K. Shivashankar Bhat,.

(1) THE fourth respondent in the writ petition is the appellant. Respondents 1 and

2 before us are the petitioners who filed the writ petition. The third respondent in

the writ petition is ranked as 5th respondent in this appeal, while the second

respondent is the 4th respondent before us. The writ petition seems to have been

filed on 16th july, 1992. On 22-9-1992 the learned single judge ordered the state

government not to make any further payment to the appellant and the said order

was continued thereafter. The writ petition was allowed on 3-12-1992.

(2) THE petitioners sought the quashing of a government order dated 31-3-1992

where by approval was accorded for purchase of 100 numbers of. Apple macintosh

computer systems from M/s. Classik computer systems (the appellant) at a total

cost of Rs. 5. 27 crores, with the configuration stated therein, and, which shall be

subject to the approval of the high power committee and the technical advisory

panel. The order also approved release of 30% of the total amount as advance

payment subject to meeting the expenditure from the contingency fund initially and

subject to regularisation later. Petitioners, further, sought for a direction to the

appellant herein to refund the advance sum of Rs. 1. 58 crores. The petitioners also

sought a mandamus to respondents 2 to 4 in the writ petition to refund the sum of

Rs. 1. 58 crores jointly or severally. The first petitioner is a member of the

Karnataka legislative council and is the leader of the opposition. The second

petitioner is a citizen of this country who was a member of the legislative assembly

for two terms between the years 1967 and 1978. He was also a minister in the state

cabinet earlier; he was also a member of the loksabha between 1979 and 1989. As

persons interested in the administration of the state, in accordance with the

Constitution and law, they have approached this court according to the writ petition

there was a news item published on 1st july, 1992 stating that respondents 2 and 3

in the writ petition have passed an order on 31-3-1992 and that the entire deal was

finalised just within one hour and a sum of Rs. 1. 58 crores was paid as advance at

about 5. 40 p. m. the petitioners filed a copy of the letter addressed by the

appellant to the additional chief secretary on 31-3-1992 as Annexure-C to the writ

petition. They have also produced a copy of the proceedings dated 7-5-1992, of the

technical advisory panel as Annexure-D , whereunder the technical advisory panel

(the tap for short) after examining the proposal to purchase the apple macintosh

computer systems opined that it was non-standard, non-popular and non-compatible

with the ibm and ibm based systems and also not manufactured in india; the tap

pointed out several drawbacks and ultimately suggested that the department of

personnel and administrative reforms (dpar for short) should procure equivalent

ibm based systems from rate contract firm. According to the petitioners there was

undue haste in finalising the release of Rs. 1. 58 crores on 31-3-1992. The writ

petition describes the sequence of events as follows: "3. 30 pm (31-3-1992): V.

Gokulkrishna Meets. Alexander in vidhana soudha and gives a proposal to sell 100

apple macintosh computers to government at a total price of Rs. 5. 27 crores.

(3) 40 pm:. Alexander writes and sends a note recommending purchase ofapple

macintosh to s. Bangarappa for approval.

(4) 00 pm: s. Bangarappa approves the note and sends it back to. Alexander.

(5) 00 pm: the gos. (government orders) are issued approving purchase of 100

Apple Macintosh Computers From V. Gokulkrishna. 5. 30 pm: the bills are presented

to treasury. 5. 40 pm: the treasury issues a cheque worth Rs. 1. 58 crores (as part

advance) to personal assistant to. Alexander. 5. 41 pm (31-3-1992): the personal

assistant to. Alexander hands the Cheque to V. Gokulkrishna. (incidentally

acknowledgement is taken on a plain paper without stamp ). " the petitioners

further asserted that fourth respondent (the appellant) has no business premises in

the city or in this country and the address given by him was that of his residence.

The business concern "classik computer systems" was not registered as a dealer

under the Provisions of the sales tax laws. The petitioners also asserted that the

apple macintosh was an obscure company. It was further asserted in the writ

petition that respondents 2 and 3 did not call for tenders for the supply of the

articles in question, which was the basic procedure to be followed by the

government. It was also stated that the matter was raised before the legislature.

The sum of Rs. 1. 58 crores, according to the petitioners, were thus squandered and

that the impugned order was vitiated by fraud, mala fide and favouritism and that

there was a close nexus between the respondents 2 and 3. The petitioners stated

that the third respondent was an accused under the Provisions of the Prevention of

Corruption Act and was kept under suspension when Sri veerendra patil was the

chief minister and a criminal complaint had been registered against the third

respondent. The complaint was lodged with the special judge, Bangalore. After the

second respondent became the chief minister he got the investigating officer to file

b report and thereafter re-instated the third respondent in office, and this action is

challenged and is pending consideration by this court in several writ petitions. It is

further asserted that the third respondent was promoted as the chief secretary by

the second respondent superseding many senior. a. s. officers. 3. The writ petition

was amended on 10th november, 1992 and it was averred by the petitioners that as

on the said date not a single machine was supplied and that the Provisions of article

299 of the Constitution was contravened and the payment of Rs. 1. 58 crores to the

appellant was without the execution of any agreement, by the director of stores and

purchase department. No norm was applied while placing the order. It was further

pleaded that the supplementary estimates 1992-93 was not duly passed by the

legislative council. The first respondent, the state of Karnataka, filed its statement of

objections, initially raising the question of locus standi of the petitioners and the

maintainability of the writ petition. There was another statement of objection. The

first respondent in the writ petition asserted that the policy of the government was

to increase the use of kannada as official language and that the government evinced

interest in apple macintosh computers in 1991 when it came to know that apple

computers alone have the ability to use kannada language besides english in all

applications and that apple computers were being extensively used in several

governmental departments at the centre as well as by the tamil nadu government.

The release of Rs. 1. 58 crores was under a tentative decision and that the

configuration would have to be cleared by the high level committee (the hlc for

short) and the tap and the final approval of the government. It was stated that the

proposal as well as the report of the tap were considered by hlc on 21-5-1992. The

hlc sought the opinion of other individuals and organisations with experience in

computerisation and after obtaining these opinions, the hlc at its meeting held on 2

7-1992 recommended the proposal. The proposal was thereafter placed before the

cabinet on 3-7-1992 and the cabinet ratified the proposal to make the purchase. The

payment of Rs. 1,58,10,000/- was approved by the legislature, when it approved the

demand No. 41; thus the payment made out of the contingency fund was actually

approved by the legislature in view of the appropriation (no. 3) Act, 1992. According

to the first respondent the proposal to acquire apple computers was "hanging fire"

eversince 11- 10-1991 when the tap opined unfavourably. As to the sequence of

events dated 31-3-1992 stated in the writ petition, the first respondent averred that

"the exact hour and minute furnished by the petitioner are incapable of verification"

and that the relevant statement in the writ petition was like an extract from a

"railway time-table" and that the petitioners have drawn heavily on their own

imagination. However, the statement of objections in no way suggests even broadly

the time taken for finalising the making of the government order dated 31-3-1992

and the release of Rs. 1,58,10,000/ -. It was also stated that the most important

consideration to choose apple computers was that they were the only computers

that could work both in english and in kannada and "when the indent was only for

apple computers, there was no scope nor need for inviting tenders since those

computers could be supplied only by the authorised dealer namely, respondent No.

4. " the allegation as to personal benefit, favouritism and abuse of power were

rejected as vague and indefinite and it was pointed out that no details were

forthcoming in the writ petition regarding the allegations of fraud, mala fide and

favouritism. The opinion received from some of the organisations regarding the

apple computers were filed as annexures to this statement of objections. Another

Annexure is a letter of the government to the appellant dated 17-7-1992 placing an

order for the supply for 100 numbers of apple macintosh computers (referred as

computers in question hereinafter ). 4. The second respondent, the then chief

minister, also filed his statement of objections stating that the action taken to place

orders with the appellant was ratified by the cabinet and that "besides according the

approval referred to above this respondent was not directly concerned with the

transaction impugned in the writ petition. " the second respondent repudiated all

allegations of favouritism, abuse of power, etc. It was denied that there was any

nexus between the second respondent and the third respondent and that the only

relationship that existed was the one arising out the respective offices. The third

respondent who was by that time chief secretary to the government, (he was earlier

the additional chief secretary), also filed his statement of objections. According to

him the proposal to acquire the computers in question was prompted by the policy

of the government to computerise its administration as much as possible and his

active interest in the proposal started, on coming to know that the computers in

question were being widely used in other parts of India because of their capacity to

be operated in Indian languages; and that after a study of the relevant literature

and also witnessing a demonstration and presentation of the computer systems in

question he sought the approval of the second respondent for the purchase of these

computers from the fourth respondent (appellant ). The appellant had made offers

earlier which was renewed on 31-3-1992. On the said date certain savings were

available, being the end of the year, and it was found that a part of the savings

could be utilised for purchasing the computer systems. According to this respondent

there was no hasty decision, and ultimately the cabinet had approved to place a firm

order after the proposal was cleared by hlc. He denied any nexus between himself

and the second respondent. 5. Interestingly this objection statement also no where

traverses the allegations made in the writ petition about the sequence of events and

the various timings given in the writ petition, though it was this respondent who set

the ball in motion on the said date, as could be seen hereafter.

(6) THE appellant, who was the fourth respondent in the writ petition, in the

objection statement averred that reckless and baseless allegations were made by

the petitioners against him. Apple macintosh computers, according to this

respondent are recognised even in the united states as being in many respects

superior to certain brands produced by ibm and both of them were giant companies.

The computer in question was a world renowned product and that these machines

have been specially developed to meet the kannada language requirements of state

government and that there is no other computer available in India which can

perform the functions which these computers are equipped to perform and they are

simple to operate. Question of considering any other computer did not arise in view

of this fact. It is unnecessary to refer to several other general averments in this

statement of objections. As to the credentials of the appellant the objection

statement reads thus:"this respondent is certainly not an anonymous entity as is

made to appear in the writ petition. Classik computer system was started mainly to

market apple computer systems. It acquired dealership in August 1991; Annexure 2

is the letter of appointment dated 10-8-1991 issued by raba contel pvt. Ltd. Its

office premises are at jayanagar, Bangalore, which is not the residence of the

proprietor. It is duly registered under the central and stale sales tax laws. It has

capable and highly experienced staff and support service and can train both

hardware and software apple products. "the fourth respondent (appellant) asserts

that the hlc was not impressed with the views expressed by the tap and that the

members of the tap had no practical knowledge or experience of apple computers.

The appellant- gokulkrishna, whose affidavit is filed in support of the statement of

objections just describes himself as the resident of Bangalore. In the cause title to

the writ petition 4th respondent is described as gokulkrishna, director, classik

computer systems, obviously because that is how the 4th respondent signed his

letter dated 31-3-1992 produced as Annexure-C to the writ petition. We are nothing

this here because ultimately it has come to light that classik computer systems is a

proprietory concern of the appellant. At no time it was a firm nor an incorporated

company. However, we have come across a few documents or letters singed by the

appellant, either as "authorised signatory" of classik computer systems or as its

"director". Quite strangely, the appellant tried to project himself not as the

proprietor of the classik computer systems. It is quite possible that he was

attempting to create an impression that classik computer systems was a big

business concern belonging to a group of people.

