Andhra Civil Construction Company vs The Government of India and others

These petitions coming on for hearing on Thursday the 8th, Friday the 16th Wednesday the 21st days of February, 1990. Thursday the 8th day

and Friday the 9th day of March 1990 upon perusing the petitions and the respective affidavits filed in support thereof the order of this Court

dated 7-1-88, 9-2-88, 14-4-88 and made in W. P. Nos. 13234/87, 916 and 4174 of 1988 and the respective counfer-affidavits and common

reply affidavit filed thereon and the records relating to the order in 1. C2/RC/19/86 dated 30-11-86 on the file of the 2nd respondent 2.

ED/(C)/DB/F.59-1/88 dated 30-11-88 on the file of the 2nd respondent. 2. E(C) 59/i)88-EE/P1 dated 5-2-88 on the file of the second

respondent respectively comprised in return of the 1st and 2nd respondents in W.P. No. 13234/87, and the 1st respondent in W.P. Nos. 916 and

4174/88 to the writs made by the High Court and upon hearing the arguments of Mr. S. Govindaswaminathan for M/s. N. S. Sivam, G. Anbumani

and R. Ganesan Advocate for the petitioner in all the petitions and of Mr. P. Narasimhan Senior Central Government Standing Counsel on behalf

of the 1st respondent in all the pelitions and of Mr. B. Sriramulu Special Public Prosecutor on bealf of the 2nd respondent in W.P. No. 13234/87

and of Mr. T. S. Subramaniam for Mr. S. Jayakumar Advocate for the 3rd respondent in W. P. No. 13234/87 and of Mr. R. Krishnamurthy for

M. Venkatachalapa-thy Advocate for the 4th respondent in W. P. No. 13234/87 and for the second respondent in W.P. Nos. 916 and 4174 of

1988 and having stood over for consideration till this day the Court made the following order:

Writ petition No. 13234 of 1987 is filed by the petitioner company praying for an issuance of a writ of certiorari to call for the records of the

respondents culminated in the report of the second respondent therein dated 30-11-1986 and quash the observation, ""while no action is

recommended against A-17 firm, the Ministry of Shipping may be advised to recommend banning of business dealings with the firm by the Ports

made in the said report.

Writ Petition No. 916 of 1988 is filed by the petitioner company praying for an issuance of a writ of certiorari to call for the records of the

respondents culminated in Letter ED(C)/DB/F.59-1/88 dated 30-1-1988 issued by the second respondent therein and quash the same and direct

the respondents issue Work Order to the petitioner company for Balance Dredging of Approach Channel between 525 to 1950 metres minus 10-

98 metres in the Tuticorin Port Trust.

Writ Petition No. 5174 of 1988 is filed by the petitioner praying for an issuance of a writ of certiorari to call for the records of respondents

culminated in Letter E(C) 59/1/88-EE/P1 dated 5-2-1988 issued by the second respondent therein, and quash the same.

The petitioner company is represented by its Managing Partner B. Hanumantha Rao in all these writ petitions. During the year 1979, Tuticorin

Port Trust called for tenders for deepening the 1450 metres long Approach Channel up to a depth of minus 10.98 metres level to have 30 draft for

the ships coming in to the Harbour, in order to encourage Dredging Corporation of India Limited, Tuticorin Port Trust, a Government of India

concern, split the entire length of 1450 metres into two portions and awarded the contract 00 metres to 525 metres and 10-50 to 1450 metres to

the petitioner company and the middle portion 525 to 1050 metr to the Dredging Corporation of India. The petitioner company was able to

complete the outer portion 1050 metres to 1450 metres and inner portion 00 to 400 metres without any problem. In so far as the portion 400

metres to 525 metres is concerned, the seabed is full of hard coral conglomerates and does not respond to the conventional method of drilling,

blasting and grabbing and since the hard coral conglomerate rocky stratum extends up to 1100 metres, the Dredging Corporation of India also

could not complete whole work and could complete only 40% of the work. As such, between 400 metres, to 1100 metres the work of deepening

of the channel came to a stand still. It seems the petitioner company informed the Tuticorin Port Trust that it can tackle the problem with the latest

technology available in Europe. Since bringing the latest cutters, for a shorter length of 150 metres will be costly, the petitioner company requested

the Tuticorin Port Trust to give time to complete the work along with the balance of the reach 525 to 1050 metres abandoned by the Dredging

Corporation of India. In the year 1983, the Tulicorin Port Trust invited tenders for dredging the balance length in the Approach Channel from 525

metres to 1050 metres up to a depth of minus 10-98 metres. The petitioner company and two other companies submitted tenders. It seems the

Tender Committee constituted by the Tuticorin Port Trust, after scrutinising the tenders advised Tuticorin Port Trust to award the contract to the

petitioner company. However, it seems one of the tenderers M/s. Asia Foundation and Construction Limited (herein after referred to as M/s.

