low value procurement court case.docx

7/27/2019 low value procurement court case.docx

1/28

Mobile View

Madras High Court

Indian Kanoon - http://indiankanoon.org/doc/1655304/Madras High Court

Aminjikarai Lorry vs The State Of Tamil Nadu on 3 August, 2005

IN THE HIGH COURT OF JUDICATURE AT MADRAS

DATED: 03/08/2005

CORAM

THE HON'BLE MR.MARKANDEY KATJU, CHIEF JUSTICE

and

THE HON'BLE MR.JUSTICE F.M.IBRAHIM KALIFULLA

W.P.No.12934 of 2005

and W.P.Nos., 12935 and 19053 of 2005

and

W.P.M.P.Nos.14156, 14157 and 20591 of 2005

W.P.Nos.12934 & 12935 of 2005

Aminjikarai Lorry

Owner's Welfare Association,

rep. by its President V.S.Yuvaraj,

Chennai - 30. ... Petitioner in W.P.12934 of 2005

V.S.Yuvaraj . .. Petitioner in W.P.12935 of 2005

-Vs-

1. The State of Tamil Nadu,

rep. by its Secretary to Government,

Public Works Department,
http://www.indiankanoon.org/change_device/?device=mobile&nextpage=/doc/1655304/%3Ftype%3Dprinthttp://www.indiankanoon.org/change_device/?device=mobile&nextpage=/doc/1655304/%3Ftype%3Dprinthttp://www.indiankanoon.org/change_device/?device=mobile&nextpage=/doc/1655304/%3Ftype%3Dprinthttp://www.indiankanoon.org/change_device/?device=mobile&nextpage=/doc/1655304/%3Ftype%3Dprint


2/28

Fort St. George, Chennai - 9.

2. The District Collector,

Thiruvallur District,

Thiruvallur.


Kancheepuram District,

Kancheepuram.


Chennai District,

O/o the District Collector, Chennai.

5. The Assistant Director of Geology and Mining,

Kancheepuram District,

Kancheepuram.

6. M.Palanisamy .. Respondents in both the W.Ps.

PRAYER in W.P.Nos.12934 and 12935 of 2005: Petition filed under Article 226 of theConstitution, praying for a writ of mandamus directing the first respondent to permit the

members of the petitioner-association in W.P.No.12934 of 2005 and the petitioner in W.P.No.12

935 of 2005 to directly load the sand from the quarry under the supervision of the staff of PublicWorks Department on receiving the cost of the sand from the petitioners by dismantling the

stockyard set up by the 6th respondent located within 1 km from the Palar river bed in Padalam,

Kancheepuram.

!For Petitioners :: Mrs.Nalini Chidambaram, Senior Counsel For M/s.Gladys Daniel & C.

Uma

For Respondents 1 to 5:: Mr.A.L.Somayaji, Addl. Advocate General For

Mr.D.Krishnakumar, Spl. G.P.

For Respondent - 6:: Mr.V.T.Gopalan, Senior Counsel For Mr.K.Ramakrishna

Reddy

W.P.No.19053 of 2005


3/28

R.Panneerselvam ..Petitioner

Vs.

1. The State of Tamil Nadu,

rep. by its Secretary to Government,

Public Works Department,

Fort St. George, Chennai - 9.


Kancheepuram District, Kancheepuram.

3. M.Palanisamy .. Respondents.

PRAYER in W.P.No.19053 of 2005: Petition under Article 226 of the Constitution of India

praying to issue a writ of mandamus directing the first respondent to abolish the system of

appointment of loaders and permit traders to directly load the sand from the quarry under thesupervision of the staff of Public Works Department on receiving the cost of the sand from the

traders by dismantling the stockyard set up by the loaders in 18 places. For Petitioners ::

Mrs.Nalini Chidambaram, Senior Counsel For M/s.Gladys Daniel & C. Uma

For Respondents 1 and 2:: Mr.A.L.Somayaji, Addl. Advocate General For

Mr.D.Krishnakumar, Spl. G.P.

For Respondent -3 :: Mr.V.T.Gopalan, Senior Counsel

For Mr.K.Ramakrishna Reddy

:COMMON ORDER

(Order of the Court was made by The Hon'ble The Chief Justice)

These three writ petitions deal with a common question regarding the loading system adopted by

the Public Works Department of the Tamil Nadu Government.

2. The petitioner in W.P.No.12934 of 2005 is Aminjikarai Lorry Owner's Welfare Association,

which is registered under the Societies Registration Act, and claims to be formed to espouse the

cause of the lorry owners in the State of Tamil Nadu involved in sand business.

3. Sand is a minor mineral under the Mines and Mineral ( Regulation and Development) Act,1957. The Government of Tamil Nadu framed rules known as Tamil Nadu Minor Mineral

Concession Rules, 1959 which inter alia deals with sand which is a minor mineral. Since, there


4/28

were complaints of indiscriminate quarrying of the sand in the river systems of Tamil Nadu a

Public Interest Litigation was filed before the High Court which by its order dated 26.07.2002

directed the State Government to constitute a High Level Committee of experts consisting ofGeologists, environmentalists and scientists to study the impact of sand quarrying in river

systems. Pursuant to this order the Government of Tamil Nadu in its Governmental Order in

G.O.2(d)No.46, Industries Department, dated 25.09.2002 constituted a six member High LevelCommittee. The said Committee made an extensive tour of Tamil Nadu and inspected all theriverbeds and submitted a detailed report before the High Court.

4. Pursuant to this Report the Government of Tamil Nadu issued G.O.Ms.No.95, Industries

(MMC.1) Department, dated 01.10.2003 which reads as follows:-

GOVERNMENT OF TAMIL NADU

ABSTRACT

Mines and Quarries - Minor Mineral - Tamil Nadu Minor Mineral Concession Rules, 1959 -Introduction of Rule - 38 AAmendment to Tamil Nadu Minor Mineral Concession Rules,1959 - Notification - Issued.

INDUSTRIES (MMC1) DEPARTMENT

G.O.Ms.No.95

DATED:1.10.2003

Read:

G.O. 2(D) No.46,Industries Department dated 25.9.2002

ORDER:

Taking cognizance of the indiscriminate quarrying in the river systems of Tamil Nadu in a public

interest litigation, the Hon'ble High Court in their order dated26.7.2002 had directed the StateGovernment to constitute an Expert Committee consisting ofgeologist, environmentalist and

scientists to study the river and river beds in the State with reference to the impact of sand

quarrying.Accordingly the Governmentin the G.O. read above constituteda six member

High Level Committee.The Committee after extensive touring of the State has submitted its

report to the Government.

A copy of the report has been furnished to the

Hon'ble High Court.The High Court had while ordering the Government to constitute the High Level Committee also

directed :-

" The Government on receipt of the report from the Committee shall act in conformity with

the Guidelines and take all necessary further steps to arrest the exploitation and to protect andimprove the situation and restore status quo-ante.The Government shall pass suitable


5/28

regulatory legislation in this regard.The action on the part of the Government after the receipt

should not brook any delay, it should act fast."

2. The High Level Committee in its report has pointed out that illicit and haphazard sand mining

has led to deepening of the river beds, widening of the rivers, damage to civil structures,

depletion of groundwater table, degradation of groundwater quality, sea water intrusion incoastal areas, damages to the river systems and reduction in biodiversity.Moreover sewage

and other effluents let into the rivers cause health hazards and environmental degradation.

3. Some of the major observations of the High Level Committee are (a) In all the areas, mining

of riversand has been donein a haphazard, irregularand unscientific manner,

causing environmental degradation. (b) Sand quarrying hascreated pools of water stagnation inthe river bed, impairing the water flow down stream, which in turn will have grave consequences

on agricultural production.

(c) The usage of machinery like poclain for removal of sand hascaused river bed erosion,

collapse of banks, damages to infrastructure like bridges and transmission power lines, drinkingwater systems.

(d) The lessees have generally exceeded the area of grant and quarriedmore than the

permissible depth.

(e) There is no responsibility of a single department in respect of sand mining. Three

departments that are involved are Geology and Mining, Revenue and Public Works Department

4. TheHigh Level Committee has concludedthat

(a) illicit and haphazard sand mining has led to deepening of the river beds, widening of therivers, damage to civil structures, depletion of groundwater table, degradation of groundwater

quality, sea water intrusion in coastal areas, damages to the river systems and reduction inbiodiversity.Moreover sewage and other effluents let into the rivers cause health hazards and

environmental degradation.Tamil Nadu has several river basins with good potential of sand.

Proper scientific approach of exploitation and utilization are needed to remove this resource.This will not only ensure good revenue to the Government, but will also be in harmony with

nature. (b) even though several rules on sand mining exist, illegal quarrying of sand is out of

control.Authority for regulating sand mining is vested with different organizations such as,

State Geology and Mining Department, Revenue Department and Public Works Department.

Hence implementation and monitoring of rules and regulations regarding sand quarrying are not

effective.This important task of sand mining therefore should be entrusted to a SINGLE

AGENCY.

5. The observations and conclusions of the High Level Committee clearly indicate the emergent

need for a framework for regulation of mining in the State in Public interest.

