ORDER
S.J. Mukhopadhaya, J.
1. In this writ petition, the petitioner has challenged the legality and validity of Tender Notice dated 11th April, 2003 issued by the 2nd Respondent, The Jharkhand State Tribal Cooperative Development Corporation Limited, Ranchi (for short ‘Corporation’), whereby and where-under, tenders have been called for only from Government of India Enterprises who have executed similar Government aided projects in remote areas to install solar power lighting systems in the Government Tribal Residential Schools and Hostels.
2. The petitioner, BP Solar India Limited, a Private Company registered under the Companies Act, 1956 having not come within the zone to apply for tender, has challenged the proposals/Tender Notice dated 11th April, 2003, as illegal, arbitrary and void.
3. According to the petitioner, it is not only a manufacturer and distributor of solar power systems, but it also designs, develops, manufactures, installs, commissions and give services of photovoltaic cells, modules, products, systems and other accessories for application like, lighting, pumping, refrigeration, grid connect, hybrid power, voltage power plants etc.
The petitioner claims that over a period of 12 years, it has built up the name for itself as having expertise in the area of manufacture and supply of solar power systems. Its expertise has been recognized and acknowledged by the Central Government and various State Governments and Governmental agencies. It has carried on extensive utilization of solar powered equipments and systems, inter alia, for various State Governments and Governmental Agencies. The petitioner claims to have made largest investments in the field of solar powers of India and further claims to be the largest employer in the field having turnover of about 262 crores–500 crores.
The details of works so performed by the petitioner in the States of Jammu and Kashmir, Orissa, Chennai, West Bengal, Punjab and Haryana have been shown at paragraphs 7 to 10 to the writ petition.
4. The counsel for the petitioner submitted that the action of the respondents by excluding the private parties and only calling for applications from Government Organisations/Agencies is arbitrary, un-reasonable, unfair, unjust and is against the basic tenets of natural justice.
5. On the other hand, according to the respondents, there is a valid classification made by the 2nd respondent having a nexus to the object achieved. Reliance was placed on enclosures to the counter affidavit.
6. “If the Government awards a contract or leases out or otherwise deals with its property or grants any other largess, it would be liable to be tested for its validity on the touch-stone of reasonableness and public interest and if it fails to satisfy either test, it would be unconstitutional and invalid.”
This was the observation of the Supreme Court in the case of Kasturi Lal v. State of J&K, reported in AIR 1980 SC 1992. In the said case, the Supreme Court further observed :
“It must follow as a necessary corrolary that the Government cannot act in a manner which would benefit a private party at the cost of the State : such an action would be both unreasonable and contrary to public interest.”
7. In the case of Thimmappa v. Chairman, Central Bd. of Dirs., S.B.I., reported in AIR 2001 SC 467, the Supreme Court observed :
“What Article 14 prohibits is class legislation and not reasonable classification for the purpose of legislation. If the rule making authority takes care to reasonably classify persons for a particular purpose and if it deals equally with all persons belonging to a well defined class then it would not be open to the charge of discrimination. But to pass the test of permissible classification two conditions must be fulfilled :
(a) that the classification must be founded on an intelligible differentia which distinguishes persons or things which are grouped together from other left out of the group; and
(b) that the differentia must have a rational relation to the object sought to be achieved by the statute in question.
The classification may be founded on different basis and what is necessary is that there must be a nexus between the basis of classification and the object under consideration.”
8. In this case, the only question arises whether the decision of the respondents to invite proposals/tenders only from Government of India Enterprises who have executed similar Government Aided projects to install solar power lighting systems in the Government Tribal Residential School and Hostels situated in remote areas is arbitrary or is proper?
9. Similar was the case of Rai Sahib Ram Jawaya Kapur v. State of Punjab, reported in AIR 1955 SC 549, wherein the Supreme Court noticed similar restrictions imposed by the State on the purchase of text books. The Supreme Court held that a publisher did not have the right to insist on any of their books being accepted as text books.
10. In a similar case of Indian Drugs and Pharm. Ltd. and Ors. v. Punjab Drugs Manufacturers Association and Ors., reported in AIR 1999 SC 1626, the Supreme Court tested the constitutional validity of the policy decision of the Government of Punjab to purchase certain medicines for the Government Hospitals and Dispensaries from Public Sector manufacturers only.
The High Court of Punjab and Haryana allowed the writ petition and quashed the Government policy decision.
In the said case, the Supreme Court noticed that in a similar case C.A. Nos. 4550-51/89, the Rajasthan High Court by rejecting the contention of the writ petitioner held that there was no monopoly created in favour of public sector undertakings. The High Court of Rajasthan also came to the conclusion that if at all the policy only restricts to the Government Departments from purchasing certain drugs from public sector undertakings only, the same cannot be equated with a monopoly as contemplated under Article 19(6) of the Constitution.
11. The Supreme Court of India while reversed the Punjab and Haryana High Court judgment, approved the judgment of High Court of Rajasthan and held, as follows :
“We have perused the impugned policy whereby the State Government had directed the authorities concerned to purchase certain medicines only from public sector undertakings or their dealers. In our opinion the impugned policy only directs that certain drugs are to be purchased from the specified manufacturers. This does not preclude the other manufacturers or their dealers from either manufacturing or selling their projects to other customers. It is of common knowledge that the requirement of drugs is not the need of the Government hospitals and dispensaries only. As a matter of fact, the need of the Government hospitals and dispensaries must be only a fraction of the actual demand in the market which demand is open to be met by the manufacturers like the appellants. Monopoly as contemplated under Article 19(6) of the Constitution is something to the total exclusion of others. Creation of a small captive market in favour of a State owned undertaking out of a larger market can hardly be termed as creation of monopoly as contemplated under Article 19(6) of the Constitution, more so because the captive market consists only of State owned hospitals and dispensaries. Thus, on facts, we agree with the High Court that there is no monopoly created by the impugned policy. We are supported in this view of ours by a catena of decisions of this Court.”
12. In the present case, the, respondents mentioned in their tender notice that installation of solar powers lighting systems in the Government Tribal Residential Schools and Hostels is being a pilot project, the State of Jharkhand with abundant precaution to ensure reliability of the systems offered, took a policy decision and proposed to invite proposals/tenders only from Government of India Enterprises that have executed similar Government Aided projects in remote areas.
13. A valid classification was made on an intelligible differentia distinguishing the Government Companies which were grouped together from other left out. The nexus between the basis of classification and the object under consideration were mentioned in the tender notice, as mentioned above. It having created a small captive market in favour of the State owned undertaking out of a larger market, cannot be termed as creation of monopoly as contemplated under Article 19(6) of the Constitution, more so because the captive market in this case is State Tribal Residential Schools and Hostels.
14. In view of the aforesaid observations and finding, the impugned tender notice dated 11th April, 2003 requires no interference. This Court has noticed the facts brought on record by the respondents vide letter dated 12th October, 2001 (Annexure-A) that the petitioner BP India Limited who was provided with some work order to supply, installation and commissioning of solar power plants and lighting systems by the Agency for Non-Conventional Energy and Rural Technology (ANERT), Tiruvananthapuram, failed to perform its work in spite of repeated reminders for fulfilling the work order and due to non-cooperative attitude of petitioner, the time bound programme of the Agency came to a stand-still and caused unusual delay, for that the petitioner was debarred from doing business with the Agency aforesaid for a period of one year from the date of order.
15. In this background also, this Court is not inclined to give any specific direction to the respondents at the instance of the petitioner.
16. There being no merit, the writ petition is dismissed. However, there shall be no order, as to costs.