(7) IN the course of the hearing the learned attorney-general placed before the

learned single judge all the relevant files relating to the impugned transaction and

on perusal of the files the learned judge sought certain clarifications and these were

furnished on behalf of the state on 2-12-1992. The entire note is extracted below:

points on which learned single judge sought clarification: clarification by the state1.

Para 2 of additional chief secretarys note in file No. Dpar 83 dfr 92 it is stated that

the proposal has been under consideration for sometime and the same has been

deferred in view of the resources position. This is not true since technical committee

had already rejected earlier. The technical advisory panel had earlier recommended

that the procurement of the computers may be deferred. However, in the middle of

the year, the resources position would not be known to meet the expenditure in this

regard as there was no budget provision. Hence after knowing the resource position

at the end of financial year, orders were issued on 31st march, 1992. 2. At the time

of issue of orders, whether the fact that national informatic centre is cbmputeris

ing

the secretariat has been. Taken note of So far as the Karnataka government

secretariat is. Concerned, these computers were meant for installation in all the

ministers offices. The computer network provided by the n. . c. is only english

whereas the apple computers are bilingual both in kannada and english which are

more useful in the minister office. 3. Whether the then chief secretarys views dated

26-5-1992 has been taken note of while submission of papers to the cabinet The

entire file including this note was before the cabinet. 4. There was no technical

member except the kgcc director in the high level committee which considered the

proposal. High level committee is concerned only with identification of areas for

computerisation. It is fact that there was no technical member except the

representative of kgcc on the hlc which considered the proposal. Therefore, the hlc

decided to obtain the opinion of the orginisations who are using apple macintosh

computers. 5. Whether the note dated 26-5-1992 of the chief secretary is taken care

of Since in the cabinet note, only decisions are recorded and discussions held are

not recorded and since the entire file was before the cabinet, the note might have

been taken note of. 6. Whether the chief secretary can refer the matter to high level

committee Yes. The chief secretary to government and the additional chief

secretary to government can refer the mater to high level committee."

(8) THE learned single judge allowed the writ petition and quashed the

government order dated 31-3-1992 and the further action taken thereto was

declared as null and void. The first respondent state was directed to take such

further action as is consequential upon the declaration made by the court. The

learned single judge held as follows: (1) the petitioners have requisite locus standi

to file the writ petition. (2) the appropriation act was constitutionally valid and it was

not permissible to consider the contention that the relevant bill was not even placed

before the legislative council and that the said bill was not passed by the council, in

view of the certification made by the speaker to the effect that the bill has been duly

passed. (3) thereafter, the learned judge proceeded to consider the case on the

basis that the appropriation act was duly passed by both the houses of legislature;

the learned single judge observed: "section 3 thereof (the appropriation (no. 3) Act,

1992) provided that sums authorised to be paid and applied from and out of the

consolidated fund of the state by Karnataka appropriation (no. 3) Act, 1992 shall be

appropriated for the services and purposes expressed in the schedule in relation to

the said year and in the schedule under the head general administration-revenue

Rs. 1,58,10,0007- is mentioned and that was for the purpose of modernisation of

government offices as is clear from the supplemental estimate placed before the

legislature, which was voted. Of course, in the explanatory note it is stated as

follows: explanatory note with a view to modernise government offices and to have

better monitoring of both physical and financial achievements of various schemes,

sanction was accorded to purchase 100 apple macintosh computers from M/s.

Classik computer system at a cost of Rs. 5. 27 crores. 30% of the cost had to be

paid in advance in order to get certain amount of concession. As no budget

provision was made for this purpose, a sum of Rs. 158. 10 lakhs was released from

contingency fund. An equal sum is required for repayment to the fund. " the

explanatory note was held as irrelevant because even the objects of the bill or notes

or debates thereof would become irrelevant when the statute is clear. The learned

single judge held: ". . . . . . the question is whether expenditure has been properly

made under that authority or not. The issue before the court is not whether there is

due authority to incur the expenditure but the manner of incurring the same.

Therefore, i do not think the learned attorney-general is right in his submission that

after the appropriation act is passed it is no longer open to this court to go into the

validity of the transaction arising out of the Administrative Act and paying the

money to a particular party. Money had been drawn from the contingency fund to

pay to respondent 4. When moneys are drawn from the contingency fund on

account of incurring some unforeseen expenditure the expression unforeseen will

have to be understood in its proper context. " it was held that the exercise was to

regularise the expenditure incurred which was unforeseen earlier. What was

approved by the legislature was the expenditure for modernisation of government

offices and not the particular contract awarded to the appellant and if, perchance

the contract with the appellant could not be concluded or there was any breach of

contract, the government was still competent to incur a similar expenditure without

further approval of the legislature; therefore the explanatory note was entirely

irrelevant. (4) on facts, the note prepared by the additional chief secretary on 31-3

1992 was approved by the second respondent, the then chief minister. However, in

none of the files it is disclosed that any decision had been taken or note made to

keep in abeyance the earlier proposal, to know the resource position. On the other

hand the files disclosed that the tap had rejected the offers made by the appellant

on various grounds. Para 2 of the note made by the third respondent on 31-3-1992

was plainly incorrect. Thereafter the learned single judge observed that: ". . . . . to

say the least the third respondent was not responsible in having made the

assessment. Further, if earlier offers had been made it is not clear as to why this file

was not linked with the earlier files nor the offer in question was processed along

with earlier offers made by 4th respondent. Moreover, a suggestion is made that

30% of the total amount is to be paid in advance immediately. Even that was not

the demand made by 4th respondent. All that 4th respondent wanted was once firm

orders were placed 30% advance would be paid. Firm order was placed with 4th

respondent only in the month of July and not in March 1992. Therefore there is

absolutely no hurry on the part of the 3rd respondent to recommend release of 30%

of the amount in advance. As to why such payment was made when that was not

the demand of 4th respondent is shrouded in mystery. The 3rd respondent is not a

raw junior officer but an experienced top functionary at the level of chief secretary.

It is also difficult to accept that second respondent was either naive or gullible to

accept the offer made by 4th respondent without processing the same. It is also

difficult to accept as to why 2nd respondent approved the same even without calling

for the earlier files when there was reference to the earlier offers made by 4th

respondent. Without even ascertaining the fate of those offers how he can approve

the offer made by 4th respondent is difficult to understand. 1 must observe here

that a person in the position of 2nd and 3rd respondents could accept the offer of

4th respondent without following due procedure is unimaginable. I cannot agree

that the transaction in question was a routine one without anything more to it, but

on the other hand if 2nd or 3rd respondent could accept the offer made by 4th

respondent without due verification, it only shows that there is no application of

mind at all. " the note made by the under secretary to the government was referred,

which pointed out that on two earlier occasions technical committee had rejected

the offers made by the 4th respondent. The note of the under secretary was

extensively referred by the court and it was observed: "in that view of the matter, i

specifically asked the learned attorney- general as to why this file did not move as is

ordinarily done from the bottom to the top and why the file in this case had a topsyturvy

journey. He hardly had any answer to that question. " (5) as to the cabinet

decision it was held that the various facts noted in the under secretarys note had

not been considered in the cabinet meeting; placing of the entire file before the

cabinet by itself is not sufficient to hold that the cabinet considered the relevant

factors and that the cabinet note must have been prepared under the instructions of

third respondent (who had become the chief secretary by that time) and that there

was suppression of facts. In the words of the learned single judge: ". . . . . neither

the cabinet note nor the decision of the cabinet will indicate that these files had

been placed or taken note of before arriving at a decision. Entire decision is based

on the cabinet note alone. If all the files or all the facts had been placed before the

cabinet what decision it would have taken is another matter. Hence i must hold that

relevant factors had not been placed before or taken note of by the cabinet and the

cabinet merely approved without due consideration of relevant materials the

decision arrived at by 2nd and 3rd respondents to which factors I have adverted to

earlier. Thus the conclusion is irresistible that the action of the government is

vitiated in issuing an order in favour of 4th respondent in spite of the cabinet

decision. " (6) after summing up the decision, the learned single judge again

observed in para 8 thus: ". . . . . these factors clearly show that second and third

respondents were bent upon issuing orders in favour of 4th respondent. For what

reasons, it is difficult to ascertain with the material placed before me. No nexus is

established between respondents 2 and 3 on the one hand and respondent 4 on the

other to establish mala fides. On the material on record it may be difficult to say

that there are mala fides on the part of second and third respondents but i dare say

that the decision taken by them is not bonafide but very strange. The decision has

been taken in stultification of all financial and administrative norms and procedures.

The action was taken without due care and caution and not with due responsibility

by respondents 2 and 3 for motives which are not clear. And, it is difficult to delve

into minds of men for devil knoweth not the mind of man. " (7) the learned judge

also observed that this court has a duty to examine the matter in detail when

serious complaints were made in the matter of purchase of computer systems and

therefore the files of the government were looked into, though normally such files

were not being examined by the court. It was also observed that the file was sought

to be processed after the respondents 2 and 3 decided to place the orders without

taking into consideration all relevant facts.

(9) BEFORE us Mr. Jayaram, learned counsel for the appellant, advanced the

following propositions, which we have repeated in the words of the learned

counsel:". The petition filed as public interest litigation by two politicians who had

failed in their attempt to raise the same question on the floor of the legislature, not

maintainable as it does not involve any violation of constitutional or statutory

obligations and the transaction in essence consists only of a pure and simple case of

purchase of goods by the state government. . While the writ petition challenged the

provisional order of the state government dated 31-3-1992, it had failed to

challenge the government order dated 17-7-1992 which was actually the firmplacing

of the order with the appellant. It was therefore impermissible for the

learned single judge to grant a prayer which had not been sought for. . The learned

single judge having accepted the material placed on behalf of the respondents in the

writ petition and come to the conclusion that the petitioners had not established

either mala fide or any other illegality, it was impermissible for the learned single

judge to call for files and embark upon an enquiry of his own into what was

essentially the areas of executive action unamenable to judicial scrutiny. This

approach is also opposed to the basic principle of the adversary system of Justice

which is one of the corner stones of our legal system. Having held that the writ

petitioners had failed to establish any nexus between respondents 4 and 5 (chief

minister and chief secretary) or to establish mala fide, he ought to have declined to

grant the relief at the instance of petitioner who had failed to make out any grounds

for such reliefs. iv. The order of the learned single judge is opposed to the settled

law as laid down by various decisions of the Honble Supreme Court that in matters

which are purely executive, courts will not sit in judgment or interfere. This position

is particularly so when the matters involved relate to economic policy and in regard

to such decisions courts will not sit as appellate authority. The learned single judges

order constitutes a violation of these will recognised principles. v. The learned single

judge failed to hold, on the basis of clear principles consistently laid down by the

