{"id":142009,"date":"2005-04-19T00:00:00","date_gmt":"2005-04-18T18:30:00","guid":{"rendered":"https:\/\/www.legalindia.com\/judgments\/ms-makhija-construction-enggr-vs-indore-development-authority-and-on-19-april-2005"},"modified":"2018-11-24T16:28:11","modified_gmt":"2018-11-24T10:58:11","slug":"ms-makhija-construction-enggr-vs-indore-development-authority-and-on-19-april-2005","status":"publish","type":"post","link":"https:\/\/www.legalindia.com\/judgments\/ms-makhija-construction-enggr-vs-indore-development-authority-and-on-19-april-2005","title":{"rendered":"M\/S Makhija Construction &amp; Enggr. &#8230; vs Indore Development Authority And &#8230; on 19 April, 2005"},"content":{"rendered":"<div class=\"docsource_main\">Supreme Court of India<\/div>\n<div class=\"doc_title\">M\/S Makhija Construction &amp; Enggr. &#8230; vs Indore Development Authority And &#8230; on 19 April, 2005<\/div>\n<div class=\"doc_author\">Author: R Pal<\/div>\n<div class=\"doc_bench\">Bench: Ruma Pal, C.K. Thakker<\/div>\n<pre>           CASE NO.:\nAppeal (civil)  2694-2695 of 2005\n\nPETITIONER:\nM\/s Makhija Construction &amp; Enggr. P. Ltd\n\nRESPONDENT:\nIndore Development Authority and Ors\n\nDATE OF JUDGMENT: 19\/04\/2005\n\nBENCH:\nRuma Pal &amp; C.K. Thakker\n\nJUDGMENT:\n<\/pre>\n<p>J U D G M E N T<\/p>\n<p>(Arising out of SLP) Nos. 21113-21114 of 2001)<\/p>\n<p>RUMA PAL, J.\n<\/p>\n<p>\tLeave granted.\n<\/p>\n<p>\tThe appellant&#8217;s grievance is that his tender for allotment<br \/>\nof land reserved for educational use was not accepted by the<br \/>\nrespondent- authority.  The tender notice was published on<br \/>\n22nd September 1993.  It invited tenders from &#8220;registered<br \/>\ninstitutions who manage educational activities or are constituted<br \/>\nfor this purpose&#8221; for 10,340 sq. mtrs. of land reserved for<br \/>\neducational purposes under the respondent-authority&#8217;s scheme.<br \/>\nOf the tenders submitted the three tenderers  were  the<br \/>\nappellant, Jagriti Bal Mandir Society (hereafter referred to as<br \/>\n&#8216;Jagriti&#8217;) and Crescent Public school (hereafter referred to as<br \/>\n&#8216;Crescent&#8217;) who bid Rs. 261 per Sq.m., Rs.201 per Sq.m. and<br \/>\nRs. 177.60 per Sq.m. respectively.  The appellant, as its name<br \/>\nsuggests,  is a construction company.  However, one of its<br \/>\nobjects in its Memorandum of Association is claimed to be to<br \/>\nconstruct and establish schools.  Because the appellant did not<br \/>\nhave any experience of managing an educational institution its<br \/>\ntender was rejected  on 28th December  1993 and , the<br \/>\nrespondent authority allotted the land in equal halves to Jagriti<br \/>\nand Crescent.\n<\/p>\n<p>The appellant and Jagriti filed writ petitions in the Gujarat<br \/>\nHigh Court.  The appellant&#8217;s grievance was that he was the<br \/>\nhighest tenderer having quoted for the land at Rs.261 per sq.<br \/>\nmtr. and that his tender was rejected unreasonably.  Jagriti&#8217;s<br \/>\ngrievance was that it had bid for the land at  Rs.201 per sq. mtr.<br \/>\nwhich was higher than the bid of Crescent which had offered<br \/>\nonly Rs.177.60 per sq. mtr.  Jagriti, therefore, claimed that the<br \/>\nwhole of the land should have been made available to it.<br \/>\n\tBoth the writ petitions were disposed of by an order dated<br \/>\n4th March 1998 by which the Court directed the respondent-<br \/>\nauthority to consider the representations of the appellant and<br \/>\nJagriti.  The matter was re-considered by respondent No. 1 and<br \/>\nagain by resolution dated 7th December 1998, the decision<br \/>\ntaken earlier was re-affirmed.   Pursuant to the decision, a letter<br \/>\nof allotment was issued to Jagriti and Crescent.<br \/>\n\tThis led to a second round of litigation by the appellant<br \/>\nand Jagriti reiterating their earlier stand.  Both the writ petitions<br \/>\nwere allowed by a common order on 29th February 2000.  The<br \/>\nlearned Single Judge was of the view that the requirement in<br \/>\nthe tender that the tender would be accepted only from<br \/>\nregistered institutions which are engaged in educational<br \/>\nactivities had an alternative which was ignored by the<br \/>\nrespondent No.1, namely, that the institutions constituted for<br \/>\nthat purpose could also participate.  