Afcons'') who did not attend the tender committee meetings, filed a Writ Petition No. 9648 of 1988 before this Court praying to direct the Port

Trust to award the contract to them one of the members of the Board of the Tuticorin Port Trust Mr. D. M. Stephen interested in the abovesaid

company filed another Writ Petition No. 9823 of 1986 praying to direct the Port Trust to award the contract to M/s. AFCONS as their

subsequent offer was the lowest of all other tenderers. In these writ petitions, originally the petitioner company was not included as a party

respondent. They got impleaded as the party-respondent in these writ petitions. The writ petitioner in those writ petitions had alleged that the

petitioner company herein had committed irregularities while executing the work in Madras Port Trust and the C.B.I. Madras had been

Investigating those irregularities and on these circumstances it was prayed the petitioner-company in these writ petitions should not be considered

for entrusting the dredging contract work. In the above mentioned cases, the Port Trust submitted stating that it was true that a case was registered

by the C.B.I. against the petitioner herein on the complaint of Madras Port Trust and having come to know of that the Chairman of Tuticorin Port

Trust referring the matter to the Deputy General of Police, C.B.I., Madras requested for advice. It seems a reply was received from the C.B.I, to

the effect that the complaint is still under investigation and as nothing incriminating has been found so far, against the peittioner-company, the Board

of Trustees of Tuticorin Port Trust could decide the matter on merits. After due consideration of all the relevant facts mentioned above, the Board

of Trustees of Port Trust, Tuticorin resolved to abide by its earlier decision of awarding the contract to the petitioner-company and all the

objections of M/s. AFCON raised by Mr. D. M. Stephen a member of the Board were duly considered and rejected by the Board. The Writ

Petitions W. Ps. 9648 and 9823 of 1986 came to be dismissed by Mohan, J. (as he then was) by order dated 24-12-1986 in which the learned

Judge has specifically considered the submissions of the petitioners therein regarding the C.B.I, investigation against the peittioner-company herein

and the allegations of the petitioners therein that in spite of such investigations, the Port Trust had gone out of the way to award the work to the

petitioner-company herein. Further, the learned Judge in his order has considered the submissions of the petitioners therein and held that when the

Board of Trustees of the Port Trust had been advised by the C.B.I. that they could decide the awarding of the contract on merits, there could be

no impediment as contended by the petitioners therein. Aggrieved by the above mentioned order, M/s. AFCONS preferred Writ Appeal No. 56

of 1987 before this Court and after due consideration of all relevant submissions and perusing the relevant records, a Division Bench of this Court

dismissed the abovesaid writ appeal at the stage of admission itself. M/s. AFCONS preferred SLP (Civil) No. 2578 of 1987 before the Supreme

Court against the order of the Division Bench of this Court and after issuing notice to the respondents therein, the Supreme Court dismissed the

special leave petition. It seems the petitioner-company undertook the construction of the ''Outer Protection Arm'' of Madras Port and the said

work involved quarrying, transporting and dumping of 1.2 Million tonnes of stones and casting and placing 7,000 numbers of Tetra pods. It seems

during the month of December 1984 the Chief Engineer of Madras Port Trust informed the petitioner-company that certain irregularities had been

noticed by him in the supply, transport and dumping of stones in connection with the abovementioned construction and the Madras Port Trust

lodged a complaint with the C.B.I., Madras for due investigation. After due investigation, the C.B.I. submitted a final report in the month of

November, 1986 and the investigation conducted by the C. B.I. conclusively showed that there was no incriminating evidence against the

petitioner-company. It is alleged in the affidavit that it has now come to light that the C.B.I. submitted a final report dated 30-11-1986 to the

Ministry of Shipping of Government of India recommending no action against the petitioner-company, that on the complaint lodged by Madras

Port Trust, the Ministry could consider whether it could recommend banning of business dealings with the petitioner-company by the various Ports

in the country and Madras Port Trust could take action to recover Rs. 1,01,220-50 from the petitioner-company towards the less sustained by

them. It is also stated in the affidavit that the advise of C.B.I. is contrary to all known principles of law, that after specifically coming to the

conclusion that no action is recommended against the petitioner-company, as nothing incriminating has been found against them, the Central Bureau

of Investigation ought not to have given such improper and unsustainable advice to the Ministry of Shipping and that black listing a firm company

from awarding any business dealings with it is a serious act that amounts to penalty, that such a decision could be taken only on sufficient materials

after affording an opportunity to the erred firm to state its case, and that as such the said advice of Central Bureau of Investigation is per se illegal

and improper. It is submitted in the affidavit filed in support of the petition that after receiving the letter dated 30-11-1986 from the Central Bureau

of Investigation, the Ministry of Shipping were consulting Law Ministry and other legal advisers of the Government of India as to what action

should be taken against the petitioner-company, that the Higher Law Officer of the Government of India had advised that action should be taken

only in accordance with law and not otherwise, and that under these circumstances, the Ministry of Shipping is deliberately keeping alive the

subject without giving a finality to the matter. It is further alleged in the affidavit that because of the improper advice given by the Central Bureau of

