judgement:
Appeal No. 47 of 1979.
From the Judgment Order dated 20.1.77 of the Gujarat High Court in Second Appeal No. 90 of 1976.
Krishan Kumar for Vimal Chandra section Dave for the Appellants.
Ms. Meenaksh Arora for Anip Sachthey for the Respondent.
The Judgment of the Court was delivered by ANAND, J.
This appeal by special leave, is directed against the judgment of the Gujarat High Court dated 20th of January, 1977 in Second Appeal No. 90 of 1976.
The plaintiffs appellants are the farmers of the Village Morzar under Bhanwad Taluka of Jamnagar District.
Their lands are situated on the outskirts of the village.
Under the Vartu Dam Irrigation Scheme, the defendant State proposed to construct a Dam on river Vartu and prepared a sketch, indicating the passage of the canal from Vartu Dam and for that purpose, it proceeded to acquire land through which the canal was proposed to run.
The plaintiffs appellants apprehended serious damage to their lands by the passing of the canal through their lands and they filed a Regular Civil Suit in 1966 against the defendant State, seeking to restrain it from implementing the Irrigation Scheme, as proposed.
Suit was registered and defendants were summoned.
During the pendency of the suit, it appears that an agreement was arrived at between the parties and it was agreed that the canal from Vartu Dam would be run as per the line demarcated in red in the map appended to the deed of agreement Ex.45.
As a result of the said agreement the suit was unconditionally withdrawn by the plaintiffs on 24.11.1966.
Somewhere in 1972, the plaintiffs appellants discovered that the State Government was going back from the agreement and alignment of the canal was being undertaken contrary to the alignment reflected in the map appended to the agreement Ex.45.
They, therefore, filed a fresh suit for declaration to the effect that the agreement, dated 7.11.1966, entered into between them and the respondents through its Executive Engineer, Irrigation Department Jamnagar, was binding on the parties and that the parties were bound to act according to the terms of the said agreement and for an injunction, restraining the defendant State from going back on the agreement.
This suit of the plaintiffs appellants was contested and the following issues were framed 371 (1) Whether the suit agreement dated 7.11.1966 is not binding to the defendant ? (2) If it is binding whether the plaintiff prove that they have complied with the terms and conditions of this agreement? (3) Whether the suit as framed is not maintainable? (4) Whether the suit is bad for the mis joinder of the plaintiffs and the cause of action? (5) Whether the suit is not maintainable as the agreement dated 7.11.1966 has not been registered of because no compromise decree had been passed in terms of this agreement? (6) Whether the suit is not in time? (7) Whether the plaintiffs are entitled to the declaration sought? (8) Whether the plaintiffs are entitled to get the permanent injunction as prayed for by them? (9) What order? Issues 1 to 8 were decided in favour of the plaintiffs appellants and against the defendant State.
The Trial Court decreed the suit and declared that the suit agreement dated 7.11.1966 entered between the plaintiffs and the defendants through its executive engineer, was binding on the parties and that the parties were bound to act in accordance with the terms of the said compromise the defendant state was permanently restrained from going back from the agreement and act otherwise than as per the terms of the same.
The State of Gujarat preferred an appeal in the Court of District Judge Jamnagar against the judgment and decree of the Trial Court.
During the hearing, the parties confined their arguments to the following two points (1) Whether the agreement dated 7.11.66 is binding to the 372 State of Gujarat? (2) Whether the plaintiffs are entitled to the reliefs, granted to them by the trial court? The appellate court answered both the questions in the affirmative and by its order dated October 20, 1975 confirmed the judgment and decree of the trial court.
The appeal of the State of Gujarat was dismissed.
The State filed a Second Appeal in the High Court.
The High Court examined the agreement dated 7.11.1966, exhibit 45 which is in Gujarati and is described as Rojkam on the subject of the alignment of Vartu Canal.
The High Court noticed that the Rojkam refers to the filing of the suit in the Civil Court and the meeting between the Executive Engineer and the occupants of land and proceeded to recite that on the aforesaid subject there was discussion of the Executive Engineer with the occupants and thereafter both the sides have amicably settled(compromised) the dispute with regard to the alignment of the canal.
The Rojkam further records that both the sides have agreed to the alignment shown in rose colour in the map.
The Rojkam then records: "The Executive Engineer Mr. B.V. Nanavati having assured of getting necessary alterations as aforesaid made, they (i.e., the plaintiffs or the occupants) have shown willingness to withdraw unconditionally the suit filed in Civil Court.
" The Rojkam is signed by the Executive Engineer as also by the occupants.
Before the High Court, the main plea raised by the State was that the alleged compromise/agreement was not binding upon the State.
It was stated that the State does not admit any agreement made by the Executive Engineer either on behalf of the State or as a representative of the State and, therefore, the so called agreement did not bind the State Government.
It was asserted by the State that the Executive Engineer had no authority to agree on behalf of the State Government as he was not the representative of the Government.
Similar plea had been raised before the trial court and the lower appellate court but was rejected.
The High Court, however, accepted the plea of the State and found that the courts below had erred in ignoring the mandatory provisions of Article 299 of the Constitution of India which mandates that all contracts made in the exer 373 cise of the executive power of the Union or of a State shall be expressed to be made by the President or by the Governor of a State, as the case may be, and all such contracts and all assurances of property made in the exercise of that power shall executed on behalf of the President or the Governor by such persons and in such a manner as he may direct or authorise.
The High Court found that for non compliance with the provisions of Article 299(1) of the Constitution of India which are mandatory in character, the agreement exhibit 45, was a null and void document.
The High Court then observed : "Apart from the question whether the Executive Engineer in the present case was directed or authorised to execute this agreement on behalf of the State Government, it is clear on the face of the document Ex.45 itself that the alleged agreement contained therein is not expressed to be made by the Governor.
This position is incontrovertible and even Mr. Shah for plaintiffs respondents was not able to show that the document Exh.45 contains an agreement expressed to be made by the Governor.
Really speaking, on a correct interpretation of this document Exh.45, it only contains basis of the compromise terms between the Executive Engineer and the occupants (who probably were plaintiffs of the earlier suit) as regards the change of alignment; and pursuant to which compromise the plaintiffs agreed to withdraw the suit.
The Governor or the State Government is nowhere in the picture if we go through this agreement.
Therefore, assuming that the document contains an agreement in reality it is an agreement not by the Governor or the state Government but by the Executive Engineer with the occupants who signed the same.
Such an agreement which is not in compliance with the provisions of Article 299 of the Constitution is void and unenforceable against the State.
If this is so, the suit filed by the respondents plaintiffs must fail.
" The High court negatived the contention raised on behalf of the plaintiffs appellants to the effect that under the statutory powers conferred by Section 18 of the Bombay Irrigation Act, 1879 (hereinafter called the Act), the Executive Engineer was competent to enter into compromise and 374 that the said compromise arrived at during the pendency of the earlier suit was binding on the Government.
The High Court said : "Then it was contended that in exercise of his powers under section 18 of the aforesaid Act, the Executive Engineer acts for the Government; and, therefore, the agreement in question is binding on the Government.
There is an inherent misconception underlying this contention.
While exercising statutory powers i.e. powers conferred by a statute an officer of the Government does not act for the Government.
He acts not because of any authority derived from the Government to exercise power conferred on him by the Statute.
This contention must also fail." As a consequence, the appeal filed by the State was allowed and the judgment and decree passed by the courts below were reversed and the suit filed by the plaintiffs appellants was dismissed with costs throughout.
Learned counsel for the appellants has assailed the judgment of the High Court and submitted that the agreement/compromise, Ex.45, had been validly entered into by the Executive Engineer with the appellants in view of the statutory powers vested in the Executive Engineer under Section 18 of the Act and reliance placed on Article 299 of the Constitution of India, in the facts and circumstances of this case, was wholly erroneous.
It was urged that by a Notification, dated 27th of September 1963, published in Part IV B of the Gujarat Government Gazette dated 31st of October, 1963, the Government of Gujarat had appointed all Executive Engineers and superintending Engineers in charge of canals in the State of Gujarat to be Canal Officers in respect of such canals and assigned to them all the powers and duties of the Canal Officers under the Act, and, therefore, the agreement/compromise entered into by the Executive Engineer on 7.11.1966 during the pendency of the suit of which he was doing "pervi" was a validly executed compromise which was binding on the parties and the respondent could not go back on it.
Having been made to withdraw their earlier suit on the basis of the agreement, dated 7.11.1966, it was not permissible for the respondent to now dispute the act done by its officers or agents within their powers under the statute.
In the facts and circumstances of this case, we find force in the submission of learned counsel for the appellants regarding the non ap 375 placability of Article 299 of the Constitution of India to invalidate the agreement/compromise dated 7.11.1966 arrived at during the pendency of the earlier suit filed by the appellants relying whereupon the appellants withdrew the earlier suit.
The agreement/compromise Ex.45, arrived at in the previous suit, could not have been equated with a contract between the State and the citizen.
Article 299 (1) which reads thus : "All contracts made in the exercise of the executive power of the Union or of a State shall be expressed to be made by the President, or by the Governor of the State, as the case may be, and all such contracts and all assurances of property made in the exercise of that power shall be executed on behalf of the President or the Governor by such persons and in such manner as he may direct or authorise.
" concerns itself with contracts and assurances of property and lays down how Government contracts, including assurances of property are to be made and executed.
Indeed, the provisions of Article 299 are mandatory in character and their non compliance would render a contract void but where the agreement is not referable to Article 299 and is not a contract, as contemplated by that Article, the agreement cannot be invalidated for not satisfying the essential requirements of Article 299 of the Constitution.