Honble Supreme Court; that once the transaction enters into the realm of contract,

parties are governed by the law relating to contracts and courts in the exercise of

their power under article 226 of the constitution, will not investigate into such

matters. The learned single judge failed to note that the government in its objection

statement had made its position fully known that it had accepted the contract and

was willing to proceed further in the matter, but for the pendency of the writ

petition. It had also refuted all allegations of the petitioner assailing the validity of

the contractual transaction. In any event, these were matters which could not be

gone into in writ jurisdiction. v. The learned judge failed to attach due importance to

the fact that the appropriation of Rs. 1,58,10,000/- had been made by the

legislature and his technical approach that the explanatory note could not be looked

into is opposed to the well-settled principles of interpretation. He ought to have held

that the matter having received the approval of the legislature, it was no longer

open to the court to set in judgment over the same. v. In laying down the principle

that the decision to purchase the computers from the appellant which had been

approved at the cabinet meeting was bad in law for "non-application of the mind",

the learned single judge failed to appreciate that the decision of the cabinet in the

present case was not the exercise of judicial or quasi-judicial power but purely an

executive action. Concepts such as the application of the mind and observation of

prescribed norms were inapplicable in the said situation. In enunciating this

principle, the learned judge has opened a new door for judicial interference with

every cabinet decision on the ground of non-application of the mind, an

intervention which has been prohibited by the principles laid down by the Honble

Supreme Court consistently in many decisions. v. The learned single judge failed to

appreciate that the technical advisory panel was purely an advisory panel and its

advice could not have any binding force. In any event, on the facts he ought to have

held that the said committee did not have adequate experience or knowledge of

computers operating in kannada language and was therefore not qualified to judge.

ix. Having come to the conclusion that the appellant was entitled to sympathetic

consideration, the learned judge nevertheless failed to dismiss the petition when

there was no justification whatsoever for allowing the same and thereby inflicting

upon the appellant a loss of several crores of rupees for no fault committed by it.

The learned judge failed to note that the apple computers which were to be supplied

by the appellant were the only computers which had the bilingual facility, and upon

this ground alone there was no question of considering any other choice by the

government. The note placed by the advocate-general on an enquiry made by the

learned single judge made it clear that the entire file relating to the transaction had

been placed before the cabinet meeting. In view of this also, there was no question

of omission to supply informations."

(10) MR. Santhosh hegde appearing for the 5th respondent in appeal contended

that the remarks made by the learned single judge against the fifth respondent were

unnecessary and any judicial remark made in strong words would affect his servicecareer

and this court should not keep alive those remarks.

(11) MR. Muthanna, the learned counsel for the fourth respondent (chiefminister),

also reiterated the submissions of Mr. Santhosh hegde. Mr. Muthanna further

submitted that the decision to place orders with the appellant was approved by the

cabinet and it cannot be held that there was any nexus between respondents 4 and

5 and that fourth respondent had no communication at all with the appellant and

therefore no adverse remarks could be made against the 4th respondent. At a later

stage Mr. G. Ramaswamy, the learned counsel appearing for 4th respondent,

submitted that: (1) the decision of the learned single judge is entirely based on the

cabinet files and in view of article 163 (3) of the Constitution the court cannot look

into those files. (2) there was no specific allegation of mala fides in the original writ

petition; in view of the finding given that there is no evidence to establish mala fides

the learned single judge court not have further remarked that the impugned action

is "not bonafide". (3) the 4th respondent, as chief minister, had no personal role to

play in the entire matter; his role was the one he played as part of the entire

cabinet. (4) the state government cannot go beyond its own pleadings filed in the

writ petition and thus take a different stand in this appeal. (5) the order dated 31-3

1992 was a provisional and a conditional order. The real order was the final order

dated 7-7-1992 and this later order had been approved by the state legislature

under the appropriation (no. 3) Act, 1992 read with demand No. 41. Therefore, the

question raised before the court is not justiciable. Re. Locus standi:

(12) IT is too late in the day to contend that the petitioners lack locus standi

to challenge a governmental action involving expenditure from public funds. The

petitioners have no personal interest in the subject-matter of the litigation. They are

men of long standing in public life. Their contribution to the democratic system and

its functioning in the state has been highlighted in the writ petition. Even an

ordinary citizen could approach this court challenging a governmental action if the

said action is contrary to the public interest. In s. p. gupta and others v miss lijy

thomas and others, AIR 1982 SC 149 [LQ/SC/1981/463] Justice bhagawathi (as he then was) explained

the principle. The learned judge observed at page 185 thus:". . . . . IT is necessary

to democratise judicial remedies, remove technical barriers against easy accessibility

to Justice and promote public interest litigation so that the large masses of people

belonging to the deprived and exploited sections of humanity may be able to realise

and enjoy the socioeconomic rights granted to them and these rights may become

meaningful for them instead of remaining mere empty hopes. "at page 188 it was

held as follows:"it may therefore now be taken as well-established that where a

legal wrong or a legal injury is caused to a person or to a determinate class of

persons by reason of violation of any constitutional or legal right or any burden is

imposed in contravention of any constitutional or legal provision or without authority

of law or any such legal wrong or legal injury or illegal burden is threatened and

such person or determinate class of persons is by reason of poverty, helplessness or

disability or socially or economically disadvantaged position, unable to approach the

court for relief, any member of the public can maintain an application for an

appropriate direction, order or writ in the high court under article 226 and in case of

breach of any fundamental right of such person or determinate class of persons, in

this court under article 32 seeking judicial redress for the legal wrong or injury

caused to such person or determinate class of persons. Where the weaker sections

of the community are concerned, such as undertrial prisoners languishing in jails

without a trial inmates of the protective home in agra or harijan workers engaged in

road construction in the ajmer district, who are living in poverty and destitution, who

are barely eking out a miserable existence with their sweat and toil, who are

helpless victims of an exploitative society and who do not have easy access to

justice, this court will not insist on a regular writ petition to be filed by the public

spirited individual espousing their cause and seeking relief for them. This court will

readily respond even to a letter addressed by such individual actingpro bonopublico.

It is true that there are rules made by this court prescribing the procedure for

moving this court for relief under article 32 and they require various formalities to be

gone through by a person seeking to approach this court. But it must not be

forgotten that procedure is but a handmaiden of Justice and the cause of Justice can

never be allowed to be thwarted by any procedural technicalities. The court would

therefore unhesitatingly and without the slightest qualms of conscience cast aside

the technical rules of procedure in the exercise of its dispensing power and treat the

letter of the public minded individual as a writ petition and act upon it. "as to

another type of cases the observations are:"but there may be cases where the

state or a public authority may act in violation of a constitutional or statutory

obligation or fail to carry out such obligation, resulting in injury to public interest or

what may conveniently be termed as public injury as distinguished from private

injury. Who would have standing to complain against such act or omission of the

state or public authority Can any member of the public sue for judicial redress Or

is the standing limited only to a certain class of persons Or there is no one who can

complain and the public injury must go unredressed. "after some discussion it was

held:". . . . . BUT if no specific legal injury is caused to a person or to a determinate

class or group of persons by the act or omission of the state or any public authority

and the injury is caused only to public interest, the question arises as to who can

maintain an action for vindicating the Rule of law and setting aside the unlawful

action or enforcing the performance of the public duty. If no one can maintain an

action for redress of such public wrong or public injury, it would be disastrous for

the Rule of law, for it would be open to the state or a public authority to act with

impunity beyond the scope of its power or in breach of public duty owed by it. The

courts cannot countenance such a situation where the observance of the law is left

to the sweet will of the authority bound by it, without any redress if the law is

contravened. The view has therefore been taken by the courts in many decisions

that whenever there is a public wrong or public injury caused by an act or omission

of the state or a public authority which is contrary to the Constitution or the law,

any member of the public acting bonafide and having sufficient interest can maintain

an action for redressal of such public wrong or public injury caused by an act or

omission of the state or a public authority which is contrary to the Constitution or

the law, any member of the public acting bonafide and having sufficient interest can

maintain an action for redressal of such public wrong or public injury. The strict Rule

of standing which insists that only a person who has suffered a specific legal injury

can maintain an action for judicial redress is relaxed and a broad Rule is evolved

which gives standing to any member of the public who is not a mere busy-body or a

meddlesome interloper but who has sufficient interest in the proceeding. There can

be no doubt that the risk of legal action against the state or a public authority by

any citizen will induce the state or such public authority to act with greater

responsibility and care thereby improving the administration of justice. " the learned

judge also pointed out that the public injury is an injury to an indeterminate class of

persons and in these cases the duty which is breached, giving rise to the injury, is

owed by the state or a public authority not to any specific or determinate class or

group of persons but to the general public; the duty is not co-relative to any

individual rights. Mr. Jayaram relied on some observations made in Sri sachidanand

pandey and another v the state of West Bengal and others, AIR 1987 SC 1109 [LQ/SC/1987/155] ,

wherein khalid,. , made certain observations in respect of public interest litigation,

and against filing of such cases without any rhyme or reason, in us and it was

pointed out that traditional litigation would suffer if courts do not restrict the free

flow of public interest cases. We think that the observations of khalid,. In noway

goes against the maintainability of the present writ petition. The impugned action of

the government is alleged to be the result of non-consideration of relevant factors

and failure to observe appropriate procedure resulting in payment of a huge sum of

over Rs. 1. 58 crores to the appellant without any security. The principle involved is

again brought out by the Supreme Court in a recent decision in sterling computers

ltd. Vm/s. M and N publications ltd. And others, 1993 AIR SCW 683. The court is

concerned primarily as to whether there has been any infirmity in the "decision

making process" of the state while awarding a contract. The purpose is to find out

whether the government has taken care to safeguard the public interest. The

decision making process resorted to by the government would disclose whether the

government acted objectively and whether the process was such that it would

prevent favouritism in the matter of awarding contract and whether the government

acted "free from bias, discrimination and under the exigencies of the situation then

existing to be just and proper" (vide para 26 of the above decision ). In chaitanya

kumar v state of Karnataka, ILR 1986 (2 [LQ/KerHC/1986/599] ) kar. 1723 the Supreme Court stated, at

page 1737:". . . . . WHEN arbitrariness and perversion are writ large and brought

out clearly, the court cannot shirk its duty and refuse its writ. Advancement of the

public interest and avoidance of the public mischief are the paramount

considerations. "in Indian hume pipe co. Ltd. V Bangalore water supply and

sewerage board, ILR 1990 kar. 1134 one of us made the following observations in

para 8:"since the act impugned is of the instrumentality of the state, same is liable

to be tested by the touchstone of reasonableness and unarbitrariness. This test is

applied, not to enforce the right of anyone of the parties who submitted the tender.