Investigation, the business activities of the petitioner-company with ports have come to a standstill, that the petitioner-company alone has necessary

expertise in the field of pre-cast concrete block work, that the Madras Port Trust called for applications from contractors to submit their

qualifications for due consideration in connection with the tenders for the extension of work in Madras Trust, that the petitioner-company submitted

its pre-qualification application on 24-12-1986 to the Chief Engineer of Madras Port, and that since the Central Bureau of Investigation had sent a

report dated 30-11-1986, the Port Trust, Madras did not approve the qualification application submitted by the petitioner-company. It is further

submitted in the affidavit that even the contract to execute balance dredging in the Approach Channel of Tuticorin Port, therein the petitioner-

company has been selected by the Board of Trustees for awarding the work as early as 1984, is yet to be formally awarded by the Port Trust, that

enough the Ministry of Shipping advised the Board of Trustees, Tuticorin in the year 1985 to their decision in awarding the contract, in view of the

advise tendered by the C.B.I, to the Ministry of Shipping, even though no formal orders have been issued by the Ministry in this regard, the

Chairman of the Port Trust is hesitant in issuing the work order to the petitioner-company. It seems that without issuing the work order, the Port

Trust, Tuticorin is merely directing the petitioner-company to renew the validity of its tender periodically and the petitioner-company extended the

validity of its tender up to 31-3-1988 and that the delay in awarding the work order to execute the balance dredging of the Approach Channel had

caused financial less to the petitioner-company and to the general public. It is also alleged in the affidavit that every year the Electricity Board is

incurring a loss of Rs. Two crores and Tuticorin Port is losing more revenue. It is further submitted that for about four years the deepening of the

approach channel has been delayed, that the total loss runs to several crores of rupees, and that since the petitioner-company has kept its offer

valid for more than three years expecting work order, it is maintaining its site organisation at enormous cost. It is also stated by the petitioner in the

affidvit that the officials of the Port Trust have informed the petitioner-company that unless the Ministry of Shipping gives clearance in respect of the

C.BI.''s advice, the Work Order cannot be issued to the petitioner-company, that because of the improper report submitted by the C.B.I. the

petitioner-company is put to immense hardship, that after exonerating the petitioner-company totally from the criminal liability, the C.B.I. has no

right to advise the Ministry of Shipping that it should ban business dealings with the petitioner-company by the Ports in the country, and that the

above mentioned actions of the respondents infringe the fundamental rights under Art. 19(1)(g) of the Constitution of India. With these allegations,

the petitioner-com-pany has come up to this Court with the prayer in W.P. No. 13234 of 1987 to quash the order of the C.B.I, dated 30-11-

1986, as stated above.

Based on the report of the C.B.I, which is impugned in W.P. No. 13234 of 1987, the first respondent Ministry of Shipping and Transport

issued an advice to Port Trust not to entrust the work to the petitioner-company. Only in the month of January 1988, the petitioner-company came

to know about the abovesaid fact. On 12-1-1988, the Ministry of Shipping Corporation advised the Tuticorin Port Trust to discharge all the

existing tenders and call for fresh tenders. On 29-1-1988, the Tuticorin Port Trust passed a resolution, as per the Ministry''s guidelines, rejecting

the tender of the petitioner-company. The said rejection has been informed by way of telex/ telegram on 29-1-1988 and it has been challenged by

the petitioner-company in Writ Petition No. 916 of 1988. It has been stated on the telex, a copy of which is produced, that to award a contract in

1988 based upon 1983 tenders and rates, it has been decided by the Board in its meeting on 29-1-1988 to discharge all the tenders received in

and that the tender submitted by the petitioner-company herein for the balance of dredging in approach channel from CH.525M to 1050 M has

been rejected, on the advice by the Government of India. On 9-2-1988, the Port Trust cancelled the earlier work awarded to the petitioner stating

that the completion of remaining work under the agreement will be done as per Cl. 43 of the agreement and as per the relevant terms of agreement.

The petitioner-company got the refund of Earnest Money Deposit. Against the said cancellation, the petitioner-company has filed Writ Petition No.

4174 of 1988 praying to quash the letter dated 5-2-1988.

The fourth respondent in W.P. No. 13234 of 1987, the Tuticorin Port Trust, in its counter-affidavit states that the writ petition filed by the

petitioner-company is premature and that it is not maintainable. It is further claimed in the counter-affidavit that the impugned letter of the Director,

Central Bureau of Investigation, the second respondent herein is an inter-departmental correspondence between the respondents 1 and 2, and that

it is purely of a recommendatory nature. It is also claimed in the counter-affidavit, referring to paragraphs 6 and 7 of the affidavit filed by the

petitioner-company, that as per the terms and conditions of tender, the respondent Tuticorin Port Trust can always reject all the tenders without

assigning any reason, that there was time lag of more than five years and that the very cost of dredging all over the world having been reduced

considerably and the subsequent conduct of the petitioner in the collateral proceedings are all taken into consideration by the Board and it was

resolved to reject all the tenders and to call for fresh tenders. It is also claimes in the counter-affidavit that the recommendation given by the second

respondent is valid and within its jurisdiction, that in view of the subsequent development and the filing of W. P. No. 916 of 1988 the writ petition

W.P. No. 13234 of 1987 itself has become infructuous, and that the contention that the petitioner-company kept its offer valid for more than three

years and on that score entitled to the work order is wholly misconceived it is further claimed that the same contention has been rejected by this

Court as well as by the Supreme Court to which the petitioner was a party. It is further claimed that if the petitioner is aggrieved against the order

of rejection, it can always resort to arbitration or to the Civil Court.