A compromise of the nature contained in the agreement dated 7.11.1966, arrived at during the pendency of a suit, is not a contract executed between the parties as envisaged by Article 299.
There is a marked distinction between contracts which are executed in exercise of the executive powers and agreements or orders made which are statutory in nature.
Article 299(1) applies to a contract made in exercise of the executive power of the Union or the State and it has no application to a case where a particular statutory authority, as distinguished from the Union or the State, enters into an agreement within his authorised capacity.
In State of Haryana & Ors.
vs Lal Chand & Ors., ; this Court considered a contract granting exclusive privilege of liquor vending, in exercise of the statutory powers referable to Punjab Excise Act, 1914 and Punjab Liquor Licence Rules, 1956, and held that the grant of the exclusive privilege gave rise to a contract of a statutory nature, distinguished from the one executed under Article 299(1) and, therefore, compliance with Article 299(1) was not required in such a case.
376 The question which immediately arises for our consideration is : Was the Executive Engineer competent to execute the agreement Ex.45? In this connection, it would be relevant to refer to some of the more relevant statutory provisions contained in the Act.
Section 3(6) provides as follows : (6) "Canal Officer" means any officer lawfully appointed or invested with powers under section 4; Section 17 reads thus; "Any persons desiring to construct a new water course, but being unable or unwilling to construct it under a private arrangement with the holder of the land required for the same, may apply in writing to any Canal Officer duly empowered to receive such applications, stating; (1) that he is ready to defray all the expense necessary for acquiring the land and constructing such water course; (2) that he desires the said Canal Officer in his behalf and his cost to do all things necessary for constructing such water course.
" Section 18 provides as follows "If the Canal Officer considers the construction of such water course expedient, he may call upon the applicant to deposit any part of the expense to such officer may con sider necessary, and upon such deposit being made, shall cause inquiry to be made into the most suitable alignment for the said water course, and shall mark out the land which, in his opinion, it will be necessary to occupy for the construction thereof, and shall forthwith publish a notification in every village through which the water ' course is proposed to be taken, that so much of such land as is situated within such 377 village has been so marked out, and shall send a copy of such notification to the Collector of every district in which such land is situated, for publication on such land.
The said notification shall also call upon any person who wishes to share in the ownership of such water course to make his application in that respect to the Canal Officer within thirty days of the publication of such notification.
If any such applicant appears, and his application is admitted, he shall be liable to pay his share in the construction of such water course, and in the cost of acquiring the land for the same, and shall be an owner of such water course when constructed.
" Powers of the canal officers are contained in Section 77 reads thus "(1) For the purpose of the inquiries under section 76 such Canal Officer may enter, by himself or any officer authorised by him for the purpose, upon any land adjacent to any such work, and may survey, demarcate and make a map of the same.
(2)Notwithstanding anything contained in section 76 where no sufficient evidence is forthcoming as to all or any of the matters specified in that section such Canal Officer shall, so far as may be, settle and record the aforesaid matters in such manner as he may deem fit.
" A perusal of the record reveal that it was the Executive Engineer who was doing "pervi" of the case in the suit filed.
in 1966.
The agreement (compromise) Ex.45 was entered into during the pendency of the said case.
As already noticed the Government of Gujarat had appointed all Executive Engineers and Superintending Engineers in charge of Canals in the State of Gujarat to be Canal Officers in respect of such canals and assigned to them all the powers and duties of the Canal Officers under the Act by virtue of the Notification dated 27th September, 1963.
Thus, it is manifest that the Executive Engineer, by virtue of the said Notification, had been lawfully appointed as Canal Officer within the meaning of Section 378 3(6) of the Act.
Section 18 of the Act vests the Canal Officer with the power to hold inquiry and direct the construction of suitable alignments for a water course and by Section 77 of the Act (supra) the Canal Officer is vested with the authority to survey, demarcate and make a map of the land which in his opinion is suitable for constructing an alignment for the water course.
Thus, under the statute,, read with the Notification dated 27th September 1963, the Canal Officer (Executive Engineer) was fully com petent to decide about the particular alignment of the water course and it fell within his jurisdiction to decide and settle about the suitable demarcation of the alignment of the water course of the canal from Vartu Dam.
He exercised that jurisdiction under the statute when he demarcated the water course in red, in the map attached to Ex.45, the agreement.
It is the content of the agreement and not its form which is relevant to trace the source of power behind it and when examined in the light of the statutory provisions noticed above, it is manifest that the document Ex.45 has been executed by the Executive Engineer by virtue of the statutory powers vested in him.
The circumstance that the agreement Ex.45 came into existence during the pendency of the suit and was executed by way of an agreement does not militate against the order of alignment as reflected therein being any less statutory in character.
As a matter of fact the Act itself envisages that the Canal Officer may alter and settle the alignment in consultation with the landholders through which the water course is to run.
In the agreement Ex.45, the Executive Engineer had agreed to alter the alignment of the water course in consultation with the petitioners who thereupon ,unconditionally ' withdrew the suit as it appears no grievance remained to be settled.
The altered alignment was, therefore, validly made by following the procedure envisaged by the Act.
The High Court fell in error in ignoring this aspect of the case.
It failed to appreciate the statutory powers of the Executive Engineer, vested in him under Sections 18 and 77 of the Act read with the notification of 27th September, 1.963 on the true import of agreement Ex.45.
Thus, in the facts and circumstances of the case we are satisfied that the agreement dated 7.11.1966, exhibit 45 was lawfully executed by the Executive Engineer in exercise of his statutory powers under the Act and the State was obliged to act according to the terms of the said agreement and could not give it a go bye without following the procedure under the Act to again alter the alignment.
It is nobody 's case that for making an alteration in the alignment, the requisite exercise was undertaken, as envisaged by the Act, in 1972, when the suit out of which 379 these proceedings have arisen was filed.
In view of the aforesaid discussion, the judgment and decree of the High Court deserves to be set aside and are hereby set aside.
The judgment and decree passed by the Trial Court as confirmed by the District Judge are restored though for different reasons, as detailed above.
The appeal is consequently allowed.
The parties, however, shall bear their own costs throughout.
Before parting with the judgment, we would also like to clarify certain position.
The dispute is almost three decades old.
Learned counsel for the parties were unable to state as to whether fresh alignments as envisaged by the red line in the map attached to Ex.45, agreement, had been made for the passing of the canal or not.
We would, therefore, like to clarify that if any fresh alignment for the water course is required to be made, different than the one originally proposed or the one contained in the said Map, the same may be made but only by following the procedure prescribed under the Act and this judgment shall not be construed as any bar therefore.
N.P.V. Appeal allowed.

summary:
Under an Irrigation Scheme, the respondent State proposed to construct a dam on a river in the State and prepared a sketch, indicating the passage of the canal from the Dam and for that purpose, proceeded to acquire land through which the canal was proposed to run.
Apprehending that serious damage will be caused to their lands by the passing of the canal through their lands, the appellants farmers filed a suit against the respondent State, seeking to restrain it from implementing the Irrigation Scheme, as proposed.
During the pendency of the suit an agreement was arrived at between the parties to the effect that the canal from the Dam would be run as per the line demarcated in red in the map appended to the deed of agreement.
As a result, the suit was unconditionally withdrawn by the appellants, but subsequently, on discovering that the State Government was going back from the agreement and the alignment of the canal was being undertaken contrary to the alignment reflected in red in the map appended to the agreement, they filed a fresh suit for declaration to the effect that the agreement entered into between them and the respondents through its Executive Engineer, Irrigation Department, was binding on the 367 parties and that the parties were bound to act according to the terms of the said agreement and for an injunction, restraining the respondent State from going back on the agreement.
The trial court decreed the suit and permanently restrained the State from going back from the agreement and acting otherwise than as per the terms of the same.
The appeal preferred by the State was also dismissed by the District Judge.
The State riled a second appeal before the High Court contending that the alleged compromise/agreement was not binding upon the State, inasmuch as the Executive Engineer had no authority to agree on behalf of the State Government as he was not the representative of the Government.
The High Court held that the agreement was a null and void document for non compliance with the mandatory provisions of Article 299(1) of the Constitution.
It also rejected the appellants ' plea that under the statutory powers conferred by section 18 of the Bombay Irrigation Act, 1879 the Executive Engineer was competent to enter into a compromise and that the said compromise arrived at during the pendency of the earlier suit was binding on the Government.
In the appeal filed before this Court on behalf of the appellants farmers, it was submitted that reliance placed on Article 299 of the Constitution of India was wholly erroneous, that by a Notification, dated 27th of September 1963, published in Part IV B of the Government Gazette, the State Government had appointed all Executive Engineers and Superintending Engineers in charge of canals in the State to be Canal Officers in respect of such canals and assigned to them all the powers and duties of the Canal Officers under the Act and, therefore, the agreement/compromise entered into by the Executive Engineer during the pendency of the suit of which he was doing 'pervi ' was a validly executed compromise which was binding on the parties and respondent could not go back on it, and that after having made the appellants to withdraw their earlier suit on the basis of the agreement, it was not permissible for the respondent to dispute the act done by its officers or agents within their powers under the statute.
Allowing the appeal, this Court, HELD : 1.1.
The agreement/compromise arrived at in the previous 368 suit, could not have been equated with a contract between the State and the citizen.
Article 299(1) of the Constitution concerns itself with contracts and assurances of property and lays down how Government contracts, including assurances of property are to be made and executed.
The provisions of Article 2" are mandatory in character and their non compliance would render a contract void, but where the agreement is not referable to Article 299 and is not a contract, as contemplated by that Article, the agreement cannot be invalidated for not satisfying the essential requirements of Articles 299 of the Constitution.
