B.S.N.L. Ltd. v. Bhupender Minhas, (SC) BS143721
SUPREME COURT OF INDIA

Before:- Dr. Arijit Pasayat and P. Sathasivam, JJ.

Civil Appeal 2283 of 2008 (Arising out of S.L.P. (C) No. 4778 of 2004). D/d. 31.3.2008.

B.S.N.L. Ltd. and another - Appellants

Versus

Bhupender Minhas and others - Respondents

WITH Civil Appeal No. 2284 of 2008 (Arising out of S.L.P. (C) No. 3232 of 2004), Civil Appeal No. 2287 of 2008 (Arising out of S.L.P. (C) No. 6225 of 2004), Civil Appeal No. 2286 of 2008 (Arising out of S.L.P. (C) No. 6307 of 2004).

For the Appellants :- Ajit Singh Bawa, Arjun Singh Bawa and S. Thananjayan, Advocates.

For the Respondents :- Ms. Madhu Moolchandani, Ashok K. Mahajan and T. Raja, Advocates.

Constitution of India, 1950, Article 226 - Contractual Matters - Policy decision - Notice of Inviting Tenders - Containing a disqualification clause which disentitled an intending tenderer to submit tender whose near relative is working in any of the units of the appellant-BSNL - Whether person belonging to class III or class IV can be in a position to influence the decision making process in respect of tender ? - Held, it can certainly be provided that other things being equal, preference will be given to those whose relatives are not in employment in any unit.

[Paras 3 and 11]

Cases Referred :-

Narinder Kumar v. Union of India, C.W.P. No. 33 of 1995.

S.N. Engineering Works v. Mahanagar Telephone Nigam Ltd., 1996(37) DRJ 446.

Air India Ltd. v. Cochin International Airport Ltd., 2000(2) RCR (Civil) 670 : (AIR 2000 Supreme Court 801).

Directorate of Education v. Educomp Datamatics Ltd., 2004(2) RCR (Civil) 486 : (AIR 2004 Supreme Court 1962).

Tata Cellular v. Union of India, 1994(6) SCC 651.

JUDGMENT

Dr. Arijit Pasayat, J. - Leave granted.

2. These appeals involved identical issues. While two appeals are against the judgment of the Himachal Pradesh High Court, the other two are against the judgments of the Punjab and Haryana High Court.

3. The controversy lies in a very narrow compass. Writ petitions were filed by the respondents in each case questioning correctness of a stipulation in the "Notice Inviting Tender" (in short 'NIT') containing a disqualification clause which disentitled an intending tenderer to submit tender whose near relative is working in any of the units of the appellant-BSNL. According to the writ-petitioners such a prohibition was impermissible. It was submitted that if the ultimate intention was to ensure that a person working in the unit will not be able to influence the decision-making process in respect of the tender, the same is irrelevant if the person concerned is holding a post of Class III or Class IV. The Himachal Pradesh High Court referred to an earlier order passed by a Division Bench of the High Court in Narinder Kumar v. Union of India and Anr. (C.W.P. No. 33 of 1995), where a similar stipulation was struck down. Accordingly, the High Court held that the stand of the respondents in the writ petition with reference to the communication issued by the Bharat Sanchar Nigam Limited bearing No. 151-08/2002 O&M/38 dated 11.9.2002 cannot be sustained. It was observed that Rule 4 of Government of India's CCS (Conduct) Rules, 1964 had no relevance. Accordingly, the writ petition was allowed by order dated 24.5.2003 in Civil Writ Petition No. 122/2003. The said decision was followed in Civil Writ Petition No. 269(M/B) of 2003 by order dated 13.8.2003. The Punjab and Haryana High Court has expressed a similar view in Civil Writ Petition No. 12799 of 2003 by order dated 4.11.2003 and Civil Writ Petition No. 18439 of 2003 by order dated 9.1.2004.

4. The appellants' stand is that the stipulation is essentially a policy decision that too in a contractual matter and the High Court should not have interfered.

5. Respondents submitted that in view of the irrationality, the High Court in each case was justified in its view.

6. It appears that the Delhi High Court had occasion to deal with a similar issued in S.N. Engineering Works v. Mahanagar Telephone Nigam Ltd. 1996(37) DRJ 446. The conditions which were under consideration of the Delhi High Court were Clauses (J) and (K) of NIT providing as follows :

APPENDIX-V(DECLARATION)
APPENDIX-V

Name of The CONTRACTOR

CAPACITY in which signing)

Station

Date"

7. It is to be noted that the aforesaid conditions specified the category of the employees to whom the restrictions applied. Two conditions were stipulated. One is a ban on the category of officers, while there was a necessity of intimation so far relatives in respect of other posts. Para 9.2 deals with an undertaking which refers to "any capacity". In para 18 of the judgment it was noted as follows :

The stress was on a defined category.

8. The judgment of the Delhi High Court did not relate to BSNL and related to department of telecommunication. The concerned officials were Junior telecom officers.

9. In Air India Ltd. v. Cochin International Airport Ltd. and Ors., 2000(2) RCR (Civil) 670 : (AIR 2000 Supreme Court 801) it was observed at para 7 as follows :

10. In Directorate of Education and Ors. v. Educomp Datamatics Ltd. and Ors., 2004(2) RCR (Civil) 486 : (AIR 2004 Supreme Court 1962) after referring to the decision in Tata Cellular v. Union of India, (1994(6) SCC 651), it was observed as follows:

(emphasis supplied)

11. The ultimate objective appears to be that the official concerned should not be in a position to influence the decision-making process. Then the question would be whether a person belonging to Class III or Class IV can be in a position to do so. It can certainly be provided that other things being equal, preference will be given to those whose relatives are not in employment in any unit. In the instant case the period for contract is stated to be over. The conditions as noted in the Delhi High Court judgment appear to be rational.

12. The authorities can certainly consider the methodology indicated above in future. So far as the present appeals are concerned, the High Courts decisions cannot be sustained as correct principles have not been kept in view. But in the absence of any order of stay, the appeals have become infructuous by passage of time.

13. The appeals are accordingly disposed of. No costs.

Appeal disposed of.