Nature of Government Contracts, Tenders, and Maintenance of Writ Petition against them under Article 32 of Indian Constitution

Introduction:

Trust is very important when it comes to doing business or making a contract between individuals. In a contract consideration acts like trust and reputation, the promisor who is willing to enter into the contract will see to it that the promisee is trustworthy of performing the contract, and if both the parties agree then the contract is formed. The contract should be legally enforceable by law and consideration of parties is a must constitute a legal contract. Similarly, business is also done by giving tenders to the potential party who can complete the tender. Tender generally means a task that has to be done within a specific period of time or to supply goods for a fixed price within a specific period of time. The state is considered as a sovereign authority and one cannot file an appeal against the state, but if the state violates principles of natural justice and fundamental rights the person can file an appeal against the state through writs.

Meaning

Writs are a command of the court in which an order is passed by the court orders a person or authority to perform his or its duties. It is the right of the person who can file an appeal against the state under Articles 227 and 32 of the Indian Constitution.

Types of writs are:

1. Writ of Habeas Corpus
2. Writ of Mandamus
3. Writ of Prohibition
4. Writ of Certiorari
5. Writ of Quo Warranto

• The word Habeas Corpus means “to have the body of”, it is a fundamental right that an individual can claim when he is illegally detained it is used to express a person’s right to freedom.
• The word Mandamus means “we command”, this writ is issued by the court to a public official when he has failed to perform his duty or refused to do his work.
• Prohibition means “to forbid”, this writ is issued by the court who is in a higher position to lower court to prevent a lower court from exceeding its jurisdiction.
• Certiorari means “to be certified” or “to be informed”, this writ is issued by a higher court to the lower court seeking to transfer the case to them or quash the order. It is mainly issued to prevent an error of law and exceeding jurisdiction.
• Quo Warranto means “by what authority” or “warrant”. This writ is issued by the court to prevent illegal encroachment of public office by a person.

Meaning of Govt. Contract and Tender

Government contracts are the contracts in which one of the parties is the government well the central government and state may be the party in the contract. All the government contracts are made in the name of the president of India. While creating a government contract it has to follow the rules explained in Article 299 of the constitution. u/a 299 the contract should be made under the executive power of the union or of a state. In clause 2 of Article 299, the president nor governor shall be personally liable in respect of any contract for purpose of enactment relating to the government of India. The contract should be expressed in the formal express agreement, if the government enters into a contract impliedly he or the government shall not be held liable.

Government tender is just like normal tender in which instead of a private body the government announces and invites organizations for tender. They’ll post the necessary details on their website where the interested parties will bid on the work with their quotes, the organizations which are suitable based on bidding price, days of completion of work, and quality of work shall be allotted for tender. Government tenders are considered safe as the safety of payment is present in government tenders.     

Legal Provisions

Writ petitions are usually filed in higher courts that are present in the country. In India, high courts present in the states and the Supreme Court have the authority to issue orders if a person files a writ petition in these courts. A person simply cannot file a writ petition unless if the fundamental rights of the person are violated.

Article 32 and Article 226 explains when the courts can issue writs for certain cases. Article 32 gives Supreme Court the power to issue writs if necessary for certain cases under its jurisdiction. Article 226 gives High Court the power to issue writs if required for certain cases.

Premji Bhai Parmar and Others V. Delhi Development Authority[1]

Facts in Brief

In this case, the Delhi Development Authority made a contract and hired Premji to build flats. The estimated cost for the construction of the full building was around 2 crores and said each flat should cost around Rs. 51,800 to 55,600 but they sold the flats at the rate of Rs. 56,000 to 60,000 rupees per flat. The authority had created these rates by categorizing the people into Middle Income Group (MIG), Low Income Group (LIG), and Community Personnel Service (CPS). The Authority had exceeded the given budget from 2 crores to 2.07 crores for 304 flats and the rate of each flat this time on an average was 68,200 rupees. And the cost of land-dwelling was 7008 rupees which the revised rate stood at 75,208 rupees. The petitioner contended that the Authority has made huge profits by charging surcharge rates on people and filed an appeal against the Authority.

Issues raised in the Case

1. The complainant claimed that it is violative of Articles 14 and 32.
2.  Claimed that Authority cannot charge surplus charges as it violates the principle of no profit no loss.
3. Alleged that Authority made a lot of profits through surplus charged.

