Electrical Contractors Welfare Association Haryana vs State of Haryana and others

By means of this writ petition filed under Article 226 of the Constitution of India, petitioner prays for following main reliefs:-

“(i) Issue a writ in the nature of certiorari for the quashment of letter dated 07.03.2018 (Annexure P-2) issued by the respondent No.3 and

notification dated 16.02.2018 (Annexure P-3) vide which the provision in PWD Code Clause 13.4.4 was relaxed and alongwith order dated 12.02.2018

(Annexure P-4) passed by respondent No.1 for the composite tender of the mentioned civil & electrical work was approved inspite of the fact, it was

in violation of the clause 13.4.4 of PWD Code and further by issuing the single tender for civil as well as electrical work of the project has virtually the

electrical contractors to the position of mere sub-contractor of the main civil contractor and hence the aforesaid conduct by respondent is violative of

the provisions of Article 14 & 19 (1)(g) of the Constitution of India;

(ii) Further to issue a writ of mandamus directing the respondent to issue to separate tender for electrical and civil work for the construction of war

memorial at Ambala Cantt.

In the owner of martyrs of the first war of India’s independence, 1857, at Ambala Cantt. In Ambala District;â€​

The aforesaid reliefs are being claimed in the background of following facts.

Petitioner is an association of contractors for the electrical works. All the members of the association are duly registered with the P.W.D. (B&R)

Department. The basic challenge is to the composite tender invited by the respondents for civil and electrical works. A composite tender for carrying

out civil and electrical works was advertised for construction of War Memorial at Ambala Cantt. vide letter dated 07.03.2018. The tender document

goes to show that total contract was for a sum of Rs.31,46,00,000/-out of which the cost for electrical component was shown to be Rs.16,80,00,000/-.

Learned counsel for the petitioner vehemently contended that by issuing composite tender vide letter dated 07.03.2018, respondents have violated

the right of electrical contractors to compete and have virtually reduced the electrical contractors to the position of mere sub-contractors of the main

civil contractor and such action is discriminatory and illega l and also violative of Articles 14 and 19(1)(g) of the Constitution of India. It is also

submitted that the composite tender is in violation of clause 13.4.4 of the P.W.D. Code as also the guidelines issued by the Central Vigilance

Commission vide Office Memorandum dated 17.12.2002. Learned counsel for the petitioner further submits that the composite tender has been issued

after relaxation of clause 13.4.4 of the P.W.D. Code by the Government of Haryana vide its resolution dated 16.02.2018 and the same is at the behest

of Minister of Health, Sports & Youth Affairs who himself passed an order dated 12.02.2018 for calling of a complete composite tender and, thus, his

action is tainted by mala fides inasmuch as the P.W.D. Code and the guidelines of the Centra l Vigilance Commission have been given a total go bye

at the behest of a Minister.

Per contra, learned Additional Advocate General for the State of Haryana contends that a decision was taken by the government for issuing

composite tender for civil as well as electrical works with a view to save time as also the cost of the project and such decision taken by the

government cannot be termed discriminatory or arbitrary since it is a policy decision taken in the best interest of the project to be completed in a time

bound frame. It is further submitted that a single composite tender is a viable solution for the execution of tedious works inasmuch as under the

composite tender system the responsibility to complete the work lies with a single agency only and t he delay, if any, in completion of the project

cannot ultimately be attributable to non execution of electrical part. It is also pointed out that the tender work has already been finalized with M/s A.S.

Enterprises, 62-B, Model Town, Patiala who are execut ing the work contract.

Learned counsel for the petitioner has relied upon two pronouncements, one of the Kerala High Court in Writ Petition (Civil) Nos.28113/2009-H

and 30556/2009-L decided on 19.11.2010 and the other of Bombay High Court in the case of Aurangabad Electrical Contractors Association and

others vs. The State of Maharashtra, W.P. 3196/13, decided on 10th April, 2014 wherein it has been held that the system of inviting tender only

through the civil contractor will effectively deny any opportunity to submit tender for electrical contractors independently which will result in absence

of any competition from among electrical contractors, as the contractors will not be able to compete for the work on their own by submitting the

tender. Therefore, the prospect of civil contractors getting monopoly in the field is writ large. They can on their own whims and fancies, join along

with any of the electrical contractors whom they name, in the tenders. Even though it is provided that registration of ctricalele contractor/electrician

will be a precondition for carrying out the electrical works in PWD, that alone will not help the electrical contractors to participate in the tender,

resulting in violation of Article 19(1)(g) as also Article 14 of the Const itution of India.