Since the appellant&#8217;s<br \/>\nmemorandum showed that the appellant was constituted, inter-<br \/>\nalia, for setting up schools, it could not be disqualified on this<br \/>\nground.  The respondent No. 1 was accordingly required to<br \/>\ndecide the representations of the appellant and Jagriti afresh<br \/>\nwith a speaking order without being influenced by the earlier<br \/>\nrecommendations or earlier resolutions.<br \/>\n\tThree appeals were preferred from this order before the<br \/>\nDivision Bench.  One appeal was by Jagriti and two by<br \/>\nCrescent. Jagriti&#8217;s appeal was dismissed for default.  One of<br \/>\nCrescent&#8217;s appeal was dismissed on the ground that the Single<br \/>\nJudge had done substantial justice.\n<\/p>\n<p>\tThe respondent No. 1  authority then reconsidered the<br \/>\nmatter again and by a resolution dated 18th September 2000, in<br \/>\nkeeping with the observations of the High Court, held that the<br \/>\nappellant was competent to tender and accept the tender. Its<br \/>\ntender was accepted and allotment of the entire plot of 10,340<br \/>\nsq. mtrs.  was made to the appellant.\n<\/p>\n<p>\tImmediately after this, Jagriti&#8217;s Letters Patent Appeal  was<br \/>\nrestored and ultimately after hearing the parties allowed by the<br \/>\nimpugned order. The learned Single Judge&#8217;s decision  was set<br \/>\naside and the respondent No. 1 was given the liberty to<br \/>\nimplement and give effect to the advertisement published by it<br \/>\non 22nd September 1993.\n<\/p>\n<p>\tThe appellant has challenged the decision of the Division<br \/>\nBench contending that the dismissal of Crescent&#8217;s Letters<br \/>\nPatent Appeal from the order of the learned Single Judge<br \/>\noperated as res judicata and that in any event, the<br \/>\nadvertisement had been misconstrued by the Division Bench to<br \/>\nmean that the tenderers had to be engaged in education<br \/>\nwithout considering that the advertisement allowed institutions<br \/>\nwhich were merely constituted for the purpose of education to<br \/>\napply.\n<\/p>\n<p>\tThe respondents have submitted that there was no<br \/>\nquestion of the order of the Division Bench dismissing<br \/>\nCrescent&#8217;s appeal operating as res judicata against Jagriti<br \/>\nbecause Jagriti was only a co-respondent in Crescent&#8217;s appeal.<br \/>\nIt is also argued that the principle of res judicata would only<br \/>\napply if there was a hearing and a decision &#8211;  both which were<br \/>\nabsent when the order on Crescent&#8217;s appeal was passed.  On<br \/>\nthe question of the eligibility of the appellant to apply, it was<br \/>\ncontended that irrespective of the construction of the<br \/>\nadvertisement since Jagriti had established experience in the<br \/>\nfield of education it was better qualified than the appellant.   It is<br \/>\nsubmitted that the appellant could not be said to have been<br \/>\nconstituted for the purpose of education.  The objects of<br \/>\nMemorandum of Association merely list possible fields of<br \/>\ndiversification.  It is also submitted that there was nothing in the<br \/>\nadvertisement from which it could be assumed that the tender<br \/>\nwould be given to the highest bidder.  In fact, money was not<br \/>\nthe sole governing factor.  In this connection, reference was<br \/>\nmade to Government Order dated 28th August 1986 from<br \/>\nMadhya Pradesh Tender Advertisement Law Manual.  It<br \/>\nrecords that the Government had taken a decision that public<br \/>\ninstitutions like educational, religious and charitable institutions<br \/>\nmay be allotted space for the purposes for which they were set<br \/>\nup by determining the price of land allotted on the principle of<br \/>\n&#8216;No Profit No Loss&#8217; basis.\n<\/p>\n<p>On the merits, Jagriti&#8217;s submissions appear to be correct.<br \/>\nThe tender notice had asked for bids from registered institutions<br \/>\ncarrying on educational activities.  The clear implication of the<br \/>\nlanguage is that the institution must be one which is constituted<br \/>\nfor the purpose of educational activities, if  it does not already<br \/>\nmanage educational activities.  The tender notice specified,<br \/>\ninter alia, that the tender form had to be accompanied with<br \/>\n&#8220;description of activities managed earlier by the society&#8221;.  