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Judgment
D.N. Baruah, J.—This appeal is directed against the Judgment and order dated 7.1.94. in Misc. Case No. 986 of 1993, arising out of Civil Rule No. 3377 of 1933 by the learned Single Judge (sic) direction to continue the order of stay granted earlier on 1.12.93
This Court at the request of the counsel for the parties, by order dated 4.2.94 decided to dispose of the connected Civil Rule, i.e. Civil Rule No. 3377/93 alongwith the present appeal. Similarly, Civil Rule No. 674/94 was also ordered to be listed with the present appeal for disposal as this Civil Rule is arising out of the same order.
The facts for the purpose of disposal of the matter may be stated as follows:
Eastern Food Products (Pvt) Limited (Petitioner in Civil Rule No. 3377/93) is a Company incorporated under the Companies Act, 1956 with its registered office at Silchar, Cachar. Assam. The Company owns tea estate, viz; Hilara Tea Estate near Badarpur. The Petitioner company is engaged in business of tea plantation since 1950 and has built up a modern tea factory at Hilara Tea Eastate with a capacity to produce 5 lakhs made tea at the time of filing the writ petition having scope for further increase. The Company is a local tea company with its Head Office at Silchar and its share holders and the Managing Director are all residents of Silchar Town.
Jethmal Choraria, the Petitioner in Civil Rule No. 674/94 is a permanent resident of Silchar, Cachar and had undergone the training in Entrepreneurship Development Programme organised by the North Eastern Industrial and Technical Consultancy Organisation Limited Guwahati in the 1987. The members of the Petitioner''s family own a tea estate, viz; Chargola Valley Tea Estate, in the district of Karimganj. The said tea estate is being (sic) by the Petitioner''s family since 1970. He has been looking after the said (sic) state for several years. He has adequate knowledge and experience in the line of tea plantation, manufacture of tea, besides, administrative experience in managing tea garden.
Doloo Tea Company (India) Ltd. (5th Respondent in both the Civil Rules and Appellant in writ appeal) is a Public Limited Company having its registered office at Cachar, Assam. This Company also has tea garden and factory at Doloo in Cachar, Assam.
The Government of Assam, through the Cooperation Department issued notice inviting offers from reputed and experienced Tea Company/tea planters/tea farms having experience to participate in management/to lake lease of the said Chincoorie Tea Estate of Cachar Tea farming and Industrial Cooperative Society Ltd, Cachar. The said notice was published in Assam Tribune dated 20.7.93. Chincoorie Tea Estate is owned by Cachar Tea Farming and Industrial Cooperative Limited. This tea estate was originally a proprietorial concern, which was sub-sequently owned by the aforesaid Cooperative Society with the Deputy Commissioner, Cachar as its Chairman. The Tea estate was facing acute financial hardship because of huge accumulation of statutory arrears to wards its labourers and staff, With a view to run the said tea estate without increasing any further liabilities, the authorities decided for leasing out/sale of the garden, so that, it might not face (sic) in very near future. The terms and conditions of the said notice were as follows:
The tenderer must be a well experienced lea planter/Tea company/Tea farm having his/her/their own tea estate, Tea farms or the farms having tea estate
in the State will be given preference;
The tenderer must accept the committed and statutory liabilities and willing to clear up the same within a stipulated time;
The genuine permanent workers/staffs who have been made/permanent on or before 31.3.93 must be accepted and their service shall not be terminated;
The wages/salaries/ration/bonus etc. shall be given to them as per plantation Act Rules;
The tenderer must be financially sound enough, and his/their own tea garden must be well developed and well managed in all respects;
The tenderer shall not use the land of the garden for purpose other than the tea plantation and its ancillary purposes;
The tenderer must lay out his/their developmental programme for new plantation/in filling/rejuvenation (sic) and well developed unit;
The Govt. reserves the right to call suitable tenderers only for negotiation/discussion for leasing out the garden/participation in management and not bound to call all the tenderers. Further the Govt. also reserves the right to reject any lender without assigning any reason thereof; etc.
In pursuance to the said notice inviting offers, altogether 11 tenderers submitted their tenders; out of which 8 tenderers were called for preliminary discussion on 23.8.93. Out of 8 tenderers following 5 had participated in the discussions, held with the Minister of Cooperation Assam
The Eastern Food Products (Pvt) Ltd. (Petitioner in CR 3377/93)
Sri Jcthmal Choraria, (Petitioner in CR 674/94)
Doloo Tea Company (India) Ltd.