Judgment

The court, in this case, held that the executive officer can charge surplus money if required, as in this case the building wasn’t constructed on time and extra materials were used which exceeded the estimated cost required, and regarding the surplus charged the officer had a valid reason as to why it was changed because of the price of land, building material, labour charges etc. and the allegation made on Authority of charging surplus shall stand void as it was proved that the officials didn’t earn huge amount profits. The court stated that article 14 is violated when there is discrimination is made amongst persons of the same class for a purpose. Article 32 is not violated as there is no violation of a person’s rights which are conferred to him. But here there wasn’t any discrimination between the people it was only classified based on income. Court also added that the complainant forgot to consider the area-wise rate and the current rate of flats which makes this allegation without proper reasons and dismissed the petition.

Analysis of Premji’s Case is Related to Whether Article 32 can be issued Against The Govt. Contracts and Tenders

In Premji’s case, the main issue why the case was filed against the Delhi Development authority because the allegation was it had violated articles 14 and 32 of the constitution. Article 32 says the power of the Supreme Court to issue writs if required for certain cases when it finds out that when the state is not performing its duties. The basic principles of writs are it can be issued only if the fundamental rights of a person are violated, then a person can file a writ petition in the court. Apart from these conditions writ petition cannot be filed against a private individual or private authority. The case of Premji didn’t meet the requirements required for filing the writ petition as the Authority in the case did not violate any fundamental rights of a person so it stands invalid. Hence, it is proved that a person can file a writ petition against the government bodies or officials if they have failed to perform the duty.

Case Laws

State of Uttar Pradesh v Sudhir Kumar Singh[2]

Facts of the Case: State Warehouse Corporation (SWC) proposed a tender for the appointment of handling and transport for food grains in FCI. The tender was canceled midway by the Managing Director of the Corporation stating that it is impractical to go with the tender. After a few days later the tender was reissued for 2 years after looking into workable capacity and estimated annual value of the contract. Sudhir Kumar was declared as a successful bidder and agreements were made between him and the Corporation. Later the complaints were received regarding financial irregularities to the government. The commissioner conducted an ex parte inquiry where govt. considered the role of Managing Director and Commission was doubtful the tenders were canceled. Sudhir later filed a writ petition stating the action is illegal and arbitrary as he had completed 1 year out 2 years of the contract.

Judgment: The court decided that the acts of petitioner were challenged as the tender was canceled without giving any notice to the respondent wasn’t given an opportunity to be heard which was a clear breach of principles of natural justice. The maxim ‘Audi Alteram Partem’ was violated as the respondent wasn’t given an opportunity to be heard. The Court also further stated that ‘Audi Alteram Partem’ is an important part of natural justice and the state cannot in a manner and discharge any of its functions, and the cancellation order shall be quashed.

Ram and Shyam Co. v State of Haryana[3]

Facts of the Case: The state of Haryana has powers to grant leases for mining under the minor minerals act in the area of Faridabad. Ram and Co was the highest bidder at the auction which was accepted by the preceding officer, despite being the highest bidder they weren’t given the tender and due to this the Ram and Co filed a writ petition against the state and claimed for remedies.

Judgment: The court criticized the decision taken by the High Court regarding exhausting alternative remedies. The court further stated that the state is a public entity and its main focus should be on maximizing the wealth output of the country and maximizing the value of the country. By not giving tender to the highest bidder the Supreme Court held the state for its mala fide intention by not giving the tender to Ram and Shyam Co. and failed to perform their duties.

Analysis

From the above cases and judgments, one thing is clear that a person can write a petition only when his fundamental rights are violated when the public official or the body fails to do their duty. A writ petition can be filed against govt. contracts and tenders if they fail to execute the contract or fail to give tender. Article 32 is used when the case is appealed before Supreme Court, the court then if they find out that the State official or body has failed to perform its duty the writ order is issued under Article 32 of the constitution. In certain instances, the people had filed a writ petition against persons, private bodies. Then the court laid down the conditions which have to be followed when a person can file a writ petition in court. Therefore, Writs are considered a fundamental part of the constitution.

Conclusion

In India and other countries at the time of the king’s rule, the concept of law was in brief and only the king had the authority to make a decision and the decision would be final and everyone should compulsorily obey the decision. The king was considered as the supreme authority and no one had the power to question the king as it followed the principle which said, ‘A king can do no Wrong’. In India, in the initial days of the establishment of government rule, this principle was followed. When the people filed the case against the state or state bodies the case would be dismissed based on this principle. Over the years the court understood that this principle is outdated and an appeal was filed before the judges that this principle should be removed as violates Article 14 of the constitution. It was decided that the state and bodies which work under the state are equal before the law and further added that no person or authority is above the law. Then the writs were created to protect the fundamental rights of the person. Before the writs were only used in criminal matters, but now they can be used in civil matters and contractual matters as well.

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References:

[1]  1980 2 SCC 129

[2] 2020 (10) TMI 746

[3] 1985 AIR 1147