TMI Blog2023 (2) TMI 1244X X X X Extracts X X X X X X X X Extracts X X X X ..... hale, JJ. For the Appellant : Mustafa Doctor, Senior Advocate, Jehangir Jejeebhoy, Rahul Dwarkadas, Areez Gazdar and Shireen Mistri i/b Veritas Legal For the Respondents : Suresh Kumar JUDGMENT G.S. Patel, J. 1. Rule. Since there is an Affidavit in Reply (it runs into four volumes), by consent, Rule is made returnable forthwith and the matter is taken up for hearing and final disposal. A Rejoinder has already been filed. 2. On this Petition, we made an order first on 25th November 2022, which reads thus: 1. Leave to amend in terms of the draft tendered, taken on record and marked X1 for identification with today's date. Amendments to be carried out forthwith in the course of the day without need of reverification. The Respondents are not represented although they seem to have been given notice including notice by email of today's listing. 2. This appears to be a fourth round of litigation by the Petitioner. It is a major supplier of Over Head Equipment to the Indian Railways. This equipment consists inter alia of copper conductors used in railway electrification. We are not entering into any larger controversy today since our objecti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... despite service, the Respondents are not present. This order will continue only until 7th December 2022. The Petitioners must apply to the appropriate Bench which has this roster assignment for an urgent listing before then. 7. The Respondents will act on production of an authenticated copy of this orde r. 3. We have extracted this only to give an abbreviated summary of the conspectus of the Petition. The prayers in the Petition, as amended, read thus: (a) that this Hon'ble Court be pleased to issue a Writ of Certiorari or any other Writ in the nature of Certiorari or any other appropriate writ, direction or order calling for all the documents in relation to the Impugned Show Cause Notice and the Impugned Delisting Letter, and after going into the legality and propriety of the same, quash and set aside: 1. the Impugned Show Cause Notice dated 2nd August 2022 (Exhibit B hereto); and 2. the Impugned Delisting Letter dated 10th November 2022 (Exhibit A hereto) . (b) that this Hon'ble Court be pleased to issue a Writ of Mandamus or any other writ in the nature of Mandamus or any other appropriate writ, direction or order directing the Respondents ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he only charge against Apar Industries is that it got copper cathodes from a third party and supplied these to HCL to manufacture CCC rods. Apar Industries is accused of engaging in what is described job-work . It is true that Apar Industries bought the copper cathodes from Sumitomo Japan as these met the required London Metal Exchange Grade-A specification. 10. The 4th Respondent is the Rail India Technical and Economic Service Limited or RITES. It has inspected the CCC rods and HDGC wires and certified these as meeting the quality requirements and specifications. 11. On 25th February 2021, the 2nd Respondent, the Central Organisation for Railway Electrification, withheld or recovered about Rs. 38 crores due to Apar Industries for the supply of HDGC wires. Apar Industries invoked arbitration. Mr. Doctor accepts that payment for the HDGC wires was actually made, but what was withheld related to the supply of HDGC wires which did not use CCC rods obtained from HCL. 12. On 30th March 2021, the Research Designs and Standards Organisation (RDSO), the 3rd Respondent, issued a notice de-listing the Petitioner for alleged job-work. 13. Apar Industries filed a Writ Petition on ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (ii) that because Apar Industries supplied the Sumitomo copper cathodes to HCL for manufacturing CCC rods, after which it could make its HDGC wires, there has been any degradation, deterioration, variation or fall in prescribed quality or specifications. 19. We understand the prohibition or proscription against job-work. The reason is self-evident. It has to do with quality control. But the mere fact that a person has obtained the copper cathodes from another vendor and sent them to HCL for manufacture of CCC rods does not inevitably lead to a factual conclusion that there has been a variation in quality standards. 