The object of the judicial examination is to see whether the public interest would

suffer, by the transaction in question, and the state has failed to play fairly while

entering into the transaction. Courts jurisdiction is invoked usually, by one of the

parties, who made the tender offering to purchase the public property or articles put

up for sale at a price which he asserts as the highest, or, offering to supply goods or

works to the government of a state instrumentality, at a rate which he asserts as

the lowest. In such a situation, court is not concerned as to how far, the partys

interest suffered, by non-acceptance of his tender. The judicial review is permitted,

in order to safeguard the public interest. Public interest could be advanced or

safeguarded only when the State Acts reasonably and rationally. "the decision of the

Supreme Court in rr. Dalavai v the state of tamil nadu, AIR 1976 SC 1559 [LQ/SC/1976/227] once

again illustrates the principle involved. The tamil nadu government granted pension

to "anti-hindi" agitators. The grant was approved by the state legislature by

sanctioning the fund, under the appropriation act. The Supreme Court pointed out

that:". . . . . THE appropriation in the present case shows that a fund was kept apart

to meet the pension scheme. There is no legislative sanction for such pension

scheme. The government by an executive order could not authorise payment of

pension scheme. The appellant is right in his contention that the pension scheme is

unconstitutional and the budget sanction is equally unconstitutional. "for our

immediate purpose the relevancy is that the writ petition was entertained at the

behest of a member of the public; certainly it was a public interest litigation.

Consequently the first proposition of the learned counsel for the appellant is

rejected. Re. Proposition ii:

(13) UNDER the second proposition it was contended that, in the writ petition

challenge was made only against the government order dated 31-3-1992; this order

stood merged with the government order dated 17-7-1992 and the later order was

the result of the decision of the cabinet. There was no challenge made by seeking

specific relief against this subsequent order and therefore the learned single judge

erred in quashing the contract awarded to the appellant.

(14) THE writ petition was filed on 16th july, 1992, however writ petition was

amended subsequently in some respects, in November 1992. It was pointed out that

the petitioners did not care to seek any relief against the order of the government

made in July 1992.

(15) THE contention is highly technical. All the parties before the court were fully

aware of the real issue involved. The petitioners were challenging the governmental

action starting with the order dated 31-3-1992. The real question before the court

was whether placement of the order for the supply of the computers in question

with the appellant and the payment of the advance sum of Rs. 1,58,10,000/- was

valid at all and whether the governmental action was preceded by a proper

consideration of the relevant factors. Even in a private litigation it has been held that

if a litigation is fought out by the parties knowing fully well the respective

contentions involved, lack of proper pleading and failure to frame a proper issue

would not vitiate the ultimate finding. (vide nagubai ammal and others v b. Shama

rao and others, AIR 1956 SC 593 [LQ/SC/1956/39] ). The parties were fully aware of the question that

was being considered by the court and in fact the learned attorney general himself

placed all the relevant files before the learned single judge. High technical rules of

pleading should not control the public interest litigation. A person who espouses the

cause of public interest, has no personal interest in the litigation. When he agitates

a public cause and the impugned action is of the government, he has certain

disadvantages with regard to the relevant material. The public interest is the key

note to the courts approach; there is a failure on the part of the appellant to

establish as to how he has suffered in his defence by the lack of a proper pleading.

In the circumstances, it is not possible to accept the contention now advanced on

his behalf in the appeal.

(16) THE third proposition putforth by the learned counsel for the appellant has to

be considered along with the contention of Mr. G. Ramaswamy that the court should

not have examined any of the files placed before the court having regard to the

constitutional bar imposed by article 163 (3) of the constitution. Before considering

this question a few other contentions may be conveniently disposed of. Re.

Propositions iv and v:

(17) THESE propositions could be considered together. It was contended that

government was competent to award contract by placing the order for supply of

required goods, in the exercise of its executive power, when the subject in question

is not occupied by any particular legislative enactment. The decision of the Supreme

Court reported in rai sahib ram jawaya kapur and others v the State of Punjab, AIR

1955 SC 549 [LQ/SC/1955/38] was cited in support of these propositions. Several other decisions

were cited to contend that this court cannot scrutinise the terms of a contract even

though one of the contracting party is the government. It is unnecessary to consider

these decisions because we are concerned here with the propriety of the procedure

followed by the government before entering into the contract. Further the

governments power to enter into contract and placing an order for the supply of

computers, in the exercise of its executive power, is not at all challenged. At the

cost of repetition we have to state that the propriety of the ultimate decision is

questioned because of the alleged impropriety in the procedure followed preceding

the impugned action of the government. Re. Proposition vi:

(18) THE sixth proposition pertains to the effect of the appropriation actread with

the explanatory note appended to the relevant bill. The explanatory note attached to

demand No. 41 placed before the legislature along with the supplementary

estimates 1992-93 reads thus:"with a view to modernise government offices and to

have better monitoring of both physical and financial achievements of various

schemes, sanction was accorded to purchase 100 apple macintosh computers from

M/s. Classik computer system at a cost of Rs. 5. 27 crores. 30% of the cost had to

be paid in advance in order to get certain amount of concession. As no budget

provision was made for this purpose, a sum of Rs. 158. 10 lakhs was released for

contigency fund. An equal sum is required for repayment to the fund. "the relevant

heading was given as "other administrative services". Under "sub and detailed

heads" the matter was referred as "modernisation of government offices". In the

appropriation act of the state legislature the sum of Rs. 1,58,10,000/- was referred

in the schedule against the heading. "general administration revenue". There is no

reference to the particular order placed with the appellant. The legislature did not

specifically sanctioned the amount for payment exclusively towards the fulfilment of

the contract entered into with the appellant by the state government. As observed

by the learned single judge, this amount of Rs. 1,58,10,0007- could have-been

utilised by the state government for any of the purposes of general administration.

The appropriation act does not even provide for the transfer of this amount to the

contingency fund from which the amount was drawn on 31-3-1992 for payment to

the appellant.

(19) IN this context it is necessary to consider the constitutional propriety of

drawing the amount on 31-3-1992 from the contingency fund for payment to the

appellant and whether this withdrawal from the fund has been properly ratified by

the state legislature. Article 204 of the Constitution provides for the appropriation

bills. The bill is to provide for the appropriation out of the consolidated fund of the

state required to meet (a) the grants so made by the assembly; and (b) the

expenditure charged on the consolidated fund of the state but not exceeding in any

case the amount shown in the statement previously laid before the house or houses.

Article 267 (2) provides for the contingency fund of the state. It reads as

follows:"the legislature of a state may by law establish a contingency fund in the

nature of an imprest to be entitled the contingency fund of the state into which

shall be paid from time to time such sums as may be determined by such law, and

the said fund shall be placed at the disposal of the governor of the state to enable

advances to be made by him out of such fund for the purposes of meeting

unforeseen expenditure pending authorisation of such expenditure by the legislature

of the state by law under article 205 or article 206. "articles 205 and 206 provide for

the approval of the legislature, of the amounts expended which were not specifically

authorised earlier under the relevant appropriation act.

(20) THE Karnataka contingency fund Act, 1957 (the Karnataka Act No. 11of 1957)

was enacted under article 267 (2 ). Section 2 provides for the establishment of a

contingency fund by drawing the amounts stated in the said act from and out of the

consolidated fund. In the year 1957 the contingency fund was established with a

sum of Rs. 1 crore drawn out of the consolidated fund and this amount was

enhanced by subsequent amendments to the act. Section 3 of the act states, inter

alia, that no advance shall be made out of such fund except for the purposes of

meeting unforeseen expenditure pending authorisation of such expenditure by the

state legislature under appropriation made by law. Section 4 contemplates the

making of rules.

(21) THE contingency fund rules, 1957 was accordingly framed. It provides for an

application for advances from the contingency fund and the application shall be

made to the secretary to the finance department of the state government. The

application shall give several particulars including the circumstances in which

provision could not be included in the budget and why its postponement is not

possible. It is unnecessary to refer to other Provisions of these rules.

(22) ACCORDING to the contesting respondents in the writ petition the proposal

for the computers in question was pending since the year 1991. According to the

note put up by the additional chief secretary on 31-3-1992 though the government

had received an offer from the appellant and the appellant had made similar offers

earlier, the decision was kept in abeyance in order to assess the resource position at

the end of the year. "now it is found that there are certain savings available at the

end of the year and therefore it is proposed to utilise part of this savings to

purchase the computer system. " can it be said that the amount required for the

purchase of the computer system is "an unforeseen expenditure" The obvious

answer could be in the negative. If the proposal was already pending and the policy

of the government was to encourage computerisation, the proposed expenditure will

be an expenditure known already. In this context another important circumstance to

be considered is whether there was a compulsion to make the payment on 31-3

1992. The appellant expected the advance of 30% only on the placement of a

confirmed order. The order of the government dated 31-3-1992 did not place any

firm order. This position is admitted by all including the appellant. In fact, Mr.

Jayaram repeatedly told us that the appellant never insisted for the payment of Rs.

1,58,10,000/- on 31-3-1992. He expected the advance only when a final and firm

decision is taken by the government. The order dated 31-3-1992 itself states that

the approval accorded for the purchase of the computers at a total cost of Rs. 5,27

crores shall be subject to the approval of high power committee and the tap for

computers and that the terms and conditions offered by the company would be

accepted only after finalisation of the configuration. Therefore, on this admitted

position, there was no immediate necessity to expend this sum of Rs. 1,58,10,000/

. It was not an unforeseen expenditure at all. In the circumstances there can be no

doubt that the drawing up of this sum from the contingency fund for payment to the

appellant was clearly unconstitutional and the executive action in drawing the

amount and paying the same to the appellant was on the face of it contrary to the

public interest.

(23) IN the realm of constitutional law, exercise of power by an authority, which is

not warranted by the constitution, is referred as a fraud on the power. It is a case of

colourable exercise of the power, when in reality the power could not have been

exercised in that particular manner. The drawing up of the money and payment to

the appellant from the contingency fund, purporting to act and take advantage of

article 267 (2) of the Constitution read with the relevant enactment of the state

legislature certainly was a colourable exercise of the power; the payment was under

the colour of unforeseen expenditure when in reality the expenditure was not

unforeseen. The reality was entirely coloured by the wrong picture depicted while

exercising the power. Re. Propositions vii and viii:

(24) PROPOSITIONS vii and viii shall have to be considered along with proposition.

Re. Proposition ix:

(25) ASSUMING that the appellant acted bonafide and he has become a victimof

circumstances, the question is whether the governmental action could be upheld to

save the appellant from suffering any injury. If the process of awarding the contract

was vitiated by illegality or impropriety, the resultant governmental action will

contravene article 14 of the constitution, as held by the Supreme Court in sterling

computers ltd. s case. The placing of the order with the appellant is not the

outcome of a contract between two private parties. One of the contracting parties is

the state government and the latter has to act in consonance with propriety, bearing

always in mind that the public interest should not suffer in any manner. Any

arbitrariness involved in taking the decision by the government renders the decision

unconstitutional and void. The invalidity attached to the decision cannot be legalised

merely on the ground that one of the contracting parties would suffer in spite of his

innocense. The state government is like a trustee and its powers are normally to be

exercised in a manner a trustee exercises his powers. The beneficiaries (the public)

are entitled to question the exercise of the power and to have the action nullified

when the public interest suffers. Those who deal with the government should be

always aware of the risk involved and should be prepared to suffer any injury. If the

contract in the instant case is nullified, the nullification is part of the risk which a

trader normally takes as part of his business life. Re. Propositions iii, vii and viii:

(26) ARTICLE 163 (3) is similar to article 74 (2) of the constitution. While

article163 pertains to the advice tendered to the governor by the council of

ministers, article 74 (2) governs the advice tendered to the president.