[375B, D E] 1.3.
There is a marked distinction between contracts which are executed in exercise of the executive powers and agreements or orders made, which are statutory in nature.
Articles 299(1) applies to a contract made in exercise of the executive power of the Union or the State and it has no application to a case where a particular statutory authority as distinguished from the Union or the State, enters into an agreement within his authorised capacity.
[375F] State of Haryana and Ors.
vs Lal Chand and Ors., ; , relied on.
A compromise of the nature contained in the agreement arrived at during the pendency of a suit, in the instant case is not a contract executed between the parties as envisaged by Article 299.
[375E] 2.1 It is clear from the record that it was the Executive Engineer who was doing 'pervi ' of the case in the suit filed earlier.
The agreement in question was entered into during the pendency of the said case.
The State Government had appointed all Executive Engineers and Superintending Engineers in charge of canals in the State to be Canal Officers in respect of such canals and assigned to them all the powers and duties of the Canal Officers under the Act by virtue of the Notification dated 27th September, 1963.
Thus, it is manifest that the Executive Engineer, by virtue of the said Notification, had been lawfully appointed as Canal Officer within the meaning of Section 3(6) of the Bombay Irrigation Act, 1879.
[377F H, 378A] 2.2.
Section 18 of the Act vests the Canal Officers with the power to 369 hold Inquiry and direct the construction of suitable alignments for a water course and by Section 77 of the Act a Canal Officer Is vested with the authority to survey, demarcate and make a map of the land which, in his opinion, Is suitable for constructing an alignment for the water course.
[378A] 23.
Thus, under the statute, read with the notification dated 27th September, 1963, the Canal Officer (Executive Engineer) was fully competent to decide about the particular alignment of the water course and it fell within the jurisdiction of the Canal Officer to decide and settle about the suitable demarcation of the alignment of the water course of the canal from the Dam, in question and he exercised that jurisdiction under the statute when he demarcated the water course in red, in the map attached to the agreement.
It is the content of the agreement and not its form which is relevant to trace the source of power behind it and in the light of the statutory provisions, it Is manifest that the document has been executed by the Executive Engineer by virtue of the statutory powers vested In him.
The circumstance that the agreement came into existence during the pendency of the suit and was executed by way of an agreement does not militate against the order of alignment as reflected therein being any less statutory in character.
[378B D] 2.4.
The Act itself envisages that the Canal Officer may after and settle the alignment in consultation with the landholders through which the water course is to run.
In the agreement in question, the Executive Engineer had agreed to alter the alignment of the water course in consultation with the appellants who thereupon 'unconditionally ' withdrew the suit since no grievance remained to be settled.
The altered alignment was, therefore, validly made by following the procedure envisaged by the Act.
The High Court fell in error in ignoring the statutory powers of the Executive Engineer, vested in him under Sections 18 and 77 of the Act read with the notification or 27th September, 1963 on the true import of agreement.
[378E F] 2.5.
Under these circumstances, the agreement was lawfully executed by the Executive Engineer in exercise of his statutory powers under the Act and the State was obliged to act according to the terms of the said agreements and could not give it a go bye without following the procedure under the Act to again alter the alignment [378G] 370


judgement:
(C) Nos.
1189798 of 1992 etc.
From the judgment and Order dated 28.8.1992 of the Delhi High Court in Civil Writ Petition Nos.
1152 & 1157 of 1992.
V.R. Reddy, Addl.
Solicitor General, Kapil Sibbal, P.P. Rao, Rama Jois, A. Temton, Dr. Shankar Ghosh, K.K Venugopal, Harish Salve, F.S. Nariman, A.N. Haksar, Shanti Bhushan, K.N. Bhat, T.R. Andhyarujina, C.V. Subba Rao, P.P. Singh, Mrs B. Sunita Rao, Sudhir Kulshreshtha, Rohit Tandon, Parijat Sinha, Ms Sunanda Roy, Ms. section Bhattacharya, B.D. Ahmed, Man Mohan Singh, Gopal Subramanium, D.N. Mishra, A.M. Dittia, P. K. Ganguli, Manoj K. Das, Amit Prabhat, Tripurary Roy, K.L. Mehta, section Ganesh, Pratap Venugopal, K.J. John, Pramod Dayal, Ajay K. Jain and D.N. Najjunda Reddy for the appearing parties.
The following Order of the Court was delivered by 116 K. JAYACHANDRA REDDY, J. All these Special Leave Petitions arise out of the common judgment of the High Court of Delhi in Civil Writ Petitions Nos. 1 152 and 1 157/92.
We heard these matters for considerable length of time.
Eminent counsel appearing on both sides advanced detailed arguments.
After the conclusion of the hearing it was represented that having regard to the constraint of time factor, namely that the contracts with the Railways entered into by the manufacturers who are parties, have to be completed very soon the judgment in these matters has to be delivered as early as possible or at least the conclusions have to be given soon.
We are conscious of the fact that it is likely to take considerable time to deliver a detailed judgment.
However having gone through the records carefully and after due consideration of the various arguments advanced, we have reached the conclusions given hereunder and we propose to deliver the detailed judgment at a later stage giving all the reasons in support of these conclusions.
We, however, think it necessary to state a few relevant facts and the issues involved in a concised form before we set out our conclusions.
Every year the Railway Board enters into contracts with the manufacturers for the supply of cast steel bogies which are used in turn for building the wagons.
Cast steel bogies come under a specialised item procured by the Railways from the established sources of proven ability.
There are 12 suppliers in the field who have been regularly supplying these items.
Two new firms Simplex and Beekay also entered the field.
Among them admittedly M/s H.D.C., Mukand and Bhartiya are bigger manufacturers having capacity to manufacture larger quantities.
On 25, 10.91 a limited tender notice for procurement of 19000 cast steel bogies was issued to the regular suppliers as well as the above two new entrants for the year namely from 1.4.1992 to 31.3.93.
The last date for submission of offers to the Ministry of Railways was 27.11.91 by 2.30 P.M. and the tenders were to be opened on the same day at 3 P.M.
It was also stated therein that the price was subject to the price variation clause and the base date for the purpose of escalation was 1.9.91 and that the Railway reserved the right to order additional quantity upto 30% of the ordered quantity during the currency of the contract on the same price and terms and conditions with suitable extensions in delivery period.
The offers were to remain open for a period of 90 days.
On that day the tenders were opened in the presence of all parties.
The price quoted by the three manufacturers 117 i.e M/s H.D.C., Mukand and Bharatiya was an identical price of Rs. 77,666 per bogie while other tenderers quoted between 83.000 and 84,500 per bogie.
After the tenders were opened and before the same could be finalised, the Government of India announced two major concessions namely reduction.
of custom duty on the import of steel scrap and dispensation of freight equalisation fund for steel.
The tenders were put up and and placed before the Tender Committee of the Railways which considered all the aspects.
The committee concluded that three of the tenderers namely M/s H.D.C., Mukand and Bharatiya who had quoted identical rates without any cushion for escalation between 1.7.91 and 1.9.91, have apparently formed acartel.
The Tender committee also noted that the rates quoted by them were the lowest.
Taking into consideration the reduction of Rs. 1500 as a result of the concessions in respect of the reduction of custody duty on the import of steel scrap and dispensation of the freight equalisation fund for steel, the Tender Committee concluded that the reasonable rate would be Rs.76,000per bogie.
On the question of distribution of quantities to the various manufacturers the Tender committee decided to follow the existing procedure.
The Tender Committee.
signed these recommendations on 4.2.92 but on the same day the Member (Mechanical) of the Committee received letters from M/s H.D.C. and Mukand.
M/s H.D.C. in its letter stated that in view of the concessions and also on the basis that per kg.
rate of casting per bogie could be reduced from Rs.37.50 to Rs.29 the cost of casting can also be reduced and therefore they would be in a position to supply the bogies at a lesser rate, in case a negotiation meeting is called.
M/s Mukand in its letter also offered to substantially reduce the prices and they would like to co operate with the Railways and the Government and bring down the prices as low as possible and asked for negotiations.
Though this was post tender correspondence, the Department felt that the offers made by M/s H.D.C. and Mukand could be considered.
The whole matter was examined by the Advisor (Finance) in the first instance and by an elaborate note he observed that the need for encouraging open competition to improve quality and bring down costs has been recommended by the Government and if it is intended to continue the existing policy of fixing a rate and distributing the order among all the manufacturers, then negotiations may not be useful as uniform prices offered to all manufacturers have to be sufficient even for the smaller and less economical units and that as any review of the 118 existing policy would take time, the present tender can be decided on the basis of the existing policy.
With this noting the file was immediately sent to the Member ( Mechanical), the nest higher authority.
He with some observation, however recommended the acceptance of the Tender Committee 's recommendations.
The file was then put up to Financial Commissioner, He noted that the Tender Committee was convinced that the three manufacturers who quoted identical price of Rs. 77,666 had formed a cartel.
He also considered the offers made by M/s H.D.C. and Mukand and observed that these three manufacturers who quoted a cartel price intended to get a larger order on the basis of such negotiated price which would eventually nullify the competition from the other manufacturers and lead to their industrial sickness and subsequently to monopolistic price situation.
lie, however, approved the Tender committee 's recommendations that a counter offer of Rs. 76,000 may be accepted but in the case of M/s H.D.C. a price lower by Rs. 1 1,000 may be offered as per their letter dated 4.2.92.
lie also recommended that the two manufacturers M/s. Cimmco and Texaco may the given orders to the extent of their capacity or quantity offered by them whichever is lower in view of the fact that they are wagon builders and the present formula regarding the distribution of quantities may he applied to all manufacturers except the three who have formed a cartel.