6. Hence, detailed discussions were held by a Government at various levels.After taking

cognizance ofthe pernicious practice of unsustainable overexploitation of sand in the State it


6/28

was decided in Public interestthat the quarrying of sand in Government poramboke lands and

private patta lands by private agencies will cease to be effective withimmediate effect and

sand quarrying henceforth will be undertaken only by the Government.In order to meet theabove requirements, suitable amendment to the Tamil Nadu Minor Mineral Concession Rules,

1959 is necessary.

7. In accordance with the directions of the Hon'ble High Court and the recommendations of the

High Level Committee constituted in pursuance of the directions of the Hon'ble High Court,

Government has taken these initiatives in public interest to ensure

(a) elimination of indiscriminate and unscientific sand quarrying. (b) uninterruptedavailability

and supply of sand in a regular and orderly manner to the common public.

(c) availability of the sand at affordable prices to common public thereby effecting reduction in

the cost of construction.

(d) augmentation of

the revenue of the State Government.

8. The Notification appended to this order will be published in the Tamil Nadu Government

Gazette and in the District Gazettes.The Works Manager, Government Central Press, Chennai-

79 is requested to publish the Notification in the Tamil Nadu Government Gazette and supply 75copies of the Notification to this Department and Commissioner of Geology and Mining,

Chennai-32 and to all District Collectors.

9. The Director, Tamil Development and Culture and Religious Endowments (Translation)

Department is requested to send the Tamil translation of the Notification appended to this order

to the Works Manager, Government Central Press, Chennai-79 for publishing in the Tamil Nadu

Government Gazette and to the Collectors of all Districts for publishing it in the District Gazettesimmediately.

(BY ORDER OF THE GOVERNOR)

D.RAJENDRAN,

SECRETARY TO GOVERNMENT

(incharge)

To

The Works Manager, Govt.Central Press, Chennai-79.

The Director, TamilDevelopment and Culture and Religious Endowments (Translation)Department, Chennai-9.

The Commissioner of Geology and Mining, Chennai-32.


7/28

The Chairman and Managing Director, TAMIN, Chennai-5.

All District Collectors.

All District Forest Officers through the Principal Chief Conservator of Forests, Chennai-6.

The Accountant General, Chennai-18.

Copy to:

The Public (SC) Department, Chennai 9.

The Chief Minister's Secretariat, Chennai 9.

The Law Department, Chennai-9.

The Finance Department, Chennai-9.

All Sections in Mining Wing, Industries Department, Chennai-9. The Industries (OP.II)

Department, Chennai-9.

Sf/Sc.

/FORWARDED/BY ORDER/

ECTION OFFICER.

5. Subsequently, the State of Tamil Nadu on the basis of the

G.O.Ms.No.95, Industries(MMC.I) Department dated 01.10.2003 issued notification amending the Minor MineralConcession Rules, 1959 by inserting Rule 38-A which reads as follows:-

"38-A. Quarrying of sand by the State Government - Notwithstanding anything containedin these rules, or any order made or action taken thereunder or any judgment or decree or order

of any Court, all existing leases for quarrying sand in Government lands and permissions/leases

granted in ryotwari lands shall cease to be effective on and from the date of coming into force ofthis rule and the right to exploit sand in the State shall vest with the State Government to the

exclusion of others. The proportionate lease amount for the unexpired period of the lease and the

unadjusted seigniorage fee, if any, will be refunded".

6. Under the aforesaid rule, quarrying of sand in poromboke land and private patta land by

private agencies ceased to be effective with immediate effect and henceforth sand quarrying

could be undertaken only by the Government through its Public Works Department. Thus, from01.10.2003 the PWD has the sole monopoly to quarry sand. By G.O.3D No.39 dated 07.10.2003

orders were issued directing the Regional Chief Engineers, Water Resources Organisation,

Public Works Department to directly operate sand quarrying at 239 locations identified by therespective Regional Chief Engineers, to be stored at 95 depots and sold to the users at a price of


8/28

Rs.1,000/- per lorry load (2 units) ex depot. By G.O.Ms.No.452, PWD dated 03.10.2003 orders

were issued directing the Chief Engineer, Water Resource Organisation to directly operate the

sand quarries at 3 locations in 2 depots. The Government passed G.O.3D No.39 dated07.10.2003 on the recommendation of the Engineer in Chief, RO, PWD, directed that the sand

quarrying operations be commenced immediately by the Regional Chief Engineers. The Chief

Engineers would directly operate the sand quarry in all the regions as mentioned in the Annexureto this order and sell sand at Rs.1,00 0/- per lorry of 2 units.

7. Subsequently, the Government passed G.O.No.414, PWD dated 30.06.2004 by which it wasstated that the sale of sand in sand stockyards will take place between 8 Am to 6 PM by the

Regional Chief Engineer. It is alleged that the lorry owners have to go to the quarry site and

remit a sum of Rs.650/- by cash inclusive of sales tax and resale tax to the PWD engineers who

will be present in the quarry site, but the receipt would be issued only for Rs.626/-. The lorryowners would collect the sand as per their priority in the queue.

8. It is alleged in paragraph - 11 of the petitioner's affidavit that the loading contractors like the

6th respondent act as traders. They take more than 100 loads illicitly in collusion with the PWDEngineers without following the procedure of paying Rs.626/- towards the cost of one lorry load

comprising of 2 units. The loading contractors give preference to their own lorries andconsequently the other lorry owners have to wait for long hours to get one lorry load of sand.

The loading contractors have set up their own stockyard near the quarry site and the 6th

respondent sells the sand which has been illicitly quarried to private individuals. The members of

the petitioner-association have no option except to buy the sand from the 6th respondent who arebenamis ofthe loaders otherwise the waiting period will be very long.

9. It is further alleged that the 6th respondent is a benami of Coimbatore Arumugasamy who hasbeen given the loading contract. Coimbatore Arumugasamy after illicitly quarrying the sand

dumps the sand in a stockyard very near the quarry site located within 1 km from the Palar riverbed in Padalam, Kancheepuram without paying any amount to the Government. The Governmentis losing crores of rupees as revenue in the form of royalty. The 6th respondent thereafter sells

the sand to private parties making huge profits thus depriving the state of its legitimate revenue

by way of seigniorage fee/royalty. The lorry receipts issued by the 6th respondent show as if thesand which has already suffered seigniorage fee is being sold by him to 3rd parties, but the real

situation is that out of 1000 lorries quarried from river bed only about 200 lorries suffer

seigniorage fee. The rest 800 lorries are illicitly quarried.

10. In paragraph - 14 of the petitioner's affidavit it is alleged that he made a representation on

09.01.2005 to respondents 2 to 4 requesting them to take necessary action against the 6th

respondent to protect the interest of the revenue and genuine traders like the members of thepetitioner-association. It is alleged in paragraph - 16 that the nationalization of sand quarrying

had resulted in privatization and creation of monopoly in favour of three persons. It is further

alleged that the 6th respondent is misusing the court's order and had sold illicitly quarried sand,

while the State had been deprived of its legitimate dues.

11. It is alleged by the petitioner-association that even though the policy of the 1st respondent isnationalisation of sand quarrying in the State of Tamil Nadu, in effect the appointment of loaders


9/28

is privatisation of sand quarrying in a different form without following the tender process. It is

alleged that the Government had appointed about 3 loaders for the entire State without calling for

tenders, and the said loaders hold the lorry owners who are involved in sand business to ransom.It is alleged that the appointment of loaders had led to loss of revenue by way of royalty since the

loaders are carrying on illicit quarrying. It is further alleged that Rule 36 of the Tamil Nadu

Minor Mineral Concession Rules, 1959 had been amended by which machinery can be used forquarrying sand only with the permission of the nominated authority if use of machinery is notdetrimental to ecology. However, it is alleged that the loading contractors indiscriminately use

the machines without getting permission from the designated authority.

12. A counter affidavit has been filed by the Secretary to the State Government, PWD, Chennai

on behalf of the 1st respondent. In paragraph - 11 of the same it is alleged that though sand

quarry operation is carried out by the State Public Works Department, the contract for the workof loading two units of sand per lorry load to the buyer at the quarry site is entrusted to either

P.W.D. registered Contractors or registered Lorry Owners' Associations by calling for tender

with publicity by the Executive Engineer, P.W.D., W.R.O., Superintending Engineer P.W.D.,

W.R.O., etc., depending on the contract value. The powers of the tender accepting authority forthe contract value are as follows:

1) Executive Engineer Up to 10 lakhs

2) Superintending Engineer Up to 30 lakhs

3) Chief Engineer Up to 1 crore

4) Tender Award Committee More than 1 crore

13. As regards the allegations of the petitionerassociation that loading contracts were givenwithout calling for tender, it is stated in paragraph - 12 of the counter affidavit that tender

procedure is being followed in respect of loading contract in sand quarrying operations for eachand every locality. Registered PWD contractors as well as Registered Lorry Owners' Association

are eligible to participate in the tenders. The successful bidder is awarded the contract for loading

the sand in the lorries in the quarries operated by the PWD.

14. In paragraph - 13 of the counter affidavit it is stated that the existing tender procedure is

strictly adhered to and accordingly the contracts are awarded to the contractors. It was denied

that the contracts were awarded to the benamis of Coimbatore Arumugasamy and Palanisamy. Itwas also alleged that contracts were awarded only to the successful tenderers as per the tender

procedure.

