The High Court of Orissa at Cuttack Bench has Internal communications issued by government departments directing Tender Inviting Authorities to ensure fair competition, prevent cartelization and bid-rigging, and report credible cases to the Competition Commission of India are merely executive instructions and do not create any legally enforceable right in favour of a third party. The Court clarified that such communications do not override, undermine, or usurp the powers and jurisdiction of the Competition Commission under the Competition Act, 2002, and can at best be treated as a trigger point for invocation of the statutory provisions of the Act.
The High Court emphasised that the rejection of a bid is an independent exercise within the competence of the Tender Inviting Authority, and courts should be slow and circumspect in interfering with such internal administrative instructions at an interim stage. A litigant whose name does not figure in the impugned communication and who has no remote nexus with the same lacks the locus to challenge such instructions, particularly when the challenge is founded on the untenable premise that the provisions of the Competition Act apply only upon a reference or suo motu initiation by the CCI.
The conduct of a petitioner who seeks to get away from anti-cartelization directives with the latent intent to promote cartelization disentitles him to the discretionary relief of the High Court under Article 226 of the Constitution, added the Court while dismissing the petition with costs of Rs. 50,000, to be deposited with the State Legal Services Authority.
Briefly, the Petitioner, Bikramananda Mohanty, approached the Orissa High Court challenging two internal communications issued by the Works Department of the State of Odisha. The first letter was sent by the F.A.-cum-Special Secretary to Government, Works Department, to the Engineer-in-Chief (Civil)-cum-Roads, Nirman Soudh, Bhubaneswar, instructing tender-floating authorities to ensure fair, transparent and impartial participation in the open tender process and to eradicate cartelization. The second letter was issued by the Office of the Engineer-in-Chief (Civil) to all Chief Construction Engineers of the respective Circles, laying down detailed instructions to be followed by Tender Inviting Authorities (TIAs) to maintain genuine competition and prevent cartelization and bid-rigging.
The Petitioner’s name did not appear in either of the impugned letters, and no remote nexus between the Petitioner and the communications could be perceived from the record. The Petitioner contended that the letters, in effect, usurped the powers of the Competition Commission of India (CCI) and were therefore contrary to the Competition Act, 2002. The Petitioner also relied on a subsequent letter cancelling a tender, contending that the impugned communications had larger ramifications affecting ongoing tenders.
The Division Bench comprising the Chief Justice Harish Tandon and Justice Chittaranjan Dash observed that the impugned communications were internal instructions issued to tender-floating authorities and were not addressed to any individual or association of persons. The Court noted that the communications were a reminder of the duties and responsibilities of Administrative Officers in the tender process, aimed at ensuring adherence to the objects and reasons underlying the Competition Act, 2002.
The Court observed that the Competition Act, 2002 is a self-contained enactment with the avowed object of ensuring fair competition in the market, and that proceedings by the CCI can be triggered by a reference from the Central Government, State Government, or a statutory authority, or suo motu upon formation of a prima facie opinion. The Court further observed that internal communication between different departments or officials within the same department is merely an executive instruction and does not create any legally enforceable right in favour of a third party, and that the Court should be slow and circumspect in interfering at such a stage.
On a bare perusal of the contents of the letters, the Court observed that there was no ambiguity that they overrode or undermined the provisions of the Competition Act or the powers of the CCI. The Court noted that the communications were in conformity with Section 26 of the Act, under which a reference has to be made to the CCI, and that the letters could, at best, be termed as a trigger point for invocation of the provisions of the Competition Act, 2002. The Court also observed that rejection of a bid is within the domain and jurisdiction of the Tender Inviting Authority, which is otherwise competent either to proceed with the tender or to cancel the same, subject to the limitations carved out by law.