The first respondent Ministry of Surface Transport has filed a counter-affidavit in each of W.M.Ps. It is claimed in the counter that on the basis

of the investigation carried out by the Madras Port Trust. It had noticed various irregularities amounting to great loss to the Madras Port Trust,

which at the same time enabled the petitioner-company the chance of unjust enrichment, the facts leading to the investigation of the C.B.I. are

narrated in the counter-affidavit. It is also claimed in the counter-affidavit that on the basis of charges the C.B.I, had recommended to the

Government to consider the advisability for banning to future dealings with the petitioncr''s-company, that no instructions have been issued by the

Government to the Madras Port Trust and Tuticorin Port Trust forbidding them to issue tender forms to any company including the petitioner-

company. It is further submitted by the first respondent that the report of the C.B.I. is a confidential document, that the same cannot be furnished to

the petitioner-company, and that the prayer in this regard is quite unsustainable. It is clearly stated in paragraph 9 of the counter-affidavit that

invoking the principles of natural justice, the petitioner-company is trying to create sympathy from the Court. Knowing very well that the

Government would not straightway implement the recommendation of the C.B.I., that banning business dealings with the petitioner-company would

require compliance with the principles of natural justice and would have to be covered by the instructions of the Government of India regarding the

banning of business dealings as held by Supreme Court in Erusian Equipment and Chemicals Ltd. Vs. State of West Bengal and Another, . It is

further claimed in the counter-affidavit that any action leading to banning of the business dealings with any firm in question would require sufficient

opportunity to be given fo the concerned company and also after proper enquiry if it is found to be guilty and the punishment to be imposed would

depend on the gravity of the charges, then only any action could be taken against the company, that the petitioner-company at present has not been

served with show cause notice, that an action has been taken against the petitioner-company by the Government for banning business dealings with

the petitioner-company and that the prayer of the petitioner-company to restrain the respondents from taking into consideration the advice of the

C.B.I. is not entitled to be considered. It is further submitted in the counter-affidavit filed by the first respondent that at this juncture the petitioner-

company cannot revoke the jurisdiction of this Court under Art. 226 of the Constitution of India.

The Director, Central Bureau of Investigation, New Delhi, the second respondent herein has filed a separate counter-affidavit in W.M.P. It is

claimed in the counter-affidavit that the investigation clearly disclosed that the petitioner-company along with several Port Trust officials fabricated

documents and made false claims and cheated the Madras Port Trust and that all the payments were received by the petitioner-company

submitting false bills. It is also claimed in the counter-affidavit that the pelitioner-company in the sub-contract with M/s. Brokhovan submitted the

bi!ls towards non-existent lorries and trips not made and payments were received that by the aforesaid act of the petitioner-company, Port Trust

sustained a loss of Rs. 1,01,220.50 towards the items subjected to investigation alone and that therefore it was recommended by the C.B.I. to the

Ministry of Shipping to consider banning of business dealings with the petitioner-company by the Ports. It is further submitted in the counter-

affidavit that the impugned letter of the second respondent addressed to the first respondent dated 30-11-1986 is a confidential inter-department

communication and purely of recommendatory in nature and that since the report of the C.B.I, is only recommendatory in nature it cannot be

questioned in the Court of law.

The Chairman, Tuticorin Port Trust, the second respondent in W.P. No.916 of 1988, has filed a counter-affidavit stating that the writ petition is

misconceived and is not maintainable. It is stated in the counter-affidavit that the reliefs which are sought for relate to two contractual transactions,

one covered by the notice dated 9-12-1983 inviting tenders for the work of balance dredging of the Approach Channel of Tuticorin Port from Ch.

525 M to Ch. 1050M, that another contract is covered by agreement entered into the petitioner-company with the second respondent herein for

executing the work of dredging the Approach Channel from Ch. 00 M to 525 M and from 1050 M. to 1450 M. to a depth of minus 10.98 M.

level. It is further stated that the rights and obligations of parties are governed by the terms and conditions respectively of the tender notice and the

contract, that the relationship between the parties is purely contractual, and that the petitioner-company can seek redress for grievance, if any, in

respect of the above said transactions, only in the Civil Court. It is further claimed in the counter-affidavit that the petitioner-company is not entitled

to invoke the jurisdiction of this Court under Art. 226 of the Constitution of India. It is further claimed in the counter-affidavit that as regards the

work of dredging entrusted to the petitioner-company under agreement for the year 1970-80, more than 25% of the work has not been executed,

that the said work was abandoned by the petitioner-company in June, 1985, that the averment made by the petitioner-company with regard to the

basis on which the tender committee made its recommendations for award of the contract to the petitioner-company is not correct, that the Writ