(27) AS per article 163 (3), the question whether any, and if so what advicewas

tendered by ministers to the governor shall not be inquired into in any court. A

literal reading of this provision bars the court from inquiring into the nature of

advice given to the governor by the ministers. However, it has been held that the

advise tendered by the ministers necessarily would include the basis for the advise

and therefore all relevant papers leading to the advise would be part of the advise.

(28) IN Mis. Doypack Systems Pvt. Ltd. , etc. Etc. V union of India and others, etc.

etc. , AIR 1988 SC 782 [LQ/SC/1988/116] the Supreme Court had an occasion to consider the scope of

article 74 (2) of the constitution. The question before the Supreme Court pertained

to the scope of an acquisition act and whether by virtue of the said acquisition act

certain shares held by the company vested in the state as a consequence of

acquiring the company. The petitioners before the Supreme Court contended that

the shares held by the company in question did not vest in the union of india. To

understand the scope of the acquisition the counsel for the petitioners contended

that certain documents were necessary, and an application was filed for a direction

to the union of India to produce those documents. The learned attorney-general

contended that those documents were privileged documents and the court is

precluded from looking into them by virtue of article 74 (2) of the constitution. The

Supreme Court held that the Provisions of the acquisition act in the said case were

quite clear and there was no ambiguity at all in the relevant Provisions and therefore

no other document was relevant to understand the scope of the Provisions.

Thereafter the Supreme Court proceeded to consider the scope of article 74 (2) and

upheld the plea of the learned attorney-general. An earlier decision of the Supreme

Court in s. p. guptas case, AIR 1982 SC 149 [LQ/SC/1981/463] (at page 230) was referred by the

Supreme Court and it was held that the context and the nature of the documents

sought for in the s. p. guptas case were entirely different. The Supreme Court

observed at page 798 thus:". . . . . IN this case these documents as we see are part

of the preparation of the documents leading to the formation of the advice tendered

to the president of India and as such these are privileged under article 74 (2) of the

Constitution which provides that the question whether any, and if so what, advice

was tendered by ministers to the president shall not be enquired into in any court.

This court is precluded from asking for production of these documents. In s. p.

guptas case (supra) the question was not actually what advice was tendered to the

president on the appointment of judges. The question was whether there was the

factum of effective consultation between the relevant constitutional authorities. In

our opinion that is not the problem here. We are conscious that there is no

sacrosanct Rule about the immunity from production of documents and the privilege

should not be allowed in respect of each and every document. We reiterate that the

claim of immunity and privilege has to be based on public interest. Learned attorney

general relied on the decision of this court in the case of state of U. P. v RAJ narain,

(1975)3 scr 333 [LQ/SC/1975/31] : AIR 1975 SC 865 [LQ/SC/1975/31] . The principle or ratio of the same is applicable

here. We may, however, reiterate that the real damage with which we are

concerned would be caused by the publication of the actual documents of the

cabinet for consideration and the minutes recorded in its discussions and its

conclusions. It is well-settled that the privilege cannot be waived. "thereafter, again

the Supreme Court observed thus:"___it is well to remember that it is duty of this

court to prevent disclosure where article 74 (2) is applicable. We are convinced that

the notings of the officials which lead to the cabinet note leading to the cabinet

decision formed part of the advice tendered to the president as the act was

preceded by an ordinance promulgated by the president. We respectfully follow the

observations in s. p. gupta v union of india, (1982)2 scr 365 [LQ/SC/1968/309] at pages 607, 608 and

609 : AIR 1982 SC 149 [LQ/SC/1981/463] at p. 238 (supra ). We may refer to the following

observations at page 608 (of scr): (at p. 238 of air) of the report: it is settled law

and it was so clearly recognised in RAJ narains case, AIR 1975 SC 865 [LQ/SC/1975/31] (supra) that

there may be classes of documents which public interest requires should not be

disclosed, no matter what the individual documents in those classes may contain or

in other words, the law recognises that there may be classes of documents which in

the public interest should be immune from disclosure. There is one such class of

documents which for years has been recognised by the law as entitled in the public

interest to be protected against disclosure and that class consists of documents

which it is really necessary for the proper functioning of the public service to

withhold from disclosure. The documents falling within this class are granted

immunity from disclosure not because of their contents but because of the class to

which they belong. This class includes cabinet minutes, minutes of discussions

between heads of departments, high level inter-departmental communications and

despatches from ambassadors abroad (vide conway v rimmer, 1968 ac 910 at pp.

952,973, 979,987 and 993 and reg v lewes. k exparte home secretary, (1973) ac

388 at 412. Papers brought into existence for the purpose of preparing a submission

to cabinet vide lanyon property ltd. V commonwealth, 129 commonwealth lr 650 and

indeed any documents which relate to the framing of government policy at a high

level [vide re. Grosvenor hotel, london, (1964)3 All er 354 (ca)]. cabinet papers

are, therefore, protected from disclosure not by reason of their contents but

because of the class to which they belong. It appears to us that cabinet papers also

include papers brought into existence for the purpose of preparing submission to the

cabinet. "

(29) WHILE making the above observations the Supreme Court had alsopointed

out that there is no sacrosanct Rule about the immunity from the production of

documents and the privilege should not be allowed in respect of each and every

document and that the claim of immunity and privilege has to be based on public

interest; cabinet papers also include papers brought into existence for the purpose

of preparing submission to the cabinet.

(30) IN the earlier decision in S.P. Guptas case there is a discussion of the

question by bhagwathi,. (as he then was) at page 230. There is an observation that

the "material on which the reasoning of the council of ministers is based and the

advise is given cannot be said to form the part of the advise. After applying the

anology of the judgment of the court it was pointed out that the evidence on which

the reasoning and the decision of the court are based would not be part of the

judgment; similarly the material on which the advise tendered by the council

ministers is based, cannot be said to be part of the advise. . . . . "at page 234 the

learned judge observed thus: "this is the new democratic culture of an open society

towards which every liberal democracy is moving and our country should be no

except. The concept of an open government is the direct emanation from the right

to know which seems to be implicit in the right of free speech and expression

guaranteed under article 19 (l) (a ). Therefore, disclosure of information in regard to

the functioning of government must be the Rule and secrecy an except justified only

where the strictest requirement of public interest so demand. The approach of the

court must be to attenuate the area of secrecy as much as possible consistently with

the requirement of public interest, bearing in mind all the time that disclosure also

serves an important aspect of public interest. It is in the context of this background

that we must proceed to interpret Section 123 of the Indian Evidence Act."

(31) THE learned judge pointed out that there may be classes of documents which

public interest requires, should not be disclosed. The relevant passage has been

quoted by us already while referring to mis. Doypack systems case, AIR 1988 SC

782, at p. 798. At page 241 it was observed thus:"there is nothing sacrosanct about

the immunity which is granted to documents because they belong to a certain class.

Class immunity is not absolute or inviolable in all circumstances. It is not a Rule of

law to be applied mechanically in all cases. The principle upon which class immunity

is founded is that it would be contrary to public interest to disclose documents

belonging to that class, because such disclosure would impair the proper functioning

of the public service and this aspect of public interest which requires that Justice

shall not be denied to any one by withholding relevant evidence. This is a balancing

task which has to be performed by the court in all cases. "

(32) CLASS of papers protected from revelation consists of documents which are

really necessary for the proper functioning of the public service to be withheld from

disclosure. This class includes cabinet minutes, "minutes and discussions between

heads of departments, high level inter-departmental communications. ___" papers

brought into existence for the purpose of preparing a submission to cabinet are also

included in this class. (vide s. p. guptas case and mis. Doypack systems case ).

There are two aspects to be considered here; one is the effect of Section 123 of the

Evidence Act and the other is article 163 (3) or 74 (2) of the Constitution of india.

(33) THE protection afforded by Section 123 of the Evidence Act is not absolute;

the privilege conferred by this provision can be waived, as the very Section states.

However, the protection under Section 163 (3) or 74 (2) of the Constitution is

absolute and the mandate of these Provisions is against the court from inquiring into

them, because, the papers which are part of the advice tendered by the cabinet to

the governor/president, are integrated into and merges in the advice tendered by

the cabinet.

(34) THERE is need to prevent disclosure of the cabinets decision and the process

anterior to it; equally, it is necessary to note that an excessive protection may not

be conducive to the public interest, because, a wholesale and all pervading

protection to a variety of documents and papers may prevent the courts from

inquiring into matters, while examining the constitutionality of a particular action of

the government. Therefore, it is necessary to limit the operation of article 163 (2) to

such of the papers which were prepared solely for the purpose of the decision of the

cabinet and to the proceedings of the cabinet, leading to the cabinets decision,

which, in turn is conveyed to the governor as its advice.

(35) THE papers and documents which came into existence in the course of the

executive and ministerial functioning of the government cannot form part of the

exclusive privileged class, constitutionally protected by article 163 (3) or 74 (2);

some of them may fall within the privileged category, protected by Section 123 of

the Evidence Act. For the sake of convenience, we may refer to the class protected

by Section 123 of the Evidence Act, as quasi-privileged class, while, the one

protected by article 74 (2)/163 (3), as belonging to the class of absolute privilege,

(as has been referred in state of Bihar v kripalu shanker, AIR 1987 SC 1554 [LQ/SC/1987/426] , para

19 ).

(36) THE observations of the Supreme Court in doypack systems case, AIR 1988

SC 782 at para 43, obviously refer to the class of documents having absolute

privilege. In fact, this approach has been indicated in the said decision itself, when

the court observed:"we are conscious that there is no sacrosanct Rule about the

immunity from production of documents and the privilege should not be allowed in

respect of each and every document. We reiterate that the claim of immunity and

privilege has to be based on public interest."

(37) IT was a case, where privilege was claimed by the government in respect of

documents prepared for the purpose of a decision by the cabinet, resulting in the

tendering of advice to the president; it was a case of article 74 (2 ). At first, the

Supreme Court held that the documents sought to be produced were irrelevant to

the question involved; thereafter the court, as an alternative ground, considered the

applicability of article 74 (2) to the documents in question.

(38) HERE, we are concerned with the files produced by the state government and

the question is whether this court could go into all the papers in these files,

irrespective of the class to which they belong. If the papers in the files are

integrated into and merged in the ultimate decision of the cabinet, in the sense,

without those papers the advice tendered to the governor would be meaningless,

then, certainly such of those papers falling within the class of papers enjoying the

absolute privilege, should be excluded from consideration.

