15 October 2004
Supreme Court
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NANDKISHORE GANESH JOSHI Vs COMMNR., MUN.CORPN.OF KALYAN & DOM.&ORS.

Bench: N. SANTOSH HEGDE,S.B. SINHA
Case number: C.A. No.-006793-006793 / 2004
Diary number: 9750 / 2002
Advocates: Vs PAREKH & CO.


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CASE NO.: Appeal (civil)  6793 of 2004

PETITIONER: Nandkishore Ganesh Joshi

RESPONDENT: Commissioner, Municipal Corporation of Kalyan & Dombivali & Ors.

DATE OF JUDGMENT: 15/10/2004

BENCH: N. Santosh Hegde & S.B. Sinha

JUDGMENT: J U D G M E N T

[Arising out of SLP (Civil) No.14833 of 2002]

S.B. SINHA, J :

       Leave granted.

INTRODUCTION :

       The Appellant herein, Chairman of the Standing Committee of  the  Second Respondent-Municipal Corporation of City of Kalyan and  Dombivali (hereinafter referred to as ’the Corporation’) had filed a writ  petition before the Bombay High Court praying for issuance of a writ of or  in the nature of mandamus directing the respondents to ensure that whenever  a proposal for grant of approval of the contract in terms of Section 73 of the  Mumbai Provincial Municipal Corporation Act, 1949 (hereinafter referred to  as ’the Act) is placed before the Standing Committee,  the same should  contain the tender forms and other documents submitted by the contractor as  well as other documents, if any, containing the records of negotiations made  by the Commissioner of the Corporation after  the tenders are opened or  placed before it.  The said writ petition was dismissed by the High Court on  an interpretation of clause (c) of Section 73 of the Act as also the locus of  the Appellant.   

THE ACT VIS-@-VIS THE PARTIES :

The Respondent-Corporation has been constituted under the  provisions of the said Act.  The First Respondent herein is the  Commissioner of the said Corporation appointed in terms of Section 36 of  the Act.  The State is also a statutory authority under the Act and may in a  given situation exercise its revisional jurisdiction in terms of Section 451  thereof.  A Standing Committee is constituted under Section 20 of the said  Act.   The Chairman of the Standing Committee is elected in terms of  Section 21 thereof.  The Standing Committee exercises  various powers with  which we are not concerned at present.  Section 73 empowers the  Commissioner to execute contracts on behalf of the Corporation but clause  (c) thereof restricts the said power in the following terms :

"(c) no contract which will involve an expenditure  (ten lakh rupees) or such higher amount as the  Corporation may, with the approval of the (State)  Government, from time to time prescribe, shall be  made by the Commissioner unless the same is  previously approved by the Standing Committee:

       Provided that, where the previous approval of

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the Standing Committee is sought by the   Commissioner for any contract the Standing  Committee shall consider and dispose of the  proposal made by the Commissioner in that behalf  within fifteen days from the date on which the item  is first included in the agenda of any meeting of that  Committee, failing which, the approval to such  contract shall be deemed to have been given by the  Committee, and a report to that effect shall be made  by the Commissioner to the Corporation."

BACKGROUND FACTS :

       In exercise of the said power the First Respondent issued notices  inviting tender for supply of various materials, pursuant whereto or in  furtherance whereof,  contractors submitted their tenders.  He forwarded  summaries of three separate tenders, which according to the Standing  Committee of the Corporation did not disclose any material whereby it could  assess the merits or demerits thereof.  The matter was placed before the  Standing Committee on 26.4.2001 whence the following resolution was  passed :

       "Considering the administrative proposal of  supplying Bleaching Powder Grade-2 and  Hydrated Lime to Twelfth Water Treatment Plant,  it is essential to obtain relevant documents to  provide detailed information to the members of the  Standing Committee.  Therefore, this Standing  Committee resolves that, as per rules the  administration should submit brief of the said case  in office of the Secretary for the information of the  Standing Committee.  Similarly, in future briefs of  each proposal from administration, which is placed  before the Standing Committee should be  submitted in Secretary’s office along with profile  from time to time for the perusal of the Standing  Committee."