In<br \/>\nresponse to the appellant&#8217;s tender, by letter dated<br \/>\n1st December, 1993, the respondent No.1 had informed the<br \/>\nappellant that it was required to submit the detailed particulars<br \/>\nof the educational activities of the institution.<br \/>\nThe appellant admittedly has no experience in<br \/>\neducational activities of any sort. The question then is- Was it<br \/>\nconstituted for educational purposes? Out of 67 objects<br \/>\nmentioned in its Memorandum of Association, the main objects<br \/>\nof the appellant were to carry on the business of constructing,<br \/>\nbuilding, roads, bridges etc. and to act as a supplier of<br \/>\nhardware, paints, sanitary fittings, construction material and so<br \/>\non. The objects incidental or ancillary to the attainment of the<br \/>\nmain objects, are specified in Clauses 3 to 28.  Other objects<br \/>\nare mentioned in Clauses 30 to 67.  These include a wide<br \/>\nvariety of possible diversification of the appellants businesses.<br \/>\nThe last Clause reads:\n<\/p>\n<p>&#8221; 67. To establish and construct<br \/>\nshopping markets, show rooms Nursing<br \/>\nhomes, schools, clubs houses, cinemas,<br \/>\noffice premises and other buildings for<br \/>\ncommercial purposes on lands seized<br \/>\nand licence basis&#8221;.\n<\/p>\n<p>We do not read this as in any way justifying the<br \/>\nappellant&#8217;s claim that it was constituted for educational<br \/>\npurposes.  To be &#8216;constituted for&#8217; means the primary objective<br \/>\nof the constitution.  The primary objective of the appellant was<br \/>\ncertainly not to carry on educational activities.    Besides the<br \/>\nlanguage of Clause 67 does not indicate that even this object is<br \/>\nto carry on the running of the management of the school, but<br \/>\nrather pertains to the construction of school buildings. Where<br \/>\nthe object was to carry on the business, this has been<br \/>\nspecifically so stated in the remaining objects clauses, for<br \/>\nexample in Clauses 30-31, 34-37, 40-42, 44-64 and 66 of the<br \/>\nMemorandum.\n<\/p>\n<p>The importance of the requirement for being involved with<br \/>\neducational activities will also appear from the Regulations for<br \/>\nTransfer of Property and Other Ancillary Matters, 1987 framed<br \/>\nunder the Madhya Pradesh Nagar Tatha Gram Nivesh<br \/>\nAdhiniyam 1973, where Regulation 33 (which refers to the<br \/>\nrespondent No.1 as &#8216;the Authority&#8217;) says  that:-\n<\/p>\n<p>(i)\tThe Authority may transfer any property<br \/>\near-marked in the layout of any scheme<br \/>\nfor fulfillment of any community needs<br \/>\nlike education, medical, social, etc. by<br \/>\ndirect negotiations with such registered<br \/>\ninstitutions which run hospitals, schools<br \/>\nor to such bodies dedicated to science,<br \/>\nart, music, literature etc. or engaged in<br \/>\nother social or community purposes.\n<\/p>\n<p>(ii)\tThe Authority shall determine the rate of<br \/>\npremium on &#8220;No profit No loss basis&#8221;,<br \/>\neach year commencing from 1st<br \/>\nOctober, at which such property shall be<br \/>\ntransferred to such institutions or<br \/>\nbodies.&#8221;\n<\/p>\n<p>The fact that the appellant had bid the highest was, in the<br \/>\ncircumstances, immaterial as the object of allotting the land to<br \/>\nan educational institution was not the making of profit.  The<br \/>\nlearned Single Judge was therefore wrong in construing the<br \/>\nadvertisement dated 22nd September, 1993 in the manner he<br \/>\ndid and the Appellate Court erred in dismissing Crescent&#8217;s<br \/>\nappeal.  In our opinion the appellant was not competent to<br \/>\nparticipate in the tender.\n<\/p>\n<p>However, the appellant is entitled to succeed on the<br \/>\nground that the order of the Division Bench disposing of<br \/>\nCrescent&#8217;s appeal operated as res judicata to bind not only<br \/>\nCrescent but also Jagriti and the appellant. It makes no<br \/>\ndifference that Jagriti was a co-respondent with the appellant.<br \/>\nThe principle of res judicata has been held to bind co-<br \/>\ndefendants if the relief given or refused by the earlier decision<br \/>\ninvolved a determination of an issue between co-defendants<br \/>\n(or co-respondents as the case may be). This statement of the<br \/>\nlaw has been approved as far back as in 1939 in Munni Bibi<br \/>\nvs.  Trilokinath 58 I.A. 158,165, where it has been said that to<br \/>\napply the rule of res judicata  as between co-defendants three<br \/>\nconditions are requisite.