ALLAHABAD HIGH COURT
DILIP B. BHOSALE, C.J. AND MANOJ KUMAR GUPTA, J.
BUNDEL KHAND ADVERTISING ASSOCIATION AND OTHERS - Petitioners
Versus
STATE OF Uttar Pradesh AND OTHERS - Respondents
(Civil Misc. Writ Petition Nos. 35910 and 32507 of 2017, decided on 8th March, 2018)
(B) Arbitration and Conciliation Act, 1996—Section 12(5)—Appointment—Arbitrator—Illegality/Legality—Person falling under prohibited category can act as an arbitrator provided parties agree to assign such a role to him after dispute has arisen—In instant case parties were aware of fact that in case of breach of conditions of contract decision to repudiate contract would be taken by Municipal Commissioner—Thus parties chose not to assign him role of an arbitrator however that of a mediator/conciliator—Doctrine of bias nor prohibition under Section 12(5) nor Seventh Schedule would eclipse power conferred upon Commissioner—Further petitioner not being party to agreement cannot assail validity of decision of Commissioner. [Para 17]
(C) Constitution of India, 1950—Article 226—Order—Statutory authority—Validity—Not to be based on extrinsic material or supplementary reasons—Order of Municipal Commissioner terminating contract was only an approval of report of Incharge Officer—Office report upon being approved became part and parcel of order of Municipal Commissioner—Thus Municipal Commissioner was id idem with suggestions and reasonings given in report—Hence placing reliance by Court on reports in ascertaining cause which led to cancellation of contract—Not extrinsic material nor amounts to permitting Nagar Nigam to supplement reasons not taken earlier. [Para 20.2]
(D) Constitution of India, 1950—Article 226—Writ Petition—Maintainability of—Locus standi—Tender for advertisement on hoardings—Petitioners who were ineligible to participate in tender process and did not participate however were granted license in previous year only as a stop gap arrangement—Have no locus to challenge award of contract to highest bidder and its revival including terms and conditions of tender notice—And further action of Municipal Commissioner in permitting highest bidder to deposit auction money in installments. [Para 27]
(E) Contractual Matter—Tender conditions—Relaxation—Validity—Municipal Commissioner permitting highest bidder to deposit auction money in installments—Was a decision taken in course of negotiation with highest bidder with commercial considerations—Cannot be said to be illegal. [Para 31.2]
(F) Uttar Pradesh Municipal Corporations Act, 1959—Sections 451, 305—Advertisement—Hoardings—Renewal of licenses—Petitioners who were ineligible to participate in tender process and did not participate however were granted license in previous year only as a stop gap arrangement without any time limit—Section 451(4) would have no application—Petitioner not entitled to renewal of licence. [Para 39]
Result; Petitions Dismissed.
Hon’ble Manoj Kumar Gupta, J.—The first writ petition (Writ-C No. 35910 of 2017), under Article 226 of the Constitution of India, is filed by one Bundelkhand Advertising Association (for short, ‘the Association’) and its members, whereas the second writ petition (Writ-C No. 32507 of 2017) is filed by M/s. Anoop Publicity alone, who is also a member of the Association. The prayers made in both the writ petitions and factual matrix against which they are arising are similar. Even the respondents in both the writ petitions are common. Hence both the writ petitions were heard together and are being disposed of by this common judgment.
1.1 In the first writ petition, initially the petitioners had challenged the order dated 27th July 2017, whereby their applications seeking renewal of permissions for displaying advertisements for the years 2016-17 and 2017-18 made under the provisions of the Uttar Pradesh Municipal Corporation Act, 1959 (for short, ‘the Act’) were rejected. The petitioners, by way of an amendment, also raised a challenge to the order dated 20th October 2016 passed by respondent No. 8, another order dated 20th October 2016 passed by respondent No. 3/4 and the agreement dated 4th January 2017 executed between the respondent - Nagar Nigam and respondent No. 5 - Midas Infra Tech Private Limited. By the order dated 20th October 2016, respondent No. 4 Municipal Commissioner, Nagar Nigam, Jhansi (for short ‘Municipal Commissioner’) decided/allowed the representation made by respondent No. 5 dated 10th October 2016 and re-allotted the contract that was cancelled earlier vide order dated 4th August 2016, for two years, commencing from 20th October 2016 to 19th October 2018, by executing an agreement dated 4th January 2017. The challenge raised in the second writ petition is similar. Thus, the petitioners have principally raised challenge to the order of re-allotment dated 20th October 2016 of the contract in favour of respondent No. 5 on grounds, to which we propose to make reference after narration of the factual matrix and at an appropriate stage in latter part of the judgment. We may also observe at this stage that if the order dated 20th October 2016 is set aside and the subsequent contract dated 4th January 2017 is cancelled as a consequence thereof, then alone it would be necessary to consider whether the petitioners are, as of right, entitled to seek renewal of the permission to display advertisements.
2. The factual matrix, sans unnecessary details, is as follows: the respondent - Nagar Nigam, as usual, for realising the advertisement fee from advertisers, who are engaged in the business of advertisement, and who install hoardings in the territorial limits of the Nagar Nigam, Jhansi, decided to appoint contractors for financial years 2016-17 and 2017-18 and, consequently, issued an advertisement on 13th January 2016, inviting tenders. However, there was no response to the tender notice. In other words nobody came forward to participate in the tender proceedings. Thereafter, two more tender notices dated 12th March 2016 and 27th March 2016 were issued, and to these advertisements also, there was no response and hence, fourth time, making some changes in terms and conditions of the tender notice, an advertisement was published in newspapers on 13th April 2016. In response to this advertisement, respondent No. 5 and two more advertising agencies submitted the tender. None of the petitioners participated in the tender process in view of the typical terms and conditions mentioned in the advertisements, including the condition whereby the defaulters were debarred from participating in the tender process. Respondent No. 5, being the highest bidder, after negotiations, enhanced the auction amount by 15% and, accordingly, the bid was finalised for an amount of Rs. 1,27,80,000/- for a period of two years. In pursuance thereof, an agreement was entered into between respondent No. 5 and the Nagar Nigam on 18th May 2016.
The importance of fair and reasonable actions by the State, the need for public auction in granting state largesse, and the significance of complying with the terms and conditions of agreements.
Lowest bidder has no vested right to contract; authority may cancel tender for valid reasons like cartel without malice; tender conditions not judicially reviewable unless arbitrary.
Judicial review in contractual matters is limited to evaluating decision-making processes and does not extend to substituting the authority's decisions unless clear evidence of arbitrariness or mala ....
Point of Law : when a bidder who has not been issued the final acceptance of the bid by the competent authority being the highest bidder acquires no vested right ,but the bidder has right to equality....
(1) Disputes arising out of purely contractual obligations cannot be entertained by High Court in exercise of extra-ordinary writ jurisdiction.(2) A wrong doer ought not to be permitted to make profi....
Login now and unlock free premium legal research
Login to SupremeToday AI and access free legal analysis, AI highlights, and smart tools.
Login
now!
India’s Legal research and Law Firm App, Download now!
Copyright © 2023 Vikas Info Solution Pvt Ltd. All Rights Reserved.