Petions Nos. 9648 and 9823 of 1986 filed by M/s. AFCONS and one Mr. D. Stephen respectively are not relevant to the writ petitions, that the

petitioner-company cannot try to take advantage of the letter of the C.B.I, dated 20-8-1986 to the second respondent at a time when the

investigation made by it on the case registered against the petitioner-company had not been completed. The fact that the second respondent acted

upon the letter then received from the C.B.I, is admitted in the counter-affidavit filed by the Chairman, Tuticorin Port Trust. It is further submitted

to the counter-affidavit that the second respondent herein is not aware of the final report of the C.B.I., that the contention of the petitioner-

company that the C.B.I. ought not to have given the advice to the Ministry is not tenable, that the plea that any blacklisting of a firm would amount

to penalty and it cannot be done without giving an opportunity to the erring firm has no point at all inasmuch as no black listing has so far been done

as could be seen from the averments in paragraph 8 of the affidavit to the effect that no final action has been taken by the Government. It is further

submitted in the counter-affidavit that the plea based on the assumption by the petitioner-company that nothing incriminating has been found against

the said company by the C.B.I, in the course of investigation is not well founded, that the story trotted out by the petitioner-company that in issuing

the said direction, the officials of the Ministry succumbed to the pressure brought by interested parties is a concoction and a figment of imagination

and does not deserve any consideration, and that the petitioner-company ignores the basic concept that the Ministry of Shipping, the first

respondent herein has got statutory powers to give proper advice and issue suitable direction to the second respondent in the matter of contracts

and matters with financial implications and the exercise on the part of the petitioner-company to assail such advice or direction on the grounds

which are baseless and attributing motives to officials acting in the discharge of their duties is opposed to fairness and equity. It is claimed in the

counter-affidavit that the contention of the petitioner-company that the Board of Trustees of Tuticorin Port is an autonomous body is not correct,

that the Board of Trustees is only a statutory body being a creation of the Major Port Trusts Act, 1963, that its functions are governed by the

various provisions of the said Act, and that the Board is subject to the control of the Central Government. It is further claimed in the counter-

affidavit that all the tenders received for the balance dredging work have been rejected. The telegrams and the confirmation letters which are

impugned herein given by the second respondent herein to the petitioner-company are admitted in the counter-affidavit. It is submitted by the

respondent that Cl. 8 of the tender notice clearly stipulates that the Port Trust reserves the right to waive any formality thereof or to reject any or all

tenders received, without assigning any reason, that the second respondent has a right to reject any or all tenders at any time without assigning any

reason whatever and that the said right of the second respondent exists till the work order is issued and as such the contentions raised by the

petitioner-company are not correct. It is also stated in the counter-affidavit, that no right can flow from revalidation of a tender for award of the

contract, that the tenders of all the three tenderers have been revalidated as required in para 24 of the ''Instructions for tendering'' read with Rules

of C.P.W.D. Manual Volume II, that none of the tenderers who have quoted for the said work and who have revalidated the tenders are entitled

to set up a claim and as such the petitioner-company has no right to set up any claim. It is , further stated in the counter-affidavit that no work

order was issued to the petitioner-company pending clearance from the Ministry, the first respondent herein, that the Ministry has now given advice

to discharge all the tenders received for the work, that the Board of Trustees of Tuticorin Port has duly considered the advice given by the Ministry

as can be seen from the minutes of the meeting held on 29-1-1988 and has taken a final decision to reject all the tenders. It is further submitted in

the counter-affidavit that the advice given by the Ministry that it would be against the normal principle of project formulation and management to

award the contract in 1988 based upon the 1983 tenders and rates has also been considered by the Board to be not reasonable, and that Cl. 8 of

the tender notice, which provides that any or all the tenders can be rejected without assigning any reason has been referred to in the counter-

affidavit. It is also clearly stated in the counter-affidavit that not only the tender of the petitioner-company but also all the tenders in regard to the

balance of dredging work have been advised by the Ministry to be discharged and the attribute of motives to officials is unfair and unjustified. It is

further stated that in any case, the rejection of tenders can be made it any time without assigning any reason therefor, and that therefore is no point

in the petitioner-company harping again and again upon the contention that the reasoning given by the Ministry is untenable in law. It is further

submitted that when on the above mentioned reasoning all the tenders have been rejected, the contention of the petitioner that the reasoning has

been devised only in view of the report, which is impugned in W.P. No. 13234 of 1987 is not only incorrect but also misleading. In paragraph 17

of the counter-affidavit it is stated that many of the dredging companies in the world have recession period, that it is not possible to do the dredging

work at a lower cost as will be made out from the minutes of the meeting held on 10-9-1987 by the Development Adviser (Ports) New Delhi at

Tuticorin with the port officials and as such the advice given by the Ministry to discharge all the tenders and call for fresh tenders cannot be said as

incorrect or untenable. It is further claimed in the counter-affidavit that the petitioner-company has suppressed facts and set up wrong contentions.

