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Autotronic Elevator Services, Hyderabad v/s Electrical Engineer PWD, R and B, Nampally

    W.P. Appeal No. 12309 of 1985

    Decided On, 03 December 1985

    At, High Court of Andhra Pradesh

    By, THE HONOURABLE MR. JUSTICE K. RAMA SWAMY

    For the Appearing Parties: Mohana Rao, Advocate.



Judgment Text

K. RAMA SWAMY, J.


(1) THE petitioner is seeking a writ of Mandamus or any other appropriate writ for hearing the respondents 1 to 3 from entrusting comprehensive maintenance of 19 lifts (OTIS LIFTS) on the nomination basis to the manufacturers and for a direction to follow the system of tender to attend the comprehensive maintenance of the lifts as was done from the year 1983 to 1985.


(2) THE case of the petitioner is that the respondents are having number of lifts of which 19 lifts were manufactured and installed by the fourth respondent Otis Elevators Company (I) Ltd. For the years 1983-84 and 1984-85 tenders were called for. The petitioner is the lowest tendered to effect maintenance. After the expiry of two years with effect from 31-3-1985 and pending taking decision whether a tender system should be continued or not, the petitioner was permitted to carry on maintenance on monthly nomination basis on the same rate which he tendered. When he has been continuing, the third respondent, Chief Engineer, P. W. D. Roads and Buildings now decided to give the maintenance work to fourth respondent on nomination basis at a rate 35% higher than the rates at which the petitioner is offering. It is his case that three successive Electrical engineers have recommended for giving on tender basis and it is also approved by the Superintendent Engineer. But the third respondent, Chief Engineer for his own reasons, has given a go-by to the tender system and has fallen back on the nomination basis. This action of respondents is arbitrary under Art. 14 of the Constitution preventing equally eligible persons like petitioner to participate in the tender and be one of the successful tenderers in effecting the repairs.


(3) A counter has been filed by one A. Gopala Kishanrao, Electrical Engineer on behalf of the respondents. He admitted that the petitioner is the lowest tendered in the previous years. The tender offered by the fourth-respondent was high, therefore, the petitioner was preferred and he continued as Maintenance Engineer of the lifts for two previous years and for this year he continued up-to-date on nomination basis. It is admitted that there was no complaint against the petitioner with regard to the maintenance effected by the petitioner. It is also admitted that the rates quoted by the fourth respondent is 35% higher than what was offered by the petitioner. It is also stated in the counter-affidavit that from the year 1975 to 1983 the fourth respondent was attending to the maintenance of the lifts and due to labour trouble the fourth respondent discontinued and thereafter the petitioner was given on tender basis. It is further contended that with a view to effect quality, better service and to avoid risk to the user of the lift, it was decided that the maintenance work of the lifts be given to the fourth respondent. It is further pleaded that it is a policy decision and is at the discretion of the Chief Engineer as to whom the work has to be entrusted for maintenance. The fourth respondent is manufacturer, the spare-parts are not available in the open market. The petitioner has no right under Art. 226 of the Constitution. It is only a contractual right. He has no legal right to the contract and has not been infringed. The policy of the Government in the matter of technical function is outside the writ jurisdiction of this Court. Maintenance of lifts is a specialised work and it cannot be entrusted to sundry organisation. It is for the department to formulate a policy and it is not open to the petitioner to assail the policy of the department. The fourth respondent filed a counter practically on the line of defence taken by A. Gopala Kishanrao Electrical Engineer on behalf of the respondents. It is further stated that the work has already been entrusted to the fourth respondent.


(4) THE only question that arises in this writ petition is whether the system of nomination basis is a valid in law and whether this Court can interfere under Art. 226 of the Constitution. It is now well settled law that where the Government is dealing with public, whether by way of giving jobs or entering into contracts or granting other forms of largess, the Government cannot act arbitrarily as its sweet will and like a private individual deals with it, but its action must be attuned to some standard or norms which is not arbitrary, irrational or irrelevant. The governmental action must be based on some principles which meets the test of reason and relevance. A citizen, though has no fundamental right to insist upon the Government to enter into favourable relations with him, has a fundamental right to be fairly considered and has a "privilege" or "legitimate expectation of a right" to enter into contractual relations with the Government or the local authority or instrumentality of the State. Though the State need not deal with any one, but if it do chooses, its action must be in conformity with the law or policy. A citizen has a fundamental right under Art. 19 (1) (G of the Constitution to carry on any trade or occupation or business. Calling for tenders is one of the well accepted mode of distribution of the largess of the State by way of contract. But undoubtedly each work differs from its very nature, content and the purpose. In some cases it may require special skill or expert knowledge.


