2016 Supreme(Pat) 1285
IN THE HIGH COURT OF JUDICATURE AT PATNA
VIKASH JAIN, HEMANT GUPTA, JJ.
Baidyanath Singh, S/o. Late Gonour Singh - Appellant
Versus
The State of Bihar & Ors. - Respondents
Letters Patent Appeal No. 1861 of 2016
Decided on : 16-12-2016
Advocate Appeared:
For the Appellant :Mr. Rajendra Narayan Sinha, Senior Advocate and Mr. Nityanand, Advocate
For the Respondent: Mr. Dhurendra Kumar, A.C. to G.P.-5
Headnote:Contract Matter–Scope of Judicial Review–powers of writ court are plenary in nature and in exercise of such power, the Court can embark an inquiry into the disputed questions of facts as well, but whether such powers should be exercised or not is one of the direction–the Power of Judicial Review in the matter of award of contract conferred by Article 14 is wide, which enjoins the public authority to act fairly, reasonably by excluding irrationality and arbitrariness–but the power of judicial review in a concluded contract is limited and is not all pervasive as in the matter of awarding of contract–the writ court in exercise of judicial review can intervene even in respect of concluded contracts if the contract is statutory contract or there is public law element in it–in the present case, the appellant did not produce the licence under the Act which was a condition in the tender itself–therefore, even if the Tender was accepted at one point of time overlooking such requirement, the same could be cancelled–the appellant did not produce the licence over after the show-cause notice was served–therefore, the cancellation of contract awarded to the appellant is based on good and sufficient reason and is not an arbitrary action–no reason to exercise writ jurisdiction–LPA dismissed. (Paras 8 & 16)
AIR 2005 SC 2299, (2003)2 SCC 107, (2010)3 SCC 321, (2001)10 SCC 491, (1998)8 SCC 1, (2009)14 SCC 451, (2011)5 SCC 697, (2004)3 SCC 553, (2015)7 SCC 728, (1991)3 SCC 91–Referred.
Hemant Gupta, J.
1. The challenge in the present Letters Patent Appeal is to an order passed by the learned Single Bench of this Court on 8th of September, 2016 in C.W.J.C. No. 14165 of 2016 whereby, the writ application seeking quashing of the order dated 23rd of April, 2016 whereby, the contract of food articles for supply in jail was recalled and it was decided to call for the fresh tender, was dismissed.
2. A tender was invited on 27th of January, 2016 by the Superintendent, Shahid Khudiram Bose Central Jail, Muzaffarpur for supply of general food and other miscellaneous articles. The appellant submitted his tender including certificate of registration under the Food Safety and Standard Act, 2006 (hereinafter referred to as "the Act"). The tender of the appellant in respect of some items was accepted and the appellant was directed to deposit a sum of Rs. 44,65,000/- i.e. 10 per cent of the total estimated amount for the Financial Year 2016-17 as earnest money in the form of Bank Guarantee. The appellant deposited the said amount but the tender was cancelled on 23rd of April, 2016 when even after request of the appellant for grant of time to produce the licence from Food Safety and Standard Authority was not accepted.
3. The contention of the appellant is that he had assured the respondents that he would submit such licence before 28th of April, 2016 but even before that date, the decision to invite fresh tender was taken.
4. The learned Single Bench dismissed the writ application on the ground that the appellant has not immediately invoked the writ jurisdiction of this Court and has allowed the fresh tender notice to be issued and finalized. Therefore, there is no reason to entertain the writ application filed by the appellant.
5. Before this Court learned counsel for the appellant contended that the decision to cancel the contract and to issue fresh tender is arbitrary and without any reason and, thus, this Court in the writ application should not allow such arbitrary action to stand and consequently allow the appellant to complete the contract awarded to it at an early stage.
6. A perusal of the show-cause issued to the appellant on 15th of April, 2016 shows that the appellant was informed that licence has not been produced from Food Safety and Standard Authority which is mandatory in respect of dealers who have an annual production of more than twelve lakhs rupees (condition number 6). Such condition is that the dealers have to produce licence and registration under the Act. Admittedly, the appellant has not produced such licence which was a condition in the notice notifying the tender when it submitted tender and did not supply, even when called upon to produce the same.
7. Before this Court, learned counsel for the appellant referred to the judgments in the case reported as M/s. Master Marine Services Pvt. Ltd., v. Metcalfe & Hodgkinson Pvt. Ltd. and another, AIR 2005 Supreme Court 2299, Harbanslal Sahnia and another v. Indian Oil Corpn. Ltd. and others, (2003) 2 SCC 107, Hindustan Petroleum Corporation Limited and others v. Super Highway Services and another, (2010) 3 SCC 321, Modern Steel Industries v. State of U.P. and others, (2001) 10 SCC 491, Whirlpool Corporation v. Registrar of Trade Marks, Mumbai and others, (1998) 8 SCC 1, National Sample Survey Organisation and another v. Champa Properties Limited and another, (2009) 14 SCC 451, Union of India and others v. Tantia Construction Private Limited, (2011) 5 SCC 697 and ABL International Ltd. and another v. Export Credit Guarantee Corporation of India Ltd. and others, (2004) 3 SCC 553 to contend that in exercise of the writ jurisdiction, the Court can decide even disputed questions of fact to annul the arbitrary action of the State Government.
8. The reading of the judgments referred to by the learned counsel for the appellant lead to the conclusion that the powers of the Writ Court are plenary in nature and in exercise of such power, the Court can embark an in