15. In paragraph - 14 of the counter affidavit it is stated that as per G.O.Ms.No.414, P.W.(W.Spl)

Department dated 30.06.2004, the sale of sand to the consumer/buyer is operated between 8 AM

to 6 PM. The duration of time is strictly followed at the site. As per G. O.Ms.No.396 P.W. (W.Spl) Department dated 16.06.2004 the sand cost is collected from the buyers in the form of

Demand Drafts drawn in any one of the Nationalised/Co-operative/Scheduled Bank with effect

from 16.06.2004 for a total value of Rs.626/- for 2 units of sand at the site in favour of the


10/28

Executive Engineer, PWD, WRO of the respective Divisions and a permanent cash receipt by the

Engineer in charge is given and 2 units (200 Cft) of sand is loaded to the buyer of one lorry load.

16. In paragraph - 15 of the counter affidavit it is stated that at any point of time lorries of all

categories follow the queue system (as stated by the petitioner-association itself in paragraph 1 0

of the affidavit filed along with the writ petition). The Public Works Department Engineer,which is in charge of the sand quarry operation, issues a receipt after collecting the amount for a

value of Rs.6 26/- in the form of Demand Draft and then allows the lorry to reach the quarry

points. The Public Works Department staff posted at the loading point of the quarryalsoverifies the receipt and then only loading is done. The above procedure is followed scrupulously.

Hence, the question of quarrying more than 1000 loads illicitly without paying the amount of

Rs.626/- (in the form of Demand Draft) does not arise at all.

17. In paragraph 16 of the counter affidavit it is stated that according to the procedure followed

at the quarry site, the work of the Public Works Department is limited to quarrying sand from the

specified area of river as approved by the Government then and there and selling the same to the

buyers after receiving the cost in the form of Demand Draft as fixed by the Government. There isno illicit quarrying of sand. If any irregularity is brought to the notice of the appropriate

authority, strict action would be taken in arresting the illicit operators with the assistance of theDistrict Administrative Authorities and Police Department and the vehicle would also be

confiscated.

18. The first respondent in his counter also denied that the appointment of loaders is a different

form of privatization of sand quarrying, and quarrying is done only by the State Government,

and it has not been entrusted toprivate parties. It is alleged that no complaint has been received

from any one that the loading contractors are holding the lorry owners to ransom.It is furtheralleged in the counter that under the rules and regulations no royalty is payable in the event of

second sale of sand. The loading contractors load the sand only on the direction of the authoritiesconcerned. The registration number and name of the lorry drivers are mentioned in the receiptissued by the Public Works Department. It is denied that the lorry owners have to remit a sum of

Rs.650/- to the P.W.D. Engineers present at the quarry site but receipt is issued only for Rs.626/-.

It is further denied that there is any collusion between the P.W.D. Engineers and the loadingcontractors. The first respondent is obliged to sell sand to individuals who purchase the same,

after remitting a sum of Rs.626/- by Demand Draft in favour of Executive Engineer. No illicit

quarrying is done.

19. An additional counter affidavit has also been filed on behalf of the first respondent. In

paragraph - 3 of the same it is stated that the contract is awarded for loading of 2 units of sand at

the quarry site following the procedure laid down in the Tamil Nadu Transparency in TendersAct,1998 and the Rules framed thereunder. The above Act came into force on and from

01.10.2000. Rule - 9 of the Tamil Nadu Transparency in Tenders Rules, 2000 deals with

publication of information in the State Bulletin, which is extracted below:-

"Information to be published in the State TenderBulletin -


11/28

The notice inviting tenders and decisions on tenders shall be published in the State Tender

Bulletin in cases where:-(a) the value of procurement exceeds rupees twenty five lakhs; (b)

The Tender Inviting Authority is a Secretary to Government, or a head of a GovernmentDepartment, or Local Authority or the Chief Executive of a Public Sector Undertaking, Statutory

Board, Apex Cooperative Institution, University or State Level Society formed by the

Government.

(c) In any other case, where the Tender Inviting Authority deems it fit.

20. It is further stated in paragraph - 3 of the additional counter affidavit that Rule - 11 of the

aforesaid rules proposes publication of notices inviting tenders in Newspapers.The said Rule

states:- Publication of notice inviting tenders in newspapers:-

(1) The Tender Inviting Authority shall have the notice inviting tenders published in the Indian

Trade Journal in all cases where the value of procurement exceeds rupees ten crores.

(2) The number, editions and language of the newspapers in which the notices inviting tendersshall be published will be based on the value of procurement. (3) In cases where publication ofTender Notices is to be done only in Newspapers with circulation within the District, the

Information and Public Relations Officer attached to the District Collectorate shall be the

competent authority to release the advertisement and in all other cases the competent authority torelease the advertisement shall be the Director of Information and Public Relations, Chennai.

(4) The notice inviting tender shall be given due publicity in Newspapers and also on noticeboards in the District Offices. For tenders above rupees fifty lakhs, Director of Information and

Public Relations will publish the Notice Inviting Tenders as per instructions of the tendering

department. For other tenders, Director of Information and Public Relations will publish keeping

in mind the request of the department. There should not be any additional insertion and nopublication of Notice Inviting Tenders in newspapers not requested by the tendering departments

for tenders above rupees fifty lakhs.

21. In paragraph - 4 of the additional counter affidavit filed on behalf of the 1st respondent it is

stated that even though sand quarrying operation is carried out by the Public Works Department

under the supervision of Technical Assistatnt/Junior Engineer/ Assistant Executive Engineer, thecontract work of loading of 2 units of sand is entrusted to the contractors. In paragraph - 7 of the

additional counter affidavit it is stated that if the value of the work is below Rs.5 lakhs, notices

are issued to all the eligible registered contractors in that Division in the form of tender notice

under certificate of posting, and tender notice is also displayed in the notice board of all thePublic Works Department Offices situated in the nearby areas. If the value exceeds Rs.10 lakhs,

the tendering authority publishes it in the newspapers as per the G.O.Ms.No.108, Information

and Tourism Department dated 28.05.1999. In fact, the writ

petitioners namely Mr.M.Panneerselvam, Secretary of the then Puranagar Lorry Owners' Welfare

Association and Mr.V.S.Yuvaraj, President of Aminjikarai Lorry Owners' Welfare Associationhave received tender notices sent under Certificate of Posting in terms of G.O.Ms.No.140,

Information and Tourism Department dated 06.08.1996 and responded to the same. So far two


12/28

contracts have been awarded to them. These facts have not been disclosed by the writ petitioners

and hence the writ petitioners have not come with clean hands. It is alleged that the tendering

authorities have scrupulously followed the said procedure as per the Governmental Order.

22. In paragraph - 8 of the additional counter affidavit filed by the 1st respondent it is stated that

the PWD authorities have taken a decision to fix the estimate rate as per the current schedule ofrates for executing the work. The registered contractors participated in the tender and quoted

their bid amounts. In paragraph - 9 of the additional counter affidavit filed by the 1st respondent

it is stated that the contract work of loading of 2 units of sand per lorry was entrusted tosuccessful contractors only, but if there is any violation by the contractor, the authorities

concerned will take suitable action against the contractors.

23. A counter affidavit has also been filed by the 6th respondent in W.P.No.12934 of 2004 viz.,

M.Palanisamy of Coimbatore, and we have perused the same. In paragraph - 4 of the counter

affidavit it is stated that the 6th respondent is dealing with the processing and marketing of sand

for the past 15 years, and he is registered under the Tamil Nadu General Sales Tax Act. He

alleged that his regular business is sand trading and he owns about 50 lorries to transport thesand from his stockyard to the place of the purchaser's choice. As per the usual practice, the

stockyards are situated within a couple of kilometers distance from the quarry sites. The sand ispurchased by the 6th respondent like any other purchaser from the P.W.D. and with the valid

bills issued by the P.W.D. the sand is transported to the stockyards. The bills issued by the

P.W.D. after collecting the value of the mineral together with sales tax at 4%contains the

name of the purchaser, the place of loading and the destination (the stockyard of the petitioner).After transporting to the stockyards in many of the places the sand is processed and the

processed mineral which is ready for use issold adding the processing charges. In some places

the sand is sold without processing. When the sand is sold at the stockyard, the said transaction isa second sale. Hence, the petitioner is issuing separate bill/invoice collecting 1% as second sales

tax.

24. In paragraph - 7 of the counter affidavit it is denied that the loading contract has been given

in favour of benamis of Coimbatore Arumugasamy. In paragraph - 8 of the counter affidavit it is

denied that the loading contractors give preference to their own vehicles while loading. Thelorries have to be in a queue, and in all the quarries there is only one line and it is practically not

possible to overtake any of the waiting vehicles as nobody will allow others to overtake their

waiting vehicles or to break the queue. The allegation of illicit quarrying is denied, and it is

alleged that the sand was transported only with valid bills issued by the P.W.D.25. In paragraph - 9 of the counter affidavit filed by the 6th respondent

in W.P.No.12934 of 2005 it is stated that as an experienced sand trader, it is natural for the 6th

respondent to prefer to be a loading contractor in as many places as possible as he has got

enough loading machineries and expertise. It is alleged that the sand is purchased from theP.W.D. by paying the necessary cost and the same is transported to the stockyard with the valid

bills issued by the P.W.D. and there is no illegality or irregularity. Not even one unit of

overloading is permitted and the entire mineral suffers tax at the P.W.D. quarry and also sufferssecond sales tax at the time of re-sale from the stockyard. It is alleged that it is the members of

the petitioner-association who indulged in regular illicit quarrying, transporting and marketing.