( 39 ) IN the case of a decision to place an order for supply of goods, several papers

shall have to be considered, such as the papers reflecting the history of the case,

any earlier policy formulated by the government, enquiries made, rival tenders

submitted to the government, processing of the tenders, etc. Etc. In the case of a

sole tender for supply of goods, the normal enquiry would also include enquiry as to

why there is only a single tender, and whether other similar suppliers are available

who can be asked to submit the tenders. But most of these enquiries are antecedent

enquiries and some of them relate to, what maybe termed as, historical facts. The

cabinet may look into them, or may not look into them. For example, a tender

submitted by the supplier, shall have to be necessarily placed before the cabinet

while considering the advisability of placing orders with the said supplier; from this,

can it be said that the very tender forms part of the papers enjoying absolute

privilege; if it is held that the very tender cannot be considered by the court while

examining the propriety and validity of the order passed by the government, it will

be impossible for the court to discharge its constitutional obligation to safeguard the

public interest and no contract of the state government, could be examined. The

public interest to be safeguarded and the constitutional bar under article 14 of the

Constitution against the arbitrary actions of the government will be rendered

illusory. Therefore, to balance the interests of the public, with the need to protect

the advice tendered by the cabinet under article 163 (3)/74 (2), the background

papers reflecting the historical facts, and the manner in which the tender was

procured and processed and what steps were taken earlier, should be excluded from

the class of papers enjoying absolute privilege.

(40) IN the instant case, there are atleast three stages involved. The first stage, is

the preliminary stage (ultimately forming the very foundation of the governments

impugned action of placing order with the supplier) of the tentative decision taken

on 31-3-1992, including the release of Rs. 1,58,10,000/- for payment to the

appellant on the said date. The second stage is the stage, at which, the executive

officers took a particular decision and the final stage is the decision taken by the

cabinet in July 1992.

(41) IN connection with the scope of article 163 (3), one more decision of the

Supreme Court is very relevant. In state of Madhya Pradesh v nandlal jaiswal and

others, AIR 1987 sc 251 [LQ/SC/1986/404] , the Supreme Court observed at page 278:". . . . . IT is true

that what has been produced before the court by way of policy decision dated 30th

december, 1984 is the decision of the cabinet and if its production had been

objected to on behalf of the state government, a question would perhaps have

arisen whether it is barred from the scrutiny of the court under clause (3) of article

163 of the constitution. But, it has been produced by the petitioners without any

objection on the part of the state government and once it is produced, the court is

entitled to look at and it clearly contains the decision of the state government and

must be held to fall within the last clause of Rule xx. This view finds complete

support from the decision of this court in l. g. chaudhari v secretary, l. s. g, deptt. ,

government of bihar, AIR 1980 SC 383 [LQ/SC/1979/431] . "

(42) ABOVE decision, if applied, would permit this court to look into all the files

produced by the state government before the learned single judge voluntarily and in

fact, those files were produced by the highest law officer of the union of india, the

attorney-general. However, we have proceeded on the basis of the subsequent

decision of the Supreme Court in doypack systems case, AIR 1988 SC 782 [LQ/SC/1988/116] .

(43) A circular dated 29-4-1989 issued by the dpar refers to the decision of the hlc

dated 10-4-1989 with regard to computerisation. As per this, tap should determine

the choice of hardware and software when computers are being purchased by

government department. The secretaries to government/heads of departments

proposing to purchase computers were requested to consult the tap which would

decide the suitability of the p. cs. , etc. , hlc was reconstituted on 26-9-1990 under

the chairmanship of the additional chief secretary; this is referred in another circular

dated 4-12-1990; this circular also states that tap should be consulted and that tap

would decide the suitability of p. cs. , etc. ; objects of tap are detailed in this

circular; the objects include the determination of choice of computer hardware,

approving of rate contract, etc.

(44) ON 24-4-1991, computronics inc. Addressed a letter to the chief minister,

introducing themselves as the authorised dealers for the apple macintosh products

of u. s. a. for the entire state of karnataka; a proposal for modernising office

equipment by installing apple products was enclosed to the letter. The quotation

gives the description of the units and unit prices for each unit, separately.

( 45 ) ON 10-6-1991, the joint secretary to the chief minister forwarded the offer to

secretary, dpar, to offer his comments. Ultimately matter went to tap, which, on 25

10-1991, stated that the systems proposed was non-standard and not compatible

with the ibm computers, thereby the systems cannot be used to run several popular

programmes sold; tap pointed out, further, that the vendor had no service facilities

and maintenance would be a problem; tap advised that procurement of the system,

may be deferred. In view of the advice of the tap, the file was closed on 31-12

1991, in the office of the chief minister.

(46) ON 27-1-1992 classik computer systems wrote to the chief minister

introducing themselves as one of the leading suppliers of apple macintosh computer

systems in south india, stating that the system is a completely integrated system

which can be used to generate reports, letters (both in english and kannada

languages) budgets, estimates and analysis data; letter further slates that, they

have been supplying these systems to various government organisations in tamil

nadu and that almost all the departments were using the system to generate reports

and letters in the regional language and that the classik computer systems was in

business for nearly 4 years; the offer to the Karnataka government was enclosed to

this letter. It is Signed by V. Gokulkrishna (Appellant before us) as "director". The

offer mentioned the rate per one unit at Rs. 5,27,000. 00 and the offer was to be

valid for 30 days. Payment of 30% advance with firm order was required. This

officer is tagged on to the order sheet ending with 31-12-1991 referred by us

already.

(47) ON 31-3-1992, another letter was addressed to the additional

chiefsecretary/finance commissioner by classik computer systems. This letter thanks

the additional chief secretary for "the kind courtesy extended" to classik computer

systems and to the demonstration held in the office of the addressee; it also refers

to the quotation dated 27-1-1992 for the system. Letter recommends 100 systems

as the first phase of implementation and mentions the cost at Rs. 5. 27 crores

inclusive of installation of software development charges and training. It also refers

to the terms and conditions, one of which was that the offer was valid for 30 days

only and that 30%, advance was to be paid with "firm order".

(48) ON the very day, the additional chief secretary purported to consider the

quotation and prepared a note, which is quite relevant here. Before referring to this

note, we reiterate that the appellants offer and the order of the government made

on 31-3-1992, including the release of 30% of Rs. 5. 27 crores advance are under

challenge and this note of the additional chief secretary and consequential notings

of others were not prepared at that time for the purpose of submission to the

cabinet at all. These notings at the most enjoy the status of quasi-privilege, but the

privilege was clearly waived by the slate government which unhesitantly and

willingly placed the relevant files before the learned single judge as well as before

us. Before the learned single judge, the then atlorney-general also had appeared,

and none raised the plea of any privilege, either under article 163 (3) of the

constitution, or under section 123 of the Evidence Act; the quasi-privilege, if any,

available to these papers was thus clearly given up and there is no constitutional bar

against us looking into these papers.

(49) IF none of these papers could be perused, the court will be left with the

pleadings in the writ petition and if the pleadings are to be the only basis for the

decision, the resultant position would in noway help the appellant; the release of the

amount on 31-3-1992 and the order of the government of the said date as well as

the subsequent agreement dated 10-8-1992 are lable to be quashed on the ground

of arbitrariness; non-consideration of relevant faciors, such as: the need to purchase

computers, availability of alternative suppliers, the suitability and qualitative merit of

these particular computers as against other available computers in the market, the

fairness of the price quoted and agreed upon, the reason for releasing the advance

on 31-3-1992, when, no firm order was placed with the appellant, the credentials of

the appellant to whom such a large amount was released without insisting on any

security (especially when it was understood that there was no commitment by the

government to place orders), would vitiate the order dated 31-3-1992 and the

agreement dated 10-8-1992.

(50) ADMITTEDLY, the chief secretary was the head of the dpar; computerisation

of the government departments had to be dealt by him. Surprisingly, the chief

secretary was ignored and the appellant approached the additional chief secretary

directly with his letter dated 31-3-1992; the letter of the appellant indicates that

there was some sort of demonstration of the system of the chamber of the

additional chief secretary, earlier. It looks as if the additional chief secretary took the

initiative which resulted in making the order of the same date (31-3-1992 ).

( 51 ) WE have proceeded on the basis that we would not consider the documents

fallingwithin the privileged class of documents, in view of article 166 (3) of the

constitution. Therefore the note prepared in July 1992 for the purposes of the

cabinet proceedings has to be ignored; if so some of the observations of the learned

single judge on this aspect of the case are also liable to be ignored. Therefore the

last sub-para of para 7 of the judgment of the learned single judge, commencing

with the observation, "i shall now examine the effect of the cabinet decision on the

decision taken on 31-3-1992," and ending with the said para shall have to be passed

over as unnecessary. However, this would not affect the essence of the judgment

and the ultimate conclusion of the learned single judge with regard to the invalidity

of the government order dated 31-3-1992 and all consequential actions arising out

of the said order.

(52) IN para 8 of the judgment under appeal, there is a clear finding that nonexus

is established between respondents 2 and 3 on the one hand and respondent 4 on

the other to establish mala fides. (ranking of the respondent here is with reference

to the writ petition ). It was further observed, "on the material on record it may be

difficult to say that there are mala fides on the part of second and third respondents

but i dare say that the decision taken by them is not bona fide but very strange". It

is true that technically, the observation is self-contradictory; if there is no mala fide,

the action taken should be bona fide; it is not possible to have a "grey area", where

lack of bona fides and lack of mala fides operate. This sentence has to be

understood in the context of this case. The disbursement was of a huge sum

without any security and the decision placing an order with the 4th respondent has

been taken in "stultification of all financial and administrative norms"; this, certainly

is a strange executive action.

(53) THE further observations, "the action was taken without care and caution and

not with due responsibility by respondents 2 and 3 for motives which are not clear.

And, it is difficult to delve into minds of men for devil knowcth not mind of men"

certainly suspects the motives of the then chief minister and the chief secretary.

Purpose of the writ proceedings is not to investigate into the motives of the men in

power; motives are certainly relevant, in cases where the validity of the action

depends on the motives. A governmental action will not be valid solely because the

motive behind, it was pervaded with good intentions. If the decision taking process

failed to consider relevant factors, and established norms of good administration

were ignored, motive becomes irrelevant. Extraneous motive reflected in the

decision taking process, would also invalidate the ultimate decision, because, in such

a case, the motivated action leads to a biased decision and becomes arbitrary.

