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Judgment
R. Banumathi, J.—This is an intra Court appeal preferred against the order in W.P. No. 24768/2008 dated 14.8.2009 wherein the learned
single Judge held that ''Flesh season tender'' issued for auction of surplus fish is for a period of five years as contained in the tender notice issued
for fishing rights of Bhavani Sagar Reservoir. By consent of both sides, at the admission stage, the Writ Appeal is taken up for final disposal.
The facts necessary for better appreciation of facts leading to the present dispute are as follows:
(i) Bhavani Sagar Reservoir is under the control of Appellant Corporation. Appellant Corporation called for tenders for licensing of fishing rights of
Bhavani Sagar Reservoir and conducted auction. As per the existing system the licensee should conduct the fishing using the share fishermen who
are engaged in share fishing from time to time by the Appellant Corporation and no other fishermen should be engaged for fishing for any reason.
(ii) Case of the Appellant is that the share fishermen are eligible for l/3rd of the daily catches as their wages and the l/3rd of the total catches due to
the share fishermen should be placed at the disposal of the Appellant Corporation for the smooth functioning of the activities/fish marketing stalls
run by the Appellant Corporation. The wages to the share fishermen will be paid from and out of the sale proceeds of the fishes,
(iii) Further case of Appellant Corporation is that tenders will be called for the disposal of surplus fishes after meeting the demand of the local sales
and indents of the marketing stalls run by the Corporation from l/3rd of me total catches due to the share fishermen. The tender for surplus fishes is
commonly known as ''Flesh season tender'' which is stated to be normally auctioned for 3 or 4 months especially during the period when the water
level of the Reservoir goes down and the catch of me fishes will be more than the indents of the stalls and local demand,
(iv) Appellant Corporation called for me tender for the disposal of surplus fishes after meeting the demand of the local sales and the indents of the
marketing stalls on 18.07.2007. Respondent being the highest bidder was awarded tender for the sale of surplus fishes for one year ending with
30.09.2008 by the order dated 26.10.2007. On completion of the said period, by the impugned communication dated 29.09.2008, Respondent
was informed mat his licence period ends on 30.09.2008 and asking him to clear the outstanding dues if any.
The impugned communication dated 29.9.2008 was challenged in the Writ Petition on me ground that tender notice is silent about the period
and that the same has to be ascertained in the light of the clauses mentioned in the tender notice issued for fishing rights of Bhavani Sagar Reservoir
and termination of the licence for the sale of surplus fishes by 30.09.2008 is arbitrary and violation of principles of natural justice.
Learned single Judge held that in the absence of period in the tender notice for the sale of surplus fishes, period in the tender notice for Bhavani
Sagar Reservoir has to be adopted. Accepting the arguments advanced by the Respondent, learned single Judge raised doubts as to the
Memorandum dated 26.10.2007 sent to the Respondent. Learned single Judge took the view that having taken the decision to restrict the period
of licence with regard to the sale of surplus fish from five years to one year, duty is cast upon the Appellant Corporation to communicate the same
through proper mode of communication to the address to which other communications were sent to the Respondent.
Challenging the order of the learned single Judge, Mr. P.S. Raman, learned Advocate-General submitted that the learned single Judge has
misunderstood the tender for surplus fishes which is normally only for the period of three or four months and that the tender for fishing rights in
Bhavani Sagar Reservoir which is for a period of five years. Learned Advocate-General further submitted that learned single Judge erred in relying
upon the clauses in the tender for Pimpri Chinchwad Municipal Corporation and Others Vs. Gayatri Construction Company and Another, learned
Advocate-General submitted that the dispute relating to the contract cannot be agitated in a Writ Petition under Article 226 of Constitution of
India.
On behalf of the Respondent, Mr. Vijay Narayan, learned Senior Counsel submitted that when two tenders were on the same date -
18.07.2007 and in the absence of period being mentioned in the tender-cum-auction notice in the tender for sale of surplus fishes the natural
inference was to go by the period in the tender for fishing rights in Bhavani Sagar Reservoir. Drawing our attention to the clauses in the tender-
cum-auction conditions for licensing of fishing rights of Bhavani Sagar Reservoir, learned Senior Counsel submitted that the period for sale of
surplus fishes was co-terminus with the period in the tender notice for the licence of sale of fishery rights in Bhavani Sagar Reservoir. Taking us
through, the Typed set of papers, learned Senior Counsel submitted that the only communication relied upon by the department is the
Memorandum dated 26.10.2007 which was sent to the earlier address of the Respondent and therefore, serious doubts arise as to whether such
communication restricting the period of tender for one year was actually sent. The main plank of argument is that in the absence of any time
stipulation, the time stipulated in the tender notice for licensing of fishing rights in Bhavani Sagar Reservoir is to be accepted. In support of his
contention, learned Senior Counsel placed reliance upon Karnataka State Forest Industries Corporation Vs. Indian Rocks, Noble Resources Ltd.