It is further claimed in the counter-affidavit that the work under the 1970-80 agreement has been running into difficulties and the petitioner-

company has not been able to cope up with the work they abandoned the work in the year 1985, that in spite of several peruasions and strict

warnings they were not able to revive it, that as a result the second respondent invoke the forfeiture Cl. 43(3) of the contract and issued a notice of

forefeiture on 18-8-1986 informing the petitioner-company that after 14 days after receipt of notice, the port will enter upon the site and works

expelling them therefrom. It is also stated in the counter-affidavit that proceedings were initiated by the second respondent only to forfeit into

contract in terms of Cl. 43(3) of the petitioner-company will not be affected. It is categorically stated in the counter-affidavit that the petitioner-

company has to seek any remedy, if so desired, only in the Civil Courts and a writ will not lie. It is also stated in the counter-affidavit that Cl. 47 of

the agreement provides for arbitration, and that if at all the petitioner-Company is aggrieved by the forfeiture notice and the order of taking over of

the site and works by the second respondents, it has to work out its rights by resorting to arbitration, and that the petitioner-company is estopped

and barred from taking any other different action. A couple of legal proceedings instituted by the petitioner-company against the second

respondent herein is referred to in the counter-affidavit. It is also stated that the question of rejecting all the tenders received in 1984 for the

balance of dredging work was fully considered by the Board of Trustees of Tuticorin Port in its meeting held on 29-1-1988 and decided to reject

all the tenders. The tenders were all rejected in pursuance of the resolution of the Board of Trustees. A reference to judgment of this Court in W.

A. Nos. 307 and 403 of 1986 is also referred to in the counter-affidavit. The judgment of W.A. Nos. 307 and 403 of 1986 dated 27-8-1986 has

been reported in Chokhani International Ltd. v. Board of Trustees of the Port of, Madras 1987 WLR 529.

I do not think it necessary to refer to the counter-affidavit filed by the respondent Port Trust in miscellaneous petitions in W.P. No. 4174 of

1988. The Chairman, Tuticorin, Port Trust has almost repeated the same contentions raised in the counter-affidavit filed in W.P. No. 916 of 1988,

except extracting the terms and conditions of the contract, under Cl. 43(3).

Mr. S. Govindaswaminathan, the learned senior counsel, appearing for the petitioner in all these writ petitions refers to the affidavit filed by the

Chairman, Tuticorin Port Trust, Tuticorin before the Supreme Court in the SLP No. 2578 of 1987 filed against the order passed in earler writ

petitions. The learned counsel refers to paragraph 10 of the counter-affidavit filed by the Chairman, Tuticorin Port Trust, Tuticorin before the

Supreme Court. It is stated in the said counter-affidavit as follows :

.....with regard to the awarding of contract to the second respondent by the Tuticorin Port Trust the decision could be taken on merits as deemed

fit by the Board of Trustees and further stated that it was not possible to say anything for certain at that stage when investigation was in its final

stage, with reference to the matter relating to the Madras Port Trust.....

The learned counsel also refers to the said counter-affidvit in which it is stated that the contract was awarded to the petitioner herein for the

balance of dredging in the approach channel from Ch. 525 m to 1050 m up to minus 10.98 m level, subject to the condition that the petitioner-

company agreed categorically in writing to the deletion of the clause relating to arbitration from the contract. The learned senior counsel further

argues that among the rates quoted by tenders, the petitioner-company alone quoted the lowest rate in the year 1983 and that no company can

give the same rate, even now since seven years have elapsed. The learned Senior Counsel further argues that though the C.B.I. has taken note of

the fact that behind back of the petitioner company, all actions were defended by the Port Trust in favour of the petitioner company in the earlier

writ petitions up to Supreme Court. It is also stated that the Port Trust is an autonomous body and that it cannot act on the directions of the

Ministry. The learned counsel further argues that black-listing cannot be done without a notice and refers to the decisions in Erusian Equipment and

Chemicals Ltd. Vs. State of West Bengal and Another, for this proposition. The sum and substance of the argument of the learned Senior Counsel

for the petitioner company is that the petitioner company alone has given the lowest rate and as such the petitioner company is entitled to get that

contract. The learned counsel further argues that the work order alone has to be issued in this csae and it has been stopped because of the C.B.I,

report which is impugned in W.P. No. 13234 of 1987, The learned Senior Counsel''s main contention is that invoking of forfeiture clause 43 is

erroneous, and that the authorities concerned should not take such an extreme step of taking over the balance of dredging work.

Mr. P. Narasimhan, the learned Senior Central Government Standing Counsel, appearing for the Ministry, the first respondent in all these writ

petitions contends that under S. 111 of Act 38 of 1963 (the Major Port Trusts Act, 1963) the Central Government has got power to give

directions to the Board. The learned Counsel further argues that the C.B.I. report is on record, that no action has been taken that no show cause

notice has been issued to the petitioner and as such the writ petitions filed by the petitioner company are premature. The learned counsel further

argues that the contention of the petitioner as if he has been black-listed is not correct. The learned counsel further submits that no question of

black-listing arises in this case. According to the learned counsel for the first respondent, the petitioner company is not at all black-listed. The

learned counsel further argues that the petitioner company cannot rely upon the report of the C.B.I. which is impugned in W.P. No. 13234 of

1987 and that the petitioner company also build up an argument as if it had been black-listed.

