The Bombay High Court dismissed a PIL challenging a tender process and contract award for road securitization. The court held the issues were conclusively decided in prior judgments and the petition was barred by res judicata and public right principles.
Prayer clauses (a) and (b) rejected; PIL dismissed.
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
APPELLATE SIDE
PUBLIC INTEREST LITIGATION NO.206 OF 2010
Peasants & Workers Party of India & Anr. : Petitioners
V/s.
State of Maharashra & Ors. : Respondents
Mr.C.G.Gavnekar with Mr.G.S.Hiranandani and Mr.A.C.Gavnekar for the petitioners.
Mr.N.P.Deshpande, Asstt. Govt. Pleader for respondent no.1.
Mr.R.A.Dada, Senior Advocate, with Mr.P.P.Chawan, Mr.F.Lakdawala and Mr.K.Shah i/b. Little & Co., for respondent no.2.
Mr.F.E. Devitre, Senior Advocate, with Mr.Rajiv Kumar, Senior Advocate, and D.Y.Chitnis i/b. Deepak Chitnis Chiparikar & Co., for respondent no.3.
CORAM : D.D. SINHA AND
SMT.V.K.TAHILRAMANI, JJ.
DATE : FEBRUARY 7 & 9, 2012.
ORAL ORDER (Per D.D.Sinha,J.)
This Public Interest Litigation is directed against the tender notice dated 20.6.2009 issued by the respondent no.2 – Maharashtra State Road Development Corporation Limited (for short “MSRDC”) as well as the decision of the Cabinet Sub-Committee dated 31.8.2010 whereby the
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contract under tender is awarded to the respondent no.3. The petitioners have also sought a direction to the respondent no.2 to invite fresh tenders by following e-tendering process for five Mumbai Entry Points along with maintenance of flyovers and allied structures. So far as prayer clause (c) is concerned, the petitioners are seeking a direction to constitute a Special Committee under the chairmanship of a retired High Court Judge and such other members, including Civil Engineer, Structural Engineer to scrutinize the proposals sanctioned under the scheme of Private Sector participation commonly known as “Built, Operate and Transfer” and to frame guidelines and conditions for awarding such contracts to private entrepreneurs with a view to prevent undue benefit, excess concession.
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learned Senior Advocate has submitted that Writ Petition No.1542 of 2009 was filed by the unsuccessful bidder i.e. Reliance Infrastructure Limited on 10.8.2009 and prayed for the following reliefs:-
writ of Certiorari or a writ in the nature of certiorari or other appropriate writ, order or direction calling for the records of the Petitioners’ case and after looking into the same to quash and to set aside the 1st Respondents’ decision and action/inaction in not calling the Petitioners for the second stage of the bidding process pursuant to Tender Notice (Exhibit -A’ hereto) and treating the Petitioners as disqualified from participating in the bidding process pursuant to Tender Notice (Exhibit-A’ hereto).
(b) THAT this Hon’ble Court be pleased to issue a writ of Mandamus or any other appropriate writ, order or direction in the nature of Mandamus ordering and directing the Respondents -
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(iii) to withdraw and to cancel the impugned decision and action of the Respondents in not calling the Petitioners for participating in the second stage of the bidding process pursuant to the Tender Notice (Exhibit-`A’ hereto) and further;
(iv) ordering and directing the Respondents to call the Petitioners for participating in the second stage of the bidding process pursuant to the Tender Notice (Exhibit-A’ hereto) and allow them to participate in the bidding process pursuant to the Tender Notice (Exhibit-A’ hereto) and evaluate the Petitioners’ bid through competitive bidding process.”
