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PETITIONER: G.J. FERNANDEZ

       Vs.

RESPONDENT: STATE OF MYSORE & ORS.

DATE OF JUDGMENT: 14/04/1967

BENCH: WANCHOO, K.N. (CJ) BENCH: WANCHOO, K.N. (CJ) BHARGAVA, VISHISHTHA MITTER, G.K.

CITATION:  1967 AIR 1753            1967 SCR  (3) 636  CITATOR INFO :  RF         1975 SC1331  (24)  R          1988 SC1681  (18)  R          1989 SC2138  (99)

ACT: Constitution  of India, 1950, Arts. 14 and 162-Article  162, if  confers  power  on  State  Government  to  make   rules- Administrative instructions-Effect of violation.

HEADNOTE: Sealed  tenders were submitted to the Chief Engineer of  the P.W.D.  of the respondent-State for a certain  construction. The  tender  submitted  by  the  appellant  was  the  lowest unconditional tender, whereas that of the third  respondent, though  lower in amount was a conditional tender.   None  of the tenders was accepted by the Chief Engineer.  Instead, he wrote  to  the  third  respondent asking  him  if  he  would withdraw  his conditions, and wrote to the  other  tenderers asking  them if they would undertake the work at the  lowest amount, that is the amount tendered by the third respondent. The  replies  were  to be submitted within  a  week  of  the receipt  of  the  letters by the tenderers,  but  the  third respondent submitted his reply. withdrawing his  conditions, beyond that time.  The appellant wrote that his tender being unconditional should have been accepted.  The Chief Engineer again   wrote  to  the  appellant  asking  him  to  send   a categorical reply and the appellant ’replied that he was not prepared  to reduce the amount.  The third respondent  wrote thereafter  asking for a higher payment, and so,  the  Major Irrigation  Projects  Control  Board, which  was  the  final accepting authority, directed that fresh negotiations should be  opened  with  all the  tenderers.   The  Chief  Engineer therefore  again  called for tenders and wrote  to  all  the tenderer% if they were prepared to reduce the amounts.   The appellant did not send any revised quotations but  protested against  the  action taken by the Chief  Engineer.   As  the offers  made by the others in their second tenders were  not advantageous to the Government, the Chief Engineer called  a meeting  of  all the tenderers and asked them if  they  were prepared to make further reductions.  ’MO appellant and some other tenderers stated that they had no further reduction to

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make, two of the tenderers said that they would write later, while  the third respondent wrote immediately reducing  the amount  of his tender.  The Chief Engineer made a report  to the Technical SubCommittee which made its recommendations to the  Board  and the Board accepted  the  third  respondent’s final tender. The appellant filed a writ petition challenging the grant of the contract to the third ’respondent on the grounds that  : (1)  the  rules in the Mysore Public Works  Department  Code were not followed; and (2) there was a violation of Art.  14 because, (a) the Chief Engineer accepted the first offer  of the  third  respondent beyond the prescribed period  of  one week,   and  (b)  the  Chief  Engineer  favored  the   third respondent by entering into secret negotiations with him. The High Court dismissed the petition. In appeal to this Court, HELD  :  (i)  There is no statute nor  any  Article  of  the Constitution  which  confers  any  authority  on  the  State Government to issue rules in matters with which the Code was concerned.   Article 162 of the Constitution  only  provides that  the State Government can take executive action in  all matters in which the legislature of the State can pass laws. But                             637 the Article by itself does not confer any rule making power on the State Government.  Therefore, the instructions in the Code were mere administrative instructions and even if there was a breach thereof the appellant had no right to apply  to the   Court   for  quashing  orders  in   breach   of   such instructions. [643B-E] (2)  There was no discrimination by the Chief Engineer. (a)  The  period of seven days fixed by the  Chief  Engineer for  sending the reply was not a period of’  limitation,  no other  tender’s reply was rejected an that ground, and  even the appellant was given extended time to reply, showing that the period was not meant to be rigid. [644A-C] (b) There was no evidence of any secret negotiations between the chief Engineer and the third respondent. [644G]