20. This is one reason we find that the impugned order at page 79 could not possibly have speculated as to what might happen. If there was to be a blacklisting, this could only be done on the basis that there was indeed and in fact a deterioration in quality. Once the supply by Apar Industries was found to be non-conforming in quality, then it really would make no difference why that nonconformity took place. It could then perhaps be further attributed to the fact that Sumitomo copper cathodes were being supplied to HCL. But this is a factual determinant, and it c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... fits the standard of Wednesbury unreasonableness as enunciated in Associated Provincial Picture Houses Limited v. Wednesbury Corporation. [1948] 1 KB 223 Lord Greene said: ... It is true that discretion must be exercised reasonably. Now what does that mean? Lawyers familiar with the phraseology used in relation to exercise of statutory discretions often use the word 'unreasonable' in a rather comprehensive sense. It has frequently been used and is frequently used as a general description of the things that must not be done. For instance, a person entrusted with a discretion must, so to speak, direct himself properly in law. He must call his own attention to the matters which he is bound to consider. He must exclude from his consideration matters which are irrelevant to what he has to consider. If he does not obey those rules, he may truly be said, and often is said, to be acting 'unreasonably'. Similarly, there may be something so absurd that no sensible person could even dream that it lay within the powers of the authority. ... In another, it is taking into consideration extraneous matters. It is unreasonable that it might almost be described as being done in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he possible adoption in the future of the principle of 'proportionality'... 29. The CCSU standard was accepted in Union of India Anr. v. G. Ganayutham. (1997) 7 SCC 463 The two doctrines received an elucidation in Om Kumar Ors. v. Union of India, (2001) 2 SCC 386 particularly on the question of primary judicial review (where fundamental rights are involved) and secondary judicial review (where they are not). See also: Kerala State Beverages (M M) Corporation Ltd v PP Suresh Ors, (2019) 9 SCC 710. 30. The scope of the proportionality principle came to be examined in Coimbatore District Central Cooperative Bank v. Coimbatore District Central Cooperative Bank Employees Association Anr. (2007) 4 SCC 669 The Supreme Court said: 17. So far as the doctrine of proportionality is concerned, there is no gainsaying that the said doctrine has not only arrived in our legal system but has come to stay. With the rapid growth of administrative law and the need and necessity to control possible abuse of discretionary powers by various administrative authorities, certain principles have been evolved by courts. If an action taken by any authority is contrary to law, improp ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... The Wednesbury doctrine is now in terminal decline, but the coup de grace has not yet fallen, despite calls for it from very high authorities. Lord Slynn said in the Alconbury case [R. v. Secy. of State for Environment, Transport the Regions ex p Alconbury Development Ltd., (2001) 2 All ER 929 (HL)], with reference to proportionality: 'I consider that even without reference to the Human Rights Act, 1998 the time has come to recognise that this principle is part of English administrative law not only when judges are dealing with community acts but also when they are dealing with acts subject to domestic law. Trying to keep the Wednesbury principle and proportionality in separate compartments seems to me to be unnecessary and confusing.' and in the Daly case [R. v. Secy. of State for the Home Deptt., ex p Daly, (2001) 3 All ER 433 (HL)] Lord Cooke said: 'I think that the day will come when it will be more widely recognised that Associated Provincial Picture Houses Ltd. v. Wednesbury Corpn. was an unfortunately retrogressive decision in English administrative law, insofar as it suggested that there are degrees of unreasonableness and that only a very extre ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tification for a de-listing for nine months. We can only presume that it was less than 12 months because someone might have described that as a blacklisting, and hence completely illegal. But that still does not answer why it should be this particular period. 35. It is impossible to sustain the impugned order at Exhibit A . 36. Accordingly, the Petition succeeds. Rule is made absolute in terms of prayer clauses (a) and (b). 37. This leaves the question of what is to happen about the existing tender that we have just been shown. This is Tender No. 16225056 on which there was an auction on 7th February 2023. The Petitioner bid for the tender and Mr. Doctor informs us on instruction that in fact the Petitioner was the lowest bidder. But the Petitioner has been excluded and its technical bid rejected on the ground that it was not eligible for participation. 38. Mr. Suresh Kumar tells us that tender has not been awarded. 39. The result is that so far as this tender is concerned, Tender No. 16225056, the Petitioners' technical bid will have to be accepted, opened, and examined by the Respondents. The Petitioners must be allowed to participate in that tender and in tha ..... X X X X Extracts X X X X X X X X Extracts X X X X
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