It is submitted that during the pendency of the petition, the Cabinet SubCommittee vide decision dated 31.8.2010 awarded the contract to the respondent no.3 and the petitioners made a grievance about the decision dated 31.8.2010 of the Cabinet Sub-Committee whereby the contact came to be awarded to the respondent no.3 in the said petition. Mr.Dada, the learned Senior Advocate for the respondent no.2, has submitted that the
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Division Bench of this Court dismissed the petition vide judgement dated 28.10.2010 and the relevant observations made by the Division Bench are in paragraphs 13 and 14 of the judgement which read thus:-
“13. Finally, the attention of the Court has been
drawn to the fact that on 18 August 2009, the consortium of the Petitioners was intimated of its
tender being held to be non-responsive. Thereupon, Mr.D.V. Deshkar, who was the authorized representative of the consortium applied by is letter dated 18 August 2009 for refund of the earnest money deposit of Rs.105 crores and Envelope 2 containing a financial bid. By the letter, MSRDC was requested to issue a demand draft or cheque towards refund of the EMD, in favour of the First Petitioner. Accordingly EMD of Rs.105 crores was returned to an authorized representative on 18 August 2009 together with the financial bid. Once the financial bid was returned on the request of the authorized representative
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together with the earnest money deposit, no valid bid remained in the field. This petition has been instituted by two members of the consortium. SMS Infrastructure Ltd., the lead member has not joined in the Petition.
the Consultants had underestimated the revenue realization. The Consultants, while computing the estimated concession period adopted an IRR of 11.50% and a 5% traffic growth rate. On this basis, the concession period was worked out as fifteen years. We do not propose to examine the contentions assailing the working out of the period by the Consultants, which was done on the basis of upfront payment of only Rs.1350 crores to be made within ninety days of acceptance and the rest to be paid over a period of 2-3 years. Now that Respondent No.3 has agreed to pay the entire amount of Rs.2100 crores within ninety days, the
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contention pales into insignificance. In any event due consideration would now be given to the circumstance that the Third Respondent has agreed to make a payment of the entire amount of Rs.2100 crores upfront, while reducing the concession period to sixteen years.”
“Having regard to the fact that the lead member
of the consortium, which had the petitioners also as
its members, withdrew itself from the deal and had
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taken back the earnest money deposited, as well as the financial bid, this Special Leave Petition, in our
view, is not maintainable. The same is, accordingly, dismissed on the said ground.”
People’s Action Committee & Anr. filed PIL No.172 of 2009 whereby the decision dated 18.6.2009 of the Cabinet Sub-Committee and tender notice dated 20.7.2009 issued by MSRDC was challenged. It is contended that the said PIL was summarily dismissed by the Division Bench of this Court vide order dated 13.9.2010. The relevant observations are reflected in paragraphs 3, 4 and 5 of the decision which read thus:-
“3. In response to the above tender notice, 19
bidders purchased blank tender forms and seven bidders submitted their bids. The respondentCorporation took a decision on 17 August 2009 that out of seven bids four bids were liable to be rejected as non-responsive for failure to satisfy the
respective eligibility/bid criteria and conditions
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prescribed under the bid document. One of the unsuccessful bidders M/s.Reliance Infrastructure Limited filed a Writ Petition, being Writ Petition
No.1542 of 2009, apprehending their disqualification from the tender process. The said writ petition has been heard today and is being disposed off by a separate judgment.
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Mumbai.
respondents that the present petition has been filed at the instance of one of the unsuccessful bidders, we are of the view that the exercise of our extraordinary jurisdiction under Article 226 of the Constitution, this Court is not sitting in appeal over the decision of an authority whether two projects should be entrusted to one party through one single tender notice or whether two separate tenders processes should be followed for awarding two separate contracts. On this ground alone we find no merit in this petition and the petition is, therefore, summarily dismissed.”
the challenged raised in PIL No.172 of 2009 in respect of the decision dated 18.6.2009 of the Cabinet Sub-Committee as well as tender notice dated 20.7.2009 issued by MSRDC also came to be disallowed by this
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Court and dismissed the PIL. The learned Senior Advocate, therefore, submitted that the entire issue pertaining to initiation of the tender process, issuance of the tender notice dated 20.7.2009 as well as the decision of the Cabinet Sub-Committee dated 18.6.2009 has been held to be sustainable in law and the Division Bench of this Court dismissed PIL No.172 of 2009 as well as Writ Petition No.1542 of 2009. The Apex Court also affirmed the judgment of this Court dated 28.10.2010 rendered in Writ Petition No.1542 of 2009. It is, therefore, contended that it is not open for the petitioners in PIL No.206 of 2010 to re-open the challenge either to the tender notice dated 20.6.2009 or the decision of the Cabinet Sub-Committee dated 31.10.2010 since it stands finally concluded by the judgments rendered by this Court referred to hereinabove and, therefore, PIL No.206 of 2010 is liable to be dismissed.