He also recommended some recoveries from these three manufacturers who are alleged to have formed a cartel on the basis of their letters wherein they have quoted prices which were much less than the updated price as on 1.9.91 of Rs. 79,305.
He also made certain other recommendations and finally concluded that the post tender letters may be ignored and that for short term gains the Department can not sacrifice long term healthy competition.
After these recommendations of the Financial commissioner the file was put up to the approving authority i.e. the Minister for Railways, who in general agreed with the recommendations of the Financial Advisor.
He also noted that these three manufacturers have formed a cartel.
He also noted that subsequent to the Financial commissioner 's note, besides M/s H.D.C. and Mukand has also offered to reduce the price by 10% or more vide their letter dated 19.2.92 if called for negotiations.
Taking these circumstances into consideration the Minister ordered that all these three firms may be offered a price lower by Rs. 1 1,000 with reference to the counter offer recommended by the Tender committee and the quantities also be suitably adjusted so that the cartel is broken.
The Minister also noted that as a result of this a saving of about Rs. 11 119 crores would be effected.
In his note, the Minister also ordered redistribution of the quantities.
Heal so ordered that3O% options should straightaway be exercised.
After the approving authority took these decisions,the file went to he Chairman Railway Board for implementing the decisions.
The noted that action will be taken as decided by the Minister but added that action will be taken as decided by the Minister but added that it results in dual pricing namely one to the three manufacturers and the higher one to the others and therefore the Minister may consider whether they could counter offer the lower price to all the manufacturers as that would result in saving much more.
The file was then again sent to and was considered by the financial Commissioner who noticed this endorsement made by the Chairman, Railway Board.
He however noted that so far all the other firms are concerned it is Rs.3305 less than the present contract price but it would not be equitable to offer the lower price put forward by the three manufacturers as it would make the other units enviable and that incidentally the price of ' Rs. 76,000 now proposed to be counteroffered to the other firms is also in line with the recommendation of the Tender committee.
The, however, noted that some of the units were sick units and owe a lot of money to the nationalised banks and it would therefore be in the national interest to accept dual pricing.
Therefore the file was again put up to the approving authority who agreed with the recommendations of the Financial Commissioner and the render Committee and directed that the same may be implemented.
In view of this final decision taken by the approving authority a telegram was issued to the three manufacturers giving them a counter offer of Rs. 65 000 per bogie.
The counter offer was also made to the other nine manufacturers at the rate of Rs. 76,000per bogie namely the price worked out by the Tender committee.
Soon after the receipt of this telegram dated 18.3.92 M/s H.D.C. and Mukand filed writ petitions in the Delhi High Court challenging the so called discriminatory counteroffer.
M/s Bhartiya also filed a similar petition in Calcutta High Court but the same was withdrawn but another writ petition was filed later in the Delhi High Court.
In the writ petitions filed by M/s H.D.C. and Mukand, the High Courts stayed the operation of the telegram dated 18.3.92 and issued notice to the Union of India and to the Executive Director and Director of the Railways (Stores) who figured as respondents in those writ petitions.
M/s H.D.C. and Mukand also wrote to the Minister of Railways in reply to the telegram that they were not prepared to accept the counter offer at the rate of Rs.65,000 and 120 instead they offered to supply the bogies at the rate of Rs 67,000) per bogie.
The Railways accepted this offer and intimated M/s H.D.C. and Mukand accordingly.
The High Court, in an interlocutory stage pending the writ petitions, passed an order on 2.4.92 directing the Ministry to accept the allocation of bogies recommended by the Tender committee and to pay a price at the rate of Rs. 67,000 only per bogie and that would be subject to the final decision of the writ petitions.
Being aggrieved by this order, the Railways filed a petition for special leave to appeal No. 5512/92 and this court while refusing to interfere at that interlocutory stage made the following observations on 28.4.92: "However, we may observe and so direct that during the pendency of the writ petition if any of the suppliers in terms of the package of distribution indicated by the High Court (including the petitioners in the High Court in the writ petition), seek an "on account" payment representing the difference between the sum of Rs. 67,000 indicated as price by the High Court and the sun of Rs 76,000 contemplated by the Railways; the order of the High Court shall not prohibit the Government making such on account payment to such suppliers on each wagon on the condition that the said on account payment of Rs. 9,000 per bogie should be covered by a bank guarantee for its prompt repayment together with interest at 20% per anum in the event the on account payment cannot be observed in the price structure that may ultimately come to be determined pursuant to the final decision in the writ petitions.
The special leave petitions are disposed of accordingly.
" Thereafter the High Court took up the writ petitions for final hearing and by the impugned judgment allowed the writ petitions filed by M/s H.D.C. and Mukand and directed that all the suppliers should make the supplies at the rate of Rs. 67,000 per bogie and also set aside the quantity allocation and directed that the same should be considered 121 afresh on a reasonable basis and pending such fresh consideration future supplies should he made on the basis of the recommendations ofthe Tender Committee.
In the course of the judgment, the High Court also made certain observation to the effect that the decision of the approving authority is arbitrary and that this Government has no justification to offer a higher price than the market price to any supplier to rehabilitate it.
It was further observed that the stand of the Railways that those three manufacturers formed a cartel is based on extraneous considerations.
The learned judges of the High Court also observed that they failed to understand as to why the Railways authorities could not initiate negotiations with those manufacturers who had offered to reduce their offer which could result in saving crores of rupees to the Railways.
Aggrieved by this judgment of the High Court the Union of India filed S.L.P. (civil) Nos. 1 1897 98/92.
Before the High Court in the two writ petitions filed by M/s H.D.C. and Mukand the other manufacturers figured is respondents Nos. 4 to 12 and M/s Bharatiya otherwise Known as Besco figured as respondent No. 13.
The other S.L.Ps. are filed by those nine manufacturers.
M/s Bharatiya, respondent No. 13, has not questioned the judgment of the High Court.
As mentioned above M/s Bharatiya filed a separate writ petition No. 1753/ 92 in the Delhi High Court after withdrawing an earlier writ petition filed in the Calcutta High Court.
The same also was disposed of in terms of the judgment in the, other two writ petitions Nos. 1 152 and 1157/92.
But they have not questioned the same.
Consequently M/s Bhartiya figures as a respondent before us in the SLP filed by the Union of India.
Before we proceed further.
we would like to briefly indicate the main submissions made on behalf of all the parties to the extent relevant and important for arriving at the necessary conclusions.
Learned counsel have advanced arguments on several other aspects which are incidental.
We propose to deal with them and give our findings in our detailed judgment at a later stage.
Mr. Kapil Sibal, learned counsel appearing for the Union of India submitted that the three big manufacturers i.e. M/s H.D.C. Mukand and Bhartiya formed a cartel and the same is evident from the fact that each one of them quoted an identical price which is a cartel price; and that the Government in the matters of economic policy for good and sufficient reasons and in the public interest can reject the lowest offer with a view not to allow any monopoly and to encourage competition among the recognised manufacturers and that the dual pricing adopted 122 by the Railways under the circumstances is not discriminatory.
In this context it is also submitted that the Railways had rightly taken into account the two concessions and found that the price at the rate of Rs. 67,000 per bogie was not reasonable and workable and it was only a cartel price and that Rs. 76,000 was the reasonable price and on that basis made acounter offer to other manufacturers except to these three big manufacturers.
The Railways had no option except to accept the offer of Rs. 67,000 by the three big manufacturers as they took firm stand that the price is reasonable and that they would be able to supply on that rate and thereby a binding contract came into force so far these three manufacturers are concerned.
Regarding the allocation of quantities the Railways have taken into consideration all the relevant factors namely that three of the nine manufacturers were BIER companies and the two others are also wagon builders having their entire business with Railways only and on that rational basis the quantities were allotted.
It is also his submission that since the three big manufacture originally offered a cartel price and ill of them later apparently offered Rs. 67,000/ , in unworkable price, the Railways felt that they attempted to destroy the competition.
Therefore they were not given larger share.
Learned counsel relied on several authorities particularly touching the scope and ambit of Article 14 and the power of the court under Article 226 of the constitution of India.
Mr. Sibal also strongly contended that the High Court grossly erred in making certain observations against the Railways namely that the stand of the Railways that those three manufacturers formed a cartel is based on extraneous considerations and somewhat similar observations in respect of the decision or the Railways on the question of price fixation.
The other counsel appearing for the nine smaller manufacturers in general supported these submissions and also highlighted certain aspects in their individual cases.
Shri K.K. Venugopal.
learned counsel appearing for the respondent namely M/s H.D.C. submitted that the award of the contract for supply of bogies was vitiated by malafides and that disproportionate allotment of quota of bogeis and dual pricing were based on malafides and extraneous considerations violating Article 14 of the Constitution.
tie further submitted that the reasons put forward on behalf of the Railways are disingenuous and bereft of rationale.
The supported the finding of the High Court that the price should he fixed at Rs. 67,000 123 for every manufacturer.
Shri Nariman, learned counsel appearing for M/s Mukand, another respondent submitted that the dual set of counter offers and allocation of disproportionate quantites are highly arbitrary and that the practice and policy of the past 10 years of placing orders on all manufacturers in respect of the quantities worked out on the basis of standard quantity formula at a uniform price, gave rise to legitimate expectations among all bogie manufacturers and irrational departure from the existing policy is arbitrary and unreasonable.
He further submitted that the making of law tender offers can not by itself be visited with punty consequences like dual pricing and reducing the allotment of legitimate quantities.