       Curiously the First Respondent did not respond thereto directly to  the  Standing Committee; but by a letter dated 9.5.2001 addressed to the  Secretary of the Corporation posed a question as to under which rule  it had  asked for the said documents.  It   was contended :

       "The administration has decided to ask the  Government for advice.  As soon as the advice is  obtained from the Government a decision shall be  taken in respect of the demand referred to above."

       The Government of Maharashtra by its letter dated 18.5.2001 quoting  Rule 24 of the Rule Book of the Corporation, General Meetings, Standing  Committee and Transport Committee Working Rules, opined :

       "Therefore before approving any work or  resolution the Standing Committee shall examine  these documents.  Therefore it is essential to make  available such documents in the office of the  Secretary or in the presence of their representative  for the perusal of the speaker or member of the  Standing Committee."

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       Rule 24 of the Rules, however, does not appear to have been correctly  quoted in the said letter, which is as under :

"24. Papers laid on the Table.-

       Papers which are intended to be placed  before the Corporation  or any committee for its  information shall be kept in the office of the  Municipal Secretary and intimation thereof shall  be given to every councillor.  Such paper shall be  open for inspection by any councillor during office  hours."

The Standing Committee of the Corporation by its letter dated  22.4.2001 brought the aforementioned direction of the State Government to  the notice of the First Respondent and requested him to make available all  the files in the office of the Municipal Secretary.  The said issue was again  raised in a meeting dated 6.6.2001 wherein it was pointed out that all the  documents and the files had not been made available for inspection of the  members and despite the directions given by the State Government, the  Commissioner has approved the contracts treating the same to have been  sanctioned in terms of the proviso appended to Section 73(c) of the Act.     

       It is evident that before the State’s reply reached the hands of the First  Respondent,  he invoked his power in terms of the proviso appended to  clause (c) of Section 73 of the Act holding such approval of the Standing  Committee would be deemed to have been granted as it did not dispose of  the said proposal within 15 days from the date on which the item is first  included in the agenda of the  meeting of the Standing Committee.  The said  order was questioned by the Appellant herein which as noticed hereinbefore  was dismissed by the High Court.

SUBMISSIONS OF THE COUNSEL  :

       Mr. C,A. Kaladkar, the learned counsel appearing on behalf of the  Appellant would submit that the High Court committed a manifest error in  interpreting clause (c) of Section 73 of the Act and the proviso appended  thereto.  The contention of the learned counsel is that the documents sought  for by the Standing Committee of the Second Respondent were essential for  the purpose of assessing the viability, merits and demerits of the tender so as  to enable it to consider the question as to whether the recommendations of  the First Respondent should be approved or not.                  The learned counsel would urge that the reason for the Standing  Committee to ask  the First Respondent to supply the said recommendations  arose in view of the fact that the rates at which Bleaching Powder, Hydrated  Lime and Liquid Chlorine were sought to be purchased were much above  the market rates thereof.  A statement to the said effect was made in  paragraph 17 of the Rejoinder Affidavit filed by the Appellant herein but the  same had not been traversed.  The learned counsel, therefore, would argue  that in the aforementioned situation, the High Court ought to have held that  the proviso appended to clause (c) of  Section 73 of the Act could not have  been invoked.   

       Mr. K. Radhakrishnan, the learned senior counsel appearing on behalf  First Respondent, on the other hand, would submit that all the informations  in terms of the form prescribed by the Standing Committee under Chapter V  of the Schedule of the Act having been disclosed, it was not necessary to  supply any further documents.  The reasons for non-supply of such  documents, according to the learned counsel, as contained in paragraph  4 of  the Counter Affidavit are :

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       "That there are several other reason also for  not  submitting the papers, correspondence etc.  before the Standing Committee namely : (i)  important papers from the tenderers/files  containing important information may be removed  or the files may be misplaced; (ii) that the Officers  of the Corporation normally give their remarks  about the responsibility of the rates quoted, ability  and integrity of the tenderer.  In case of some  adverse remarks against a particular tenderer,  which if made known, the life of the officer  making such remark, may be endangered; (iii) in  case, the remarks etc. made in the file are revealed  to the tenderers, the tenderers may use force to  ensure that other tenderers do not submit their  tenders etc. (iv) the forms and the tender  documents are open to the public and the rates  quoted by each and every tenderer are mentioned  in the summary/proposal sent by the  Commissioner to the Standing Committee."    