JUDGMENT: CIVIL APPELLATE JURISDICTION : Civil Appeal No. 218 of 1967. Appeal from the judgment and order dated January 18, 1967 of the Mysore High Court in Writ Petition No. 2426 of 1966. S.   K.  Venkataranga  lyengar, Shyamala  pappu  and  Vineet Kumar, for the appellant.  H.  R.  Gokhale, B. R. L. Iyengar, R. H. Dhebar and  S.  P. Nayyar, for respondents Nos.  1 and 2. The Judgment of the- Court was delivered by Wanchoo, C.J. This is an appeal on a certificate granted  by the  Mysore High Court and arises in the  following  circum- stances.  Tenders were called for construction of the  right bank  masonary dam called "Hidkal Dam" by the  Public  Works Department,  Irrigation  Projects, of the State  of  Mysore. The  tenders were to be submitted to the, Chief Engineer  of the  department.   Among, the tenderers was  the  appellant. Another tenderer was respondent No. 3 before us.  Eventually the  contract was granted by the Major  Irrigation  Projects Control  Board  (hereinafter referred to as  the  Board)  on November  5,  1966  to  respondent  No.  3.  The   appellant challenged  the  grant of contract to respondent No.  3  and prayed  for quashing the resolution of the Board  mainly  on two grounds, namely, (i) that the rules in the Mysore Public Works  Apartment Code (hereinafter referred to as the  Code)

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were not followed, and (ii) that there was unequal treatment between  the  various tenderer,, which was in  violation  of Art. 14 of the Constitution. Most  of the facts are not in dispute and we  shall  narrate them in some   detail, as they are necessary for the purpose of determining whether  there was any breach of Art.  14  of the Constitution. A notification was issued on April 4, 1966 for the contract on question calling for sealed tenders, the estimated  cost  of the contract being  230.44  lakhs.   The estimated quanti 638 ties  of  several items of work were stated  in  the  tender documents  and tenderers were required to quote their  rates for  various items of work and the amount for each  item  on the   basis   of  the  said   estimated   quantities.    The notification also said that conditional tenders were  liable to be rejected at the discretion of the competent  authority without  assigning any reason therefore.   The  notification further said that the competent authority reserved the power to  reject all or any of the tenders without  assigning  any reason therefore. Nine sealed tenders were received in response to this  noti- fication  and they were opened on July 30, 1966 in the  pre- sence  of  the  tenderers  or  their  representatives.   The appellant’s tender was unconditional and was for a total sum of  Rs.  2,22.72 lakhs, this being 3.64 per cent  below  the estimated  cost.   Respondent No. 3 made a  tender  for  Rs. 214.58 lakhs i.e. 7.16 per cent below the estimated cost but he  had  stipulated  certain conditions and  his  rates  for excavating soft and hard rock were rather strange.   Another tenderer was the National Projects Construction  Corporation Limited (hereinafter referred to as the Corporation) and  it submitted  the tender for Rs. 229.34 lakhs i.e.  0.7773  per cent below the estimated cost.  The Corporation however  did not  furnish  the  earnest money  demanded  and  prayed  for exemption  from such deposit, presumably on the ground  that it  was a public corporation entirely owned by  the  Central Government and State Governments.  The Corporation also made certain  conditions to which it is unnecessary to refer,  We also  do  not  think  it necessary to  refer  to  other  six tenderers in detail.  It is enough to say that five of  them had  made unconditional tenders while the sixth had  made  a conditional  tender, but the amounts tendered by  them  were much above the amounts tendered by these three tenderers. Soon thereafter on August 6, 1966, the appellant addressed a letter to the Chief Engineer saying that his was the  lowest unconditional  tender. and therefore the contract should  be granted  to  him.  The appellant also pointed  out  in  this letter  that the tender of respondent No. 3 was  conditional and  the rates q noted for excavation of soft rock and  hard rock  were speculative, and therefore, that tender,.  though it  was  the lowest in amount should be rejected.   None  of these tenders was however accepted. On August 10, 1966,  the Chief  Engineer addressed letters to all the nine  tenderers enquiring from all of them (except respondent No. 3) if they would  be  agreeable to undertake the work  for  the  lowest amount  tendered,  namely,  Rs.  214.58  lakhs.   They  were requested  to send their replies within a week and  to  keep their  tenders open till the end of November 1966.   It  was also  made  clear  in this letter that  if  no  reply  was received  in time it would be, understood that the  tenderer was not prepared 63 9 to  do  the  work  at the rate  indicated.   The  letter  to respondent  No. 3 was however different inasmuch as his  was

