Contract Awarded Was Illegal And Unduly Favoured Respondent: Uttarakhand HC Sets Aside Parking Contract, Orders CBI Inquiry

An Uttarakhand High Court Bench of Chief Justice Vipin Sanghi and Justice Rakesh Thapliyal has set aside a parking contract awarded by the Irrigation Department by observing that the contract awarded was illegal and unduly favoured the respondent. 

"The conduct of the official respondents reveals that since beginning, respondent authorities favoured respondent no. 5, firstly by granting him contract for parking and thereafter, by extending the period of tender, which establishes that respondent authorities are hand in glove with respondent no. 5, which caused a huge loss to public exchequer."

"Therefore, this Court is of the view that the extension, as granted to respondent no. 5 is absolutely illegal and contrary to the mandatory condition no. 1 of the tender notice. Accordingly, the impugned order dated 17.12.2022 passed by Chief Engineer, Haridwar is quashed. A writ of Mandamus is issued to the official – respondents to proceed for e-auction to Pantdeep parking, Haridwar immediately and the process of e-auction should be completed, strictly as per provisions of the Uttarakhand Procurement Rules, 2017, within two months from the date of production of certified copy of this order."

The Court further held that the material on record disclosed a prima facie case calling for an investigation by the Central Bureau of Investigation.

Counsel Shobhit Saharia appeared for the petitioner, while Chief Standing Counsel CS Rawat, among others, appeared for the State of Uttarakhand. Senior Counsel Avatar Singh Rawat appeared for the respondent.

In this case, the petitioner challenged the awarding of a parking contract to respondent no. 5 on government land in Haridwar for 629 days, citing deviations from the tender's conditions. The petitioner argued that the contract extension was granted without adequate justification, particularly in light of the "AA" Class Contractor requirement.

Furthermore, the petitioner alleged that officials favored respondent no. 5 by allowing them to purchase the stamp paper after gaining possession of the parking area. Audit objections were raised, accusing officials of causing a revenue loss of Rs. 17.05 lakh. The petitioner also pointed to increases in parking fees and reduction in parking time, both seemingly benefiting respondent no. 5.

The respondent officials countered these claims, maintaining that they followed proper procedures.

The Court observed that in connivance with the officials, undue advantage that been given to respondent no. 5. In that context, it was observed that, "there was clear breach of tender condition since stamp duty was not furnished by respondent no. 5 and parking was handed over to respondent no. 5 much earlier i.e. on 08.03.2019 though as per condition no. 9, successful bidder has to furnish stamp duty and then, next step was to execute the agreement but in connivance with official respondents undue advantage has been given to respondent no. 5 by handing over the parking area. The connivance of the respondents officials cannot be ruled out, particularly, when only two firms were declared to be technically responsive and both the firms are owned by the real brothers and their addresses are also same and on the same date, they had uploaded their bids from same IP address."

Further, it was also observed that the counsel for the respondent could not justify their stand for increasing the parking fees and reducing the time of parking of vehicles. 

In light of the same, the Court had to condemn the actions of the officials. In that context, it was said that, "In view of granting the extension of 629 days for parking to respondent no. 5, increasing the parking fee and reducing duration of parking without producing any document relating to declaration of this parking as zero zone or containment zone, handing over the parking lot without agreement, this Court has no option except to condemn the action of respondents officials. Further, connivance of respondent no. 5 with the official respondents also cannot be ruled out. Observations of the audit department also cannot be over looked and that report reveals that procedure, as adopted for awarding the parking tender to respondent no. 5, caused revenue loss to the public exchequer. Grant of extension of parking even before expiry of period of agreement also creates serious doubt on the conduct of official respondents."

The Court also observed that the conduct of the officials indicated that they were in the clutches of two firms run by influential persons. In light of the same, it was noted that if the investigation was conducted by the State Police Authorities, there are little chances of fair investigation and it will be nothing, but a futile exercise.

In light of the same, it was held that, "this Court is of the view that the conduct of the concerned officials, who appears to be hand in glove with the two firms owned by real brothers and the role of the said two firms should be investigated by an independent investigating agency like CBI and as such, after considering the material on record, this Court comes to the conclusion that the present matter falls within the principles enunciated by the Constitution Bench of the Supreme Court and we are satisfied that the material available on record does disclose a prima facie case calling for an investigation by the Central Bureau of Investigation."

Hence, the petition was allowed, with costs quantified at Rs. 50,000/-, which are payable by the State to the petitioner.

Cause Title: Ashok Kumar Singh vs State of Uttarakhand & Ors.

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