangement between the parties should be specified in the tender document. No did by a consortium/ partnership/company shall be entertained, if in the opinion of the Asset Sale Committee,
1. R. K. Structures Pvt. Ltd. (respondent