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the  lowest  tender and he was merely asked whether  he  was prepared  to withdraw the conditions he had attached to  the tender. The appellant in his reply on August 16, 1966 contended that his tender was the lowest as the tender of respondent No. 3 was  liable  to  be  rejected on  the  ground  that  it  was conditional  and  that there was no  question  therefore  of asking  him  to  reduce the amount tendered by  him  to  Rs. 214.58  lakhs.   Thereupon lie received a  letter  from  the Chief  Engineer requesting him again to give  a  categorical reply  whether he was prepared to reduce the amount  to  Rs. 214.58  lakhs  and that this reply should  reach  the  Chief Engineer by August 31, 1966.  Respondent No. 3 received  the letter  of  the  Chief Engineer on August 19,  1966  and  he should have replied by August 26, 1966 but actually he  sent the  reply on August 31, 1966 informing the  Chief  Engineer that he had withdrawn his conditions and requesting that the work  might be entrusted to him.  The appellant’s  reply  to the letter of August 25, 1966 was not received by August 31, 1966.   It  was  received on September  10,  1966,  and  the appellant stated therein that he was not prepared to  reduce the  amount tendered by him.  We may indicate here that  one of the arguments before us is that there was  discrimination inasmuch  as  the  Chief  Engineer  accepted  the  reply  of respondent  No. 3 on August 31, 1966 even though it did  not come  within 7 days as required.  It way be added that  this point  was not apparently taken up before the High Court  in this form. On  September 12, 1966, respondent No. 3 wrote a  letter  to the  Chief  Engineer saying that he should  be  paid  rupees seven  lakhs more above his tender in view of the fact  that the requisite quality of sand was not available at the  site and had to be brought from some distance.  On September  21, 1966, a meeting of the Board was held and the Board directed that  fresh  negotiations with all the tenderers  should  be made  to arrive at the rate most favourable  to  Government. In  consequence of this, letters were addressed to  all  the nine tenderers by the Chief Engineer on September 27,  1966. In  this  letter, the Chief Engineer suggested to  the  nine tenderers  whether they were prepared to accept one  of  two alternatives namely-(i) to limit the overall cost of  tender to  Rs. 214.58 lakhs and so arrange the internal item  rates that they should not be too speculative, i.e., too far above or  below  the estimated rates in the tender  documents,  or (ii) to confirm in writing whether the tenderer was prepared to  reduce  his overall rates by 7.1 6 per  cent  below  the estimated  rates  pro rata on all items and thus  bring  the tendered  amount  down to Rs. 214.58 lakhs.   The  tenderers were  also  requested  to indicate (in case  they  were  not prepared  to reduce the tendered rate by 7.16 per cent)  the highest  figure  by which they would be prepared  to  reduce the, 640 rate  below  the  estimated cost.   Finally  tenderers  were requested to submit sealed tenders by October 12, 1966.   On October  4,  1966 the tenderers were  informed  that  sealed tenders would be opened on October 15, 1966. The appellant did not send revised quotations and  protested against  the  negotiations sought to be carried  on  by  the Chief  Engineer  with the tenderers and  accused  the  Chief Engineer  of trying to favour respondent No.  3.  In  that connection  the  appellant addressed letters  to  the  Chief Minister,   the  Minister  for  Public  ’Works,  the   Chief Secretary to Government and the Secretary to the Government, Public   Works  Department,  complaining  that  the   ;chief