Shri Shanti Bhaushan, learned counsel appearing for M/s. Bhartiya submitted that the Tender Committee erred in treating M/s. Bhartiya also as a member of the cartel and that the allotment of quantities has been arbitrarily reduced.
He however made one special submission namely that M/s Bhartiya never made an offer of Rs. 67,000 and there is nothing in writing to that effect and that merely because of the statement of the counsel during the proceedings before the High Court, it should not be understood that they are, willing to supply at the, rate of Rs. 67,000 and that they should not be treated by treated differently from the other nine manufacturers.
Taking all the aspects into consideration and for the purpose of giving our conclusions it may broadly be stated that M/s H.D.C. and Mukand gave post tender offers at a low pride with the hope that they would get a larger quantity allotted.
M/s Bhartiya also fell in line with them though did not specifically put it in writing.
But during the course of the hearing of the writ proceedings, it was represented on behalf of M/s Bharatiya that they would be willing to supply at Rs. 67,000 if the court fixes that price.
This is noted by the High Court in its judgment.
The Railways authorities however concluded that in the beginning itself these three have formed a cartel and the price quoted by them was only a cartel price.
The note by the Financial Commissioner is somewhat elaborate on this aspect and the Minister for Railways, the competent authority agreed with him and also directed that the quantities be suitably adjusted so that the cartel is broken.
He also took into consideration the fact that some of the smaller units are sick and 124 therefore they should be given a larger quantity to enable them to rehabilitate.
The other recommendations of the authorities were also accepted.
However in giving any directions we must bear in mind that the contract period is going to end shortly and till now all the manufacturers have been manufacturing and supplying pursuant to the interim orders.
We may indicate at this stage that we shall discuss all these aspects later in detail in our judgment.
After due and careful consideration of all the aspects, our conclusions are as follows: (1) There is no enough material to conclude that M/s H.D.C., Mukand and Bhartiya formed a cartel.
Because of mere quoting identical tender offers by the said three manufacturers for which there is some basis, the conclusion that the said manufacturers had formed a cartel does not appear to be correct.
However since the offers of the said three tenders were identical and the price was somewhat lower, the Tender Committee entertained a suspicion that a cartel had been formed and the same got further strengthened by the post tender attitude of the said manufacturers which further resulted in entertaining the same suspicion by the other authorities in the hierarchy of the decision making body including the Minister of Railways.
Though there is no enough of material to establish formation of a cartel as is understood in the legal parlance but at the same time it cannot be contended that such an opinion entertained by the concerned authorities including the Minister was perse malicious or was actuated by any extraneous considerations.
After a careful examination of the entire record and facts and circumstances of the case we are of view that all the Railway authorities including the Minister acted in a bonafide manner in taking the stand that the three manufactures formed a cartel.
(2) The current contract price based on the updated price is Rs. 79,305 The three manufacturers offered at Rs. 77,6000. 'Faking into consideration the later concessions, the Tender Committee decided that the price of Rs. 76,000 is reasonable.
In the post tender correspondence M/s H.D.C. and Mukand offered to supply at a price of Rs. 67,000 per bogie, but no particulars as to how it would be reasonable, were given.
However they have come forward before us with some particulars.
M/s Bhartiya did not gave any such offering writing, but fell in line with them and did not choose to question the order of the High court fixing the price at Rs. 67,000 The Railways were of the view that 125 it is an unreasonable price an smaller manufacturers cannot supply at that price and consequently they will get extinguished resulting in a monopoly by the big manufacturers.
The High court has directed that supply should be at Rs. 67,000 by everyone.
Taking into consideration all these aspects we are of the view that the fixation of price at Rs. 67,000 per bogie straightaway without necessary and proper consideration and appraisal regarding the viability and other aspects by some experts, is not just and fair from many points of view.
A fresh consideration is called for, particularly from the point of view of safeguarding the interests of the public exchequer and giving_ necessary protection to the smaller manufacturers.
Consequently we set aside this direction of the High Court and direct the Tender Committee to reconsider the question of fixation of reasonable price.
The Tender committee shall consider the offer of Rs, 67,000 made by M/s H.D.C. and Mukand along with the data that would be given by them in support of that and the percentage of profits available to all the 3 manufacturers and other relevant aspects and then fix a reasonable price.
at which the manufacturer would be able to supply.
The Tender Committee shall within two weeks from today complete the process.
(3) At a belated post tender stage Railways authorities did not deem it fit to reconsider the question of fixation of price in the light of the post tender offers made by M/s H.D.C. and Mukand, as by then they were of the opinion that the three big manufacturers have formed a cartel and quoted a cartel price.
The stand by the Railways to adopt dual pricing under these circumstances is bonafide and not malafide.
However.
dual pricing on principle may not appear to be rational since the railways have been following certain formula in fixing the price which is made applicable to all the manufacturers, But under certain circumstances dual pricing may be reasonable.
In the instant case M/ s H.D.C. and Mukand came forward with firm offer of a price at Rs. 67,000 per bogie.
M/s Bharatiya also got committed to supply at the same price.
All the three of them did not even challenge the order of the High Court.
These three big manufacturers just be deemed to be in a position to supply at the rate of Rs. 67,000 and thus they form a distinct category.
The smaller manufacturers belong to a different category and if a different price is fixed for them it is not discriminatory.
126 (4) If the price that is to be fixed by the Tender Committee as directed by us happens to be more than Rs. 67.000 then that would be applicable to the smaller manufacturers only and not to M/s H.D.C., Mukand and Bhartiya who on their own commitment have to supply at the rate of Rs. 67,000.
(5) The price thus fixed by the Tender committee which applies only to the smaller manufacturers shall he deemed to be final and the respective contracts shall be deemed to be concluded so for the price is concerned.
(6) Now coming to the allotment of quota of bogies the Tender Committee made recommendations on the basis of the existing practice.
The Minister of Railways in his ultimate decision has made some variations taking into consideration tile recommendations of the Financial commissioner and other authorities.
The has however not accepted these recommendations fully.
In making these variations, the Minister accepting ultimately reduced the allotment of quota to the said three tenderers substantially by way of reprisal.
In view of our finding that the formation of an opinion that cartel was formed had no firm factual foundation; such a reduction of quota by way of reprisal can not be justified.
we are however, not inclined to accept the contention made on behalf of M/s H.D.C., Mukand and Bhartiya that no departure from the recommendations of the Tender committee is permissible in the absence of any established policy which was also known by the tenderers.
From the records it appears that in the past also there have been such variations.
In our view, the Minister of Railways as the final authority.
after considering various relevant factors, may he justified in taking a particular decision in the matter of allotment of quota but such decision must be taken on objective basis.
But, in this case.
it appears to us that all the smaller manufacturers deserving a favourable treatment in the matter of allotment of quota, have not been equally treated in the sense that one or, two of them got larger quantities.
Though this does not appear to be a serious departure, yet in these matters the Govt.
is expected to be just and fair to one and all.
We hope that in future the authorities would make a proper consideration of the relevant factors in respect of each tenderer in an objective manner in allotting the quantities.
127 (7) In view of the interim orders, during the pendency of writ petitions before the High Court, and until now all the manufacturers have been supplying as per the allotments by the Tender Committee.
The High Court in its judgment finally directed the Railways to reconsider the allocation on reasonable basis.
It is submitted on behalf of the smaller manufacturers that they have made necessary manufac turing arrangements on the basis of the final allotment.
On behalf of the M/s H.D.C., Mukand and Bhartiya, it is submitted that their legitimate quotas also are cut short and that they are entitled to larger quantities in view of the low price offered by them.
Having considered the contentions made by all the manufacturers direct that the there manufacturers M/s H.D.C., Mukand and Bhartiya should be allocated the quantities as per the recommendations of the Tender committee.
We, however.
do not want to disturb at this stage the quantities finally allotted by the competent authority to the small manufacturers as that would cause great hardship to them.
We leave it to the Railway authorities to make necessary adjustments next year in the matter of allocation of quantities to them taking, into consideration these allotments given to them this year.
To that extent we modify the order of the High Court.
(8) It will he open the Railways to exercise 30% option, if not already exercised.
(9) Taking all the circumstances and the time factor into consideration the time to complete the supply is extended upto 31.3.1993.
Accordingly these Special Leave petitions are disposed of.
There will he no order as to costs.
V. P. R. SL Ps disposed of.

dataset_name: IN-Abs

summary:
The Railway Board entered into contracts with 12 manufactur ers for the supply of cast steel bogies to be used for building the wagons, every year.
Among them H.D.C., Mukand and Bhartiya had capacity to manufacture larger quantities.
In 1991 two new firms Simplex and Beekay also entered the field.
For the year 1992 93, a tender notice for procurement of 1900 cast steel bogies was issued to the Regular suppliers as well as to Simplex and Beekay the new entrants.
The tender notice stated therein that the last date for submission of offers was 27.11.91 by 2.30 P.M. and the tenders to be opened at 3 P.M. on the same day; that the price was subject to the price variation clause and the base date for escalation purpose was 1.9.91; that the Railways reserved the right to order additional quantity upto 30 % of the quantity ordered during the currency of the contract on the same price and terms and conditions with suitable extensions in delivery period.
The price quoted by H.D.C., Mukand and Bhartiya firms was identical, i.e. Rs. 77.
666 per bogie.
Other tenderers price varied between Rs. 83.000 and Rs. 84, 500 per bogie.
The Government 's announcement of reduction of custom duty 109 on the import of steel scrap and dispensation of freight equalisation fund for steel came after the opening of the tenders and before the finalisation of the tenders.