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respondent no.3 whose bid was found valid offered 17 years and one month recovery period while Reliance Infrastructure Limited (whose bid was found to be non-responsive) offered eleven years and seven months recovery period. When PIL NO.206 of 2010 was filed, Writ Petition No.1542 of 2009 filed by Reliance Infrastructure Limited was pending before this Court. It is submitted that the Cabinet Sub-Committee vide decision dated 31.8.2009 accepted the bid of the respondent no.3 while the bid of Reliance Infrastructure though was for eleven years seven months was not accepted. The learned counsel for the petitioners has submitted that the action of the Cabinet Sub-Committee awarding the contract under the tender vide its decision dated 31.8.2010 in favour of the respondent no.3 has resulted into losses amounting to Rs.10,000 crores to the public exchequer and burdened the public at large to pay the toll. The petitioners are, therefore, seeking a direction in PIL No.206 of 2010 to quash the entire tender process undertaken by the respondent no.2 by issuing tender notice dated 20.6.2009 as well as Cabinet SubCommittee’s decision dated 31.8.2010 to award the contract under tender to the respondent no.3 being colorable exercise of power and suffers from arbitrariness. It is contended that the decision lacks good faith and suffers from favoritism and the same is opposed to public policy. It is contended
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that the respondent nos.1 & 2 have been incorporating the restrictive covenant of toll experience in all contracts with a view to favour the respondent no.3 and its sister concern IRB. The decision taken by the respondent nos.1 & 2 also lacks transparency and has been taken only with a view to promote interest of the respondent no.3 and its sister concern. The counsel for the petitioners has also contended that the action of the respondent no.2 which is an instrumentality of the State is not in public interest which is evident from the fact of refusal to allow bids of other parties, including that of Reliance Infrastructure Limited which were in the interest of the public as the same could have lessened the burden of toll on the public for a substantial period of five years and, therefore, the said decision of the respondent no.1 cannot be said to have taken in good faith and, hence, is violative of the tenets of good governance.
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necessary for us, at the outset, to consider as to whether the issues and challenges raised in the present PIL stand concluded by the earlier decisions of this Court as contended by Mr.Dada, the learned Senior Advocate for the respondent no.2.
(i) The respondent no.2–MSRDC published tender notice dated 20.6.2009 in newspaper whereby bids were invited from reputed individual companies/consortia of not more than three members having experience and competence for execution of the project i.e. securitization of toll at five entry points in Mumbai with upfront payment of Rs.21,000 million.
(ii) On 10.8.2009 Reliance Infrastructure Limited & Ors. filed Writ Petition No.1542 of 2009 on the Original Side of this Court challenging the decision of MSRDC whereby the bids submitted by Reliance Infrastructure Limited was held to be non-responsive and, therefore, disqualified the petitioners as not entitled to participate in the bidding
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process pursuant to the tender notice dated 20.6.2009. The petitioners amended the prayer clauses, inter alia, adding prayer clause (c1) and alternatively prayed that in the event of the contract having been awarded to any person/part, then MSRDC be restrained from taking any further steps in pursuance thereto or giving any effect thereto. Similarly, in prayer clause (cc)(ii) alternatively, a direction was sought to the respondents to invite fresh tenders for securitization of five entry points to Mumbai.
(iii) During the pendency of the present petition, the Cabinet SubCommittee vide decision dated 31.8.2010 awarded the contract under tender to the respondent no.3 in PIL No.206 of 2010.
“The material upon which reliance has been placed
by MSRDC before the Court supports the finding of ineligibility of the Petitioners’ consortium. This
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finding essentially turns upon an evaluation of facts by MSRDC. The conclusion which was drawn by MSRDC cannot be regarded as perverse or contrary to the weight of the evidence on record. In the exercise of the jurisdiction under Article 226 of the Constitution, this Court would not be justified in reappreciating a determination of fact based upon which an inference of ineligibility has been drawn.”
