Judicial interference is less if govt policies are fair

Written by Indu Bhan | Indu Bhan | Updated: Aug 22 2012, 05:35am hrs
Courts have limited role in govt policies

The Supreme Court has held that the judiciary has a limited role in interfering with the policies of the government, if the latter followed a fair and transparent method in awarding contracts.

If the state or its instrumentalities act reasonably, fairly and in public interest in awarding contract, interference by court is very restrictive since no person can claim fundamental right to carry on business with the government, the apex court said in the case of M/s Michigan Rubber (India) Ltd vs The State of Karnataka & Ors.

Upholding the Karnataka State Road Transport Corporations tender for supply of tyres, tubes and flaps specifying certain pre-qualification criteria, it said that the government and its undertakings must have a free hand in setting terms of the tender and only if it is arbitrary, discriminatory, mala fide or actuated by bias, the courts would interfere.

If the state acts within the bounds of reasonableness, it would be legitimate to take into consideration the national priorities, the top court said, adding that the government could not be faulted by judiciary for putting conditions in tenders to protect national interests.

Counsel Madhurima Tatia, appearing for Michigan, argued that the pre-qualification criteria was unreasonable, arbitrary, and discriminatory as the conditions were incorporated to exclude the firm and other similarly situated companies from the tender process.

However, the state government submitted that the conditions were imposed with a view to obtain good quality materials from reliable and experienced suppliers. Besides, the successful biddersCEAT and JK Tyresalready effected supplies and completed the contract, it added.

Registration is a must in arbitration deeds

The Supreme Court in the case of Naina Thakkar vs Annapurna Builders has held that an arbitration clause in a lease deed, which is compulsorily registrable but not registered and insufficiently stamped, cannot be enforced.

In this case, the Hyderabad civil court in July 2010 had rejected Thakkars application invoking the Arbitration and Conciliation Act, 1996, because the deed was not registered properly. Even the Andhra Pradesh High Court had endorsed the order.

The apex court said that no fault can be found in the order of the trial court in rejecting the application as the document on which the Thakkar relied upon was admittedly unregistered and insufficiently stamped.

The top court also said that Thakkar did not show any inclination to pay the deficit stamp duty on the lease deed nor expressed her desire that she was willing to pay the penalty as may be imposed by the Collector.

Counsel Abhinav Mukerji, appearing for Thakkar had submitted that the civil court having held that the lease deed was insufficiently stamped ought to have impounded the deed. He further argued that if the document was found to be not duly stamped, he should have given an opportunity to Thakkar to make up the deficit stamp duty and pay penalty following the procedure prescribed in the Indian Stamps Act, 1899.

PIL against allotment of plots dismissed

Refusing to interfere in the land allotment issue, the Supreme Court has dismissed a PIL filed by a UP-based lawyer seeking a high-level inquiry into alleged irregularities committed by the Mulayam Singh Yadav-led government in the allotment of 28 residential plots at Vipul Khand in Gomtinagar area of Lucknow in 2005.

Besides seeking a CBI inquiry into the irregularities, Vishwanath Chaturvedi had alleged that the state government had illegally allotted the plots worth R2.80 crore to several influential persons, bureaucrats and politicians at a nominal price.

However, the Samajwadi Party chief had refuted the allegations saying that the PIL was politically motivated and the lawyer himself was a beneficiary of the allotment under the discretionary quota of the state. Mulayam also alleged that Chaturvedi is a member of Congress party and was the official candidate of Congress Party for the election to constituency number 125, Haidergarh (district Barabanki) Assembly, UP, during the general election in 1996.

indu.bhan@expressindia.com