Originally, quarrying of sand by private persons was permitted and at that time one had to obtain


13/28

a transport permit to transport sand after paying seigniorage. However, after the quarrying of

sand by private persons was banned, instead of transport permits, P.W.D. bills are being issued.

26. In paragraph - 6 of the counter affidavit filed by Mr.M.Palanisamy as 3rd respondent in

W.P.No.19053 of 2005 it is stated that initially the P.W.D. was quarrying sand and transporting

it itself to a nearby stockyard set up by the P.W.D. The intending purchasers of sand had to go tothe P.W.D. stockyard and purchase the sand. As these stockyards were very limited, the

intending buyers had to wait for days together to get their chance for loading the sand from the

stockyard to the transporting vehicles. To avoid such delays, the P. W.D. then permitted directloading by the lorry owners on a trial basis. The lorry owners used to quarry wherever they liked

and load excess quantities and the P.W.D. could not monitor the private loading as the rivers are

running kilometers in length. Therefore, in order to avoid illicit quarrying the P.W.D. introduced

the present loading contract system by permitting loading by private persons by fixing Rs.92/-per lorry load for quarrying and loading. The P.W.D. identified the sand deposit areas and

announced the loading points by monitoring the loading by way of issuing P.W.D. bills for each

lorry load of 2 units or multiples. Every lorry has to stand in a queue, pay the sale price and after

producing the P.W.D. bill, the sand is loaded by the loading contractor into the lorry of thevehicle owner. Whether the vehicle belongs to the loading contractor or to any other person it

has to stand in the queue and the queue will be on a one way road and only after paying the saleprice by their turn and on producing the P.W.D. bill the prescribed quantity of sand is loaded.There is no question of any priority or overtaking the queue or any other illegality and

irregularity in loading the sand on the vehicles. There is no complaint whatsoever by any traders

anywhere in the State of Tamil Nadu except by the writ petitioner and his so called associationwho were hither to monopolizing the sand supply in and around the city of Madras.

27. It is further alleged that the loading contracts were awarded only by tender as per the existingpolicies. No doubt, some of the loading contractors are also transport contractors for transport of

quarried sand but on that account the loading contractor-cumtransport operator is not given any

preference. All lorries which come to the site to purchase quarried sand have to stand in the

queue and wait for their turn including the lorries belonging to loading contractors. It is allegedthat once the requisite charges for the lorry load of sand has been paid along with the sales tax

for the first sale, the authorities have nothing to do with the sand thus transported out of the

quarry. The transport operators who have purchased the sand from the quarries are free to effectthe second sales whether directly from the quarry site or by having their stockyard from where

they could effect second sales.

28. In our opinion, there is no merit in these writ petitions. The petitioners have really challenged

the policy decision of the State Government which had introduced the loading system for loading

the sand at the quarry site. It is well settled that ordinarily this Court cannot interfere with policy

and administrative decisions unless it is in violation of some statutory or constitutional provisionor is shockingly arbitrary in the Wednesbury sense, vide Tata Cellular Vs. Union of India, AIR

1996 SC 11, Om Kumar Vs. Union of India, AIR 2000 SC 3689, Union of India Vs. S.B.Vohra,

2004 (2) SCC 150, Tamil Nadu Electricity Board Vs. Tamil Nadu Electricity Board Engineers'Association, 2005 LIC 1579=2005 (1) MLJ 507, S.Ramamirtham Vs. Somesuvarapuram Girama

Vivasaya Nala Pathukappu Sangam, 2005 WLR 451, Damoh Panna Sagar Rural Regional Bank

Vs. Munna Lal Jain,2005 (1) LLJ 73 0, Union of India Vs. International Trading Company, JT


14/28

2003 Vol.4 SC 549 (para-17)= 2003 AIR SCW 2828 (para-18), Delhi Development Authority

Vs. Vijaya C.Gurshaney (Mrs.), 2003 (7) SCC 301, Krishnan Kakkanth Vs. Government of

Kerala, 1997 (9) SCC 495, O.N.G.C. Madras Port Contract Employees' Union Vs. TheManagement of O.N.G.C. Ltd., 2005 (2) MLJ 90, etc.

29.In Haryana Financial Corporation and Another v. M/s Jagdamba Oil Mills andanother(2002) 1 UPLBEC 937=AIR 2002 SC 834 (vide paragraph 10) the Supreme Court observed:

"If the High Court cannot sit as an appellate authority over the decisions and orders ofquasi-judicial authorities, it follows equally that it cannot do so in the case of administrative

authorities. In the matter of administrative action, it is well known that more than one choice is

available to the administrative authorities. They have a certain amount ofdiscretion availableto them. They have "a right to choose between more than one possible course of action

upon which there is room for reasonable people to hold differing opinions as to which is to be

preferred". (per Lord Diplock inSecretary of State for Education andScience V.

Metropolitan Borough Counsel of Tameside, 1 977 AC 1014). The Court cannot substitute its

judgment for the judgment of administrative authorities in such cases. Only when the action ofthe administrative authority is so unfair or unreasonable that no reasonable person would have

taken that action, the Court can intervene. To quote the classic passage from the judgment ofLord Greene M. R. in Associated Provincial Picture Houses Ltd. V. Wednesbury Corporation,

1947 (2) ALL ER 680:

"It is true the discretion must be exercised reasonably. Now what does that mean? Lawyers

familiar with the phraseology commonly used in relation to exercise of statutory discretions

often use the word ' unreasonable' in a rather comprehensive sense. It has frequently been used

and is frequently used as a general description of the things that must not be done. For instance, aperson entrusted with the discretion must, so to speak, direct himself properly in law. He must

call his own attention to the matters, which he is bound to consider. He must exclude from hisconsideration matters, which are irrelevant to what he has to consider. If he does not obey thoserules, he may truly be said, and often is said, to be acting 'unreasonably.' Similarly, there may be

something so absurd that no sensible person could ever dream that it lay within the powers of the

authority".

30.In Tata Cellular vs Union of India AIR1996 SC 11 (vide paragraph 113) the Supreme Court

observed:

(1) The modern trend points to judicial restraint inadministrative action.

(2) The Court does not sit as a court of appeal over administrative decisions but merely reviews

the manner in which the decision was made. (3)The court does not have the expertise to

correct an administrative decision. If a review of the administrative decision is permitted it willbe substituting its own decision, without the necessary expertise, which itself may be

fallible."

31. In the same decision the Supreme Court observed that judicial review is concerned with

reviewing not the merits of the decision but the decision making process. (See also Pramod
http://www.indiankanoon.org/doc/747596/http://www.indiankanoon.org/doc/747596/http://www.indiankanoon.org/doc/747596/http://www.indiankanoon.org/doc/884513/http://www.indiankanoon.org/doc/884513/http://www.indiankanoon.org/doc/884513/http://www.indiankanoon.org/doc/884513/http://www.indiankanoon.org/doc/747596/


15/28

Kumar Misravs. Indian Oil Corporation 2002 (4) AWC 3221,State of Kerala vs. Joseph

Antony1994 (1) SCC 658, etc.)

32. As Lord Denning observed:

"This power to overturn executive decisions must be exercised very carefully, because youhave got to remember that the executive and the local authorities have their very own

responsibilities and they have the right to make decisions. Thecourts should be very wary

about interfering and only interfere in extreme cases, that is, cases where the Court is sure theyhave gone wrong in law or they have been utterly unreasonable. Otherwise you would get a

conflict between the courts and the government and the authorities, which would be most

undesirable. The courts must act very warily in this matter."

( See 'Judging the World' by Garry Sturgess and Philip Chubb).

33. In our opinion judges must maintain judicial self-restraint while exercising the powers of

judicial review of administrative or legislative decisions.

"In view of the complexities of modern society," wrote Justice Frankfurter, while

Professor of Law at Harvard University, "and the restricted scope of any man's experience,

tolerance and humility in passing judgment on the worth of the experience and beliefs of othersbecome crucial faculties in the disposition of cases. The successful exercise of such judicial

power calls for rare intellectual disinterestedness and penetration, lest limitation in personal

experience and imagination operate as limitations of the Constitution. These insights Mr. JusticeHolmes applied in hundreds of cases and expressed in memorable language:

"It is a misfortune if a judge reads his conscious or unconscious sympathy with one side or

the other prematurely into the law, and forgets that what seem to him to be first principles arebelieved by half his fellow men to be wrong.'"

(See Frankfurter's 'Mr. Justice Holmes and the Supreme Court').

34. In our opinion the administrative authorities must be given freedom to do experimentationsin exercising powers, provided of course they do not transgress the legal limits or act arbitrarily.

35.The function of a judge has been described thus by Lawton LJ: " A Judge acts as a

referee who can blow his judicial whistle when the ball goes out of play, but when the game

restarts hemust neither take part in it nor tell the players how to play" vide Laker

Airways Ltd. v. Department of

Trade (1977) QB 643 (724).

