JUDGEMENT
SABYASACHI BHATTACHARYYA,J. -
(1.) CANs 2, 3 and 4 of 2021 are applications for addition of party to W.P.A. 8958 of 2020.
The brief background of the case is:
International Commerce Limited ('ICL' for short), the applicant in CAN 4 of 2021, preferred a writ petition bearing W.P. No. 33074 (W) of 2013, challenging the process of granting contracts on nomination basis by the Union of India to Ferro Scrap Nigam Limited (FSNL), respondent no. 5 in W.P.A. 8958 of 2020. Vide order dated January 25, 2019, a co-ordinate Bench disposed of W.P. No. 33074 (W) of 2013 by quashing the decision to award contract to FSNL on nomination basis and directing such contracts to be awarded through public tender. Two appeals, bearing MAT 313 of 2019 and MAT 244 of 2019, were preferred against the said order by the Steel Authority of India Limited (SAIL) and another and FSNL respectively, which were taken up together for hearing by a Division Bench which, by its order dated April 1, 2019, stayed the operation of the order of the learned Single Judge and observed that the existing system of awarding work to FSNL on nomination basis shall continue till disposal of the appeals. The interim arrangement, it was observed by the Bench, shall not create any equity in favour of FSNL. The said appeals are still pending.
On September 4, 2020, the Inter Ministerial Group, Government of India (IMG), which is respondent no. 7 in W.P.A. 8958 of 2020, took a decision advising the Ministry of Steel to instruct CPSEs involved in iron and steel sector to switch over to competitive bidding process for steel milling and recovery of ferrous scrap function instead of nomination to FSNL. Being aggrieved by such decision, the employees' unions of the Durgapur FSNL and of the FSNL, along with their functionaries, have moved W.P.A. No. 8958 of 2020.
ICL has moved CAN 4 of 2021 for adding itself as a party-respondent to the last-mentioned writ petition. It is argued on behalf ICL that since its previous writ petition had succeeded by scrapping the nomination process and directing public tender for award of contracts, against which an appeal is pending, the ICL is a necessary and proper party to the present proceeding as the outcome of this proceeding will directly affect the ICL's interests. Needless to say, ICL is engaged in similar business as FSNL and will be entitled to participate in the competitive tender process, if held for awarding contract.
KRL Infratech (India) Limited, the applicant in CAN 2 of 2021, and K. Seshagiri Rao and Co., a registered partnership firm which has filed CAN 3 of 2021, stand on similar footing as the ICL insofar as those also conduct similar business and will be entitled to participate in any tender process floated pursuant to the decision of the IMG dated September 4, 2020, which has been assailed in W.P.A. 8958 of 2020. Hence, the said applicants also claim to have a direct interest in the outcome of the said writ petition, since valuable rights have accrued in favour of those entities, on a similar footing as ICL, to participate in the competitive bidding process for award of contract which has been monopolized in favour of FSNL by the process of nomination. Such rights are directly dependent on the outcome of the writ petition, which makes them necessary and proper parties thereto.
All three applicants argue in common that since the Union of India virtually consented to the stay order passed in MAT 313 of 2019 and MAT 244 of 2019 and is bound by the order, being parties to the appeals, the scope of argument of the Union in the present writ will be extremely limited. The SAIL stands on a similar footing as the Union and are constrained in the scope of their arguments in view of the subsistence of the stay order. However, the present applicants were never parties to the previous writ petition or the appeals and, as such, are not so fettered.
Learned Senior Counsel for the writ petitioners argues that the applicants in CANs 2, 3 and 4 are neither necessary nor proper parties to the writ petition, since they have not even pleaded to have participated in any tender process or to have been awarded any work contract, which could have created any legal right in their favour. The mere right to participate in a tender is inchoate and cannot render them either necessary or proper parties to the present writ petition. There is no proximate nexus of the applicants with the present lis and they have failed to show how or why the writ petition cannot be completely adjudicated in their absence. At best, it is argued, the applicants would be future beneficiaries of any tender process which would be floated in the event the present writ petition fails. Such benefit would be incidental to the result of the writ petition and non-existent at present, more so, in view of the stay orders passed in the appeals and at the ad interim stage of this writ petition. However, such future uncertain right, if the applicants participate in such a prospective tender process at all, cannot establish any direct connection between the outcome of the writ and the chance of curtailment of any present right of the applicants.