The Tender Committee recommended that the three manufac turers who quoted an identical lowest rates without any cushion for escalation between 1.7.91 and 1.9.1991 formed a cartel; that the reasonable rate per bogie was to be Rs. 76,000 by taking into consideration of the two concessions announced by the Government; and that the existing procedure to be followed on the question of distribution of quantities to the tenderers.
On 4.2.92, the Committee signed the recommendations.
On the same date, the Member (Mechanical) of the Committee received letter from H.D.C. and Mukand, wherein the tenderers offered to substantially reduce the prices because of the concessions.
The Advisor (Finance) examined the matter and observed that if it was intended to continue the existing policy of fixing a rate and distributing the order among all the tenderers, then negotiations might not be useful; that review of the existing policy would take time; and that the present tender be decided on the basis of the existing policy.
The Member (Mechanical), the next higher authority recom mended the acceptance (if the Tender Committee 's recommendation.
The Finance Commissioner approving the recommendations of the committee, noted that the tenderers who quoted the identical rates had formed a cartel; that a counter offer of Rs. 76,000 be accepted but in the case of H.D.C., a price lower by Rs.1 1,000 to he offered as per their post tender letter dated 4.2.92; that the present formula regarding the distribution of quantities be applied to all tenderers except the three who formed a cartel; that some recoveries from the three tenderers he made on the basis of their letters wherein they quoted prices which were much less than the updated price on 1.9.91 of Rs.79.305; that the post tender letters be ignored and that for short term gains the Department could not sacrifice long term healthy compensation.
110 The Minister for Railways, the approving authority agreeing with the recommendations of the Finance Advisor, noted that the three tenderers had formed a cartel and they he offered a price lower by Rs. 1 1.000 with reference to the counter offer recommended by the Tender Committee and the quantities also be suitable adjusted to break the cartel and ordered for redistrib ution of the quantities exercising 30% option.
The Chairman, Railway Board, when received the file for implementation of the orders from the Minister, noted that action be taken as decided by the Minister, which had resulted in dual pricing, namely, one to the three tenderers and the higher one to the other tenderers and therefore, the Minister to consider whether they could counter offer the lower price to all the tenderers as that would result in saving much more.
When the matter was sent to the Finance Commissioner, he observed that as some of the units were sick units and owe a lot of money to the nationalised banks; it would be in the national interest to accept dual pricing.
Therefore, the rile was again put up to the approving authority.
He agreed with the recommendations of the Commissioner and the Tender Committee and directed for their implementation.
As per the final decision taken by the approving authority the three tenderers were issued a counter offer of Rs.65,000 per bogie by telegram and other tenderers were given a counter offer of Rs.76,000/ per bogie.
After the receipt of the telegram dated 18.3.92 H.D.C. and Mukand riled writ petitions in the Delhi High Court challenging the discriminatory counter offer.
Bhartiya had riled a writ petition in the Calcutta High Court.
It was withdrawn and another writ petition was riled later in the Delhi High Court.
In the writ petitions filed by H.D.C.and Mukand, the High Court issuing notice to the respondents,stayed the operation of the telegram dated 18.3.92.
111 In reply to the telegram, H.D.C. and Mukand also wrote to the Minister of Railways offering to supply the bogies at the rate of Rs.67.000 per bogie, which was accepted by the Railway.
Pending the writ petitions, the High Court passed an interlocutory order, directing the Railway to accept the allocation of bogies recommended by the Tender Committee at the rate of Rs.67.000 per bogie subjected to the final decision in the writ petitions.
The Railway 's petition for special leave to appeal filed against the interlocutor%, order of the High Court was dismissed.
Thereafter, the High Court allowed the writ petitions riled by H.D.C and Mukand and directed that all the tenderers should make the supplies at the rate of Rs. 67.000 per bogie and allocation of quantity to be considered afresh on a reasonable basis.
The Union of India filed appeal by special leave (S.L.P. (c) Nos. 11897 98/92) against the judgment of the High Court.
The other SLPs.
were riled by the affected tenderers who figured as respondents Nos. 4 to 12 in the writ petitions before the High Court.
The High Court disposed of Bharatiya 's writ petition in terms of the judgment in the other two writ petitions (W.P.Nos. 1152 and 1157/ 92) wherein they were shown as respondent No. 13).
As Bharatiya alias Besco did not question the judgment of the High Court, they were arrayed as respondent in the S.L.P. riled by the Union of India.
The Union of India submitted that the three big manufactures i.e. M/s H.D.C., Mukand and Bhartiya formed a cartel and the same was evident from the fact that each one of them quoted an identical price which was a cartel price '; that the Government in the matters of economic policy for good and sufficient reasons and in the public interest could reject the lowest offer with a view not to allow any monopoly and to encourage competition among the recognised manufacturers; that the dual pricing adopted by the Railways under the circumstances was not discriminatory; that the Railways had rightly taken into account the two concessions and found that the price at the rate of Rs.67,000 per bogie was not reasonable and, workable and it was only a cartel price and that Rs. 76,000 was the reasonable price 112 and on that basis made a counter offer to other manufacturers except to these three big manufacturers; that the Railways took into consideration all the relevant factors and on rational basis the quantities were allotted; and, therefore, they were not given larger share.
The nine smaller manufacturers in general supported the sub missions of the Union of India.
The respondent M/s H.D.C. supporting the finding of the High Court submitted that the award of the contract for supply of bogies was vitiated by mala fides and that disproportionate allotment of quota of bogies and.
dual pricing were based on malafides and estraneous considerations violating Article 14 of the Constitution; that the reasons put forward on behalf of the Railways were disingenuous and bereft of rationale.
M/s Mukand respondent submitted that the dual set of counter offers and allocation of disproportionate quantities were highly arbitrary and that the practice and police of the past 10 years of placing orders on all manufacturers in respect of the quantities worked out on the basis of standard quantity formula at a uniform price, gave rise to legitimate expectations among all bogie manufacturers and irrational departure from the existing policy was arbitrary and unreasonable; that the making of law tender offers could not by Itself be visited with punty consequences like dual pricing and reducing the allotment of legitimate quantities.
M/s. Bhartiya submitted that the Tender Committee erred In treating m/s Bhartiya also as a member of the cartel and that the allotment of quantities was arbitrarily reduced; that M/s Bhartiya never made an offer of Rs. 67,000 and there was nothing in writing to that effect and that merely because of the statement of the counsel during the proceedings before the High Court, it should not be understood that they were willing to supply at the rate of Rs. 67,000 and that they should not be treated differently from the other nine manufacturers.
Disposing of the Special Leave Petitions, this Court, 113 HELD: 1.1.
Since the offers of the three tenderers were identical and the price was somewhat lower, the Tender Committee entertained a suspicion that a cartel had been formed and the same got further strengthened by the post tender attitude of the said manufacturers which further resulted in entertaining the same suspicion by the other authorities in the hierarchy of decision making body including the Minister of Railways.
(124 D) 1.2.
All the Railway authorities including the Minister acted in a bonafide mannerin taking the stand that the three manufacturers formed a cartel.
(124F) 1.3.
There is no enough of material to conclude that M/S H.D.C., Mukand and Bhartiya formed a cartel.
Because of mere quoting identical tender offers by the Said three manufacturers for which there is some basis, the conclusion, that the "id manufacturers had formed a cartel does not appear to be correct.
(124 C) 1.4.
The current contract priced based on the updated price is Rs.79,505.
The three manufacturers offered at Rs. 77,600.
Taking into consideration the later concessions, the Tender Committee decided that the price of Rs. 76,000 is reasonable.
(124 F) 1.5.
The fixation of price at Rs. 67,000 per bogie straightaway without necessary and proper consideration and appraisal regarding the viability and other aspects by some experts, is not just and fair from many points of view.
A fresh consideration is called for, particularly from the point of view of safeguarding the interests of the public exchequer and giving necessary protection to the smaller manufacturers.
(125 B) 1.6.
The Tender committee is directed to reconsider the question of fixation of reasonable price.
The Tender Committee shall consider, the offer of Rs. 67,000 made by M/s H.D.C. and Mukand along with the data that would he given by them in support of that and the percentage of profits available to all the manufacturers and other relevant aspects and then fix a resonable price, at which the manufacturer would be able to supply.
(125 C) 114 1.7.
At a belated post tender stage the Railway authorities did not deem it fit to reconsider the question of fixation of price in the light of the post tender offers made by M/s H.D.C. and Mukand, as by then they were of the opinion that the three big manufacturers have formed a cartel and quoted a cartel price.
The stand by the Railways to adopt dual pricing under the circumstances is bona fide and not malafide.
However, dual pricing on principle may not appear to be rational since the Railways have been following certain formula in fixing the price which is made applicable to all the manufacturers.
But under certain circumstances dual pricing may be reasonable. (125 E F) 1.8.
M/s H.D.C. and Mukand came forward with firm offer of a price at Rs. 67,000 per bogie.
M/s Bhartiya also got committed to supply at the same price.
All the three of them did not even challenge the order of the High Court.
These three big manufacturers must be deemed to be in a position to supply at the rate of Rs.67,000 and thus they form a distinct category.
The smaller manufacturers belong to a different category and if a different price is fixed for them it is not discriminatory.
(125 F G) 1.9.
If the price that is to be fixed by the Tender Committee as directed by the Court happens to be more than Rs. 67,000 then that would he applicable to the smaller manufacturers only and not to M/s H.D.C., Mukand and Bhartiya who on their own commitment have to supply at the rate of Rs. 67,000.
(126 A) 1.10.
The price thus fixed by the Tender committee which applies only to the smaller manufacturers shall be deemed to be final and the respective contracts shall be deemed to he concluded so for the price is concerned.
