IN THE HIGH COURT OF ALLAHABAD
Ramesh Sinha, Ajit Kumar, JJ.
Sudhir Kumar Singh - Petitioner
Vs.
State Of U.P. And Others - Respondent
Writ - C No. - 25389 of 2019
Decided On : 11-12-2019
WAREHOUSING CORPORATION - TENDER - CANCELLATION - PRINCIPLES OF NATURAL JUSTICE - BIAS - AUTONOMOUS BODY - INTERFERENCE BY GOVERNMENT - WRIT OF CERTIORARI - QUASHING OF ORDER: 1. In the instant case, the petitioner was awarded a tender for work at Bhawanipur-1, Mirzapur region. However, the order was later canceled by the Managing Director of the Warehousing Corporation on the grounds that the tender process was flawed and that the petitioner had obtained the tender through undue influence and conspiracy with the officials of the Corporation. 2. The petitioner challenged the cancellation order, arguing that he was not given an opportunity to be heard before the order was passed, that the Managing Director was biased against him, and that the Corporation, being an autonomous body, could not be directed by the government to cancel the tender. 3. The Court held that the petitioner was entitled to an opportunity of hearing before the cancellation order was passed, that the Managing Director was biased against the petitioner, and that the government could not interfere with the Corporation's decision to award the tender to the petitioner. 4. Accordingly, the Court quashed the cancellation order and directed the Corporation to reinstate the petitioner's tender.
Fact of the Case:
The petitioner was awarded a tender for work at Bhawanipur-1, Mirzapur region. However, the order was later canceled by the Managing Director of the Warehousing Corporation on the grounds that the tender process was flawed and that the petitioner had obtained the tender through undue influence and conspiracy with the officials of the Corporation.
Finding of the Court:
The Court held that the petitioner was entitled to an opportunity of hearing before the cancellation order was passed, that the Managing Director was biased against the petitioner, and that the government could not interfere with the Corporation's decision to award the tender to the petitioner.
Issues: 1. Whether the petitioner was entitled to an opportunity of hearing before the cancellation order was passed? 2. Whether the Managing Director was biased against the petitioner? 3. Whether the government could interfere with the Corporation's decision to award the tender to the petitioner?
Ratio Decidendi: 1. The principles of natural justice require that a person be given an opportunity to be heard before an order is passed against him. 2. A decision-maker is biased if he has a personal interest in the outcome of the decision or if he has a preconceived opinion about the matter. 3. An autonomous body is not subject to the control of the government and the government cannot interfere with its decisions.
Final Decision: The Court quashed the cancellation order and directed the Corporation to reinstate the petitioner's tender.
JUDGMENT :
Sinha 'J' for the Bench
1. Heard Sri Imran Syed, learned counsel for the petitioner and Sri Kunal Shah, learned counsel for the respondents. Perused the record.
2. In this petition invoking our extra-ordinary jurisdiction under Article 226 of the Constitution of India the petitioners have sought relief in the nature of a writ of certiorari for quashing the order dated 26.07.2019 whereby the petitioner's agreement pursuant to a notice invoking tender dated 26.5.2018 has come to be canceled.
3. Briefly stated facts of the case are that petitioner who is a registered contractor with the respondents-Ware Housing Corporation applied against a notice invoking tender dated 1.6.2018 for the work to be carried out for Mirzapur, Bhawanipur1, Bhawanipur-2 and tendu centres with respect to food grains of Food Corporation of India. The petitioner having offered the lowest rate to undertake the work to be assigned pursuant to the tender notice was selected in the L-1 category and after approval of the higher authorities the agreement came to be executed between the Corporation and the petitioner on 13.7.2018 for work at Bhawanipur-1, Mirzapur region. No sooner did the parties sign the agreement the petitioner started working as per the terms of the agreement. It appears that while others were also selected for different region for different work some complaint got lodged by one Pramod Kumar Singh with the Special Secretary, Department of Co-operatives, Government of U.P., Lucknow, Uttar Pradesh. The Special Secretary wrote a letter to the Managing Director of the Ware Housing Corporation on 30.5.2019 to hold an enquiry on two points: one related to a firm namely, Iqbal Ahmad Ansari qua its registration and renewal and it being black-listed already; the other point was with regard to the cancellation of tender notice dated 16.4.2018 and 5.5.2018 without assigning any reason and then floating a new tender notice dated 16.6.2018 and accepting higher prices for the distribution of work. While this letter was written by the Special Secretary to the Managing Director, it appears that the Special Secretary also wrote a letter directly to the Commissioner of the division to hold administrative enquiry of the complaint made in the matter. The Commissioner of the Vindhyachal division obtained some report from the Ware Housing Corporation, Lucknow dated 13.7.2018 and proceeded to record a finding to the effect that the notice inviting tender was a sheer formality with some ulterior motive and the officers of the Ware Housing Corporation in a very hurried manner approved the tender application, inviting application only from the contractor registered with U.P. State Ware Housing Corporation, Vindhyachal; and the officers who were involved in the tender process forming a Committee were wrongly appointed in the sense that a contract employee was part of the tender committee. So basically complaint was that in the e-tender process only registered contractors were invited which was objectionable because had there been invitation from the open market there would have been more competition and the tender applicants would have offered an accurate price and that the work has been allotted in the contract at a very higher cost to say to much more that 100 % of the earlier one. In its concluding part the report contained a finding to the effect that no survey was conducted for the assessment of the cost and that the recommendation was made by the officers concerned in a very hasty manner and that the Chief Regional Manager did not act very fairly in the matter. After the said report was submitted it appears that the Managing Director of the State Ware Housing Corporation himself conducted an enquiry in compliance of the order of the Special Secretary dated 30.5.2019 and submitted a report to the Chief Secretary on 14.6.2019. The report has been placed before this Court by learned counsel for the petitioner which is taken on record and the learned counsel
Rajasthan Housing Board (2007) 1 SCC 477; ECISPIC MCM (JV v. Central Organization 2018 (5) AWC 4772
Employees State Insurance Corporation and Anr v. Jadain (2006) 6 SCC 581
U.P. State Warehousing Corporation vs. Sunil 2013 (3) ADJ 745
Sahara India (F) Lko v. Commissioner of Income Tax & another (2008) 14 SCC 151
Securities and Exchange Board of India v. Akshay Infrastructure Pvt. Ltd. (2014) 11 SCC 112
Dharampal Satyapal Ltd. v. Deputy Commissioner
United India Assurance Co. Ltd. v. Manubhai Dharmshree Bhai and others (2008) 10 SCC 404
Bharti Airtel v. Union of India (2015) 12 SCC 1
State of Punjab & Ors v. Raja Ram & Ors in AIR 1981 SC 1694
Ramana Dayaram Shetty v. The International Authority of India
U.P. State Warehousing v. Sunil Kumar Srivastava and another 2013 (3) ADJ 745
Manohar Lal Sharma v. Narendra Damodar Das Modi (2019) 3 SCC 25
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