(Respondent No. 5 in both Civil Rules and Appellant in WA ).
Bajrangpur Tea Company, Dibrugarh,
Koomber Tea Company Limited.
After discussions it was found that either Koomber Tea Company Limited with registered Office at Koomber, Cachar District or Doloo Tea Company (India) Ltd. having tea gardens in Cachar district would be capable of rehabilitating the (sic) Tea Estate. Thereafter, the entire matter was placed before the Assam cabinet with a memorandum stating, inter alia, as follows:
that the Committee, after consideration of all aspect, particularly the economic condition of the tea estate as well as the potential for development arrived at the conclusion that the tea estate could be rehabilitated by a tea company having strong financial background so that substantial fund could be invested for development of the tea estate as an economically viable unit.
The Committee further advised the Cooperation Department to negotiate either with Koomber Tea Co. Ltd. or Doloo Tea Company (India) Ltd. on the basis of the terms and conditions for leasing out the Chincoorie Tea Estate as per its minutes. The Cabinet accepted the views expressed by the Committee and there-after, the Commissioner and Secretary to the Government of Assam, Cooperation Department by his letter dated 24.9.93 requested Appellant (Respondent No. 5) to convey its views regarding acceptance or otherwise of the following terms and conditions:
There shall be no retrenchment of any regular worker/staff/sub staff;
Lease period to be determined by the Department;
Annual rent per annum during the lease period will be Rs. 1,25,000/ -(Rupees One lakh twenty live thousand) plus 0.15 ps. per Kg. of green leaf produced;
During the period of lease, the lessee will be responsible for timely payment of all statutory dues, wages and other benefits to workers and other categories of employees as per approved norms and all other liabilities;
Existing liabilities of the Company is to be settled in the following manner:
(i) Dues payable to the State Government may be paid in three equal instalments within three years or taking over the management;
(ii) All other dues to be settled immediately. If the lessee enters into any agreement with me creditors in respect of settlement of their respective liabilities Government will have no objection;
(iii) Lessee will have to prepare a working plan to achieve minimum production of 5 Kg of Green Leaf within a period of 5 years from the date of taking over the management, failing which the lease may be terminated;
(iv) 6 (six) months notice would be necessary to terminate the lease by either party;
(v) The lessee must maintain/construct buildings, workers and staff/sub staff quarters, roads and other infrastructures as per approved norms so that the tea estate could be run as a well managed unit.
The Appellant - Doloo Tea Company replied on 5.10.93 to the Commissioner and Secretary, conveying its views on the matter and requested him for signing the proposed agreement of lease and Memorandum of Understanding after negotiation and discussion in the matter. However, before execution of the Memorandum of Undertakings and the lease agreement, M/s Eastern Food Products (P) Ltd. (writ Petitioner in CR 3377/93) approached this Court by filing the above writ petition. This Court on 1.12.93 passed an interim order to maintain status quo regarding possession and execution of documents, until further orders. The Appellant (Respondent No. 5 in both Civil Rules) approached this Court for modification, alteration or cancellation of the interim order. The learned Single Judge rejected the prayer. Hence the present appeal.
The contention of the writ Petitioner in Civil Rule No. 3377/93 are as follows:
In Clause 2 of tender/offer made by the Petitioner company; they made it clear that they were ready to accept all Government approved and genuine statutory liabilities and would clear up all the liabilities within a period of five years. Whereas the Appellant (Respondent No. 5) did not agree to clear up the liabilities within a stipulated period, but proposed for adjustment of the said liabilities against annual rent of the garden and royally to be paid on the lea leaves. The annual rent of the garden having boon fixed at Rs 1.25 lakh annually with 0.15 paise as royalty per kilogram of the green tea leaves, the liabilities of the garden would never be cleared up even at the end of 50 years of the proposed lease. As such the settlement of lease in favour of the Appellant (Respondent No. 5) would clearly frustrate the very object and purpose of the proposed lease. Therefore, the decision of the Government to lease out the garden, a public property in favour of Respondent No. 5 was clearly mala fide, arbitrary and illegal and it would adversely affect and cause loss lathe public exchequer. The Private Sector Participation Committee (for short PSPC), Respondent No. 3, was entrusted to select the suitable party for the proposed lease never considered the comparative merits of the tenderers and jumped info a conclusion that either Respondent No. 5 or Koombir Tea Company would be suitable parties for the lease, however, nothing was mentioned why the tenders/offers of other parties had been rejected. The PSPC also wrongly mentioned that the Appellant (Respondent No. 5) owned 10 gardens in Cachar district, whereas, according to the writ Petitioner, the said Respondent No. 5, in fact, owns a single tea garden all over India. This statement was made with a mala fide intention to give undue advantage to the Appellant.