There can be no dispute with the legal proposition propounded by the two High Courts in the above noted judgments as it is by now well settled that

Article 14 of our Constitution embodies the principle of non-discrimination whereas Article 21 refers to right to life which includes the right to carry on

any business lawfully, a fundamental right guaranteed by Article 19(1)(g) of the Constitution. It is equally well settled that principle of judicial review

cannot be denied in a State act ion in contractual matters in order to prevent arbitrariness. It is imperative that action of State in the matter of

awarding contract must be free from arbitrariness and any discrimination as held by the Hon’ble Apex Court in the case of Union of India and

another vs. International Trading Company and another , (2003) 5 SCC 437.

There is yet another aspect of the matter. In cases of composite tender of civil and electrical works floated by the State or its instrumentalities

conferring entire discretion upon the civil contractors to choose electrical contractors for a joint venture or appoint them as sub contractor s for the

electrical work of the project will not only be unjust, arbitrary and unfair and tend to create a monopoly of civil contractors to the exclusion of

electrical contractors but is also violative of concept of “level playing fieldâ€, a concept explained by the Hon’ble Apex Court in the case of

Reliance Energy Ltd. & another vs. Maharashtra State

Road Development Corporation Ltd. & others, [(2007) 8 S.C.C. 1] as under:- “………….Article 14 of the Constitution embodies the principle of

non-discrimination"". However, it is not a free-standing provision. It has to be read in conjunction with rights conferred by other articles like Article 21

of the Constitution. The said Article 21 refers to “right to lifeâ€. It includes “opportunityâ€. In our view, as held in the latest judgment of the

Constitution Bench of nine Judges in I.R. Coelho v. State of T.N., (2007) 2 SCC 1, Articles 21/14 are the heart of the chapter on fundamental rights.

They cover various aspects of life. “Level playing field†is an important concept while construing Article 19(1)(g) of the Constitution. It is th is

doctrine which is invoked by REL/HDEC in the present case when Article 19(1)(g) confers fundamental right to carry on business to a company, it is

entitled to invoke the said doctrine of “level playing fieldâ€. We may clarify that this doctrine is, however, subject to public interest. In the world of

globalisation, competition is an important factor to be kept in mind. The doctrine of “level playing field†is an important doctrine which is embodied

in Article 19(1)(g) of the Constitution. This is because the said doctrine provides space within which equally placed competitors are allowed to bid so

as to subserve the larger public interest. “Globalisationâ€, in essence, is liberalisation of trade. Today India has dismantled licence raj. The

economic reforms introduced after 1992 have brought in the concept of “globalisationâ€. Decisions or acts which result in unequal and

discriminatory treatment, would violate the doctrine of “level playing field†embodied in Article 19(1)(g). Time has come, therefore, to say that

Article 14 which refers to the principle of “equality†should not be read as a stand alone item but it should be read in conjunction with Article 21

which embodies several aspects of life. There is one more aspect which needs to be mentioned in the matter of implementation of the aforestated

doctrine of “level playing fieldâ€. According to Lord Goldsmith, commitment to the “rule of law†is the heart of parliamentary democracy. One

of the important elements of the “rule of law†is legal certainty. Article 14 applies to governme nt policies and if the policy or act of the

Government, even in contractual matters, fails to satisfy the test of “reasonablenessâ€​, then such an act or decision would be unconstitutional.â€​

Any State action which results in unequal and discriminatory treatment would be violative of the doctrine of “level playing field†embodied in

Article 19(1)(g) .

Any action of the State which tends to exclude any particular class of contractors from entering in fair competition by participating in tender

process for a project of the State, thus violating their fundamental right to carry on business lawfully, cannot be upheld on the touchstone of Article 14,

19(1)(g) and 21 of the Constitution. Such an action is to be adjudged as void.

Thus, any decision of the State inviting composite tenders for civil and electrical work s containing a condition that only civil contractors would be

eligible to apply and they would be entitled to enter into joint venture with registered electrical contractors or to appoint them as sub contractors for

electrical part of tender is not liable to be sustained.

Having held that such a composite tender is not liable to sustain, we now proceed to consider as to what relief petitioner would be entitled in the

peculiar facts and circums tances of this case.