(126 B) 1.11.
The formation of an opinion that a cartel was formed had no firm factual foundation; reduction of quota by way of reprisal can not be justified.
The Minister of Railways as the final authority, after considering various relevant factors, may be justified in taking a particular decision in the matter of allotment of quota but such decision must be taken on objective basis.
But, in this case, all the smaller manufacturers deserving a favourable treatment in the mat 115 ter of allotment of quota, have not been equally treated in the sense that one or two of them got larger quantities.
Though this does not appear to be a serious departure, yet in these matters the Govt.
is expected to be just and fair to one and all.
In future the authorities would make a proper consideration of the relevant factors in respect of each tenderer in an objective manner in allotting the quantities.
(126 E H) 1.12.
The three manufacturers M/s H.D.C., Mukand and Bhartiya should be allocated the quantities as per the recommendations of the Tender Committee.
However, this Court does not want to disturb at this stage the quantities finally allotted by the competent authority to the small manufacturers as that would cause great hardship to them.
(127 C) The Railway authorities was left to make necessary adjustments next year in the matter of allocation of quantities to them taking into consideration these allotments given to them this year.
It will be open to the Railways to exercise 30% option if not already exercised.
The time to complete the supply is extended upto 31.3.1993.
(127 D F)


judgement:
mpt Petition No. 159 of 1992.
IN Special Leave Petition (C) No. 12709 of 1991.
From the Judgment and Order dated 26.4.1991 of the Calcutta High Court in Appeal No. 232 of 1990.
M.L. Verma, R. Mukhejee, J. Gupta and M.L. Chibber for the Petitioners.
Ranjan Dutta, Mrs. N. Dutta, Mrs. Mridula Ray and M.N. Shroff for the Respondents.
The Judgment of the Court was delivered by B.P. JEEVAN REDDY, J.
In a suit for specific performance certain interlocutory orders were passed by a Single Judge of the Calcutta High Court.
On appeal a Division Bench of the said Court modified the said orders.
A number of special leave petitions were filed in this Court against the orders of the Division Bench.
Though the petitioners in these special leave petitions are different, the contesting respondents in all these cases are common, namely Russel Estate Corporation and its managing partner Sri Hari Narayan Bhan.
For the purpose of this petition, it is enough to mention that each of the petitioners in these S.L.Ps. is claiming to be entitled to allotment of one or more of the flats being constructed by the respondents at Calcutta.
Their complaint has been that ignoring the agreements in their favour, the 753 respondents have been allotting the constructed flats in favour of third parties thereby seeking to defeat their rights.
On 1.8.1991 a Bench of this Court comprising section Ranganathan, M. Fathima Beevi and N.D. Ojha, JJ. passed the following order in I.A. No.2 of 1991 after hearing the respondents.
"Counsel accepts notice.
in the meantime, till this Special Leave Petition is disposed of, respondents 1 & 2 should not make any further allotment of any other flats in the building in dispute, with effect from today.
Counsel for the petitioner contends that the allotment of the flat, originally allotted to him, to some other person violates an oral order of a Division Bench of the High Court.
It will be open to the petitioner to move the High Court for appropriate relief in this regard if so advised." This Contempt Petition is filed complaining that the respondents have allotted certain flats in favour of third parties in violation of the said order.
So far as the petitioners in this Contempt Petition (Major) Genl.
B.M. Bhattacharjee and Smt.
section Laha) are concerned, they claim to be interested in the flats on the 8th floor of the said building.
At any rate the complaint in this Contempt Petition pertains to the said two flats.
The petitioners say that the said flats have been allotted to the third parties in the month of January, 1992.
They rely upon the report of a group of investigators (National Bureau of Investigation) in support of the said plea.
Notice was issued to the respondents.
In their counter (filed by Shri Hari Narayan Bhan) it is stated that the two floors on the 8th floor (described as east and west flats) were allotted on 26th April, 1991 itself i.e., long prior to the order of this Court dated 1.8.1991.
It is denied that the allotment of said flats took place in the month of January, 1992.
The correctness of the Report of the National Bureau of Investigation is disputed.
It is, however, conceded that the possession of the said flats was handed over to the said third parties on 17th August, 1991 which is admittedly a date subsequent to the date on which this Court passed the aforesaid restraint order.
It is also not disputed by them that the registered sale deeds in respect of said flats in favour of the said third parties were 754 also executed in March, 1992.
The report of the Receiver (Smt.
Pratibha Bonnerjea, a retired Judge of the Calcutta High Court who was appointed as such by an order of this Court dated 7.1.1992) also supports the petitioners ' allegations.
The relevant portion of the Report reads as follows: "Present condition of these two flats in the floor.
The western apartment in the 8th floor is occupied by one Mr. & Mrs.
Kamal Thavrani, Ms. Thavrani said that they are in occupation of the flat from December, 1991.
Mr. K.K. Thavrani said that he had taken both the eastern and western apartments in the 8th floor.
He produced a copy of the agreement executed on 26.4.91 on a stamp paper purchased on 26.4.91 by M/s. Russel Estate Corporation.
The agreement relates to both the flats on the 8th floor for a total consideration of Rs. 13,40,000.
It is stated that the occupiers have taken possession in December, 1991.
Mr. Thavrani submits that the conveyance have been registered in March, 1992 but he is unable to produce the registered conveyance as the same is still lying with the Registrar.
We found eastern flat was not complete.
Wooden work was going on.
Photos Nos.
3 to 5 are attached to this effect.
" At the bearing of this Contempt Petition the respondents ' counsel took the stand that the delivery of possession on 17.8.1991 and the execution of the registered sale deed in March, 1992 do not constitute violation of the Order dated 1.8.1991.
His submission is that this Court merely restrained the allotment of flats.
Allotment, according to the learned Counsel, means entering into the agreement of sale.
Inasmuch as the agreement of sale with respect to the said two.
flats on the 8th floor was entered into long prior to the said Order of this Court, it is submitted, there is no disobedience to the order of this Court.
it is submitted that delivery of possession and the registration of the sale deed(s) is in pursuance of the aforesaid agreement of sale and not in pursuance of any agreement of We entered into on or after 1.8.1991.
The counsel further submitted that even on the date when the aforesaid order was passed on 1.8.1991, the second respondent had represented to this Court that agreement of sale in respect 755 of all the flats have already been entered into.
In this view, it is submitted, there has been no misrepresentation or suppression of relevant facts on their part.
We may mention that when we indicated our disagreement with the above stand during the course of hearing, the counsel for the respondents, Shri Dutta took time till 14th of January, 1993 to file a further affidavit/additional counter and/or documents in continuation of the counter already filed.
The second respondent has accordingly filed a further affidavit on 14.1.1993.
The counsel for the petitioners ' disputes the correctness, genuineness and validity of the agreement, allegedly entered into on 26.4.1991 in respect of said flats.
According to him, it is a fabricated document.
He points out that the stamp paper for the said agreement of sale was purchased by the Russel Estate Corporation and not by the purchaser of the flats.
It is also pointed out that the agreement is not a registered one and that it could have been fabricated at any time putting a back date.
It is not necessary for us to pronounce upon the disputed question whether the agreement dated 26.4.1991 relating to the said two flats on the 8th floor is true and genuine.
Assuming that the said agreement is true, we are yet of the opinion that the respondents have committed gross contempt of this Court by their brazen violation of the order dated 18 1991.
By the said order this Court directed the respondents 1 and 2 not to make "any further allotment of any other flats in the building in dispute with effect from today. ' Now what does the word "allotment" mean in the context.
In our opinion, the said word must be understood reasonably and having regard to the context.
The first respondent is not like a Government Department or Public Corporation where an allotment order or allotment letter is issued from the office in pursuance of which other steps are taken.
The first respondent is a proprietary concern, according to the petitioners, whereas according to the respondents it is a partnership concern.
In either event, there is no such thing as "allotment" in its case.
Even now, it is not their case that they have issued any orders or letters of allotment.
According to them, there was first an agreement of sale, then delivery of possession and finally a registered sale deed.
We are of the opinion that in the context and circumstances, the word "allotment" in the said order means making over of the flats.
In other words, it means delivery of possession 756 and registration of the sale deeds.
An agreement of sale, that too unregistered, has no significance in the context, difficult as it is to verify its truth and correctness.
This court could not be presumed to have interdicted such an uncertain thing.
It must be remember that even according to the respondents they had represented to this Court, at the time the said order was passed, that they have already entered into agreements of sale in respect of the flats and yet this Court chose to pass the said order.
In the circumstances, it cannot mean anything else than delivery of possession of flats and their sale.
It may also mean an agreement of sale but its meaning is certainly not confined to an agreement of sale.
To say so, as do the respondent, is to rob the order of any meaning or content.
Mr. Dutta, the learned counsel for the respondents contended that the second respondent understood the allotment in a particular manner and that the said misunderstanding, if any, was bona fide.
We are not prepared to agree.
Firstly, there could not have been any doubt in the mind of Respondent with respect to the meaning of the order.
Secondly, assuming that he had any doubt regarding its meaning, the least he could have done was to ask for a clarification of the said Order.
He could well have represented that he had already entered into an agreement of sale on 26.4.1991 in restpect of these flats and that he may be permitted to deliver possession and/or execute sale deeds in respect of said flats in favour of third parties.
He did nothing of the sort.
Having placed a highly restrictive and unwarranted interpretation upon the order of this Court, he went ahead and not only delivered possession of the flats to third parties subsequent to the said order but also registered sale deeds in their favour.
He thus rendered the said order nugatory.