\n<\/p>\n<p>&#8220;(1.) There must be a conflict of interest<br \/>\nbetween the defendants concerned; (2.) it<br \/>\nmust be necessary to decide this conflict in<br \/>\norder to give the plaintiff the relief he claims;<br \/>\nand (3.) the question between the defendants<br \/>\nmust have been finally decided.&#8221;\n<\/p>\n<p>This view has been consistently followed by this Court.<br \/>\n[See:  Iftikhar Ahmed Vs. Sahid Meharban Ali, (1974) 2 SCC<br \/>\n151  where the principle was extended to bind co-plaintiffs;<br \/>\n<a href=\"\/doc\/1976157\/\">Mahboob Sahab vs. Syed Ismail AIR<\/a> 1995 SC 1205].\n<\/p>\n<p>In the present case the facts show that all the three<br \/>\nconditions were fulfilled.  There was a conflict of interest<br \/>\nbetween the two co-respondents in Crescent&#8217;s appeal, namely<br \/>\nbetween Jagriti and the appellants. For the purposes of<br \/>\ndeciding the relief, if any, to be granted to Crescent it was<br \/>\nnecessary for the Appellate Court to decide whether the<br \/>\nappellant was entitled to participate.  Although, the decision of<br \/>\nthe Appellate Court is cryptic, nevertheless, it cannot be said<br \/>\nthat the Court had not applied its judicial mind to the merits of<br \/>\nthe case.  The exact language of the order disposing  of the<br \/>\nCrescent&#8217;s appeal reads as follows:-\n<\/p>\n<p>&#8221; Heard.\n<\/p>\n<p>  Dismissed as the order of the Hon&#8217;ble Single<br \/>\nJudge has done substantial justice, it also<br \/>\nsays that I.D.A. would decide the matter by all<br \/>\nconsiderations.  This order is passed after<br \/>\nhearing the L\/C for the parties for about an<br \/>\nhour.&#8221;\n<\/p>\n<p>Jagriti&#8217;s counsel  was recorded as being present.  The<br \/>\nfact that the Appellate Court was wrong in affirming the decision<br \/>\nof the learned Single Judge would not make the decision less<br \/>\nbinding. [See: <a href=\"\/doc\/802756\/\">State of West Bengal vs. Hemant Kumar<br \/>\nBhattacharjee AIR<\/a> 1966 SC 1061; <a href=\"\/doc\/1187160\/\">Gorie Gouri Naidu vs.<br \/>\nThandrothu Bodemma AIR<\/a> 1997 SC 808, 809]<br \/>\nThe counsel for Jagriti has referred us to several<br \/>\ndecisions viz. <a href=\"\/doc\/125536\/\">Gopal Upadhyaya and Ors. vs. Union of India<br \/>\nand Ors.<\/a> 1986 (Supp) SCC 501, <a href=\"\/doc\/1186098\/\">Ambica Quarry Works vs.<br \/>\nState of Gujarat &amp; Ors.<\/a> (1987) 1 SCC 213, <a href=\"\/doc\/888451\/\">Deena Alias Deen<br \/>\nDayal &amp; Ors. vs. Union of India &amp;  Ors.<\/a> etc.etc. (1983) 4 SCC<br \/>\n645 and Krishena Kumar Vs. Union of India &amp; Ors. (1990) 4<br \/>\nSCC 207.  None of  the decisions are apposite.  They refer to<br \/>\nthe principle of precedent which is distinct from the principle of<br \/>\nres judicata. A precedent operates to bind in similar situations<br \/>\nin a distinct case.  Res judicata operates to bind parties to<br \/>\nproceedings for no other reason, but that there should be an<br \/>\nend to litigation.\n<\/p>\n<p>In the circumstances, the appeals are allowed without any<br \/>\norder as to costs.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>Supreme Court of India M\/S Makhija Construction &amp; Enggr. &#8230; vs Indore Development Authority And &#8230; on 19 April, 2005 Author: R Pal Bench: Ruma Pal, C.K. Thakker CASE NO.: Appeal (civil) 2694-2695 of 2005 PETITIONER: M\/s Makhija Construction &amp; Enggr. P. Ltd RESPONDENT: Indore Development Authority and Ors DATE OF JUDGMENT: 19\/04\/2005 BENCH: Ruma [&hellip;]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_lmt_disableupdate":"","_lmt_disable":"","_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[30],"tags":[],"class_list":["post-142009","post","type-post","status-publish","format-standard","hentry","category-supreme-court-of-india"],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v27.3 - https:\/\/yoast.com\/product\/yoast-seo-wordpress\/ -->\n<title>M\/S Makhija Construction &amp; Enggr. ... vs Indore Development Authority And ... on 19 April, 2005 - Free Judgements of Supreme Court &amp; High Court | Legal India<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.legalindia.com\/judgments\/ms-makhija-construction-enggr-vs-indore-development-authority-and-on-19-april-2005\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"M\/S Makhija Construction &amp; 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