       The learned senior counsel would further submit that the Appellant  herein has no locus standi to maintain the writ petition and in any event, the  matter is still pending with the Government as the same had been referred to  it by the First Respondent himself.          The learned counsel would further urge that the Appellant herein did  not approach the High Court with clean hands and in that behalf our  attention has been drawn to paragraph 18 of the Affidavit filed in reply  affirmed by  Ramnath K. Sonawao, Deputy Secretary (Legal) of the  Respondent-Corporation, which  is as under  :

       "I say that the Petitioner has since oblique  motives in asking for the custody of the  documents.  As stated earlier except in particular  cases i.e. about 5 cases in the remaining contract  proposal, which were placed, the same have been  approved without calling for the files.  In relation  to the supply of chemicals for purification of water  the Petitioner appears to have some vested interest  and is intended to support the case of the  contractors who lost their tenders\005."

       Further contention of Mr. Radhakrishnan is that even in law, there  was no necessity to supply any document having regard to the form which  was prescribed by the Municipal Corporation and our attention in this behalf  has been drawn to the informations sent in the format by the First  Respondent  to the Standing Committee on 26.4.2001.  In any event, the  learned counsel would urge that as the Standing Committee  had an  alternative remedy to approach the State Government in terms of Section  451 of the Act, the writ petition was not maintainable. ANALYSIS OF THE STATUTORY PROVISIONS :

       A statute, as is well-known, must be construed in such a manner  whereby the intent and  object of the Act can be given effect to.  A literal  meaning should also be avoided if it results in absurdity.  Indisputably, the  First Respondent holds a statutory position.  A discretion conferred on a  statutory authority, it is well-settled,  must be exercised in public interest and  judiciously.   There is no place of any whim or caprice in exercise of such  discretionary power.  [See  Clariant International Ltd. & Anr. Vs. Securities  & Exchange Board of India \026 2004 (7) SCALE 180].

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Although the Commissioner is entitled to execute contracts on behalf  of the Corporation but a statutory embargo is placed thereupon by reason of  Clause (c) of Section 73 of the Act.  A contract which may be entered into  by the Commissioner requires prior approval of the Standing Committee.  It  is, thus,  not a case where an action taken by a statutory authority requires  approval which may be granted at a later stage.  The approval of the  Standing Committee, a bare perusal of Clause (c) would show,  is required to  be granted before any contract is entered into.  The approval of a contract  and that too with previous approval by the Standing Committee  cannot,  thus, said to be an empty formality. [See Canbank Financial Services Ltd.  vs. The Custodian & Ors. - 2004 (7) SCALE 495 \026 PARA 35].  The  Standing  Committee is required to perform its functions in terms of the  provisions of the said Act.  A statutory authority has also a duty to act in  public interest as also fairly and in a reasonable manner.   

       With a view to bona fide performing its statutory functions, if the  Standing Committee is unable to approve such proposal on the basis of the  documents supplied to it, it is entitled to ask for the relevant documents from  the Commissioner.  Clause (c) of Section 73 is couched in the negative  language and, therefore, is imperative in character. [See P.S. Sathappan  (Dead) by Lrs. Vs. Andhra Bank Ltd. & Ors. \026 Civil Appeal Nos. 689 of  1998 etc. \026 decided on 7th October, 2004].                  The proviso appended to Section 73 carves out an exception to the  general rule which evidently has been enacted for the purpose of  avoiding   any delay and would apply  in a situation where despite meeting, the  Standing Committee deliberately or otherwise refuses or fails to take any  decision.  No doubt a legal fiction has been created but the same cannot be  given effect to in vacuum.  It is to be applied having regard to the legislative  intent and a restricted meaning is to be attributed thereto in a situation of this  nature.  A statute, it is also well-known, must be read in such a manner  whereby it is made workable - Ut res magis valeat quam pereat.  [See  Andhra Bank vs. B. Satyanarayana and Others \026 (2004) 2 SCC 657] and  Indian Handicrafts Emporium and Others vs. Union of India and Others \026  (2003) 7 SCC 589]. In any event, where a difficulty arises in a given  situation to construe the statute upon applying a plain meaning thereof, it is  well-settled, the rule of purpose construction should be applied. [See  Swedish Match AB & Anr. Vs. Securities & Exchange Board, India & Anr.   \026  2004 (7) SCALE 158].