The cabinet decision for approval of the recommendation of PSPC was on the basis of false statements. The Government was swayed away to give the garden on lease to the Appellant on such wrong statements. The Petitioner further submitted that in the advertisement inviting offers clearly mentioned that the total land owned by the garden was 9956 Bighas (3300 Acres approximately). Admittedly the garden possesses a huge forest within the tea estate having valuable trees, which was also not taken into consideration. Fixing of annual rent, according to the Petitioners at the rate of Rs. 1,25,000/- was too low considering the fact that the garden was worth for more than 4 crores.
The main contentions of the Appellant (Respondent No. 5) were that the averments of the Petitioners to the effect that it was not a local company was not tenable. In the advertisement inviting Private Sector Participation in the Cooperative Sector - Chincoorie tea estate, Cacher, nowhere used the expression "local company". As per the terms and conditions of the said tender notice, there was no such condition that tenderer must be from Cachar. There was also no such condition that owners of local tea gardens should only submit tenders. Besides, the Respon-dent No. 5''s registered Head office was in the district of Cachar, within the State of Assam, and the Doloo Tea Estate was also situated in Cachar district therefore, all the requirements of terms and conditions No. 1 had been fulfilled. The Appellant also refuted the allegation that the annual rent of Rs. 1,25,000/- was low considering the fact that the garden was sick and incapable of running without creating additional liabilities. The garden had a total land of 9956 Bighas out of which only 1,145 Bighas were under tea plantation. Most of the unused land was under encroachment. There were liability on the garden and therefore, sound and economic business concern should not make some terms, which would not be possible to fulfil even after proper and efficient management. The company, therefore, had made practicable offer and the PSPC alter considering all the aspect recommended for granting lease to the Appellant (Respondent No. 5). The Appellant further submitted that the Committee after considering the aspect that the tea estate could be rehabilitated by a tea Company having strong financial background came to a decision that either Koomber Tea Company Ltd. or Doloo Tea Company (India) Ltd. having tea gardens in Cacher district, would be able to rehabilitate the Chincoorie tea estate.
The Appellant (Respondent No. 5) further stated that by corrigendum dated (sic) the word (sic) was corrected as "tea". After correction it would read as either Koomber Tea Company Ltd. with registered office at Koomber, Cachar District, or Dollo Tea Company (India) Ltd, having tea gardens in Cachar district (sic) therefore, there was nothing wrong m accepting the offer of the Appellant and in the decision of the Government to lease out the (sic) Tea Estate to the Appellant. The Appellant also refused the allegations that the Committee gave wrong statement with a mala fide intention so that the Appellant would get the lease. The Appellant also submitted that it excels the writ Petitioners on all material aspects and, therefore, the writ petitions are to be rejected. The Appellant also denied the allegation that while making the decision no opportunity of hearing was given to other and also denied that the opinion of the PSPC and subsequent decision of the State Govt. to lease out the Appellant was arbitrary, Was arid mala fide and if the decision was allowed to prevail the Government would loss a very huge revenue in every year.
That State Government justified the action to lease out the Chincoorie Tea Estate to the Appellant. It is further stated that the writ Petitioners having stated that they would not entertain the arrear due the writ Petitioners have no case such the petitions are liable to be dismissed.
Heard Mr. A.K. Roy, learned Counsel appearing on behalf of Appellant (Respondent No. 5 in both Civil Rules) and Mr. S.N. Bhuyan, learned Advocate General, appearing on behalf of Respondent Nos. 3 to 6 (Respondents 1 to 4 in both Civil Rules) Mr. D.N. Chowdhury, learned Counsel appearing for the 1st and 2nd Respondents (Writ Petitioners in CR 3377/93) and Mr. G.N. Sahewaila, learned Counsel appearing on behalf of the writ Petitioner in Civil Rule No. 674/94.
Mr. D.N. Choudhury challenged the Government decision to lease out the garden in favour of the Appellant (5th Respondent) on the basis of adjustment of annual rent of the garden against its liabilities as propped by the Appellant According to him, it had clearly violated Clause 2 of the tender notice. Mr. Chowdhury further submitted that the averments of the Government that the 5th Respondent agreed to entertain such arrear which was refused by the writ Petitioner was not correct, therefore, the whole action of the Government was tainted with mala fide and was liable to be struck down. The Government while giving the pardon to the private party sacrificed its own revenue as a result of which there was likelihood of serious and perpetual loss to the public exchequer. The decision was a motivated decision and it could not be for the public good. Accordingly, the decision of the Government was to be set aside.