However in the case of mala fides, it shall have to be clearly pleaded and proved;

mala fides cannot be attributed to anyone, on mere suspicion. (see express

newspapers pvt. Ltd. V union of india, AIR 1986 SC 872 [LQ/SC/1985/323] , para 119 and kedarnath v

(54) IN the instant case it is unnecessary to delve into the actual motives of the

then chief minister and of the additional chief secretary, because, "if people who

have to exercise a public duty by exercising their discretion take into account

matters which the courts consider not to be proper for the guidance of their

discretion, then in the eye of the law they have not exercised their

discretion" (quoted from an english decision by the Supreme Court in s. r.

venkataraman v union of India and another, AIR 1979 SC 49 [LQ/SC/1978/322] at p. 51. The Supreme

Court, observed, further:"___it is equally true that there will be an error of fact

when a public body is. prompted by a mistaken belief in the existence of a nonexisting

fact or circumstance. This is so clearly unreasonable that what is done

under such a mistaken belief might almost be said to have been done in bad faith;

and in actual experience, and as things go, these may well be said to run into one

another. "the Supreme Court again stated:"an administrative order which is based

on reasons of fact which do not exist must, therefore, be held to be infected with an

abuse of power". to the same effect are the observations in the express newspapers

case, AIR 1986 SC 872 [LQ/SC/1985/323] . At page 926, it was held:"fraud on power voids the order if

it is not exercised bonafide for the end design. There is a distinction between

exercise of power in good faith and misuse in bad faith. The former arises when an

authority misuses its power in breach of law, say, by taking into account bonafide,

and with best of intentions, some extraneous matters or by ignoring relevant

matters. That would render the impugned act or order ultra vires. It would be a case

of fraud on powers".

(55) IF the decision taking process is vitiated by considering non-existent facts as

in existence, and there was a failure to follow the established norms and procedure,

the decision has to be necessarily struck down as violative of article 14 of the

constitution; if so, the hidden motive of the decision maker need not be unearthed

at all, by the court while deciding the validity of the impugned action.

(56) IT was vaguely submitted that release of Rs. 1,58,10,000/- on 31-3-1992 was

to avail of certain concessions offered by the appellant; we do not find any

reference to such a concession and nowhere such a concession was specified; the

learned counsel for the appellant also could not spell out the concession offered by

the appellant; in fact, his specific statement made before us repeatedly, was that,

the appellant did not seek any advance until a firm order was placed by the

government with him and on 31-3-1992 he did not expect any advance at all.

(57) IT was further contended that the goods arrived in india, in pursuance of the

order of July 1992 and this fact alone is sufficient to prove the credentials of the

appellant and that appellant had the capacity to fulfil his part of the bargain. This

was in October 1992; by that, petitioners had moved the court on 16th july, 1992

and the transaction had received vide publicity; the placement of the order was

under challenge before this court. Naturally, those responsible for the deal would try

to justify the action by having the goods imported to give a colour of authenticity

and credibility to the entire transaction. This apart, the court is concerned here with

the decision making process of the state government prior to the importation of the

goods by the appellant. We asked the question as to how government could have

obtained the refund, if for any reason there was a failure on the part of the

appellant to supply the goods, or something happened to him between the date of

payment of rs. 1,58,10,000/- and July 1992; question could not be answered by any

one.

(58) BY way of analogy, manual of the stores purchase department may be

referred. Chapter iii contains "general principles of entering into contract". Para 11

(5) states that in selecting the tender to be accepted, the financial status of the

individual firm tendering must be taken into consideration in addition to all other

relevant factors. Para 25 (1) insists of taking security deposit, except in cases of

registered suppliers for a store, provided they have already furnished adequate bank

guarantee; nature of the security is stated in para 25 (2 ).

(59) PARA 59 governs the tenders for plant and machinery and provision for "after

sales" service and para 63 provides for obtaining of technical advice, as and where

required.

(60) THE above Provisions in the manual indicate the need to obtain security

before an order is placed for supply of goods, because, due performance of the

contract to supply goods, should also provide for the refund of advance received by

the supplier, in case, supply could not be done.

(61) ACCORDING to the petitioners, the contract for any stores could be executed

only by the director of stores and purchase department, in view of a notification

dated 15-6-1974; we dont think it is necessary to consider this contention, in the

light of the executive order issued directly by the government to place order with

the appellant. Fact remains that, the placement of the order and the earlier order of

31-3-1992 were in utter disregard of the public interest and huge amount was

released blindly without reference to any security or credentials of the appellant.

(62) THE ultimate finding of the court, in the instant case, is not strictly based on

the averments made in the writ petition, though, it is clear that all the parlies before

the court were fully aware of the real issue; the real issue was the propriety of the

decision making process involved in making the order dated 31-3-1992 and the

further order made in July 1992 placing firm order with the appellant, by the

government. The facts and circumstances are: (1) the tap, which is the competent

body to evaluate the system did not approve these computers. (2) the high level

committee/high power committee had no technical expertise to consider the

relevant question. (3) there was no evaluation of the requirements of the state

government and there is absolutely no material as to how a decision for 100

numbers of computers was arrived at. (4) whether the price quoted by the appellant

was a fair one was not at all considered, which again shows the evaluation

requirement was not respected. (5) the initiation should have come from the dpar

and not from the additional chief secretary. (6) the chief secretary, who was the

head of the dpar was ignored. (7) opinion expressed by the dpar in the year 1991,

while considering an earlier offer regarding the very systems, was ignored; it had

opined that the existing computer system could, if necessary, be expanded a little

and in this regard the suggestion of nicnet was relied upon. (8) incorrect note,

containing wrong facts was put up by the additional chief secretary on 31-3-1992;

which is the basis for the orders issued on the same day the noting stated that,

earlier, decision was deferred in order to assess the resource position at the end of

the year; this is manifestly incorrect; the statement that "now there are certain

savings available at the end of the year", is again far from the truth, because, no

amount was found in balance under the sanctioned grants; the amount available in

the contingency fund, cannot be considered to purchase articles, especially when,

the expenditure to be incurred for the purchase was not at all an "unforeseen

expenditure" referred in article 267 of the constitution; the further statement in the

note of the additional secretary that, "the terms and conditions" of the appellants

firm, for the apple macintosh computer system, "are quite attractive and

competitive", has no factual basis at all, because, none has considered this aspect;

no reason is given why an advance of 30% was to be paid, when firm order was not

placed and when the appellant did not insist on any advance till a firm order was

placed, what was the need to unburden the state by releasing its funds on the very

date; the solvency of the appellant and other credentials of the appellant were not

at all verified and no steps taken to safeguard the payment, by insisting on any

security or guarantee and, how the state could have obtained refund in case no firm

order was ultimately placed or something happened to the appellant and the supply

was not effected, was not pointed out. (9) the ultimate order of the dpar, was only

due to the specific directions of the additional chief secretary and of the chief

minister, and the under secretary to dpar once again pointed out that nic had

already covered a substantial Section of the secretariat. (10) the noting of the chief

secretary dated 26-5-1992 suggested the withdrawal of the reference to the high

level committee in view of the opinion expressed by the tap; the chief secretary

observed, at para 47 of the file, "i would like to add here that a purchase involving

the said outlay is in any case to be approved by the cabinet. I find it strange, to say

the least, that I am the officer in over-all charge of dpar, which deals with this

matter, was not kept in the picture at all."

(63) COURT is concerned with the validity of the government order; the decisions

taken by the cabinet is the ultimate step in the decision making process. We

proceed on the assumption that the papers prepared for submission to the cabinet

cannot be looked into in view of the decision of the Supreme Court in doypack

systems case, AIR 1988 SC 782 [LQ/SC/1988/116] ; if so the inevitable inference from the earlier

stages of the decision making process in the instant case, would throw the entire

burden of justifying the ultimate order would be on the state government. A

substantial part of the decision taking process reveal the haste with which the

government acted to release the funds and the eagerness to finalise the deal; the

established norms of fair administration were bypassed.

(64) IN these circumstances it is inevitable to conclude that there has been an

abuse of power in making the impugned order dated 31-3-1992; therefore the

ultimate government order made in July 1992 placing a firm order with the appellant

also is legally bad.

(65) THE remarks of the learned single judge show that the conclusion, in noway

be different, if the cabinet papers also could be referred and considered.

(66) THE note prepared by the additional chief secretary on 31-3-1992 requires to

be noted frequently and therefore it is quoted below:

"the government of Karnataka has been encouraging the use of computers in order to not only modernise the office systems but also to enable better monitoring of both physical and financial achievements of various schemes, etc. All over the world it has now been accepted

that management information system is an essential input in modern office

management. With increasing plan expenditure and increasing number of schemes it

is vital to have facilities in various offices which would enable creation of a data base

which can be updated frequently and allows retrieval of information in the required

form. In various forums and committees of the government it has already been felt

that government must go in for computerisation in a large way. The Honble cm has

also expressed that the government should spare no efforts in going in for

computerisation which would improve the quality of administration in terms of more

effective monitoring of various things. Apart from this, this would also form an

important part of the governments intention to have a more responsive

administration. The government has received an offer from M/s. Classik computer

systems which is enclosed below. The said firm has also made similar offers earlier

also but the decision was kept in abeyance in order to assess the resource position

at the end of the year. Now it is found that there are certain savings available at the

end of the year and therefore it is proposed to utilise the part of this savings to

purchase the computers system. The offer made by M/s. Classik computer systems

is to supply 100 systems of apple macintosh computers which are of standard

quality. The details of the terms and conditions as well as the configuration and

details of the software enclosed with the offer are placed below. I have gone

through the details and I am of the opinion that the terms and conditions of this

firm for the apple macintosh computer system are quite attractive and competitive

and therefore I am of the opinion that government should place orders with this firm

for purchase of 100 systems. The total cost works out to Rs. 5. 27 crores of which

30% has to be paid in advance. The secretary, dpar may be asked to take

immediate action to issue a go placing the order with M/s. Classik computer systems

for supply of 100 apple macintosh computer systems on the terms and conditions

mentioned in their offer. The go may also mention that fd has given concurrence for

release of 30% of the total amount as advance payment. After the issue of the go,

dpar may sent the file to fd to enable it to issue the corresponding contingency fund

order. "this note was approved by the then chief minister on the very day and

thereafter the additional chief secretary made further note for the issuance of

orders. The necessary order had to be issued by the dpar and when the file went to

the dpar the under secretary put up a note as follows:

"after issue of the government order dpar would have to sent the file to finance department to enable to issue the corresponding contingency fund. The proposal has been approved by the chief minister as in para 6 n/f. Accordingly, a draft go is placed in the file for approval. In

this connection, it is brought to the kind notice that in government circular No. Dpar

47 amc 88, dated 29-4-1989 (copy placed in the file), it is stated that the high level

committee on computerisation in administration constituted in g. o. No. Ped 12 pcm

87, dated 11-1-1988 (copy placed in the file) along with the technical advisory panel

should determine the choice of hardware and software when computers are being

purchased by government departments. The secretaries to government/heads of

departments are required to consult the technical advisory panel for the suitable

configuration before such purchases are made. This is specifically required to be

done in all cases where the proposals involved the expenditure of more than Rs.

