All Tender, Contract Matters Concerning Govt Bodies To Be Heard By Division Bench: Chhattisgarh High Court Clarifies

Rule 23(1)(iv) of the Rules, 2007 prescribed that writ petitions relating to Contract/Tender concerning the Government/Public Undertaking/Local Bodies/Statutory Bodies shall be heard by a Division Bench.

However, as per a Notification dated 04.04.2017, Rule 23(1)(iv) was substituted and a new Rule was enacted as per which writ petitions relating to award or termination of contract/tender concerning the Government/Public Undertaking/Local Bodies/Statutory Bodies shall be heard by a Division Bench.

In this change lay the genesis of an ambiguity with respect to whether writ petitions on other aspects of contracts or tenders should be heard by a Single Judge or a Division Bench.

Answering a reference made by the division bench, a full bench of Chief Justice Ramesh Sinha, Justice Narendra Kumar Vyas and Justice Naresh Kumar Chandravanshi held that:

“In order to remove the sense of ambiguity with regard to listing of the cases relating to tender/contract either before the Single Bench or the Division Bench, which exists today because of the Notification dated 04.04.2017, we are of the considered opinion that all the matters relating to tender / contract concerning to the Government / Public Undertaking / Local Bodies / Statutory Bodies, should be heard by Division Bench and Rule 23(1)(iv) of the Rules of 2007 as it stood earlier prior to Notification dated 04.04.2017, should prevail.”

Therefore the court has upheld the effect of Rule 23(1)(iv) as it existed prior to the 2017 notification. 

Background

The three-Judge Bench was dealing with a reference made by the Division Bench under Section 35 of the High Court of Chhattisgarh Rules, 2007, where it posed the following two questions to be determined by the three-Judge Bench:

1. Whether a show-cause notice, when challenged in relation to the award or termination of a contract/tender involving the Government, Public Undertakings, Local Bodies, or Statutory Bodies, should be heard by a Division Bench or a Single Bench?
2. Whether it would be appropriate for all matters relating to the award or termination of such contract/tender to be heard by a Division Bench?

Initially, the Court was facing an issue where two batches of petitions, both relating to tender/contract, filed by the same petitioners, were listed before the Single Bench and the Division Bench respectively. The Registry placed the earlier batch of petitions before the Single Bench in light of the decision in M/s. Vivek Enterprises v. South Eastern Coalfields Ltd (WPC No. 2414/2016), wherein a distinction was created between petitions challenging a show-cause notice in relation to a tender and petitions relating to award, non-award or relating to conditions of tender.

Deliberating on Rule 23(1)(iv) of the Rules, 2007, the Division Bench in Vivek Enterprises had held,

“In our opinion, writ petition relating to Contract/Tender would mean that it relates to award, non- award, or relating to conditions of tender. In the present case, the Petitioner challenges the notice wherein it is alleged that it has placed forged document to obtain the tender therefore, show cause notice was given stating that why it should not be black-listed. Therefore, list the case before the appropriate Single Bench on 03.10.2016.”

As a result, Rule 23(1)(iv) of the Rules, 2007 was substituted vide 2017 Notification which created the ambiguity.

Holding that the Division Bench in Vivek Enterprises tried to create an artificial distinction between the issues which had a direct bearing with the contract/tender, the full bench observed,

“Rule 23(1)(iv) of the Rules of 2007, as it stood earlier, was clear and unambiguous that the matters pertaining to Contract / Tender concerning to the Government / Public Undertaking / Local Bodies / Statutory Bodies would be heard by a Division Bench. Rule 23(1)(iv) of the Rules of 2007, as it stands today, has created a situation of confusion with respect to hearing of the matter relating to tender/contract by a particular Bench, whether it be listed before the Division Bench or before the Single Bench. We find no justification in observation made by a Division Bench of this Court in WPC No. 2414/2016 on 27.09.2016.”

Accordingly, the full bench upheld Rule 23(1)(iv) of the Rules, 2007 as it stood prior to its amendment, and subsequently ordered the Registrar General to take necessary steps.

Case Name: M/s. A.K. Construction v. State Of Chhattisgarh and bunch

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