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Engineer  was  acting contrary to rules and  illegally  with regard  to the appellant’s tender and starting  negotiations with  the tenderers.  On October 12, 1966, respondent No.  3 replied  that  it  was extremely difficult for  him  to  re- arrange the internal item rates or to. reduce overall  rates by  a  certain  percentage, as  suggested  in  the  circular letter,  and  pleaded  that  his  tender  coupled  with  the withdrawal of conditions might be accepted without modifica- tion. We  now come to what happened on October 15, 19,06  for  the main  plank  of  the appellant in support of  his  case  for contravention of Art. 14 is based thereon.  The  appellant’s case  is that after the tenders had been opened  on  October 15, 1966, the Chief Engineer carried on secret  negotiations with  respondent  No. 3 whom he was favouring  and  accepted from him a letter secretly on that date by which  respondent No.  3 quoted an overall reduction of 4 per cent  below  the estimated  rates.  The suggestion of the appellant  is  that this was done to bring down the reduction by respondent No. 3  to a little above 3.64 per cent below the estimated  cost which. was what he had tendered from the very beginning  and thus  the  Chief Engineer helped respondent No. 3  to  quote rates  which  became  the  lowest by  a  paltry  amount  and eventually  succeeded  in  getting  them  approved  by   the Technical  Sub Committee and the Board. it may be  mentioned that  before  the  Board considers any matter,  there  is  a Technical  Sub  Committee which considers  that  matter  and makes  recommendation  to  the  Board  which  is  the  final accepting authority subject to confirmation- by  Government. It  ,may also- be mentioned that at one stage  in  September 1966, the Technical Sub Committee had accepted the tender of the  Corporation, but on September, 22, 1966 the  Board  had turned  down that tender as it was unduly high  and  ordered fresh negotiations.  On November 2, 1966 the Chief  Engineer made  a  ,report which was placed before the  Technical  Sub Committee  on  November  3,  1966.   Eventually  the   Board accepted the tender of respondent No. 3 at 4 per cent  below the estimated cost.                             641 We  may  indicate here the second ground in support  of  the contention  that there was discrimination and this is  based on  what  happened  on October 15,  1966  after  the  sealed tenders were opened at 4 p.m. The case of the appellant  was that  thereafter  the  Chief  Engineer  carried  on   secret negotiations  with respondent No. 3 and managed to get  from him  the letter reducing the rates by 4 per cent  below  the estimated cost so that his became the lowest tender and that no such opportunity was given to other tenderers.  The  case of  the State on the other hand was that the Chief  Engineer called  a meeting of all the tenderers at 7 p.m. on  October 15,  1966, as in his opinion the offers made in  the  second tenders  were in no way advantageous to Government  and  had not  shown  any  substantial improvement  over  the  earlier tenders.   At that meeting the Chief Engineer asked all  the tenderers  if they wanted to make any further reductions  or withdraw any conditions, if so they should immediately  give it  in  writ’   Thereupon only two  tenderers,  namely,  the Corporation and one other, said that they would write  again while  the appellant and five others said that they  had  no further  reduction  to make.  Respondent No.  3  Immediately thereafter  wrote  the letter which was received  that  very evening  stating  that  he would be  prepared  to  take  the contract  unconditionally at 4 per cent below the  estimated cost.   The Chief Engineer- also denied that there were  any secret negotiations, opened by him with respondent No. 3  on