Mr. G.N. Sahewalla, learned Counsel for the writ Petitioner in Civil Rule No. 674/94 also challenged the decision of the Government. He adopted the arguments advanced by Mr. D.N. Choudhuty.
Mr. S.N. Bhuyan, learned Advocate General supported the actions of the Government. According to Mr. Bhuyan the decision to give the garden on lease to the present Appellant (Respondent No. 5) was to improve the conditions of the tea estate, which was facing serious financial crisis and accumulation of huge statutory liabilities towards its employees. Therefore, according to Mr. Bhuyan, the action of Respondent Nos. 3 to 6 (Respondents 1 to 4 in the writ petitions) was to save/rehabilitate the tea estate in the interest of its workers, therefore no interference of this Court is called for.
Mr. A.K. Roy, learned Counsel appearing on behalf of the Appellant (Respondent No. 5 in both Civil Rules) while supporting the action of the Government submitted that the decision to lease out the tea garden to the Appellant-company was legal. He challenged the contention of the writ Petitioner that the Appellant Doloo Tea Company was not a local Company. Further, nowhere in the Annexure-I advertisement it was mentioned that lease would be given to local company only. The Appellant-Company was a registered Company, registered before the Registrar of Companies, Assam, etc. at Shillong. In the certificate of incorporation issued from Shillong, it was mentioned that the Head Office of the Appellant Company was in the district of Cachar, within the State of Assam, therefore, the requirements of terms and conditions of the advertisement had been fully satisfied. Mr. Roy also disputed the allegation that the market value of the tea estate would be about Rs. 4 crores. The garden was a sick garden unable to pay its statutory liabilities not to speak of fulfilling other obligations, which a tea estate was expected to do Regarding the allegation that the Appellant Company owned ten tea gardens, the learned Counsel submitted that it was inadvertently mentioned as "ten" in stead of "tea", which was later on corrected by a corrigendum dated 4.12.93 (Annexure-6 to the affidavit - in - opposition). There was no (sic) for complaining that the PSPC deliberately with a mala fide intention to favour the Appellant company in giving the tea garden on lease made the false statement. The PSPC clearly stated that it had considered all the aspect and the Cabinet based its decision on the recommendation of the PSPC. On Comparison of the position of the Appellant with the writ Petitioners it would appear that the Appellant company far exceled the Petitioners in all aspects. The learned Counsel further argued that refusing a tender. There must be no question of infringement of Article 14 if the Government tries to get the best person or the best quotation. The right to choose cannot be considered to be an arbitrary power. Of course, if the said power is exercised for any collateral purpose the exercise of that power will be liable to be struck down.
In a very recent decision in Tata Cellular Vs. Union of India, The Supreme Court observed thus:
...Judicial quest in administrative matter had been to find the right balance between the administrative discretion to decide matters whether contractual or political in nature or issues of social policy; thus they are not essentially justiciable and the need to remedy any unfairness. Such an unfairness is set right by judicial review.
The Supreme Court in the said case (Tata Cellular)(Supra) further observed that the judicial power of review is exercised to rein in any unbridled executive functioning. The restraint has two contemporary manifestations. One is the ambit of judicial intervention the other covers the scope of the Court''s ability to quash an administrative decision on its merits. These restraints bear the hall marks of judicial control over administrative action. Judicial review is concerned with reviewing not the merits of the decision in support of which the application for judicial review is made but the decision making process itself. Judicial review is different from an appeal. When hearing an appeal, the Court is concerned with the merits of the decision under appeal. It is made effective by the Court quashing the administrative decision without substituting its own decision and is to be (sic) with an appeal where the appellate tribunal substitutes its own decision on the merits for that of the administrative officer. It is not for the Court to determine whether a particular policy or a decision taken in the fulfilment of that policy is fair. It is only concerned with the manner in which those decisions have been taken. The extent of the duly to act fairly will vary from case to case. Shortly put. the grounds upon which an administrative action is subject to control by judicial review can be classified, i.e. (i) the decision maker must correctly come to a decision following the accepted principles and shall regulate his decision making power and must give effect to it ; (ii) it must not be unreasonable ; and (iii) must not be procedural impropriety.
