RAJU MATHEW Vs. STATE OF KERALA

JUDGEMENT

(1.) Heard counsel on both sides.

(2.) The State cannot act arbitrarily even in contractual matters is a principle by now well settled by a catena of decisions of the Apex Court and various High Courts. Even though the scope of interference by this Court in exercise of the extraordinary jurisdiction under Art.226 of the Constitution is limited, in the realm of contract, once it is found that the action of the Government or its instrumentality is vitiated by arbitrariness which is writ large, this Court will certainly interfere in the interest of justice. On the facts disclosed, the present one is one such case where interference by this Court is called for.

(3.) The petitioner's offer for constructing Elanji Distributary Ch. 0 to 3415 meters including C.D. works having been accepted and recommended after due deliberation by the High Level Tender Committee consisting of the Secretary, Irrigation Department as the Chairman, the Secretary, Finance Department and Secretary, Law Department as members along with three Chief Engineers of Irrigation Department, the first respondent cannot brush aside and reject the tender on flimsy grounds as stated in Ext. P4. The reasons stated in Ext. P4 order of rejection of the petitioner's tender are two: The first reason is that "a separate item has been given for earth work excavation for medium rock including stray blasting and separate rate quoted for this work. This is not in accordance with the standing instructions" and the second reason is that "the estimate for the work was proposed on the 1992 schedule of rates and that since the rates have been revised with effect from 1.7.1997, a revision of the estimate is required to be done" and it is therefore, necessary to revise the estimate in accordance with the revised schedule." On a perusal of Ext. P4, I am satisfied that the reasons cited for rejection of the petitioner's offer is absolutely without any basis. As regards the first objection, the frivolous nature of the objection is clear from the fact that the above mentioned work is shown as a separate work in all the schedules of all other works under the Irrigation Department. This is also true with regard to the other 12 works made mention of in Ext. P1 order of this Court. The tenders submitted by others with regard to those works have been accepted by the first respondent even though all those tenders also had the "objected work" as a separate head of work. As regards the second objection made in Ext P4 it has to be noted that as is clear from Ext. P2, the High Level Committee had accepted the petitioner's tender along with the tenders of others for the other works as early as 9.4.1996. The first respondent had in fact accepted the decision of the Committee in relation to all other works except that of the petitioner and all the other works commenced as early as in May, 1996. Therefore, it becomes clear that the failure to award the work in favour of the petitioner is manifestly deliberate and meant to frustrate the legitimate claim of the petitioner. Therefore, I have no hesitation in holding that the rejection of tender as per Ext. P4 is illegal and malafide and the same cannot be sustained. That apart, as is clear from Ext. P4, the petitioner was not heard nor given any notice before it was passed. It is high time to remind the State that it is not and should not be as free as an individual in selecting the recipients for its largess. Whatever its activity, the Government is still the Government and will be subject to restraints, inherent in its position in a democratic society. A democratic Government cannot lay down arbitration and capricious standards for the choice of persons with whom alone it will deal. The aforesaid principle laid down by Mathew, J. in V. Punnan Thomas v. State of Kerala ( AIR 1969 Ker. 81 (FB) was approved by the Apex Court in Ramana v. I.A. Authority of India ( AIR 1979 SC 1628 ) and has been applied repeatedly by the Supreme Court in a large number of decisions. To cite only a few: 1. Kasturilal Lakshmi Reddy v. State of J & K 1980 (4) SCC 1 . 2. Gujarat State Financial Corporation v. Lotus Hotels (P) Ltd. 1983 (3) SCC 379 , 3. B.M. Minhas v. Indian Statistical Institute 1983 (4) SCC 582 . 4. Rohtas Industries Ltd. v. Chairman, Bihar State Electricity Board 1984 Supp SCC 161 . 5. Ram & Shyam Co. v. State of Haryana, AIR 1985 SC 1147 , 6. Olga Tellis v. Bombay Municipal Corporation, AIR 1986 SC 180 .