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2012 Supreme(Gau) 1343

IN THE HIGH COURT OF GAUHATI (KOHIMA BENCH)
S. Talapatra, J.
Divyajyoti Distributors Private Ltd. and Anr. – Appellants
Vs.
State of Nagaland and Ors. – Respondent
W.P. (C) No. 130 (K) of 2012
Decided On: 21.12.2012

Advocates Appeared:
For Appellant/Petitioner/Plaintiff:Mr. K.N. Choudhury, Sr. Advocate, Mr. S. Sarma, Mr. I. Apok, Mr. J. Deka, Mr. S.K. Deka and Mr. R.M. Deka, Advocates
For Respondents/Defendant:Addl. AG, Government Advocate, Mr. P. Pathak, Mr. K. Ramkumar, Sr. Advocates, Ms. Asangla, Mr. Wati Jamir, and Mr. A.B.Y.T. Varkey, Advocates

The decision-making process must be free from irrelevant considerations and mala fide intentions, and the State cannot be allowed to jeopardize the public trust reposed in it.

Headnote:

Lotteries - Eligibility Criteria - Companies Act, 1956 - Section 149(2) - Nagaland State Lotteries - [Lotteries] - [Companies Act, 1956, Section 149(2)] - The court discussed the eligibility criteria for appointment of distributors of Nagaland State Lotteries and the compliance with Section 149(2) of the Companies Act, 1956. The court found that the decision-making process was vitiated by irrelevant considerations and mala fide intentions aimed at awarding the distributorship to a specific respondent. The court quashed and set aside the impugned letters and directed the respondents to invite fresh tenders for distributorship of the Nagaland State Lotteries.

Fact of the Case:

The petitioner, a company incorporated under the Companies Act, 1956, challenged the appointment of distributors of Nagaland State Lotteries, alleging that the selected candidates did not fulfill the eligibility criteria and that the decision was arbitrary, illegal, and discriminatory. The petitioner contended that the respondents had waived non-compliance without authority and took an ex-facie illegal decision.

Finding of the Court:

The court found that the decision-making process was vitiated by irrelevant considerations and mala fide intentions aimed at awarding the distributorship to a specific respondent. The court quashed and set aside the impugned letters and directed the respondents to invite fresh tenders for distributorship of the Nagaland State Lotteries.

Issues: The main issues were the eligibility criteria for appointment of distributors of Nagaland State Lotteries, compliance with Section 149(2) of the Companies Act, 1956, and the legality of the decision-making process.

Ratio Decidendi: The court held that the decision-making process was vitiated by irrelevant considerations and mala fide intentions aimed at awarding the distributorship to a specific respondent. The court quashed and set aside the impugned letters and directed the respondents to invite fresh tenders for distributorship of the Nagaland State Lotteries.

Final Decision: The court allowed the writ petition, quashed and set aside the impugned letters, and directed the respondents to invite fresh tenders for distributorship of the Nagaland State Lotteries.

JUDGMENT

S. Talapatra, J.

1. The petitioner is a company incorporated under the Companies Act, 1956 whereas the petitioner No. 2 is the authorised signatory and the Area Manager of the petitioner No. 1 Company. All the share holders of the petitioner No. 1 are citizens of India. As the petitioner No. 2 appears to have been simply representing the petitioner No. 1, for convenience sake, the petitioner No. 1 shall hereinafter be referred to as the petitioner. The petitioner has experience of marketing lotteries run by various State Governments e.g., of Arunachal Pradesh. Nagaland, Sikkim, West Bengal, Mizoram and Royal Govt. of Bhutan. It has been asserted by the petitioner that they have got a large network all over India and they are the market leader in the business of the lotteries. The petitioner has claimed that they have got all the necessary infrastructures inclusive of the expensive licenced software for managing the online lotteries and has more than 1500 terminals spread across various States in India. The petitioner has been marketing the Nagaland State Lotteries without any blemish for many years. However, it has been also stated that the petitioner has been incorporated in the year 2011, but its Directors have vast experience in the field of lotteries. The petitioner has challenged the Government approval letter No. FIN/LOT-02/2011, dated 26.06.2012 (Annexure-R/1 to the affidavit-in-opposition filed by the respondent No. 5) and the letter of appointment of the distributor of Nagaland State Lotteries under No. DSL/17-10/2010-11/2, dated 27.06.2012 (Annexure-9 to the writ petition) alongwith the corrigendum dated 28.06.2012 under No. DSL/17-10/2010-11/123 (Annexure-10 to the writ petition).

2. According to the petitioner, the letter dated 26.06.2012 is arbitrary, illegal, mala fide, unfair, unreasonable, discriminatory and unconstitutional for the reasons that the respondent No. 5, Future Gaming Solutions India Pvt. Ltd. does not fulfill the requirement of clause 6(ii)(k) of the tender documents and has quoted lower rate than the petitioner whereas the respondent No. 6 also does not have the eligibility in terms of the tender documents, more particularly, clause 2(iv) and 2(vi) of the tender documents inasmuch as the respondent No. 6 has obtained the certificate for commencement of business on 24.01.2012, much later than the last date of submission of bids on 16.01.2012. Apart that, the respondent No. 6 did not submit the documents as referred in clause 6 of the tender documents, more particularly clause 6(ii)(c), (k) and (l) of the tender documents as issued by the respondent No. 4 for appointment of distributors of Nagaland State Lotteries. The respondents No. 1 to 4 have selected the ineligible candidates in breach of the equality clause guaranteed under Article 14 of the Constitution of India.

3. There is no dispute that the Notice Inviting Tender (NIT) for appointment for distributors of Nagaland State Lotteries was floated on 10.12.2011 in some of the well circulated newspapers, inviting sealed tenders from individuals/registered firms/companies for appointment as the distributor/s of Nagaland State Lotteries (online or paper or both). The petitioner and the respondents No. 5 and 6 had responded to the said NIT and quoted their respective rates. Amidst the process, M/s. Pooja Fortune Pvt. Ltd., by filing a writ petition, being W.P. (C) No. 179/2012 had obtained an interim order, restraining the opening of the tender papers, but the last date for submission of the tender papers remained unchanged as 16.01.2012 as the High Court did not pass any order as regards the last date of submission of the tender papers. Finally, the sealed tenders were opened on 27.03.2012 and it was found that as many as four tenderers have submitted their tenders. They are: namely (1) Future Gaming Solutions India Pvt. Ltd. (respondent No. 5), (2) Gaming India Distributor Limited (respondent No. 6), (3) Pooja Fortune Private Limited and (4)












































































































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