Similarly, in paragraph 14 of the judgement, this Court has observed
thus:-
“14. It was urged on behalf of the Petitioners that
the Consultants had underestimated the revenue realization. The Consultants, while computing the estimated concession period adopted an IRR of 11.50% and a 5% traffic growth rate. On this basis, the concession period was worked out as fifteen years. We do not propose to examine the
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contentions assailing the working out of the period by the Consultants, which was done on the basis of upfront payment of only Rs.1350 crores to be made within ninety days of acceptance and the rest to be paid over a period of 2-3 years. Now that Respondent No.3 has agreed to pay the entire amount of Rs.2100 crores within ninety days, the contention pales into insignificance. In any event due consideration would now be given to the circumstance that the Third Respondent has agreed to make a payment of the entire amount of Rs.2100 crores upfront, while reducing the concession period to sixteen years.”
The relevant observations made by the Division Bench in paragraph 15 of the said judgement read thus:-
“15. For these reasons, we are of the view that
MSRDC was justified in coming to the conclusion that the bid submitted by the Petitioners was not
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responsive on the ground that it did not meet the eligibility criteria.”
The Division Bench finally concluded the issue by observing in paragraph 16 of the judgement thus:-
“16. While we find that there is no substance in
the petition, for the reasons noted earlier, Learned Senior Counsel appearing on behalf of the Third Respondent stated that the Third Respondent is ready and willing to pay the entire contract amount of Rs.2100 crores upfront within ninety days from the date of the letter of acceptance of MSRDC and the Third Respondent has reduced the concession period from 16 years 11 months 27 days to 16 years. We record that statement.
The Division Bench, therefore, dismissed Writ Petition No.1542 of 2009 by judgement dated 28.10.2010.
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decisions of this Court in no uncertain terms demonstrate that the challenge raised by Reliance Infrastructure Limited in Writ Petition No.1542 of 2009 as well as People’s Action Committee in PIL No.172 of 2009 in respect of the tender notice dated 20.7.2009 has been totally disallowed and rejected by the Division Bench of this Court vide order dated 13.9.2010 passed in PIL No.172 of 2009 as well as by judgement dated 28.10.2010 passed by the Division Bench of this Court in Writ Petition No.1542 of 2009. In view of these decisions of this Court, the challenge to the decision of the Cabinet Sub-Committee dated 31.8.2010 also does not survive.
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This issue, therefore, is no more res integra and stands covered by the above referred decisions of this Court and, therefore, the petitioners are estopped from reopening those issues in the present PIL by raising similar challenges to the notice dated 20.6.2009 as well as the decision of the Cabinet Sub-Committee dated 31.8.2010 which were raised in the earlier PIL and Writ Petition.
“21. The second reason given by the High Court
however, holds good. Explanation VI to Section 11
provides :
Where persons litigate bona fide in respect of a public right or of a private right claimed in common for themselves and others, all persons interested in such right shall, for the purposes of
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this section be deemed to claim under the persons so litigating.
But it is only when the conditions of Explanation VI are satisfied that a decision in the litigation will bind all persons interested in the right litigated and the onus of proving the want of bona fides in respect of the previous litigation is on the party seeking to avoid the decision. The words "public right" have been added in Explanation VI in view of the new Section 91 CPC and to prevent multiplicity of litigation in respect of public right. In view of Explanation VI it cannot be disputed that Section 11 applies to public interest litigation as well but it must be proved that the previous litigation was the public interest litigation not by way of a private grievance. It has to be a bona fide litigation in respect of a right which is common and is agitated in common with others.”
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regard, it will not be possible for this Court in the present PIL to consider this issue.
(D. D. SINHA, J.)
(SMT.V.K.TAHILRAMANI,J.)
Suundaresan
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2 issues framed by the court
Whether the challenges to the tender notice and Cabinet Sub-Committee decision are concluded by earlier Division Bench judgments.
Whether the present PIL is barred by the doctrine of res judicata under Section 11 of the CPC.
Colour shows how this judgement treated each authority
PIL No.172 of 2010Relied on¶22
Writ Petition No.1542 of 2009Relied on¶22
Civil No.31526 of 2010Relied on¶22
People's Action Committee & Anr. :- PIL No.172 of 2009Referred¶26
Forward Construction Co. v. Prabhat MandalApplied¶26
Forward Construction Co. v. Prabhat Mandal [(1986) 1 SCC 100] · Who else cites this
3 provisions across 2 enactments
Peasants & Workers Party of India & Anr.
State of Maharashtra
Maharashtra State Road Development Corporation Limited
People's Action Committee
Reliance Infrastructure Limited
D. D. Sinha
V. K. Tahilramani
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