Learned senior counsel for the writ petitioner places reliance on a Division Bench judgment of this court, rendered in Mukund Shah vs. Golden Polyester Industries Pvt. Ltd., reported at 1979 (1) CLJ 258 where the Division Bench relied on Razia Begum v. Sahebzadi Anwer Begum [AIR 1958 SC 886] to hold that, in order to be added as party to a suit, a person should have a direct interest as distinguished from a commercial interest in the subject- matter of litigation. The person has to establish that without his presence the question involved in the Civil Rule cannot be completely decided. In the absence of any proprietary or any other direct interest, mere claim of a commercial interest would not suffice to add such a person. Also discussing the locus standi to file a writ petition, it was held that the concerned act of the State or any other statutory or public authority has to be shown to violate or infringe personal or private rights of the individual. Even if the act or omission affects a number of persons or infringes a statutory right jointly claimed or there is a breach of a statutory/public duty towards them, all the persons who are affected may have cause of action and may individually, jointly or in representative capacity file a writ petition.
The writ petitioner also cites a judgment of the Supreme Court reported at (2010) 7 SCC 417 [Mumbai International Airport Private Limited vs. Regency Convention Centre and Hotels Private Limited and others] in support of the above proposition.
Learned Additional Solicitor General of this court submits on behalf of the Union of India that the applications for addition of party, if allowed, would create unnecessary multiplicity and delay the hearing of the writ petition. He further submits that the applicants do not have any present right which may be affected either way by the result of the writ petition. Moreover, the interest claimed by them is already represented adequately by the respondents in the writ petition.
Learned senior counsel appearing for the SAIL submits that the applications are delaying the conclusion of the writ petition, thereby affecting public interest adversely. The entire process of issuing tenders is being stalled in view of the subsistence of the interim order. In the event the interim order is extended, such extension may be with a rider that the SAIL will be permitted to proceed with the tender process but will have to seek leave of this court to finalize such process and issue work orders.
Upon hearing all the contesting parties on the applications for addition of party, the first question which is required to be explored is, what is the scope of the writ petition? The challenge therein is against a decision to award contracts by floating tenders which, according to the writ petitioners, is patently violative of the interim stay order passed by the Division Bench, which is still subsisting. That apart, the writ petitioners rely on precedents to the effect that adopting the mode of tender is not a mandatory requirement and can be deviated from in certain cases. The writ petitioners thus want a continuance of the existing arrangement of nomination in favour of the FSNL, of which the members of the writ petitioners-trade unions are employees.
The first aspect which stands out is that the decision of the IMG dated September 4, 2020 is a fresh cause of action, having arisen subsequent to the interim order passed by the Division Bench in the pending appeals. Such decision has conferred a right on all entities standing on the same footing as FSNL, including the applicants in CANs 2, 3 and 4 of 2021, to participate in the resultant competitive process introduced by issuance of tender. Since the interim stay order apparently prevents the respondents in the present writ petition from resorting to such competitive process, no tender can be floated at present, thus perpetuating the nomination of the FSNL for the work-in-question, consequently depriving the present applicants from bidding for such work orders. Thus, the applicants got, and will get, no scope to procure such work order, since no tender can be floated due to the impediment put in place by the interim stay order. Hence, such non-participation cannot be held against the applicants so far as their prayer for impleadment in the present writ petition is concerned. Rather, the applicants' present right to participate in the competitive process for obtaining the work order from SAIL will be infringed in the event the writ petition succeeds, negating the decision introducing the competitive process.
In the present case, as distinct from the cited reports, the commercial interest is itself a direct interest and cannot be distinguished therefrom, since the subject- matter of the writ petition revolves around the respective commercial interests of the FSNL and its employees, for infringement of which the writ petition has been preferred in the first place.
As far as the applicant in CAN 4 of 2021 is concerned, it is a party to the appeal against an order passed in its favour and, thus, have direct interest in the outcome of the present writ.
As far as the applicants in CANs 2 and 3 of 2021 are concerned, those stand on an equal footing as the applicant in CAN 4 of 2021 inasmuch they operate business in the same field and are entitled to participate in any tender process floated by the SAIL pursuant to the decision dated September 4, 2020, which has been assailed in W.P.A. 8958 of 2020. Thus, all the three applicants stand to benefit directly from the impugned decision, and hence have a direct interest in the fate of the writ petition. The right of the applicants is not inchoate but is a present right flowing from the IMG decision dated September 4, 2020, the veracity and legality of which is the subject-matter of challenge in WPA 8958 of 2020.
As such, even abiding by the ratio of the reports cited by the writ petitioners, the applicants' interest is commercial as well as direct, the one being inseparable from the other in the facts of this case.
Another aspect which has to be considered is that the present respondents in the writ petition are parties to the previous writ petition and the appeals emanating therefrom and are, thus, bound by the interim order of the Division Bench. Hence, the scope of defence of the impugned decision is extremely limited and constrained as far as the existing respondents are concerned.