Mr. R. Krishnamurthy, the learned Senior Counsel appearing for the Tulicorin Port Trust contends that the petitioner company is not correct in

setting up rights based on the revalidation of tender from time to time up to 31-3-1988, that the Ministry has given advice to the Board of Trustees

of Tuticorin Port to discharge all the tenders received for the dredging of balance work and that the Board of Trustees of Tuticorin Port has

considered the advice given by the Ministry and discharged all the tenders and fresh tenders were called for. It is argued by the learned Senior

Counsel that because of re-validation, the petitioner company has no right to get the contract. The learned counsel further argues that it is true that

the Port Trust defended the petitioner company before the Supreme Court as well as before this Court with regard to awarding the lender in favour

of the petitioner company and that the fresh tenders called for by the respondent Port Trust on the ground of delay the learned Senior Counsel

further states that the reasoning has been stated in paragraph 17(3) of the counter-affidavit filed by the Port Trust. The learned counsel also stated

that it may be true that the petitioner company is the lowest tenderer, that it will not preclude the respondents inviting fresh tenders, and that since

no tender has been accepted no question of going back arises in this case on the part of the respondents. The learned counsel also argues that no

question of black-listing arises in this case. Assuming that the petitioner company has been black-listed, referring to the decisions of the Division

Bench of this Court in Chokhani International Ltd. v. Board of Trustees of the Port of Madras 1987 WLR 529 and in Shaik Mohammed Rowther

and Co. (P) Ltd. v. The Shipping Corporation of India 1987 WLR 638 the learned Senior Counsel argues that these writ petitions under Art. 226

of the Constitution are not the proper remedy and so far as there is no concluded contract between the parties and the matter is under

consideration. It is open to the Port Trust to reject all tenders and call for fresh tenders and no question of violation of Art. 14 of the Constitution

arises in these cases. With regard to balance of 50 m. forfeiture under Cl. 43 of the agreement, the learned counsel argues that there is no hope

that the petitioner company could complete it and as such under Cl. 43(3) of the agreement, the tender has been revoked. It is also submitted by

the learned counsel that any belated offer cannot be considered and should not be countenanced in this Court.

Having considered the arguments of Mr. S. Govindeswaminathan, the learned senior counsel for the petitioner company, Mr. P. Narasimhan,

the learned Senior Central Government Standing Counsel appearing for the Ministry, Mr. R. Krishna-murthy, the learned senior counsel appearing

for the Port Trust and of Mr. B. Sriramulu, the learned counsel appearing for the C.B.I., I am of the opinion that there are no merits in all these writ

petitions. The entire question tenders upon a contract entered into in the year 1979-80 with regard to one portion of dredging work between the

Port Trust and the petitioner company and all the tenders were rejected with regard to another portion. All the respondents have categorically

stated that the petitioner company has not at all been black-listed and that it is only an apprehension on the part of the petitioner company. The

letter of the C.B.I, dated 30-11-1986 reads as follows:

.....While no action is recommended against A 17 firm, the Ministry of Shipping may be advised to recommend banning of business dealings with

the firm by the Ports. Madras Port Trust should take action to recover Rs. 1,01,220.50 from A 17 firm....."".

Based on the above mentioned letter, the learned counsel for the petitioner company wants to build up, an argument as if the petitioner company

has been black-listed. This letter has been considered by Mohan, J. (as he then was) in W. P, Nos. 9648 and 9823 of 1986 and the learned Judge

in that case observed as follows:

.....Therefore, the first respondent Port Trust was fully aware of the pendency of the vigilance enquiry as against the 2nd respondent and on a

consideration of the same if a decision is arrived at to award the contract, if this Court cannot reconsider it on the ground or the other, because the

ratio of the judgment in W.A. Nos. 307 and 403 of 1986 extracted above, would squarely apply.....

As such, this has been considered by this Court in spite of the letter, regarding the petitioner company''s lender was considered. The learned

Judge, in the above mentioned case has rejected the contention put forth by the petitioner company herein that the petitioner''s offer was

considered without knowing the fact of pending investigation of the C.B.I. As such, it cannot be said that any black-listing has been made against

the petitioner company. It has been clearly stated in the counter-affidavits that no question of black-listing arises in these cases because the

petitioner company has not been black-listed and that if they had decided to do that the principle laid down by the Supreme Court had to be

followed. As such, in my view, W.P. No. 13234 of 1987 is premature. I am inclined to agree with the argument of the learned counsel for

respondent Port Trust that it is only an inter-departmental communication and the petitioner cannot try to build up an argument as if he has been

side-lined because of this inter-departmental letter. In my view, no question of quashing a inter-departmental letter has arisen in this case and as

such the writ petition is not maintainable. In so far as no order has been passed, I do not think the petitioner company can have any grievance

especially when the respondents in their counter-affidavits maintain that the petitioner was not black-listed, that means the petitioner''s case will be

considered by the respondents in future if it take part in any tender.

Coming to the question of rejection of tenders and balance of dredging of work in the Approach channel in the Tuticorin Port Trusl, I am of the

view that the entire matter has fallen into the realm of this Court. In Shaik Mohammed Rowther and Co. (P) Ltd. K.P.V. v. The Shipping

Corporation of India 1987 WLR 638 it has been held that in a case of breach of contract a petition under Art. 226 of the Constitution will not lie.

It is not the case of the petitioner that any other tender has been accepted. When the case of the respondents is that all tenders have been rejected.

