The High Court disposed of a PIL writ petition challenging the award of an IT contract by Shipping Corporation of India Ltd. to a third party. The Court held that the scope of judicial review in commercial transactions is limited and found no patent arbitrariness.
This page shows the compact analysis of this judgement. The full analysis — procedural history, issue-by-issue holdings with ratio and obiter, advocates, and paragraph-level evidence for every claim — is being added to the record in batches and will appear here when this judgement has been through it.
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IN THE HIGH COURT OF JUDICATURE AT BOMBAY ORDINARY ORIGINAL CIVIL JURISDICTION
PIL WRIT PETITION NO.103 OF 2009
Shipping Corporation of India Ltd. Staff Union Mumbai & Anr.
...Petitioners
Versus
Shipping Corporation of India Ltd. & Ors.
...Respondents
Ms.Jane Cox for Petitioners.
Mr.J.P.Cama, Sr.Counsel with Mr.Manek Kalyaniwalla & Mr.Agnel Carneiro i/b M/s.Mulla & Mulla & Craigie Blunt & Caroe for Respondents 1 to 3.
Mr.C.U.Singh, Sr.Counsel with Ms.Falguni Thakkar i/b Doijode Associates for Respondent No.4.
Mr.M.S.Bharadwaj for Union of India.
...... CORAM : SWATANTER KUMAR, C.J. AND A.M.KHANWILKAR, J. DATED : OCTOBER 1, 2009.
P.C. :
Petitioner No.1 is a Trade Union registered under the Trade Unions Act,
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1926 representing the staff employed in the establishment of Respondent
No.1. It challenges awarding of contract in favour of Respondent No.4 in
this Petition under Article 226 of the Constitution of India and pray for the following reliefs :
“a. That this Hon’ble Court may be pleased by a Writ of Mandamus or in the nature of Mandamus or any other appropriate writ, order or direction, to set aside the contract awarded to the Respondent No.4 by the Respondent No.1 for the End-to-End Integrated IT System, now known as the SET-IT project;
b. That this Hon’ble Court may be pleased to direct the Respondent No.4 to refund with interest at the rate of 10% the amounts paid to it by the Respondent No.1 for the said project;
c. That this Hon’ble Court may be pleased by a Writ of Mandamus or in the nature of Mandamus or any other appropriate writ, order or direction, to direct the Respondent No.1 to carry out the End-to-End Integrated IT System/SET-IT project as an in house project;
Or, In the Alternative:
d. That this Hon’ble Court may be pleased by a Writ of Mandamus or in the nature of Mandamus or any other appropriate writ, order or direction, to direct the Respondent No.1 to carry out the End-to-End Integrated IT System/SET-IT project by issuing separate contracts for the Phase I & Phase II;
e. That this Hon’ble Court may be pleased by a Writ of Mandamus or in the nature of Mandamus or any other appropriate writ, order or direction, to direct the Respondent No.1 to carry out the End-to-End Integrated IT System/SET-IT project by issuing separate contracts for the Phase I & Phase II;
f. That this Hon’ble Court may be pleased to direct the setting up of a Committee to carry out an enquiry into the awarding of the contract to the Respondent No.4 by the Respondent No.1 for the End-to-End Integrated IT System, now known as the SET-IT project for both the Phases I & II;
g. That pending the hearing and final disposal of this Petition, this Hon’ble Court may be pleased to stay any further implementation in any manner, including training, of the End-to-End Integrated IT System, now known as the SET-IT project;
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h. For ad-interim and interim reliefs in terms of prayers (g) above.
j. For such other and further relief as the nature and circumstances of this case might require.”
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consultancy-cum-implementation for the End- to-End Integrated IT System. It finally materialised into inviting global tenders. Only three bidders were selected and finally on 9th October 2006 and 11th October 2006, the bid was accepted and the contract was awarded to the Respondent No.4. In March 2007, first phase of the contract has already been completed and the 2nd phase of the contract was to be concluded in November 2008 or shortly thereafter. The challenge has been made primarily on the ground that the action of the Respondent No.1 in awarding the contract to the Respondent No.4 is arbitrary, disadvantageous to the Public Exchequer and is not in conformity with the guidelines issued by the Central Vigilance Commission (“C.V.C.”). From the record, however, it appears that the C.V.C. was kept in touch and information was provided to them from time to time. While reporting about the progress of the project vide Exhibit I, it was stated that the Chief Vigilance Officer (`C.V.O.’) has been informed and the guidelines issued by the C.V.C. are being adhered to. However, in Paragraph 5 of this very report, it was noticed “since C.V.O. has written regarding possible conflict of interest, he should also be briefed about the approach now we propose to follow”. Thereafter and as stated in the reply affidavit filed on behalf of the Respondent No.1 Shipping Corporation of India Ltd., it has been averred that there was no conflict of interest and the
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Chief Vigilance Commissioner had not raised any objection regarding non compliance of his direction, as there was none. It was further stated that Respondent No.4 is not working as the Contractor or Vendor and there was no violation conducted in the project of the guidelines issued by the Chief Vigilance Commissioner. Firstly, this is primarily a commercial transaction of a Public Sector Undertaking and the contract has been awarded by Respondent No.1 in its considered view in favour of Respondent No.4. This being a commercial transaction, the scope of judicial review would be very limited and unless and until there was patent arbitrariness or unreasonableness in the grant of project, the Court would be loath to interfere. We have not noticed any such infirmity. Secondly, the entire contract has practically been concluded and the part of the second phase remains to be executed which further leaves hardly any scope for judicial intervention. We cannot lose sight of the fact that the present Petition has been moved by the Trade Unions of the employees of Respondent No.1 belatedly, and they have also claimed relief for themselves which prayer has been given up by the learned Counsel appearing for the Petitioner.
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ensure that no undue loss is caused to the Public Exchequer and the directions issued by the Central Vigilance Commission are not violated in the project. On these observations, Petition disposed of with no order as to
costs.
CHIEF JUSTICE
A.M.KHANWILKAR, J.
3 issues framed by the court
Whether the High Court should interfere in a commercial transaction of a Public Sector Undertaking regarding the arbitrary awarding of a contract.
Whether the petitioner trade union was maintaining this writ petition belatedly.
Whether any scope for judicial intervention remains as most of the contract has already been concluded.
Colour shows how this judgement treated each authority
Centre for Public Interest Litigation & Anr. v. Union of India & Ors.Referred¶34
Centre for Public Interest Litigation & Anr. v. Union of India & Ors. reported in 78 (1999) Delhi Law Times 389.
1 provisions across 1 enactments
Shipping Corporation of India Ltd. Staff Union Mumbai & Anr
Shipping Corporation of India Ltd
Swatanter Kumar
A.M.Khanwilkar
As recorded by the court registry
Litigation brought on behalf of the public interest rather than a personal grievance, relaxing the usual rule of locus standi.
Judgements on the same questions, provisions and authorities, from every court