Admittedly, the composite tender was invited on 07.03.2018 and in pursuance thereof the work contract has been settled with one M/s A.S.

Enterprises. This fact situation is not being denied by the petitioner. There is nothing on record to indicate that there has been any general policy

decision by the respondent-State to issue composite tenders. On the contrary, it is stated in the response filed on behalf of respondents that composite

tender has been floated to ensure proper co -ordination of civil and electrical works for speedy execution of work on the desire of Minister of Health,

Sports & Youth Affairs by seeking relaxation of the conditions contained in clause 13.4.4 of the P.W.D. Code. It may be relevant to reproduce

paragraph 4 of the written statement which reads as under: -

“4. That to further ensure proper coordination of Civil, Public Health and Electrical works and speedy execution of work, on desiring so by the

Hon’ble Minister of Health, Sports & Youth Affairs; the respondent No.3 moved a UO Note/reference to the Government requesting for

relaxation of provision mentioned in the above Clause 13.4.4 of the PWD Code and to accord approval for calling complete composite tender for the

work of construction of War Memorial at Ambala Cantt. In the Honour of Martyrs of the First War of India’s Independence, 1857, Ambala Cant.

(sic) in Ambala District including Civil Work, Public Health Works (Internal & External complete) including fire fighting, Electrical Works (Internal &

External complete) and Land Scaping works. This UO Note was approved by Government. The intention of the Respondent No.3 and of Hon’ble

Minister of Health, Sports & Youth Affairs was to ensure proper coordination of Civil, Public Health and Electrical works and speedy execution of

work.

When tenders are floated under the Individual Contract System, it becomes very difficult to monitor the execution of whole of the work and the

progress of one executing agency depends upon the progress being achieved by the oth er agency and results in contractual complications. That the

work under consideration is a State of Art Project and one of its kind in Haryana. The Building is not an ordinary building and involves tedious and

specialized jobs in every field. Specially in the Memorial building, which is 62.97 meters high, fabricated structures are involved. Museum building is

also a typical building and involves round shaped designs which are quite typical in nature and specialized shuttering/scaffolding/machinery/ cranes etc.

are required for execution of such specialized job. Many specialized jobs are involved in the Auditorium building, water connector (bridges) and water

body. All the foundation is resting on piles. The building is to be provided international class exterior and interior finishing and is supposed to be a State

of the Art and a center of attraction for the tourists. The building is a composite work of 14 different/scattered structures. The design of the boundary

wall is also a typical one. There are many components in Electrical work, which require Civil work, such as trenches for cables and foundation work

for various Electrical installation, construction of lift wells involves the execution of work by Civil Contractual agency. Finishing work to be executed

by the Civil contractor i.e. flooring, tile work and other finishing items also require the Electrical Installation work to be complete. Under the prevailing

circumstances, single composite tender is the only solution possible for execution of such tedious work. In this way, the responsibility to complete the

work will lie with single agency only and the agency cannot claim compensation on account of delay because of non-execution of Electrical part. Also

while executing Electrical works, the civil work will not be damaged since it’s repairs and maintenance is to be done by the same agency. The

agency will execute the civil work keeping in mind the electrical components to be incorporated. The agency will execute the work with proper

planning after considering all parameters related with electrical and public health items of work resulting in timely completion of project and larger

public interest will be watched. â€​

Although in view of the legal proposition propounded by us a decision to issue composite tender is not liable to be upheld , however, since the

decision is not by way of a general policy and the work contract having already been finalized , any interference by us in the matter at this stage would

not only hamper the project in terms of time but may also result in financial loss to public exchequer which would be opposed to public interest. The

Hon’ble Apex Court while invoking the doctrine of “level playing field†in the case of Reliance Energy Ltd. (supra) has observed that this

doctrine is subject to public interest.

Thus, while holding that any general policy decision by the State to issue composite tenders for civil and electrical works would be unsustainable

being violative of Article 14, 19(1)(g) and

21 of the Constitution except in individual exceptional cases on account of public interest, in peculiar facts and circumstances of the instant case

detailed above, we decline to interfere in the matter. Thus, there is no requirement for us to enter into issue of legality of the State action in issuing the

composite tender by relaxing the rigours of clause 13.4.4 of the P.W.D. Code and whether the same can be said to be tainted by malafides due to

interference of a minister in the matter as the same now are only of academic interest.

Writ petition accordingly stands dismissed. In the circumstances, we do not make any order as to costs.