Vs. State of Orissa and Another, and ABL International Ltd. and Another Vs. Export Credit Guarantee Corporation of India Ltd. and Others,
The two tenders viz., the tender-cum-auction notice for licensing of fishing rights in Bhavani Sagar Reservoir and tender for sale of l/3rd of
surplus fishes are different. The purpose, nature and conditions of the terms of tender - licensing of fishing rights for Bhavani Sagar Reservoir and
tender for sale of surplus fishes are entirely different. The tender-cum-auction notice for licensing of fishing rights in Bhavani Sagar Reservoir deals
with fishing rights in water spread area of Bhavani Sagar Reservoir and the licensing of fishing rights is for a period of five years whereas, the tender
which is in dispute is for the sale of surplus fishes to pay the wages of share fishermen. Respondent - Bannari Amman Traders submitted quotation
dated 09.08.2007 quoting different rates depending upon the fish grade and fish variety. Even though, there was no separate tender-cum-auction
notice for sale of surplus fish, while submitting the quotation, Respondent has stated that they are submitting the quotation as per the instructions
given by the Manager, Aliyar Nagar Unit.
By the Notification Na. Ka. No. l773/A/04 dated 12.10.2007 and as per the instructions issued by the Managing Director, surplus fishes was
permitted to be supplied to the Respondent after meeting the indents of the marketing stalls operated by the Corporation and the local sales
available in the Corporation controlled by Bhavani Sagar Reservoir. In the said Notification, it is stated that tender was accepted and the
Respondent was directed to deposit security deposit amount of Rs. 5 lakhs with the office of the Manager, Aliyar Nagar Unit. In the said
Notification, no time is stipulated. Merely because, no time is stipulated in the Notification dated 12.10.2007, it does not mean that the period is
stipulated in the licensing of fishing rights in Bhavani Sagar Reservoir would apply. The purpose, nature and conditions of the terms of two tenders
are different.
As we have pointed out earlier, acceptance of tender submitted by the Respondent was as per the instructions of the Managing Director which
is shown as reference No. l in the said Notification dated 12.10.2007. Even though, no time is stipulated in the Notification, permitting supply of
surplus fishes to the Respondent, since reference is made to the Managing Director''s Notification dated 17.9.2007, evidently the tender is
governed by the said Notification of the Managing Director.
Pursuant to our direction, Files were produced by the department before us and we have carefully gone through the Files. By reading of the
Managing Director''s Notification Na. Ka. No. 7182/jpl/07 dated 17.9.2007, we find that the Managing Director has granted sanction to accept
the tender only for a period of three months as is seen from the following:
By perusal of the Files, in the letter Na. Ka. Tender/2007-08 dated 8.2.2008, the Deputy Manager, Tamil Nadu Fisheries Development
Corporation, Bhavani Sagar was called upon to explain that the tender period to the Respondent was only for a period of three months from
1.08.2007 to 31.10.2007 and while so, how the surplus fishes were supplied even after 01.11.2007. In fact, by the letter dated 20.02.2008, the
2nd Appellant requested the Managing Director to extend the tender period of Respondent for one year.
Learned Senior Counsel Mr. Vijay Narayan contended that in the absence of period stipulated for sale of surplus fishes, quite naturally the
period stipulated in the tender-cum-auction notice for licensing of fishing rights in Bhavani Sagar Reservoir is to be adopted. Learned Senior
Counsel laid emphasis upon Clauses-11 and 33 of the said tender-cum-auction notice which stipulate that the licensing of fishing rights in Bhavani
Sagar Reservoir will be for five years. Clause-33 stipulates that share fishermen are eligible for l/3rd of the catches as their wages. Emphasis was
also laid upon Clause-27, as per which the successful bidder shall have to pay the licence amount for subsequent years with 10% increase of every
year on the previous year.
Learned Senior Counsel submitted that Respondent had submitted the quotation with a definite impression that the period of tender was five
years and that is why the Respondent has deposited the huge amount of Rs. 5 lakhs as security deposit and while so, the Appellant Corporation
acted arbitrarily in restricting the tender for one year.
The above contention is unacceptable. Having submitted the quotation to purchase surplus fishes as per the fish grade and fish variety,
Respondent could not have had any impression that the same rate would be maintained for a period of five years. It was seen from the file that in
2005, in the earlier years, tender for sale of surplus fishes were normally for short period of either 15 days or three or four months. During May,
June i.e. during summer season when the water level of the Reservoir normally goes down and the catch of fishes will be more. In fact, in their
letter dated 23.06.2005, Aliyar Nagar Unit had sought for permission from the Managing Director to issue tender for sale of surplus fishes for six
months [01.07.2005 to 31.01.2006]. As rightly submitted by the learned Advocate-General, tender for surplus fishes commonly known as ''Flesh
season tender'' is normally auctioned for a short period of three or four months especially during summer season when the water level goes down
and catch of fishes will be more and the proportionate l/3rd meant for the fishermen will also would be more. When the earlier tenders were for the
limited period of either for 15 days or three or four months, the Respondent cannot contend that they had submitted the quotation with the belief
that the tender would be given to him for the period of five years.