36. In writing a biographical essay on the celebrated Justice Holmes of the U.S. Supreme Court

in the dictionary of American Biography, Justice Frankfurter wrote:

"It was not for him (Holmes) to prescribe for society or to deny it the right ofexperimentation within very wide limits. That was to be left for contest by the political forces in

the state. The duty of the Court was to keep the ring free. He reached the democratic result by the
http://www.indiankanoon.org/doc/1273197/http://www.indiankanoon.org/doc/1273197/http://www.indiankanoon.org/doc/1273197/http://www.indiankanoon.org/doc/1273197/http://www.indiankanoon.org/doc/1273197/


16/28

philosophic route of scepticism - by his disbelief in ultimate answers to social questions. Thereby

he exhibited the judicial function at its purest." (See 'Essays on Legal History in Honour of

Felix Frankfurter' Edited by Morris D. Forkosch).

37. In the process of judging constitutional cases, Justice Frankfurter wrote:

"The core of the difficulty is that there is hardly a question of any real difficulty before the

Court that does not entail more than one so-called principle. Anybodycan decide a question if

only a single principle is in controversy. Partisans and advocates often cast a question in thatform, but the form is deceptive. In a famous passage Mr. Justice Holmes has exposed this

misconception: 'All rights tend to declare themselves absolute to their logical extreme. Yet all in

fact are limited by the neighborhood of principles of policy which are other than those on whichthe particular right is founded, and which become strong enough to hold their own when a

certain point is reached."

38. In our opinion adjudication must be done within the system of historically validated restraints

and conscious minimisation of the judges preferences. The Court must not embarrass theadministrative authorities and must realise that administrative authorities have expertise in the

field of administration while the Court does not. In the words of Chief Justice Neely: " Ihave very few illusions about my own limitations as a Judge. I am not an accountant, electrical

engineer, financer, banker, stockbroker or system management analyst. It is the height of folly to

expect Judges intelligently to review a 5000 page record addressing the intricacies of a publicutility operation. It is not the function of a Judge to act as a super board, or with the zeal of a

pedantic school master substituting its judgment for that of the administrator."

39. In administrative matters the Court should therefore ordinarily defer to the judgment of the

administrators unless the decision is clearly illegal or shockingly arbitrary.

40. In this connection Justice Frankfurter while Professor of Law at Harvard University wrote in

'The Public and its Government' --

" With the great men of the Supreme Court constitutional adjudication has always been

statecraft. As a mere Judge, Marshall had his superiors among his colleagues. His supremacy lay

in his recognition of the practical needs of government.The great judges are those to whom theConstitution is not primarily a text for interpretation but the means of ordering the life of a

progressive people."

In the same book Justice Frankfurter also wrote---

" In simple truth, the difficulties that government encounters from law do not inhere in theConstitution. They are due to the judges who interpret it. That document has ample resources for

imaginative statesmanship, if judges have imagination for statesmanship."

41. In Keshvananda Bharati v. State of Kerala, AIR 1973 SC 1461 ( vide para 1547) Khanna, J.

observed:


17/28

"In exercising the power of judicial review, the Courts cannot be oblivious of the practical

needs of the government. The door has to be left open for trial and error."

42.In Indian Railway Construction Co. Limited vs. Ajay Kumar(2003) 2 UPLBEC 1206 (vide

para 14) the Supreme Court observed that there are three grounds on which administration action

is subject to control by judicial review. The first ground is illegality, the second is irrationalityand the third is procedural impropriety. These principles were highlighted by Lord Diplock in

Council of Civil Service Unions v. Minister for the Civil Service1984 (3) All ER 935. The

Supreme Court observed that the Court will be slow to interfere in such matters relating toadministrative functions unless the decision is tainted by any vulnerability enumerated above,

like illegality, irrationality and procedural impropriety. The famous case, commonly known as

the 'Wednesbury's case', is treated as the landmark in laying down various principles relating to

judicial review of administrative or statutory discretion.

43. Lord Diplock explained irrationality as follows:

" By irrationality I mean what can be now be succinctly referred to as Wednesburyunreasonableness. It applies to a decision which is so outrageous in its defiance of logic or of

accepted moral standards that no sensible person who had applied his mind to the question to bedecided could have arrived at it."

44. From the above standpoint, in our opinion, it cannot be said that loading system introducedby the Government of Tamil Nadu is so outrageous in defiance of logic or accepted moral

standards that no sensible

person could have arrived at it. It may be that a different approach could have been adopted by

the authorities, but on that ground the impugned loading system cannot be said to be vitiated.

45. The said system had been introduced by the Government obviously in consultation with the

administrative authorities who are specialists in the matter, and it is not for this Court to sit inappeal over such a decision. Hence, we are not inclined to accept the prayer of the writ petitioner

that the Court should abolish the system of appointment of loaders.

46. It is well settled that in policy matters this Court has a very limited scope of interference vide

Union of India vs. International Trading Co., J.T.2003 (4) SC 549 (para 17),State of Punjab vs.

Ram Lubhaya,1998 (4) SCC 117,Krishnan Kakkanth vs. Government of Kerala1 997 (9) SCC

495,G.B. Mahajan vs. Jalgaon Municipal Council AIR1991 SC 1153,Federation ofRailway Officers Association vs. Union of India,2003 (4) SCC 289.

47.In Union of India vs. International Trading Co.2003 (51) ALR 598 (vide paragraph 17) theSupreme Court observed:

"The Courts as observed inG.P. Mahajan v. Jalgaon Municipal Council, AIR1994 SC 988

are kept out of the lush field of administration policy except where the policy is inconsistent with

the express or implied provision of a statute which creates the power to which the policy relates,

or where a decision made in purported exercise of poweris such that a repository of the
http://www.indiankanoon.org/doc/777136/http://www.indiankanoon.org/doc/777136/http://www.indiankanoon.org/doc/777136/http://www.indiankanoon.org/doc/41775/http://www.indiankanoon.org/doc/41775/http://www.indiankanoon.org/doc/1563564/http://www.indiankanoon.org/doc/1563564/http://www.indiankanoon.org/doc/1563564/http://www.indiankanoon.org/doc/1563564/http://www.indiankanoon.org/doc/776665/http://www.indiankanoon.org/doc/776665/http://www.indiankanoon.org/doc/776665/http://www.indiankanoon.org/doc/958552/http://www.indiankanoon.org/doc/958552/http://www.indiankanoon.org/doc/1533633/http://www.indiankanoon.org/doc/1533633/http://www.indiankanoon.org/doc/1533633/http://www.indiankanoon.org/doc/41775/http://www.indiankanoon.org/doc/41775/http://www.indiankanoon.org/doc/41775/http://www.indiankanoon.org/doc/958552/http://www.indiankanoon.org/doc/958552/http://www.indiankanoon.org/doc/958552/http://www.indiankanoon.org/doc/958552/http://www.indiankanoon.org/doc/41775/http://www.indiankanoon.org/doc/1533633/http://www.indiankanoon.org/doc/1533633/http://www.indiankanoon.org/doc/958552/http://www.indiankanoon.org/doc/776665/http://www.indiankanoon.org/doc/1563564/http://www.indiankanoon.org/doc/1563564/http://www.indiankanoon.org/doc/41775/http://www.indiankanoon.org/doc/777136/


18/28

power acting reasonably and in good faith could not have made it. But there has to be a word of

caution. Something overwhelming must appear before the Court will intervene. That is and ought

to be a difficult onus for an applicant to discharge. The Courts are not very good at formulatingor evaluating policy. Sometimes when the Courts have intervened on policy grounds the Court' s

view of the range of policies open under the statute or of what is unreasonable policy has not got

public acceptance. On the contrary, curial views of policy have been subjected to stringentcriticism. As Professor Wade points out (in Administrative Law by H.W.R. Wade, 6 th Edition),there is ample room within the legal boundaries for radical differences of opinion in which

neither side is unreasonable. The reasonableness in administrative law must therefore distinguish

between proper course and improper abuse of power. Nor is the test the Court's own standard ofreasonableness as it might conceive it in a given situation. The point to note is that the thing is

not unreasonable in the legal sense merely because the Court thinks it to be unwise."

48.In Tamil Nadu Education Dept., Ministerial and General Subordinate Services Association

vs. State of Tamil Nadu and others, AIR 1980 SC 379, the Supreme Court while examining the

scope of interference by the Courts in public policy held that the Court cannot strike down a

circular / Government Order or a policy merely because there is a variation or contradiction. TheCourt observed: "Life is sometimes contradiction and even inconsistency is not always a

virtue. What is important is to know whether mala fides vitiates or irrational and extraneousfactors fouls".

In that decision the Court also observed:

"Once, the principle is found to be rational, the fact that a few freak instances of hardship

may arise on either side cannot be a ground to invalidate the order or the policy. Every cause

claims a martyr and however, unhappy we be to see the seniors of yesterdays becoming thejuniors of today, this is an area where, absent arbitrariness and irrationality, the Court has to

adopt a hands-off policy."

49.In Maharashtra State Board of Secondary and High Secondary Education and others vs.