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October 15 1966 or that he was favouring respondent No. 3 or that  he  had,  not invited all the tenderers  to  make  the reduction if they could. The  grievance of the appellant was that he would have  been equally  prepared  to reduce his tender by the  paltry  per- centaee  of  36 per cent and to take the contract at  4  per cent  below  the estimated ’cost if that was  all  that  was required.But e contended that things were so manipulated in favour ofrespondent  No. 3 that he was  eventually  granted the tender at only a little less than what the appellant had offered andmuch  above  what the respondent  No.  3  had originally offered.so  on November 14, 1966  the  appellant filed the writ petition inthe  High Court based  on  the two points already indicated.The State repudiated both  the contentions.  The High Court dismissed the petition  holding firstly that there was no breach of the conditions of tender contained  in  the  Code, and secondly  that  there  was  no discrimination which attracted the application of Art. 14. The  same two contentions have been urged on behalf  of  the appellant  before  us.  The first is that the way  in  which tenders  were  dealt  with from July 30, 1966  right  up  to October  15.  1966 showed- that the rules contained  in  the Code relating to tenders were not followed.  Secondly, it is urged that in any 7 Sup.  C.T./67-11 642 case there was discrimination between the appellant and res- pondent No. 3.   Taking first the contention with respect to the  code  not being  followed in the matter of tenders, the question  that arises  is whether this Code consists of statutory rules  or not.   The High Court has observed that the so-called  rules in  the  Code  are not framed  either  under  any  statutory enactment or under any provision of the Constitution.   They are merely in the nature of administrative instructions  for the  guidance of the department and have been  issued  under the  executive power of the State.  Even after  having  said so,  the High Court has considered whether the  instructions in  the  Code  were followed in the  present  case  or  not. Before however we consider the question whether instructions in  the  Code have been followed or not, we have  to  decide whether these instructions have no statutory force.  If they have  no statutory force, they confer no right on  any  body and a tenderer cannot claim any rights on the basis of these administrative    instructions.    If   these    are    mere administrative instructions it may be open to Government  to take  disciplinary  action against its servants who  do  not follow   these  instructions  but  non-observance  of   such administrative  instructions does not in our opinion  confer any right on any member of the public like a tenderer to ask for a writ against Government by a petition under Art.  226. The matter may be different if the instructions contained in the  Code  are  statutory rules.  Learned  counsel  for  the appellant  is  unable to point out any statute  under  which these instructions in the Code were framed.  He also  admits that  they are administrative instructions by Government  to its  servants relating to the Public Works Department.   But his contention is that they are rules issued under Art.  162 of the Constitution.  Now Art. 162 provides that "exec power of a State shall extend to the matters with respect to which the legislature of the State has power to make laws".   This Article  in  our opinion merely indicates the scope  of  the executive power of the State; it does not ’confer any  power on  the  State Government to issue rules thereunder.   As  a matter of fact wherever the Constitution, envisages issue of

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rules  it  has so provided in specific terms.  We  may,  for example,  refer to Art. 309, the proviso to which lays  down in  specific terms that the President or the Governor  of  a State  may  make rules regulating the  recruitment  and  the conditions ,of service of persons appointed to services  and posts  under  the Union or the State.  We are  therefore  of opinion that Art. 162 does not confer any power on the State Government to frame rules and it only indicates the scope of the  executive  power of the State.  Of course,  under  such executive   power,  the  State can   give   administrative instructions  to  its  servants  how  to  act  in   ;certain circumstances; but that will not make such instructions 643 statutory    rules   which-are   justiciable   in    certain circumstances.   In order that such  executive  instructions have the force of statutory rules it must be shown that they have been issued either under the authority conferred on the State Government by some statute or under some provision  of the Constitution providing therefore.  It is not in  dispute that there is no statute which confers any authority on  the State  Government to issue rules in matters with  which  the Code is concerned; nor has any provision of the Constitution been  pointed’ out to us under which these instructions  can be  issued  as statutory rules except Art. 162.  But  as  we have  already  indicated,  Art.  162  does  not  confer  any authority on the State Government to issue statutory  rules. It only provides ,for the extent and scope of the  executive power  of the State Government, and that coincides with  the legislative  ,power  of the State legislature.   Thus  under Art. 162, the State Government can take executive action  in all  matters in which the legislature of the State can  pass laws.   But Art. 162 itself does not confer any rule  making power  on  the  State Government in  that  behalf.   We  are therefore of opinion that instructions contained in the Code are  mere administrative instructions and are not  statutory rules.  Therefore even if there has been any breach of  such executive instructions that does not confer any right on the appellant  to  apply  to the court for  quashing  orders  in breach  of such instructions.  It is unnecessary for  us  to decide  whether  there  has been in fact  a  breach  of  any instruction  contained in the Code with respect  to  tenders and we do not therefore so decide.  But assuming that  there has  been  any  breach that is a matter  between  the  State Government  and  its servants and the State  Government  may take  disciplinary action against the servant concerned  who disobeyed these instructions.  But such disobedience did not confer any right on a person like the appellant, to come  to court   for  any  relief  based  on  the  breach  of   these instructions.   It  is  for  this reason  that  we  are  not referring  to the Code, though the High Court  did  consider whether  there  was  any  breach  of  these   administrative instructions  and came to the conclusion that there  was  no breach.   In  the view we take it is unnecessary for  us  to consider  this, for we are of opinion that no claim for  any relief  before a court of law can be founded by a member  of the  public,  like  the appellant, on  the  breach  of  mere administrative instructions.  Coming  now to the argument under Art. 14, the  first  con- tention  is  that though seven days’, time  had  expired  on August  26, 1966, the Chief Engineer took into  account  the letter  of respondent No. 3 which came to him on August  31, 1966  and  that  this is discriminatory.   We  have  already indicated  that no such argument was apparently put  forward in  the  High  Court;  nor do we think  that  there  is  any substance therein.  The seven days

