2005 (4) TMI 593 - SC - Indian Laws

Construction Firm Ineligible for Educational Land Tender Due to Lack of Relevant Experience; Appeals Allowed Without Costs.

M/s Makhija Construction & Enggr. P. Ltd Versus Indore Development Authority and Ors

The SC concluded that the appellant, a construction company, was ineligible to participate in the tender for educational land due to its lack of ... Tender for allotment of land reserved for educational use - highest tenderer having quoted for the land and that his tender was rejected unreasonably - tender notice had asked for bids from registered institutions carrying on educational activities - appellant did not have any experience of managing an educational institution, its tender was rejected - HELD THAT:- The fact that the appellant had bid the highest was, in the circumstances, immaterial as the object of allotting the land to an educational institution was not the making of profit. The learned Single Judge was therefore wrong in construing the advertisement dated 22nd September, 1993 in the manner he did and the Appellate Court erred in dismissing Crescent's appeal. In our opinion the appellant was not competent to participate in the tender. However, the appellant is entitled to succeed on the ground that the order of the Division Bench disposing of Crescent's appeal operated as res judicata to bind not only Crescent but also Jagriti and the appellant. It makes no difference that Jagriti was a co-respondent with the appellant. The principle of res judicata has been held to bind co- defendants if the relief given or refused by the earlier decision involved a determination of an issue between co-defendants (or co-respondents as the case may be). In the present case the facts show that all the three conditions were fulfilled. There was a conflict of interest between the two co-respondents in Crescent's appeal, namely between Jagriti and the appellants. For the purposes of deciding the relief, if any, to be granted to Crescent it was necessary for the Appellate Court to decide whether the appellant was entitled to participate. Although, the decision of the Appellate Court is cryptic, nevertheless, it cannot be said that the Court had not applied its judicial mind to the merits of the case. Jagriti's counsel was recorded as being present. The fact that the Appellate Court was wrong in affirming the decision of the learned Single Judge would not make the decision less binding. They refer to the principle of precedent which is distinct from the principle of res judicata. A precedent operates to bind in similar situations in a distinct case. Res judicata operates to bind parties to proceedings for no other reason, but that there should be an end to litigation. Thus, the appeals are allowed without any order as to costs. Issues:1. Rejection of appellant's tender for land reserved for educational use.2. Disposal of writ petitions by Gujarat High Court.3. Consideration of representations by respondent authority.4. Appeal before Division Bench.5. Acceptance of appellant's tender and allotment of land.6. Challenge to Division Bench decision.7. Application of res judicata principle.8. Conflict of interest between co-respondents.9. Final decision on the appellant's participation in the tender.Detailed Analysis:1. The appellant's tender for educational land was rejected by the respondent authority, leading to a legal challenge. The tender notice specified that bids were invited from registered institutions engaged in educational activities. The appellant, a construction company, lacked experience in managing educational institutions, raising questions about its eligibility for the tender. The rejection was based on this lack of relevant experience, prompting the appellant to contest the decision.2. Writ petitions were filed by the appellant and another society in the Gujarat High Court, challenging the rejection of their tenders. The High Court directed the respondent authority to reconsider the representations made by the appellant and the other society. Subsequent resolutions reaffirming the initial decision led to further litigation, culminating in a common order allowing the writ petitions on February 29, 2000.3. The respondent authority reconsidered the matter following the High Court's observations and accepted the appellant's tender by a resolution dated September 18, 2000. This decision was in line with the High Court's directive to consider the appellant's eligibility to participate in the tender process.4. Appeals were filed before the Division Bench, with one appeal dismissed for default and another on the grounds of substantial justice. The Division Bench's decision led to a restoration of a Letters Patent Appeal and ultimately set aside the Single Judge's decision, granting liberty to the respondent authority to implement the initial advertisement for land allotment.5. The appellant challenged the Division Bench decision, arguing that the dismissal of a co-respondent's appeal should operate as res judicata. The appellant contended that the Division Bench misinterpreted the advertisement's requirements regarding educational engagement for tenderers.6. The Supreme Court analyzed the appellant's eligibility, emphasizing the necessity of being involved in educational activities as per the tender notice's language. The Court found that the appellant's primary objective was not educational activities based on its Memorandum of Association, leading to the conclusion that the appellant was not competent to participate in the tender process.7. The Court applied the principle of res judicata, holding that the decision in a co-respondent's appeal bound all parties involved, including the appellant. The conditions for applying res judicata were met, as there was a conflict of interest between co-respondents, and the issue of the appellant's participation was crucial for deciding the relief to be granted.8. The Supreme Court highlighted the importance of finality in legal decisions, emphasizing the binding nature of judgments to prevent prolonged litigation. The Court allowed the appeals without costs, affirming the application of res judicata and the decision on the appellant's participation in the tender process.