I am of the view that even as per the terms and conditions of the tender, under which the petitioner herein gave as offer, they have a right to reject

the same. After signing an offer accepting the terms and conditions of the tender it is not open to the petitioner to question the rejection of its tender

alone. It is nobody''s case that the petitioner''s tender alone has been rejected. Admittedly all the tenders were rejected. In my view, the Port Trust

has right to do so and it has been held so in Chokhani International Ltd. v. Board of Trustees of the Port of Madras 1987 WLR 529. In the above

mentioned decision it has been held that the reservation of power to reject all offers in a tender, without assigning any reasons is not arbitrary and

violative of Art. 14 of the Constitution. In that case, it has been held by the Division Bench of this Court as follows (at p. 551)

.....It is settled law that in the case of an auction or in the case of a tender, the Government, and therefore also a public authority, has the right to

reject the highest bid or tender unless the conditions of auction or tender specifically provide that the highest bid or tender shall be accepted.

Undoubtedly, rejection pf the highest tender being permissible on good and sufficient grounds may become arbitrary if it is based on irrelevant

consideration or if it is found that the authority has not acted fairly and justly.....

It is well settled that no person has a right to get a contract and this Court cannot compel anybody to enter into a contract between one person and

another person. Assuming that the Port Trust is an autonomous body and it is open to take decision by the Port Trust, the Port Trust is bound by

the directions of the Central Government under S. 111 of the Major Port Trusts Act, 1963, I am inclined to agree with Mr. P. Narasimhan, the

learned Central Government Standing Counsel, on this aspect.

Assuming that this Court can test the reasoning for rejection of the tenders, I am of the view, that the reasoning given by the respondents

cannot be said to be arbitrary. The reasons for calling fresh tenders have been stated in the counter-affidavit. If at all the petitioner company is

aggrieved, on that it is always open to them to approach the civil Court, for any remedy if it is so advised.

With regard to taking over of the balance of dredging work to the Approach channel, by the Port Trust, clause 43(3) of the said contract

envisages such situation and it runs as follows:

43(3) Forfeiture

If the contractor shall become a bankrupt or receiving order made against him or shall present his petition in bankruptcy or shall make an

arrangement with or assignment in favour of his creditors or shall agree on arrangement with or assignment in favour of his creditors or shall agree

to carry out the contract under a committee of inspection of his creditors or (being a Corporation) shall go into liquidation (other than a voluntary

liquidation for the purposes of amalgamation or reconstruction) or the Contractor (being a parlnership) shall dissolve, the partnership or if the

contractor shall assign. The contract without the consent in writing of the Port first obtained or shall have art execution levied on his goods or if the

Engineer shall certify in writing that in his opinion the contractor, has abandoned the contract or

(b) without reasonable excuse has failed to commence the works or has suspended the progress of the works Engineer''s written notice to

proceed; or

(c) is not executing the works in accordance with the contract or his persistently or flagrantly neglecting to carry out his obligations under the

contract or

(d) has to the detriment of good workmen-ship or in defiance of the Engineer''s instructions to the contrary sub-let any part of the Contract or

(e) has expired or

(f) has become insane

then the Port may after giving 15 day''s notice in writing to the contractor enter upon the site and the works and expel the Contractor therefrom

without thereby avoiding the Contract or releasing the Contractor from any of his obligations or liabilities under the Contract or affecting the rights

and power conferred on the Port or the Engineer by the Contract and may himself complete the works or may employ any other Contractor to

complete the works and the Port or such other contractor may use for such completion so much of the construction and other plant, temporary

works and materials which have been deemed to be reserved exclusively for the construction and completion of the works under the provisions of

the Contract, as they or he may think proper and the Port may at any time sell any of the said construction Plant temporary works and unused

materials and apply the proceeds of sale in or towards the satisfaction of any sums due or which may become due to Port from the Contractor

under the Contract.....

Clause 43(3) being a forfeiture clause, it is open to the Port Trust to take over the balance of dredging work of the Approach Channel and refund

the E.M.O. amount and if the petitioner is aggrieved it has to find its remedy only in a Civil Court or arbitration and not by way of a writ petition

under Art, 226 of the Constitution.

On the facts and circumstances of the cases, I am of the opinion that the Port Trust has not acted arbitrarily and the decision taken by it cannot

be said to be unreasonable. It also cannot be said that any decision has been taken for extraneous consideration. I am also not satisfied with the

allegation made by the petitioner company that because of the directio.ns of the Central Government, the said decision has been taken by the Port

Trust rejecting all the tenders. Further I do not see any relevance when the petitioner company relying upon earlier decisions of this Court in writ

petition filed by another tenderer. Simply because the Port Trust was defending its action and support the tender of the petitioner company, does

not mean that the contract or tender has been awarded to the petitioner.

Since all the respondents have categorically stated in the counter-affidavits that the petitioner has not been black-listed, I do not think it is

necessary to refer to the decisions cited by the learned counsel for the petitioner. Factually, also I do not see the petitioner company has been

black-listed.

With regard to the question whether the tender has been taken over by other companies, I do not think it is necessary to go into that question

since, I am resting my decision more on law than on facts. There are no merits in the writ petitions. The result will be all the writ petitions will stand

dismissed. However, there will be no order as to costs.

Petition dismissed.