Paritosh Bhupesh Kumarsheth, AIR1984 SC 1543, theSupreme Court considered the scope of

judicial review in a case of policy decision and held as under:-

"The Court cannot sit in judgment over the wisdom of the policy evolved by theLegislature and the sub-ordinate regulation making body.It may be a wise policy, which will

fully effectuate the purpose of the enactment or it may be lacking in effectiveness and hence

calling for revision and improvement. But any drawbacks in the policy incorporated in a rule or

regulation will

not render it ultra vires and the Court cannot strike it down on the ground that in its opinion, it is

not a wise or prudent policy but is even a foolish one, and that it will not really serve toeffectuate the purpose of the Act. The legislature and its delegate are the sole repositories of the

power to decide what policy should be pursued in relation to matters covered by the Act and

there is no scope for any interferenceby the Courts unless the particular provision impugnedbefore it can be said to suffer from any legal infirmity in the sense of its being wholly beyond the
http://www.indiankanoon.org/doc/1282/http://www.indiankanoon.org/doc/1282/http://www.indiankanoon.org/doc/1282/http://www.indiankanoon.org/doc/1282/http://www.indiankanoon.org/doc/174675/http://www.indiankanoon.org/doc/174675/http://www.indiankanoon.org/doc/174675/http://www.indiankanoon.org/doc/174675/http://www.indiankanoon.org/doc/174675/http://www.indiankanoon.org/doc/174675/http://www.indiankanoon.org/doc/1282/http://www.indiankanoon.org/doc/1282/


19/28

scope of the regulation-making power or it being inconsistent with any of the provisions of the

parent enactment or in violation of any of the limitations imposed by the Constitution."

50. A similar view has been reiterated in Delhi Science Forum and others vs. Union of India and

another, AIR 1996 SC 1356 ;U.P. Kattha Factories Association vs. State of U.P. and others,

(1996) 2 SCC 97; andRameshwar Prasad vs. Managing Director, U.P. Rajkiya Nirman NigamLimited and others(1999) 8 SCC 381.

51.In Netai Bag and others vs. State of West Bengal and others, (200 0) 8 SCC 262 (videpara20), the Supreme Court observed:

"The Court cannot strike down a policy decision taken by the government merely because

it feels that another decision would have been fairer or wiser or more scientific or logical."

52. The Government is entitled to make pragmatic adjustments and policy decisions which maybe necessary or called for under the prevalent peculiar circumstances.While deciding the said

case, the Court referred to and relied upon its earlier judgments inState of Madhya Pradesh vs.Nandlal Jaiswal, AIR1987 SC 251 and Sachidanand Pandey vs. State of West Bengal, AIR 1987SC 1109, wherein the Court held that judicial interference with policy decision is permissible

only if the decision is shown to be patently arbitrary, discriminatory or mala fide. A similar view

has been reiterated inUnion of India and others vs. Dinesh Engineering Corporation andanother,(2001) 8 SCC

491.

53.In Ugar Sugar Works Ltd. vs. Delhi Administration and others, (20 01) 3 SCC 635, it has

been held that in exercise of their powers of judicial review, the Courts do not ordinarily

interfere with policy decisions of the executive unless the policy can be faulted on the ground ofmala fide, unreasonableness, arbitrariness or unfairness etc.If the policy cannot be touched on

anyof these grounds, the mere fact that it may affect the interests of a party does not justifyinvalidating the policy.

54. In State of Himachal Pradesh and another vs. Padam Dev and others (2002) 4 SCC 510, theSupreme Court held that unless a policy decision is demonstrably capricious or arbitrary and not

informed byany reason or discriminatory or infringing any statute or the Constitution it cannot

be a subject ofjudicial interference under the provisions of Articles 32, 226 and 136 of the

Constitution. Similar view, has been reiterated inState of Rajasthan and others vs. Lata Arun,(2002 ) 6 SCC 252.

55. This Court cannot ordinarily interfere in administrative matters, since the administrativeauthorities are specialists in matters relating to the administration. The court does not have the

expertise in such matters, and ordinarily should leave such matters to the discretion of the

administrative authorities. It is only in rare and exceptional cases, where the Wednesburyprinciple applies, that the Court should interfere, videTata Cellular vs. Union of India,(1994) 6

SCC 6 51,Om Kumar vs. Union of India,2001 (2) SCC
http://www.indiankanoon.org/doc/1344210/http://www.indiankanoon.org/doc/1344210/http://www.indiankanoon.org/doc/1344210/http://www.indiankanoon.org/doc/656676/http://www.indiankanoon.org/doc/656676/http://www.indiankanoon.org/doc/656676/http://www.indiankanoon.org/doc/656676/http://www.indiankanoon.org/doc/462163/http://www.indiankanoon.org/doc/462163/http://www.indiankanoon.org/doc/462163/http://www.indiankanoon.org/doc/320843/http://www.indiankanoon.org/doc/320843/http://www.indiankanoon.org/doc/320843/http://www.indiankanoon.org/doc/320843/http://www.indiankanoon.org/doc/121952/http://www.indiankanoon.org/doc/121952/http://www.indiankanoon.org/doc/121952/http://www.indiankanoon.org/doc/768764/http://www.indiankanoon.org/doc/768764/http://www.indiankanoon.org/doc/768764/http://www.indiankanoon.org/doc/194067/http://www.indiankanoon.org/doc/194067/http://www.indiankanoon.org/doc/194067/http://www.indiankanoon.org/doc/884513/http://www.indiankanoon.org/doc/884513/http://www.indiankanoon.org/doc/884513/http://www.indiankanoon.org/doc/1285195/http://www.indiankanoon.org/doc/1285195/http://www.indiankanoon.org/doc/1285195/http://www.indiankanoon.org/doc/884513/http://www.indiankanoon.org/doc/194067/http://www.indiankanoon.org/doc/768764/http://www.indiankanoon.org/doc/121952/http://www.indiankanoon.org/doc/320843/http://www.indiankanoon.org/doc/320843/http://www.indiankanoon.org/doc/462163/http://www.indiankanoon.org/doc/656676/http://www.indiankanoon.org/doc/656676/http://www.indiankanoon.org/doc/1344210/


20/28

386.In U.P., Financial Corporation V. M/s Naini Oxygen & Acetylence Gas Ltd. J.T.

1994 (7 ) S.C.551 (vide para 21) the Supreme Court observed: " However, we cannot lose

sight of the fact that the Corporation is an independent autonomous statutory body having itsown constitution and rules to abide by, and functions and obligations to discharge. As such, in

the discharge of its function it is free to act according to its own light. The views it forms and the

decisions it takes are on the basis of the information in its possession and the advice it receivesand according to its own perspective and calculations. Unless its action is mala fide, even awrong decision taken by it is not open to challenge. It is not for the Courts or a third party to

substitute its decision, however more prudent, commercial or business like it may be , for the

decision of the Corporation. Hence, whatever the wisdom (or the lack of it) of the conduct of theCorporation, the same cannot be assailed by making the Corporation liable."

56. In Krishnan Kakkanth Vs. Government of Kerala, (1997) 9 SCC 495 the Supreme Courtobserved:-

"To ascertain unreasonableness and arbitrariness in the context of Article 14 of the

Constitution, it is not necessary to enter upon any exercise for finding out the wisdom in thepolicy decision of the State Government. It is immaterial whether a better or more

comprehensive policy decision could have been taken. It is equally immaterial if it can bedemonstrated that the policy decision is unwise and is likely to defeat the purpose for which such

decision has been taken. Unless the policy decision is demonstratably capricious or arbitrary and

not informed by any reason whatsoever or it suffers from the vice of discrimination or infringes

any statute or provisions of the Constitution, the policy decision cannot be struck down. It shouldbe borne in mind that except for the limited purpose of testing the public policy in the context of

illegality and unconstitutionality, courts should avoid "embarking on uncharted ocean of

public policy".

57. As observed by the Supreme Court in M.H.Qureshi Vs. State of Bihar, AIR 1958 SC 731, theCourt must presume that the legislature understands and correctly appreciates the needs of itsown people. The legislature is free to recognize degrees of harm and may confine its restrictions

to those where the need is deemed to be the clearest. In the same decision it was also observed

that the legislature is the best judge of what is good for the community on whose suffrage it cameinto existence. In our opinion, the same principle also applies to the executive decisions, as the

executive is accountable to the legislature in a democracy.

58. One of the earliest scholarly treatments of the scope of judicial review is Prof. James Bradley

Thayer's article "The Origin and Scope of the American Doctrine of Constitutional

Law", published in 1893 in the Harvard Law Review. This paper is a singularly important

piece of American legal scholarship, if for no other reason than that Justices Homes and Brandeisof the U.S.Supreme Court, among modern judges, carried its influence with them to the Bench,

as also did Mr. Justice Frankfurter. Thayer, who was a Professor of Law at Harvard University,

strongly urged that the courts must be astute not to trench upon the proper powers of the other

departments of government, nor to confine their discretion. Full and free play must be allowed to"that wide margin of considerations which address themselves only to the practical

judgment of a legislative body or the executive authorities". Moreover, every action of the

other departments embodies an implicit decision on their part that it was within their
http://www.indiankanoon.org/doc/1599414/http://www.indiankanoon.org/doc/1599414/


21/28

constitutional power to act as they did. The judiciary must accord the utmost respect to this

determination, even though it be a tacit one.This meant for Thayer, and he attempted to prove

that it had generally meant to the courts, that a statute or a policy decision could be struck downas unconstitutional only "when those who have the right to make it have not merely made a

mistake, but have made a very clear one, so clear that it is not open to rational question".