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644 period given is not a period of limitation and it cannot  be said that it was not open to the Chief Engineer to take into account  a letter which came a few days later.  There  might have been some case of discrimination if at that stage  i.e. on  August  ’31, 1966, the Chief Engineer had  rejected  any other tenderers reply on the ground that it was beyond seven days or if some ones conditional tender was rejected on  the ground  that  it was not made unconditional  by  August  31, 1966.  But no such thing happened and therefore there can be no question of discrimination on the ’ground that the letter of  August  31, 1966 written by respondent No. 3  was  acted upon  by the Chief Engineer.  Besides, it appears that in  a letter  dated  August 25, 1966 the appellant  was  asked  to reply by August 31, 1966 and so it seems that the seven days time  fixed  by  the  Chief  Engineer  for  reply  was   not absolutely  rigid  and  that explains why he  wrote  to  the appellant also to send a final reply by August 31, 1966.  We are  therefore  of  opinion that the  fact  that  the  Chief Engineer acted on the letter of respondent No. 3 which  came to  him  on  August 31, 1966 cannot be  said  to  amount  to discrimination. The  other discrimination alleged is about what happened  on October  15, 1966.  The case of the appellant is  that  some negotiations  were  carried on by the  Chief  Engineer  with respondent No.. 3 alone after sealed tenders were opened  at 4  p.m.  on October 15, 1966.  But the  Chief  Engineer  has clearly  denied that and his case is that all the  tenderers were  called by him at 7 p.m. and he asked them all  whether they were prepared to make any further reduction.  His  case further  is that six of them were not prepared to  make  any change  while two said that they would send a  reply  later. His case further is that respondent No. 3 sent a letter  the same  day reducing the rates 4 per cent below the  estimated cost.   The  High Court has accepted  the  Chief  Engineer’s version.   The  appellant  does not deny that  there  was  a meeting  with  the  Chief Engineer after  the  tenders  were opened  at 4 p.m. on October 15, 1966.  His first  affidavit on  this  point  was  vague and it was  only  in  the  reply affidavit  that  he stated that the Chief Engineer  had  not asked  all the tenderers whether they would be  prepared  to reduce  rates further or withdraw conditions.   Nothing  has been brought to our notice which would induce us to disagree with  the  view taken by the High Court,  namely,  that  the Chief  Engineers assertion that he asked all  the  tenderers whether they were prepared to make any further reductions or withdraw  any conditions is correct.  If that is  so-and  we have   no  difficulty  in  accepting  the  Chief   Engineers assertion   in   that  behalf-there  is   no   question   of discrimination  in connection with what happened on  October 15, 1966. The  appeal  therefore fails and is  hereby  dismissed  with costs: V.P.S. Appeal dismissed. 645