The applicants, however, are free from such fetter since they have not been parties to the previous proceedings and, thus, not bound by any interim order passed therein. Whether the impugned decision dated September 4, 2020 is vitiated due to violation of the interim order of the Division Bench or some other reason, is the subject-matter of the writ petition itself and cannot be pre-judged either way at this premature juncture. The only present certainty is that the right of the applicants to participate in the competitive tender process, if commenced by virtue of the said impugned decision, will be directly affected by the outcome of the present writ petition. Hence, the applicants are not only proper but necessary parties to the proceeding. In their absence, it is doubtful as to whether there will be any effective opposition worth the name from the present respondents, whose scope of arguments is constrained by the Division Bench stay order. This necessitates the impleadment of the applicants all the more to have an effective contest to the writ petition.
In view of the above observations, CAN 2 of 2021, CAN 3 of 2021 and CAN 4 of 2021 are allowed on contest without any order as to costs. The respective applicants in the said applications are added as respondents to the writ petition bearing WPA No. 8958 of 2020. The learned advocate-on-record for the writ petitioners shall carry out necessary consequential amendments in the cause title of the writ petition accordingly during the course of the day, serve copies of the writ petition, along with all annexures, if not already served, on all the three applicants individually, also during the course of the day and shall file an affidavit-of-service in that regard on the next date of hearing.
The applicants in CAN 2 of 2021, CAN 3 of 2021 and CAN 4 of 2021 shall file their respective affidavits-in- opposition to the writ petition within a fortnight from date. Replies, if any, shall be filed within a week thereafter.
Further orders as regards the next returnable date and extension of interim order will be passed upon hearing counsel for all parties.
The parties shall act on server copies of this order.
(Sabyasachi Bhattacharyya, J.)
Later Learned counsel appearing for the writ petitioners submits that the interim order granted earlier by a co- ordinate Bench in this matter may continue for a limited period and the main writ petition may be fixed for hearing within the same. However, it is contended that any variation to the interim order would tantamount not only to a violation of the order of stay passed by the Division Bench but also amount to pre-judging the issues involved in the present writ petition, since the writ petitioners have raised other questions than the impugned notification being violative of the stay order passed by the Division Bench.
Learned Additional Solicitor General submits that the difficulty pleaded by the Steel Authority of India Limited (SAIL) does not hold good in view of the limited scope of the nomination-in-question being for the purpose of clearing scrap materials and not disposal of the same. As such, there cannot be any reason for the interim order to be varied at this stage.
That apart, learned counsel for the petitioners as well as learned Additional Solicitor General submit that there would be anarchy in the event bids are permitted to be opened by the SAIL at this stage.
Learned senior counsel appearing for the SAIL contends that the premise of the Division Bench order as well as the interim order passed by a co-ordinate Bench in this writ petition was that the contract with Ferro Scrap Nigam Limited (FSNL) was to immediately end and the tender process had not yet started. However, embargo put in place by the said Division Bench order pertains to issuance of work orders and continuing the nomination process. SAIL proposes to continue the nomination process for the time being, but seeks leave to start processing the bids in order to avoid unnecessary delay in the event the writ petition fails.
Upon considering the submissions of parties, it appears that SAIL have already floated tender and received bids. However, in the event SAIL is permitted to continue with the tender process in the meantime, there might be conflict of decisions with the stay order passed by the Division Bench, since nothing will remain thereafter for being adjudicated in the writ petition but to issue work orders, which was specifically stayed by the Division Bench.
That apart, any modification of the interim order at this stage would virtually tantamount to pre-judging the merits of the writ petition without hearing the parties on merits.
As such, the interim order, granted earlier, stands extended till May 17, 2021 or until further order, whichever is earlier.
As directed previously, the parties shall exchange affidavits in the meantime.
The writ petition itself, along with pending application, if any, shall appear for hearing together on May 10, 2021, to be taken up at 10.30 a.m.
As rightly pointed out by learned counsel for the parties at this juncture, the name of Mr. Anindya Mitra, learned senior counsel, was wrongly recorded in the cause title of the order dated April 13, 2021 instead of Mr. Ratnesh Rai in connection with CAN 4 of 2021.
Let such order be deemed to stand corrected to the effect that the expression 'Mr. Anindya Mitra' appearing for the applicant in CAN 4 of 2021 be replaced by 'Mr. Ratnesh Rai'.
Let this order be deemed to be a part of the order dated April 13, 2021.
Urgent photostat certified copies of this order, if applied for, be made available to the parties upon compliance with the requisite formalities. ;