After all, the Constitution is not a legal document of the nature of a title deed or the like, to beread closely and construed with technical finality, but a complex charter of government, lookingto unforeseeable future exigencies. Most frequently, reasonable men will differ about its proper

construction. The Constitution leaves open "a range of choice and judgment," and

hence constitutional construction 'involves hospitality to large purposes, not merely textualexegesis'.

59. In Lochner Vs. New York, 198 U.S. 45 (1905), Mr. Justice Holmes, the celebrated Judge ofthe U.S. Supreme Court in his classic dissenting judgment pleaded for judicial tolerance of state

legislative action even when the Court may disapprove of the State Policy. Similarly, in his

dissenting judgment in Griswold Vs. Connecticut, 3 81 U.S. 479, Mr.Justice Hugo Black of the

U.S. Supreme Court warned that "unbounded judicial creativity would make this Court aday-today Constitutional Convention". Justice Frankfurter has pointed out that great judges

have constantly admonished their brethren of the need for discipline in observing theirlimitations (see Frankfurter's ' Some Reflections on the Reading of Statutes').

60. From the facts stated above it is evident that the loading system had been introduced by the

State Government after a process of trial and error. Since the quarrying of sand by privatecontractors was abolished and the State Government decided to quarry directly, it first

experimented with the PWD itself loading the quarried sand. This, however, resulted in great

deal of delay, and hence the PWD permitted direct loading by lorry owners on trial basis. Thissystem also proved unsatisfactory and heavy loss occurred due to illicit quarrying. The PWD

then tried a third (the present) method by introducing a loading system through private

contractors, after giving such contracts through the tender process. In our opinion, no exception

can be taken to the above loading system as it has been devised by the authorities after makingseveral experiments and after finding the earlier methods unsatisfactory. It is not for this Court to

tell the Government authorities as to which system they should prefer as long as that system is

transparent and objective. After all, the authorities must be given some room for free play inmaking administrative decisions, and this Court cannot sit in appeal ove r such decisions as along

as it is not illegal or shockingly arbitrary in the Wednesbury sense.

61. It may be noted that the contracts are given through the tender process (and not by private

negotiations) as stated in the various counters filed in these cases, and they are not given

arbitrarily or by pick and choose method. In fact some writ petitioners themselves have been

loaders, as stated in paragraph - 3 of the additional counter affidavit filed by the 3rd respondentMr.M.Palanisamy in W. P.No.19053 of 2005 as well as paragraph - 5 of the same. Similarly, in

the counter affidavit of the same respondent in W.P.No.12934 of 2005 , it is stated in paragraph -

7 that Mr.V.S.Yuvaraj, the petitioner in W.P.No.12935 of 2005 himself was a loader and becauseof the illegalities committed his contract was cancelled by the authorities. These facts were

concealed by the petitioners, and hence they have not come with clean hands.


22/28

62. As stated in the counter affidavit of the first respondent in paragraph - 12, the tender

procedure has been followed in respect of loading contracts in sand quarrying operations for each

and every locality. Registered PWD contractors as well as registered Lorry Owners' Associationare eligible to participate in the tender. The successful bidder is awarded the contract. We can see

no objection to this procedure as it is evidently transparent and fair. The first respondent has

stated that the existing tender procedure is strictly adhered to and contracts awarded to thesuccessful tenderers. As per the tender procedure the lorries of all categories follow the queuesystem, and hence in our opinion there is no discrimination. In our opinion, the entire procedure

of giving the loading contracts is fair and transparent, and does not violate Article 14 of the

Constitution.

63. At any event, if the petitioners point out any specific instance of discrimination or

arbitrariness they can always approach the concerned authorities who will take strict actionagainst the culprits. However, the system cannot be termed bad merely because of possibilities of

abuse. In fact, the first respondent has alleged that no complaint has been received from anyone

that the loading contractors are holding the lorry owners to ransom. The loading contractors load

the sand only on the direction of the PWD authorities. The registration number and the name ofthe lorry driver are mentioned in the receipt issued by the authorities, and hencein our opinion

there is little chance of abuse in the loading system.

64. In our opinion, wild allegations have been made by the petitioners against the respondent for

ulterior motives. The full facts have been given in the counter affidavits filed by the Secretary to

the Government as well as Mr.Palanisamy - 6th respondent in W.P.No.1 2934 of 2005 ,and aperusal of the counter affidavits and additional counter affidavits show that the loading system is

transparent, objective and non-discriminatory, and hence no objection can be taken to the same.

In fact in paragraph - 12 of the counter filed by Mr.M. Palanisamy in W.P.No.12934 of 2005 it isstated that the Madras Lorry Owners' Association and the Chennai, Kancheepuram and

Tiruvallur Sand Lorry Owners' Association which are the older lorry associations accepted the

system introduced by the Governmentof Tamil Nadu, whereas the petitioner-association which

was registered only on 31.03.2005 has come forward with the writ petition making all kinds offalse allegations.

65. In Selvarani Vs. The Commissioner, Karaikudi Municipality, 2005 (1) MLJ 394 wehave

discussed in detail the law regarding the grant of public contracts. In the said decision we have

referred to the decision of the Supreme Court in Ram and Shyam Company Vs. State of Haryana

and Others, AIR 1985 SC 1147, R.D.Shetty Vs. International Airport Authority of India, AIR1979 SC 1628, Kasturilal Lakshmi Reddy Vs. State of J&K, AIR 1980 SC 1992, Fertilizer

Corporation Kamgar Union Vs. Union of India, (1981) 1 SCC 568, Sachidanand Pandey Vs.

State of West Bengal, AIR 1987 SC 1109, Committee of Management of Pachaiyappa's Trust

Vs. Official Trustee of Madras, (1994) 1 SCC 475, etc. In that decision we have held thatordinarily public contracts should be given by open public auction or by inviting tenders, after

advertising the same in well known newspapers having wide circulation, so that all eligible

persons will have opportunity to bid in the same. However, the learned counsel for therespondents submitted that in respect of contracts worth less than Rs.5 lakhs, such contract is not

granted after advertisement in newspapers since such advertisements are very expensive. Hence,

notices are sent to notified registered contractors by certificate of posting, apart from pasting it in


23/28

the PWD office notice boards. In our opinion, notices for such contracts should be sent by

registered post and not by certificate of posting and this in our opinion would satisfy the

requirements of Article 14 of the Constitution.

66. As regards contracts above Rs.5 lakhs they should be advertised in well known newspapers

having wide circulation, so that Section 9 of the Tamil Nadu Transparency in Tenders Act, 1998and Article 14 of the Constitution are complied with.

67. It may be mentioned that under the 1998 Act Section 9(3) requires that they should beadvertised in daily newspapers. However, Section 16(d) says that the provisions of Section 9

shall not apply to low value and local purchases as may be prescribed.

68. Rule 33 of the Tamil Nadu Transparency in Tenders Rules, 2000 defines low value contracts

as follows:-

"33. Low value procurement - For the purpose of Clause (d) of

Section 16 of the Act, 'low value procurement' means any procurement which is less than rupeesfive lakhs in value".

69. Hence, in the case of contracts worth less than Rs.5 lakhs it is not necessary to advertise the

tender in newspapers.

70. There are some factual controversies in this case about what has happened in the past, but weare not commenting on the same since writ jurisdiction is not the appropriate forum for such

factual controversies. If the petitioner is so advised, he may file a civil suit in that connection.

We are only giving the necessary guidance for future contracts so that there should be

transparency in the same and the public revenue does not suffer and there may be no grievance

among any of the contractors. We are informed that the loading contracts are granted only for aperiod from one month to three months. Hence, we can only lay down some guidance for the

future.

71. Mrs.Nalini Chidambaram, learned senior counsel for the petitioners has vehemently

contended that the sixth respondent/M.Palanisamy, who is also a trader has set up his stock yardonly about two kilometers from the quarry site. In our opinion, there is no rule or regulation that

a stock yard cannot be set up within a few kilometers of the quarry site. At any event, even if

there is any violation of any statutory rule or regulation, the petitioners can always make a

complaint to the authorities concerned, who will then inquire into the matter, and passappropriate orders in accordance with law.

72. She has also submitted that with porclain sand is quarried more than 10 feet deep when as perthe guidelines the quarrying can be done only upto three feet deep. In our opinion, this relates to

quarrying and not to loading. Quarrying is done by the State Government itself through PWD,

while the loaders have only to load the sand which has been quarried. Hence, this submission hasno merit. Further, there is no such averment in W.P.Nos.12934 and 12935 of 2005, and hence we

cannot take cognizance of this allegation. At any event, if there is any violation of any rule or


24/28

G.O, the aggrieved party can always approach the concerned authority, and the said authority

will look into the complaint and pass appropriate orders in accordance with law.

73. Learned senior counsel then contended that a loader cannot also be a transporter. No rule or

regulation has been pointed out to us to this effect, and hence we cannot accept this submission.