(5) THE Government when it deals with the public, whether by way of giving jobs or entering into contracts or granting other forms of largess, (the Government) cannot act arbitrarily at its sweet will and like a private individual deals with it, but its action must be attuned to some standard or norm which is not arbitrary, irrational or irrelevant. The Government action must not be arbitrary or capricious, but must be based on some principles which meets the test of reason and relevance. The doctrine of equality enshrined in Art. 14 assures to every citizen, though the State is entitled to refuse to enter into relationship with any one, yet if it does so, the State cannot arbitrarily choose any person it likes for entering into a relationship and discriminate between persons similarly circumstanced. Privilege is a form of liberty as opposed to duty. The activities of the Government have a public element and therefore there should be fairness and equality. Articulation of equality clause even in contractual area ensures to every citizen not merely in participation to enter into favorable relation with the Government justice and fair treatment is accorded but also keeps a check on the Governmental agencies committing arbitrary, capricious or irrational acts or actions which have lasting stains of infamy and blemish on the fountains of rule of law. The rule of law for functional success must run close to the rule of life. Therefore, the action of the State must be in conformity with the Cherished principle of equity enshrined under Art. 14 of the Constitution. The question is whether this equity has been meted out to the petitioner. As stated earlier, the Government have been giving maintenance of the lifts on tender basis during the years 1983-84 and 1984-85 and the petitioner happened to be the lowest tendered and in those two years the fourth respondent offered higher rates and the higher rates were not accepted and the lowest rates of the petitioner were accepted and the petitioner was given contract. It is stated that the fourth respondent has assured the Chief Engineer, that he would offer better services, therefore, even though he offered 35$ higher rates than what the petitioner is doing on contract on nomination basis the contract was accorded to the fourth respondent on nomination basis. The question is whether this action of the third respondent is justified. In Rasbihari Panda v. State of Orissa, AIR 1969 SC 1081 Shah, J, (as he then was) speaking for the Constitution Bench in para 17 held that :"validity of the schemes adopted by the Government of Orissa for sale of Kendu leaves must be adjudged in the light of Art. 19 (1) (G) and Art. 14. Instead of inviting tenders the Government offered to certain old contractors the option to purchase kendu leaves for the year 1968 on terms mentioned therein. The reason suggested by the Government that these offers were made because the purchasers had carried out their obligations in the previous year to the satisfaction of the Government is not of any significance. xx xx xx xx xx xx xx xx xx xx The right to make offers being open to a limited class of persons it effectively shut out all other persons carrying on trade in kendu leaves and also new entrants into that business. It was ex facie discriminatory, and imposed unreasonable restrictions upon the right of persons other than existing contractors to carry on business. In our view, both the schemes evolved by the Government were violative of the fundamentals right of the petitioners under Art. 19 (1) (G) and Art. 14 because the schemes gave rise to a monopoly in the trade in kendu leaves to certain traders, and singled out other traders for discriminatory treatment. "in that case, the Government have selected a class of persons who performed satisfactorily on the previous years and that consideration was found foul in the grinding teeth under Art. 19 (1) (G) and under Art. 14 of the Constitution. In this case also the same principle applies. The Chief Engineer has chosen person of his liking on nomination basis. He can take into consideration the experience, specialised knowledge, service knowledge available from other quarters like the petitioner from competing with the 4th respondent by offering of the tenders to enter into contractual relations with the Government. As stated earlier, calling for tenders is one of the well accepted mode of distribution of the largess of the State by way of contract s as to secure the minimum expenditure to the State. It is stated in the reply-affidavit that spare-parts are available i the open market and it is also stated that except spare parts of the Crompton Company with regard to other companies all the parts are freel

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y available in the market. The rate quoted by the 4th respondent is admittedly 35% higher than what was quoted and being worked out by the petitioners. The exchequer is unduly burdened thereby. Mere assurance of better services by the 4th respondent is only a ruse to extend arbitrary favour to the 4th respondent. The discrimination is writ large. The action created monopoly in favour of the 4th respondent by the executive action without authority of law. It is an unreasonable restriction. The action is ultra vires of Arts. 19 (1) (G) and 14 of the Constitution. Under these circumstances, I find that there is justification in the complaint of the petitioner that he and similarly placed persons are singled out by the arbitrary and discriminatory action of the Chief Engineer-3rd respondent in choosing the 4th respondent on nomination basis. It is open to the Government or the third respondent-Chief Engineer to evaluate suitable scheme by calling for tenders and then accept the same according to rules. The writ petition is accordingly allowed with costs. Advocates fee Rs. 250. 00. (6) PETITION allowed.
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