In paragraph 94 of the said decision, (Tata Cellular (Supra), the Apex Court observed thus:
The principles deducible from the above are:
(1) The modern trend points to judicial restraint in administrative action.
(2) The court does not sit as a Court of apeal but merely reviews the manner in which the decision was made.
(3)The court does not have the (sic) to correct the administrative decision a review of the administrative decision is permitted it will be substituting its own decision without the necessary expense which itself may be fallible.
(4) The terms of the invitation to tender cannot be open to judicial (sic) because the invitation to tender is in the realm of contract. Normally speaking, the decision to accept the tender or award the contract is reached by process of negotiation through several (sic). More often then not, such decisions are made qualitatively by experts.
(5) The Government must have freedom of contract. In other words, a fair play in the joints is a necessary concomitant for an administrative body functioning in an administrative sphere or quasi-administrative sphere. However, the decision must not only be tested by the application of Wednesbury principle of reasonable-ness (including its other facts pointed out above) but must be free from arbitrariness not affected by bias or actuated by mala fides.
(6) Quashing decisions may impose heavy administrative burden on the administration and lead to increased and unbudgeted expenditure.
Bearing in mind, the principles enunciated by the Supreme Court in the said case, it is now to be seen whether the action of the Government called for any interference or not. Annexure - A advertisement was issued inviting offers from reputed and experienced tea company, tea farms etc. having experience to participate in the management/to take lease in respect of Chincoorie Tea Estate, Cachar, Assam. The interested parties having requisite qualification as per the Annexure - A advertisement submitted their offers and the PSPC after examining and scrutinising all the aspects gave recommendation as follows:
Committee after consideration of all aspects particularly the economic condition of the Tea Estate as well as potentiality for development arrived at the conclusion that the tea estate could be rehabilitated by a Tea Company having strong financial background so that substantial fund could be invested for development of the tea estate as an economically viable unit. Mere expectation of the green leaves from existing tea bushes will do no good to the tea estate. Taking this aspect in view, the committee examined the offers of the tenderers and found that either Koomber Tea Company Ltd. with registered office at Koomber, Cachar District or, Doloo Tea Co (India) Ltd. having ten gardens in Cachar District could be capable of rehabilitating the Chincoorie Tea Estate.
As mentioned above, the word "ten" was corrected as "tea" by a corrigendum dated 4.12.93. The matter was thereafter placed before the Cabinet with the recommendation of PSPC and the Cabinet after going through all the details and papers etc. decided to make the offer to the Appellant (5th Respondent in both Civil Rules). The learned Counsel for the Petitioners argued that the lease was given to the Appellant at a very low price and there was no promise whatsoever to liquidate due within a prescribed period. It was further argued that if the liabilities are to be adjusted from the rent payable by the Appellant as per the agreement, the existing dues could not be paid even in 50 years.
All these matters were thoroughly considered by the PSPC appointed for the purpose and thereafter decided to give the garden on lease to the Appellant (5th Respondent). Attempt was made to show that the report was submitted saying that Doloo Tea Company having ten gardens should be offered the garden for lease. This was done, according to the writ Petitioners, to give undue advantage to the Appellant. As I mentioned above, the Chairman of the 3rd Respondent had already corrected the word by a corrigendum dated 4.12.93. Therefore, this argument has no force in view of the corrigendum issued by the Chairman of 3rd Respondent. No mala fide intention can be imputed merely on this ground. This was evidently a mistake without any intention. On perusal of the record it is patent that the Appellant (5th Respondent in both Civil Rules) fulfils all the requirements of the advertisement. There is nothing wrong in the decision making process. When there appears no infirmity in the decision making process judicial review is impermissible to interfere with. It is for the Government to decide who will be able to improve the garden. Besides, while coming to the conclusion the State Government also took the help of an expert Committee (PSPC). This Court in exercise of power of writ jurisdiction will not be justified in interfering with the administrative action in the absence of any infirmity in the process of making the decision. Normally speaking, the decision to accept the tender or award the contract is reached by process of negotiations through several tiers. More often than not, such decisions are made qualitatively by experts as in tills case. The Government must have freedom of contract.
In view of the above discussions, in our opinion, in the facts and circumstances of the case, the action of the authority in giving the garden on lease to the Appellant (5th Respondent in both Civil Rules) requires no interference by this Court. We, therefore, dismiss the Civil Rules. However, in the facts and circumstances of the case, we make no order as to costs.
The connected Misc. cases also stand disposed of.