As long as a loader is not misusing his position of a trader or transporter, we see no objection toa trader or transporter also being a loader.

74. It is then submitted that the tender value of Rs.5 lakhs gets exhausted in two days and thecontract is continuously extended in favour of the same person every two days. Thus, it is alleged

while the value of the contract is more than several crores of rupees a fraud has been played on

the Court by producing documents that the contract value is less than Rs.5 lakhs.

75. There is no such averment in W.P.Nos.12934 or 12935 of 2005, and hence we cannot take

congnizance of this submission. At any event, if there is any irregularity or illegality, theaggrieved person can always approach the authorities concerned, who will look into his

complaint and do the needful in accordance with law.

76. As regards the grievance that the loading contractors give preference to their own vehicles,

the same has been specifically denied in the counter affidavit wherein it is mentioned that all

lorries have to be in a queue and no one can break this queue. At any event, if there is anygrievance on this account, the concerned authority can be approached, who will look into thematter and do the needful.

77. The Supreme Court inState of Tamil Nadu v. M.P.P.Kavery Chetty, AIR1995 SC 858, has

upheld a provision in the Tamil Nadu Minor Mineral Concession Rules banning grant of

quarrying of leases to private persons. Since quarrying by private persons is banned obviously

the State Government is making arrangement for loading of the sand which has been quarriedand the method of this loading is for the State Government to decide and not for this Court to

prescribe.

78. The petitioner in W.P.No.19053 of 2005, namely, R.Panneerselvam has stated that he is a

lawful trader involved in the purchase and sale of sand. It appears that he has been unsuccessful

in the auctions held for awarding of the loading contract, and hence he has filed this writ petition.He is a partner in Chennai Earth Movers, and also a member of Then Chennai Puranagar Manal

Lorry Urimai Alar Sangam. All the 8 tenders in Kanchipuram District awarded in the year 2004

had been given to Chennai Earth Movers of which the said petitioner is also a partner. In our

opinion, this petition filed by R.Panneerselam is an abuse of the process of the Court and it isliable to be rejected on this ground alone. The Supreme Court in Mithilesh Garg v. Union of

India, AIR 1992 SC 443 following its earlier decisions in Jashbhai Desai v. Roshan Kumar, AIR

1976 SC 578 andRice and Flour Mills v. N.T.Gowda, AIR1971 SC 246 held that a rivalbusinessman cannot file a writ petition. Hence also these petitions are not maintainable.

79. The petitioners have made reckless allegations, many of which are false, and other relevantfacts have been concealed by them. We see no objection to the loading contracts awarded by the

PWD. After awarding of the contract, the lorry operators have to purchase a demand draft for the
http://www.indiankanoon.org/doc/263543/http://www.indiankanoon.org/doc/263543/http://www.indiankanoon.org/doc/263543/http://www.indiankanoon.org/doc/1298157/http://www.indiankanoon.org/doc/1298157/http://www.indiankanoon.org/doc/1298157/http://www.indiankanoon.org/doc/1298157/http://www.indiankanoon.org/doc/263543/


25/28

price of the sand fixed by the PWD inclusive of sales tax and loading charges and then they have

to stand in a queue with all the lorry operators, and bypassing the queue is not permitted. No

lorry without the demand draft for purchasing sand would be permitted to go inside the quarry.The demand draft has to be accepted by the PWD and only after it issues a receipt can the lorry

proceed to the quarry site. The averments in the counter affidavit show that there is no illegality

or malpractice and the petitioners have made false and reckless allegations in their petitions.Hence these petitions are liable to be dismissed.

80. Before parting with this case we would like to briefly comment on the subject of judicialrestraint while reviewing statutes or administrative decisions. We feel justified in making these

comments because the times which this country is passing through requires clarification of the

role of the judiciary vis-a-vis the executive and the legislature.

81. Under our Constitution the Judiciary, the Legislature and the Executivehave their own

broad spheres of operation. It is important that these organs do not encroach on each other's

proper spheres and confine themselves to their own, otherwise there will always be danger of a

reaction. Of the three organs of the State, it is only the judiciary which has the right to determinethe limits of jurisdiction of all these three organs. This great power must therefore be exercised

by the judiciary with the utmost humility and self - restraint.

82. The judiciary must therefore exercise self-restraint and eschew the temptation to act as a

super legislature or a Court of Appeal sitting over the decisions of the administrative authorities.By exercising self-restraint it will enhance its own respect and prestige. Of course, if a decision

clearly violates some provision of the law or Constitution or is shockingly arbitrary in the

Wednesbury sense, it can be struck down, but otherwise it is not for this Court to sit in appeal

over the wisdom of the legislature or the executive.

83. The Court may feel that a better decision could have been taken or some other course ofaction could have been adopted by the legislature or executive, but on this ground it cannot strikedown the law or the administrative decision. The legislature and the executive authorities in their

wisdom are free to choose different methods of solving a problem and the Court cannot say that

this or that method should have been adopted.As Mr. Justice Cardozo of the U.S. SupremeCourt observed in Anderson vs. Wilson, 289 U.S. 20:

"We do not pause to consider whether a statute differently conceived and framed would

yield results more consonant with fairness and reason. We take this statute as we find it."

84. In our opinion the same principle will apply to administrative decisions also.

85. It must never be forgotten that the administrative authorities have wide experience in

administrative matters.No Court should therefore strike downan administrative decisionsolely because it is perceived by it to be unwise. A Judge cannot act on the belief that he knows

better than the executive on administrative matters, because he can never be justifiablycertain

that he is right. Judicial humility should therefore prevail over judicial activism in this respect.


26/28

86. Judicial restraint is consistent with and complementary to the balance of power among the

three independent branches of the State. It accomplishes this in two ways. First, judicial restraint

not only recognizes the equality of the other two branches with the judiciary, it also fosters thatequality by minimizing interbranch interference by the judiciary. In this analysis, judicial

restraintmay also be called judicial respect, that is, respect by the judiciary for the other

coequal branches. In contrast, judicial activism's unpredictable results make the judiciary amoving target and thus decreases the ability to maintain equality with the co-branches. Restraintstabilizes the judiciary so that it may better function in a system of interbranch equality.

87. Secondly, judicial restraint tends to protect the independence of the judiciary. When courts

encroach into the legislative or administrative fields almost inevitably voters, legislators, and

other elected officials will conclude that the activities of judges should be closely monitored. If

judges act like legislators or administrators it follows that judges should be elected likelegislators or selected and trained like administrators. This would becounterproductive. The

touchstone of an independent judiciary has been its removal from the political or administrative

process. Even if this removal has sometimes been less than complete, it is an ideal worthy of

support and one that has had valuable effects.

88. The constitutional trade - off for independence is that judges must restrain themselves fromthe areas reserved to the other separate branches. Thus, judicial restraint complements the twin,

overarching values of the independence of the judiciary and the separation of powers.

89. The Court should always hesitate to declare statutes or administrative decisions as

unconstitutional, unless it finds it clearly so. As observed by the Supreme Court in M.H. Qureshi

vs. State of Bihar ( supra), the Court must presume that the legislature understands and correctly

appreciates the need of its own people. The legislature is free to recognize degrees of harm andmay confine its restrictions to those where the need is deemed to be the clearest. In the same

decision it was also observed that the legislature is the best judge of what is good for thecommunity on whose suffrage it came into existence. In our opinion the same principle will alsoapply to administrative decisions.

90. In Lochner vs. New York, 198 U.S. 45 (1905), Mr. Justice Holmes of the U.S. SupremeCourt in his dissenting judgment criticized the majority of the Court for becoming a super

legislature by inventing a 'liberty of contract' theory, thereby enforcing its particular laissez -

faire economic philosophy. Similarly, in his dissenting judgment in Griswold vs. Connecticut,381 U.S. 479, Mr. Justice Hugo Black warned that "unbounded judicial creativity would

make this Court a dayto-day Constitutional Convention." In 'The Nature of the Judicial

Process' Justice Cardozo remarked: "The Judge is not a Knight errant, roaming at will in

pursuit of his own ideal of beauty and goodness."Justice Frankfurter has pointed out thatgreat judges have constantly admonished their brethren of the need for discipline in observing

their limitations (see Frankfurter's 'Some Reflections on the Reading of Statutes').

91. In this connection we may usefully refer to the well-known episode in the history of the U.S.

Supreme Court when it dealt with the New Deal Legislation of President Franklin Roosevelt.

When President Roosevelt took office in January 1933 the country was passing through a terribleeconomic crisis - the Great Depression. To overcome this, President Roosevelt initiated a series


27/28

of legislation called the New Deal, which were mainly economic regulatory measures. When

these were challenged in the U.S. Supreme Court the Court began striking them down on the

ground that they violated the due process clause in the U.S. Constitution. As a reaction, PresidentRoosevelt proposed to reconstitute the Court with six more Judges to be nominated by him. This

threat was enough, and it was not necessary to carry it out. The Court in 1937 suddenly changed

its approach and began upholding the laws. ' Economic due process' met with a sudden demise.

92. The moral of this story is that if the judiciary does not exercise restraint and over-stretches its

limits there is bound to be a reaction from politicians and others. The politicians will then step inand curtail the powers, or even the inde

low value procurement court case.docx

Documents

Transcript of low value procurement court case.docx