It was not open to the respondents to place a convenient interpretation upon the order and proceed to act upon it, thereby totally nullifying the order of this Court.
In this context, we ought to refer to the conduct of the second respondent as disclosed from the order of this Court dated August 7, 1992 to which one of us (B.P. Jeevan Reddy, J.) was a party.
The first two paragraphs of the said order may be quoted in rull.
"In these special leave petitions notice was duly served on the respondents and the matters came up for hearing initially before a Bench of this Court comprising of Ranganathan J., Fathima Beevi J. and Ojha J. on 31.7.91 and 757 1.8.91when the parties were heard and certain interim orders were passed.
Thereafter it was listed before a Bench of this Court (of which Ranganathan J. and V. Ramaswami J. were members) on a number of occasions at which the respondents were represented and no objection was voiced against the hearing of the matters by the said Bench.
However, sometime later an attempt was made on behalf of the respondents to have these matters transferred from this Bench to some other Bench on the allegation that one of the Judges (Ranganathan J.) was biased against the respondents.
This request was made before a Bench presided over by the learned Chief Justice by the second respondent who appeared in person and made the request for the transfer of the case.
The prayer was rejected by the learned Chief Justice on 11.11.1991.
Thereafter the matter was again fisted before a Bench consisting of Ranganathan J., V. Ramaswami J. and Ojha J.
On different occasions without any demur from the parties.
It was then listed before a Bench comprising of Ramaswamy J., Yogeshwar Dayal J. and Mohan J. on 4.3.92.
This Bench directed the cases to be posted before a Bench of which Ranganathan J. is a member.
About this time, an application seems to have been presented to the Registrar that this case should be transferred to some other Bench.
However, the matters came up before us again some time last week when counsel for the respondents agreed that the matters may be listed this week.
The matters were fisted yesterday.
A person claiming to be the son of the second respondent made a request that the matter should not be heard by this Bench.
We rejected this request and made it clear to him that he should make arrangements for the conduct of the case.
The matters did not reach yesterday and when the matters came up today, a letter dated 6.8.92 written by the second respondent to his counsel revoking the counsel 's vakalatnama has been placed before us.
But the respondent No. 2 did not appear before us nor did he make other arrangements for the conduct of the case.
Sri Chatterjee, his advocate on 758 record, appeared but expressed his inability to conduct the case since his client had withdrawn the vakalatnama.
We understand that in one of the matters the respondents are represented by another counsel whose vakalatnama is also seen to have been revoked but she has not appeared or sought permission to withdraw from the case.
In these circumstances we have no other option but to proceed against the respondents ex parte.
We are unable to accede to the respondents request made on a previous occasion by the son of the second respondent for transfer of case to some other Bench.
The circumstances narrated above would show that the respondent has appeared before the Bench on several occasions without protest.
The request made for transfer, after the rejection of the earlier petition by the learned Chief Justice, is belated and is just an attempt by the second respondent to circumvent the order already passed by the Chief Justice rejecting a request for transfer and only because the Constitution of the Bench is not to his liking.
Such a request, we are clear, cannot be countenanced.
" It should be noticed that the said order dated August 7, 1992 was passed not only in the special leave petitions but also in this very Contempt Petition.
The attitude adopted by them before the Receiver (Smt.
Pratibha Bonnerjea retired Judge of Calcutta High Court, appointed by this Court as a Receiver in this case) also discloses the total disregard and disrespect the Respondents have towards the orders of this Court.
The Receiver says: "The next day, by a letter dated 22.8.92, Mr. H.N. Bhan informed me that he would not submit to the order dated 7.8.92 as the Bench was not properly constituted due to the fact that the Hon 'ble Mr. Justice V. Ramaswami was one of the judges and that an application would be moved for recalling the said order.
Thereafter, there was complete non cooperation by M/s. Russel Estate Corporation.
" The conduct of the second respondent as evidenced from the aforesaid material establishes beyond doubt that the second respondent 759 was trying to play with this Court and was consistently flouting its orders.
In the circumstances, the theory of bona fide belief, now put forward before us by his counsel, cannot be accepted.
We may at this stage deal with the further affidavit filed by the second respondent on 14.1.1993.
In para 3 of the affidavit the second respondent has stated that he has the highest regard for this Court, that he has all along complied with the orders passed by this Court and that he never intended to flout or defy the orders of the Court.
He stated further "if in spite of the aforesaid, any order of this Hon 'ble Court has been violated, the same has been so done through mistake, inadvertence and by a misunderstanding of the meaning and purport of that order and surely not intentionally and for which unconditionally apologise for self and on behalf of the Respondent firm and I beg to be excused." Then in paragraphs 4 to 12 he has "without waiving the aforesaid and fully relying thereupon" repeated the contentions which were urged by his counsel before us and which we have dealt with hereinbefore.
He stated that he understood this court 's order dated 1.8.1991 as prohibiting only the entering into of agreements of sale and not delivery of possession or registration of the sale deeds.
All the said contentions we have dealt with hereinbefore.
They need not be reiterated here.
So far as the apology contained in para 3 of the second respondent 's further affidavit is concerned, it may firstly be mentioned that it is not really an unconditional apology though it purports to say so.
While tendering unconditional apology in para 3, the second respondent has tried to defend his action in the subsequent paragraphs.
Secondly, even if we construe paragraph 3 as tendering an unconditional apology, we are not minced to accept the same having regard to the conduct of the respondent which we have adverted to hereinbefore with reference to the order of this court and the report of the Receiver.
Accordingly, we reject the apology tendered in para 3 of the further affidavit.
For the above reasons, we hold the second respondent guilty of Contempt of this Court.
Having regard to the facts and circumstances of this case, we impose a sentence of one month 's imprisonment in addition to a fine of Rs. 2,000 upon the second respondent.
The fine shall be paid into this Court within two weeks from today, in default thereof the second 760 respondent shall undergo a further imprisonment of two weeks.
The second respondent shall also pay the costs of the respondents in this Contempt case which are assessed at Rs. 5,000 within two weeks from today.
In case of failure, the Respondents are free to execute this order as a decree of Court and recover the same from the Respondents.
Mr. H.N. Bhan, who is present in the court, be taken into custody forthwith to undergo the sentence of imprisonment.
G.N. Petition allowed.

summary:
The present Contempt Petition has been filed complaining that the Respondents had allotted certain flats in favour of third parties in violation of this Court 's order dated 1.8.91.
The Petitioners ' interest has been in respect of two flats on the 8th floor.
They claimed that the said flats had been allotted to third parties in January, 1992, long after this Court 's order dated 1.8.91.
It was also contended that the agreement to sell was a fabricated document.
The Respondents contended that the said flats were allotted on 26.4.91 itself, though possession of the flats was handed over on 17.8.1991, and sale deeds were executed and registered in March 1992.
It was further contended that inasmuch as the agreement for sale was entered into long before the orders of this Court were issued, there was no question of disobedience of the orders of this Court.
Finding the Respondent guilty of Contempt of Court, this Court, HELD : 1.1.
Even assuming that the agreement of sale dated 26.4.1991 is true, the respondents have committed gross contempt of this Court by their brazen violation of the order dated 1.8.1991.
By the said order this Court directed the respondents 1 and 2 not to make "any further allotment of any other flats in the building in dispute with effect 751 from today".
The word "allotment" must be understood reasonably and having regard to the context The first respondent is not like a Government Department or Public Corporation where an allotment order or allotment letter is issued from the office in pursuance of which other steps are taken.
There is no such thing as "allotment" in this case.
According to the Respondents there was first an agreement of sale, then delivery of possession and finally a registered sale deed.
In the context and circumstances of the case, the word "allotment in the said order means making over of the flats; it means delivery of possession and registration of the sale deeds.
An agreement of sale, that too unregistered, has no significance in the context, difficult as it is to verify its truth and correctness.
This court could not be presumed to have interdicted such an uncertain thing.
Admittedly the respondents had represented to this Court, at the time the said order was passed, that they have already entered into agreements of sale in respect of the flats and yet this Court chose to pass the said order.
In the circumstances, it cannot mean anything else than delivery of possession of flats and their sale.
It may also mean an agreement of sale but its meaning is certainly not confined to an agreement of sale.
To say so is to rob the order of any meaning or content.
There could not have been any doubt in the mind of the Second Respondent with respect to the meaning of the order.
In case of any doubt the least he could have done was to ask for a clarification of the said Order.
He could well have represented that be had already entered into an agreement of sale on 26.4.1991 in respect of these flats and that he may be permitted to deliver possession and/or execute sale deeds in respect of the said flats in favour of third parties.
He did nothing of the sort Having placed a highly restrictive and unwarranted interpretation upon the order of this Court, he went ahead and not only delivered possession of the flats to third parties subsequent to the said order but also registered sale deeds in their favour.
He thus rendered the said order nugaptory.
[755E H, 756A E] 1.2.The conduct of the second respondent as evidenced from the material on record establishes beyond doubt that he was trying to play with this Court and was consistently flouting its orders.
[758H, 759A] 2.
So far as the apology tendered by the second respondent is concerned it is not really an unconditional apology.
While tendering apology the second respondent has tried to defend his action.
Even if it is 752 considered as unconditional apology this Court is not inclined to accept the same having regard to the conduct of the respondent Accordingly, the apology tendered by Respondent No.2 is rejected.
[759E G] 3.
The second respondent is guilty of Contempt of this Court Having regard to the facts and circumstances of this case, a sentence of one month 's imprisonment in addition to a fine of Rs. 2,000 is imposed upon him.
The fine shall be paid into this Court within two weeks and in default thereof the second respondent shall undergo a further imprisonment of two weeks.
[760A B]