APPLICATION OF RULE :

       We have noticed hereinbefore that the functions of the Standing  Committee must be exercised in public interest and, thus,  cannot be said to  be a formal ones.  The members of the Standing Committee must apply their  mind to the proposal of the Commissioner wherefor they must have before  them the relevant records.

       The Commissioner who is a statutory authority is bound to comply  with the said request unless there exist strong and cogent reasons for not  doing so.  It is relevant to notice that the First Respondent in his letter dated  9.5.2001 which incidentally was issued 14 days after the resolution adopted  by the Standing Committee i.e. a day just prior to the expiry of 15 days did  not raise any contention that the relevant records were not required nor did  he say that the purpose of such approval, the informations disclosed in the  prescribed form would subserve the purpose.  He further did not say that for  one reason or the other, which has now been contended in the Counter  Affidavit, that such documents should not be disclosed.  A statutory  authority, as is well known,  when acts in terms of a statute, is bound by his  action.  He cannot supplement or supplant the reason later on by way of  Affidavit.  Furthermore, we find that apart from the fact that no such  question had been raised by the Commissioner in his letter dated 9.5.2001,  the reasons sought to be assigned in the Counter Affidavit either are  unjustified or irrelevant.  A Statutory Committee  should not be denied

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access to the documents to which it is entitled to, even according to the State  Government.  Rule 24 whereupon reliance has been placed by the State  Government in its letter dated 18.5.2001 (although may not be a verbatim  copy of the extant rules) would also go to show that each member of the  Committee is entitled to have access to the documents.  No privilege had  been claimed nor can be claimed in law in the matter of disclosure of such  documents.  Furthermore, the apprehension expressed by the Commissioner  in his Affidavit as regard the consequences which may ensue by disclosure  of such documents is  not correct, having regard to the fact that the tender  had reached the final stage.  The contention of the Respondent that all  informations had been supplied in the proforma in the light of Chapter V of  the Act also appears to be incorrect as in sub-paragraph (E) of paragraph  5  of the Counter Affidavit, the Respondent himself stated that Chapter V of  the Schedule of the Act  relates to execution of the contract and evidently,  thus, would not be applicable for the purpose of grant of approval at the  threshold.  In any event, the information given in a form is merely a matter  of procedure and what matters in a situation of this nature is the substance  thereof.  The Commissioner, furthermore, despite referring the matter to the  State Government did not wait for its opinion on the subject.  He invoked the  proviso to Section 73(c) much before the opinion of the State as contained in  its letter dated 18.5.2001 reached his hands.  Submission of  Mr.  Radhakrishnan that the Appellant has no locus standi to maintain the writ  petition cannot be accepted keeping in view the fact that he was the  Chairman of the Standing Committee and although the Standing Committee  itself was not the writ petitioner.  A question involving  proper interpretation  as regard the statutory provisions conferring a statutory right on a statutory  authority vis-‘-vis a statutory duty on the part of the Commissioner  could be  gone into by the High Court even in a public interest litigation.   

We are also not in agreement with the submission of the learned   counsel that Section 451 of the Act provides for an alternative remedy.   Even such a question had not been raised before the High Court. Another  submission of  Mr. Radhakrishnan to the effect that the matter is still  pending before the State Government having regard to the letter dated  18.5.2001 again does not appear to have been raised before the High Court,  nor such a contention can be accepted as the State by its letter dated  18.5.2001 had already directed the Commissioner to disclose the documents  before the Standing Committee which had asserted its right in terms of its  resolution dated 26.4.2001.   

We fail to understand as to how the matter can be said to be pending  before the State Government.   

For the foregoing reasons, we are of the considered view that the   impugned judgment of the High Court cannot be sustained, which is set  aside accordingly.   The First Respondent is hereby directed to place before  the Standing Committee of the Second Respondent all materials sought for  from the Appellant in terms of its resolution dated 26.4.2001.   

The appeal is allowed with the aforementioned directions.  In the facts  and circumstances of the case, there shall be no order as to costs.