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2019 Supreme(Bom) 1643

IN THE HIGH COURT OF JUDICATURE AT BOMBAY
Pradeep Nandrajog, Revati Mohite Dere, Bharati Dangre, JJ.
Electrical Contractors Association of Maharashtra – Appellant
Versus
City and Industrial Development Corporation of Maharashtra Ltd. – Respondent
Writ Petition No. 1470 of 2019
Decided On : 05-09-2019

Advocates Appeared:
P.J. Thorat, Adv., Nitin Gangal, Adv., Namita M. Mestry, Adv., Ashok Kadam, Adv.

Headnote:

Constitution of India - Articles 14, 19(1)(g) and 21 - Challenge to a Government Resolution - Challenging the award – Claim of compensation - decision Electrical Contractors Association State of Maharashtra laid a challenge to a Government Resolution dated 27th January 2004 followed by a Circular dated 24th March 2011 issued by the Public Works Department of the State of Maharashtra pertaining to construction of buildings costing more than Rs. 1 Crore. The State Government Resolution required a composite tender to be floated inviting offers to execute the civil and electrical works. The Circular issued by the Public Works Department noted that in execution of civil and electrical works, the Government Resolution was not being followed and thus required officers of the Public Works Department to adhere to the Government Resolution. The decision noted a decision of a learned Single Judge of the Kerala High Court reported as Government Electrical Contractors – Held, validity of a norm could be tested on the principle of a criteria having a reasonable nexus with the objects sought to be achieved. The object of a tender is to obtain the most competitive bid. The learned Single Judge of the Kerala High Court has held that a composite tender for civil and electrical works would have the danger of non-competitiveness qua the electrical works for the reason the civil contractor would be sub-contracting the work to the electrical contractor and the prospect of civil contractors getting monopoly in the field would be writ large. As per the learned Single Judge after monopolising the business the civil contractors at their whims and fancies would join the electrical contractors - Reasoning of the learned Single Judge is flawed because it is theoretical and overlooks the realities of life. Law of life is experienced and not logic. In a competitive world where the civil contractor would have to get executed the electrical works through a licenced electrical contractor, all bidders would from the business point of view consult electrical contractors for the price to be quoted concerning the electrical works and since each would know that the others are doing so and they have to be competitive, the rates quoted are bound to be competitive and the question of any monopoly resulting does not arise. The observations of the learned Single Judge concerning level playing field have already been dealt with by us hereinabove and thus, we conclude that for building works of over Rs. 1 crore it is permissible to call for a composite tender because execution of electrical works are intertwined with the execution of the civil works. Before a roof is cast the iron rods are bound over which the concrete is poured. Before pouring the concrete the conduits are laid. The boxes are affixed from which fans and hanging lights would ultimately be affixed. Similarly, after the brick work is completed to erect a wall, channels are cut to affix the conduits and the boxes for the switches and thereafter plastering work is done – Appeal dismissed

JUDGMENT :

Pradeep Nandrajog, J.

The present reference is on account of the order dated 13th February, 2019 passed by a Division Bench of this Court and the question for consideration is found in paragraph 12 of the said order. The said question reads as under :-

    "In the light of the principles which govern the exercise of judicial review, in contractual matters, whether the decision of the Division Bench in Writ Petition No. 3196 of 2013 in Aurangabad Electrical Contractors Association & Ors. vs. The State of Maharashtra, dated 10th April, 2014, holding that the Government Resolution, dated 27th January 2014 and the Government Circular, dated 24th March 2011, are violative of the provisions of Articles 14, 19(1)(g) and 21 of the Constitution of India and thereby directing that separate tenders be invited for civil and electrical works, is correct?"

2. The decision dated 10th April 2014 in Writ Petition No. 3196 of 2013 Auranagabad Electrical Contractors Association & Ors. vs. the State of Maharashtra laid a challenge to a Government Resolution dated 27th January 2004 followed by a Circular dated 24th March 2011 issued by the Public Works Department of the State of Maharashtra pertaining to construction of buildings costing more than Rs. 1 Crore. The State Government Resolution required a composite tender to be floated inviting offers to execute the civil and electrical works. The Circular issued by the Public Works Department noted that in execution of civil and electrical works, the Government Resolution was not being followed and thus required officers of the Public Works Department to adhere to the Government Resolution. The decision noted a decision of a learned Single Judge of the Kerala High Court reported as Government Electrical Contractors vs. The State of Kerala & Ors., (2011) 1 KerLT 157 in which similar issue regarding composite tender to execute civil and electrical works was considered. Noting various decisions of the Supreme Court and in particular the decision reported as Reliance Energy Limited & Anr. vs. Maharashtra State Road Development Corporation Ltd. & Ors., (2007) 8 SCC 1 the learned Single Judge had held as under :-

    "18. Judged in the light of the above principles, the question to be considered herein is whether the circulars Exts. P3, P6 and P8 provide any level playing field for any electrical contractors. The system of inviting tender only through the civil contractor will effectively deny any opportunity to submit tender for electrical contractors independently. The civil contractor will have to name the electrical contractor, going by Ext.P8 circular. It is therefore entirely upto the civil contractor to quote the rates for execution of the work and name the electrical contractors. The chance of the electrical contractor getting any work entirely depends upon the volition of the civil contractor. The same will result in absence of any competition from among electrical contractors, as the contractors will not be able to compete for the work on their own by submitting the tender. Therefore, the prospect of civil contractors getting monopoly in the field is writ large. They can on their own whims and fancies, join along with any of the electrical contractors whom they name, in the tenders. Even though it is provided that registration of electrical contractor/electrician will be a precondition for carrying out the electrical works in PWD, that alone will not help the electrical contractors to participate in the tender, as pointed out already. Thus, the same violates the concept of level playing field resulting in violation of Article 19(1)(g) of the Constitution, as held in Reliance Energy's case (supra). Article 14 will be attracted while testing the validity of a Government policy. On both counts the circulars are invalid and arbitrary and discriminatory."

3. The said decision of the learned Single Judge of the Kerala High Court heavily relied upon the observations of the Supreme Court in paragraphs 36 a

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