As we pointed out earlier, the purpose, nature and conditions of the terms of tender for sale of surplus fishes are entirely different. Sale of
surplus fishes is the l/3rd share of fishermen which they get as their wages after meeting indents of the marketing stalls operated by the Corporation
and the local sales available in the Corporation controlled by Bhavani Sagar Reservoir Unit. If the rates quoted by the Respondent is to be
maintained for a period of five years, it would prejudicially affect the interest of fishermen which the Respondent cannot contend to maintain the
same rate for a long period of five years depriving the rights of the fishermen.
Notification dated 12.10.2007 was sent to the Respondent to his new address -""Thiru. T. Duraisamy, Tvl. Bannari Amman Traders, C/o. KP.
Murugesan, 20, Roja Illam. Soundamman Kovil street, Punjai Puliyam-patti-638 459."" According to the department. Respondent was informed
that the tender period was only up to 30.09.2008 by the Notification Na. Ka.l773/A/04 dated 26.10.2007 and the said Notification was sent to
the old address of the Respondent -""Mr. T. Duraisamy, M/s. Bannari Amman Traders, SSPS Complex, Rangasumudram, Sathiyamangalam-638
402."" Learned Senior Counsel for the Respondent submitted that in-spite of the department being informed about the change of address, it is quite
unbelievable that the department would have sent the communication dated 26.10.2007 restricting the tender period up to 30.09.2008 by ordinary
post to the old address. Accepting that argument, the learned single Judge faulted the department and expressed doubts as to whether such
communication was sent at all to the Respondent.
In our considered view even dehors the disputed communication, there are overwhelming materials to show that the Managing Director had
granted sanction to supply surplus fishes to the Respondent only for period of three months. In fact, even the tender period for one year is in clear
violation of the directions of the Managing Director.
Placing reliance upon Pimpri Chinchwad Municipal Corporation and Others Vs. Gayatri Construction Company and Another, learned
Advocate-General submitted that in the contractual matters where there is dispute regarding terms and conditions of the tender, Writ Court was
not a proper forum.
Countering the arguments and placing reliance upon Noble Resources Ltd. Vs. State of Orissa and Another, , Mr. Vijay Narayan, learned
Senior Counsel submitted that contractual matters of State is not totally beyond the scope of judicial review.
Interplay between writ jurisdiction and contractual disputes has given rise to a plethora of decisions by the Supreme Court [See Dwarkadas
Marfatia and Sons Vs. Board of Trustees of the Port of Bombay, and Mahabir Auto Stores and others Vs. Indian Oil Corporation and others,
On a conspectus of several decisions, Supreme Court in ABL International Ltd. and Another Vs. Export Credit Guarantee Corporation of
India Ltd. and Others, opined that such a writ petition would be maintainable even if it involves some disputed questions of fact. It was stated that
no decision lays down an absolute rule that in all cases involving disputed questions of fact, the party should be relegated to a civil court.
In Mahabir Auto Stores and others Vs. Indian Oil Corporation and others, the Supreme Court observed as under:
It appears to us that rule of reason and rule against arbitrariness and discrimination, rules of fair play and natural justice are part of the rule of law
applicable in situation or action by State instrumentality in dealing with citizens in a situation like the present one. Even though the rights of the
citizens are in the nature of contractual rights, the manner, the method and motive of a decision of entering or not entering into a contract, are
subject to judicial review on the touchstone of relevance and reasonableness, fair play, natural justice, equality and non-discrimination in the type of
the transactions and nature of the dealing as in the present case.
Though principles of judicial review cannot be denied so far as exercise of contractual powers of Government bodies are concerned, but it is
intended to prevent arbitrariness or favouritism and it is exercised in the larger public interest or if it is brought to the notice of the Court that in the
matter of award of a contract, power has been exercised for any collateral purpose or that the State had acted arbitrarily or unreasonably. On
examining the facts and circumstances of the present case and on going through the records, we are of the considered view that none of the criteria
has been satisfied justifying the Court''s interference in the impugned communication dated 29.09.2008 restricting the period of tender up to
30.09.2008. The order of the learned single Judge cannot be sustained and the same is liable to be set aside.
In the result, the Writ Appeal is allowed. Consequently, the connected M. Ps. are closed. No costs.