50,000/ -. In continuation of this another circular No. Dpar 94 amc 90, dated 4-12

1990 has also been issued (copy placed in the file) indicating the objectives of the

technical advisory panel and the high level committee. In the instant case the total

expenditure is Rs. 5. 27 crores and invariably before purchase of this system the

high level committee and the technical advisory panel will have to clear the

configuration to be procured. However, in view of the concessions extended by the

classik computers systems, if order is placed before 31-3-1992 and also in view of

the specific orders of the additional chief secretary and the finance commissioner

and the chief minister, draft order is placed in the file. Incidentally, it is also brought

to the kind notice that the national informatic centre has already provided computer

network in vidhana soudha and m. s. buildings for which infrastructure facilities have

been provided by government. Already the main national informatic centre controls

are installed in the finance department connecting all the 20 districts. The national

informatic centre has already covered the secretaries to government in vidhana

soudha and they are likely to cover all the secretaries in about a months time in m.

s. buildings. After completion of this, it is understood that they would be covering

the ministers as well. In the meanwhile, cabinet has also taken a decision to supply

personal computers to all the cabinet ministers and the state ministers and matter is

before the director. Computer centre to select a suitable configuration required by

the ministers. Therefore, in the instant case, before finally procuring the systems

from classik computers, it would be advisable to inter-act with the national

informatic centre also so that the systems given by national informatic centre and

the systems to be given by the classik computers do not repeat in any office. In the

meanwhile, in view of the urgency and the directions issued in previous paras, a

draft order is placed in the file which may please be approved. "thereafter the

secretary to dpar also made a note to issue the order.

( 67 ) THERE is no dispute that the government order was issued on the very day

and a sum of Rs. 1,58,10,000/- was ordered to be paid to the appellant. It was

stated before us that a bank account was opened in the name of the appellant and

the amount was credited to the said account by the appellant by seeking the

encashment of the cheque issued by the government treasury. In the course of the

arguments it was observed that very shortly thereafter the entire amount of Rs.

1,58,10,000/- was drawn by the appellant in cash and a sense of astonishment was

expressed by the learned counsel for the petitioners as to the manner in which such

a huge amount was taken away by the appellant in cash. It is unnecessary for us to

express any opinion on this aspect of the encashment. However the fact remains

that no firm order was placed with the appellant admittedly on 31-3-1992. The

payment was a tentative payment; if for any reason no firm order is placed in future

the appellant had to refund the amount. However, there is absolutely no material to

indicate the credentials and solvency of the appellant who was permitted to encash

such a huge amount without obtaining any security from him. The manner in which

the order was made to release the sum of Rs. 1,58,10,000/- without satisfying about

the credibility and solvency of the appellant and without safeguarding the interest of

the state to get back the amount in case no firm order is placed, certainly would

shock the conscience of any prudent and reasonable person. There can be no doubt

that public interest was completely ignored while making this payment to the

appellant. It is true that there is no direct evidence to show that the additional chief

secretary or the chief minister or both of them had any link with the appellant and

the payment was ordered to favour him for any reason. We are not concerned with

the motives of these high office holders. We are concerned with the real impact of

their action. We are concerned with the question whether the persons responsible

for the payment had kept in mind the need to protect the public interest was well as

the interest of public revenue. We are constrained to hold that the basic

requirement of public administration has been completely overlooked while the

amount in question was released to the appellant.

(68) UNDISPUTEDLY the tap again rejected the offer made by the appellant as

unsuitable to the requirements of the state government. The tap met on 7-5-1992.

The members of the tap unanimously felt that the dpar should procure equivalent

ibm based system from a rate contract firm. The members of the tap were: 1) the

commissioner and secretary, department of science and technology, who was the

chairman of the tap, 2) director, Karnataka government computer centre, 3)

additional secretary, department of science and technology, 4) deputy secretary,

(pp-i) planning department, 5) chairman, scepc, Indian institute of science,

Bangalore, 6) Dr. Subramanyam, from school of automation, Indian institute of

science, Bangalore, (7) an officer from national informatic centre, Bangalore region.

The members of the tap unanimously observed that the proposed apple macintosh

system is "non-standard, non-popular and non-compatible" with the ibm- ibm based

systems and also not manufactured in india. Thereby the proposed system has

several draw backs including the following: ". . . . . . " omitted here. The tap also

pointed out that the apple macintosh system is both inferior and costlier than ibm

based systems. This committee again pointed out that similar two proposals have

been rejected by the said committee earlier. It is unnecessary to refer to a few other

events except to point out that hlc opined that it is advisable to get opinions from

the users of the computers in question. The junior scientific officer of the

government of india, department of electronics stated that these machines are

highly usable/user friendly compared to counter part ibm PC compatibles. C. m. c.

ltd. Also pointed out that these computers were more favourable cost-wise and in

performance when compared with the apple machines. Dr. Kotcswara rao of the

planning commission stated that these computers required by the state government

for the purpose of desk top publishing will be useful and that these machines are to

be used for generating the master for publication and refers to annual budget

papers, etc. However, there is a note of caution suggesting that the actual

requirements are to be studied by the state level technical committee and that the

points also maybe discussed in the nic state co-ordination committee to finalise the

actual requirements. The last sentence also is very relevant "in our experience in

computerisation in different government departments, the appeal macintosh

computers have a limited purpose of dtp. " Dr. N. v. k. rao of nic pointed out that

nic provided the state of the art computer under works and that there is no need for

any other computers and for meeting the dtp needs like making the budget

documents or notes for the legislative assembly, etc. , two or three apple macintosh

systems will be sufficient for the secretariat. Dr. Koteswara rao again wrote on 20lh

june, 1992 on the same lines as Dr. N. v. k. rao. Isro satellite centre pointed out

that it was not in a position to recommend the use of any one particular computer

and that it is essential to define the goals of the project very clearly so that people

on the project have well-defined target to work towards. The director (budget) of

the government of India stated that apple macintosh system is used for processing

the budget from the formulation stage and that the system is user friendly and

possess useful features. It was written on behalf of national aeronautical laboratory

that apple macintosh computers are popular and are highly user friendly but it was

not possible to comment on the suitability of those computers for the use of the

state government without knowing the exact requirements. The project

management group of tamil nadu reacted favourably towards the projects of these

computers.

(69) A perusal of these various opinions show that there was no uniform definite

opinion expressed in favour of apple macintosh systems. In fact the experts seem to

have advised to have a thorough look into the requirements; nic in fact suggested

that it was unnecessary.

(70) WE are not referring to the cabinet note and the decision taken by the

cabinet. In other words we proceed as if we have no idea of the note prepared and

put up for the purpose of cabinet proceedings which ultimately resulted in placing a

firm order with the appellant. The fact remains that there is a government order.

The relevant materials indicate that on 31-3-1992 the then chief minister and the

additional chief secretary directed the issuance of a government order to release the

sum of Rs. 1,58,10,0007- even though no firm order was placed with the appellant.

It is also clear that the note put up by the additional chief secretary did not reflect

the true position regarding the facts stated in the said note. We do not express any

opinion as to whether the chief minister knew about the wrong notings made by the

additional chief secretary or whether the chief minister acted on the basis of the

note put up by the additional chief secretary on the assumption that the additional

chief secretary would not put up any wrong note. At the same time it is unbelievable

that the chief minister would have been unaware of the earlier decision taken in

pursuance of the opinion expressed by the tap not to place orders with the

appellant. Similarly it is unthinkable that the chief minister would have acted

mechanically without verifying as to whether proper security would be taken or not

from the appellant. Some of these aspects resulted in the learned single judge

making the remarks he made (which we have already quoted ).

(71) WHILE summing up, the following facts and circumstances required to be

reiterated: (1) the additional chief secretary put up a note containing wrong

statement of facts. (2) even though the expenditure was not unforeseen still the

amount was directed to be paid out of the contingency fund. (3) a sum of Rs.

1,58,10,0007- was paid to the appellant without taking any security from him and

without any material on record guaranteeing his solvency, when the said payment

was not even insisted upon by the appellant. (4) no undertaking was taken from the

appellant to refund the amount in case no firm order is placed in future. (5) whether

classik computer systems is a firm, a limited company or a proprietory concern, itself

is not clear from the records; at any rate the appellant held himself out in various

colours such as director, authorised signatory and now as its proprietor. (6) whether

the price quoted and offered by the appellant is a proper price to the articles has not

been considered at all by any authority. Absolutely there has been no evaluation of

the price of the goods and the quotation has been accepted as to the price without

any bargain and without any material as to its reasonableness. (7) there has been

no evaluation of quantity required and there is no material as to why and how 100

computers would be necessary for the state.

(72) APART from the above factors and the documents and files we have referred

in this judgment, there is no other material to show that the government acted

fairly, objectively and considered all relevant factors while placing a firm order with

the appellant. No material has been placed as to why no tenders were called and as

to why the appellant was chosen for the supply of the articles in question. The

ultimate government order placing the firm order in July 1992 is nothing but the

final stage and its validity entirely depends upon the foundational stage which we

have referred as the first stage. If the first stage collapses the edifice built thereon

naturally shall have to fall.

(73) THE ratification by the cabinet will not validate an unconstitutional act.

Assuming that the state government took an independent decision de hors the order

made on 31-3-1992, still the said order is liable to be scrutinised and tested by

applying various principles evolved by the Supreme Court and we are constrained to

hold that the government order is arbitrary and is the result of non-consideration of

relevant factors and therefore violative of article 14 of the constitution.

(74) THERE was one argument which was repeatedly pressed before us pertaining

to the conduct of the present state government in supporting the judgment of the

learned single judge. The learned advocate-general submitted before us that the

government had filed an objection statement earlier in the writ petition; after

hearing the entire case the learned single judge has come to a particular decision

and set aside the transaction in question as contrary to the public interest; the

government has accepted this judgment; there is nothing wrong in the government,

now taking a fair stand before the appellate bench, after being satisfied that the

decision of the learned single judge is correct.

(75) WE have no doubt that the learned advocate-general has taken a fair stand.

In fact the learned advocate-general did not advance any particular argument in

support of the case pleaded by the writ petitioners. The relevant files were placed

before us and the facts were analysed chronologically and in doing so naturally the

facts and events were pointed out with reference to the admissible papers.

(76) IN the result we hold that: (1) the order of the government dated 31-3-1992

is entirely unconstitutional and void. (2) the payment of a sum of Rs. 1,58,10,000/

out of the contingency fund was contrary to article 267 (2) of the Constitution and

the Provisions of the Karnataka contingency fund Act, 1957. (3) the then additional

chief secretary who put up the note on 31-3-1992 did not disclose the true facts in

his notings. (4) the procedure preceding the order dated 31-3-1992 was entirely

improper. (5) the ultimate decision of the government dated 17-7-1992 placing a

firm order with the appellant is arbitrary and violative of article 14 of the

Constitution and therefore the resultant contract cannot be acted upon. writ appeal

is accordingly dismissed. Order of oral sclap k. Shivanshankar bhat,. the learned

counsel for the appellant made an oral application under article 134-a of the

constitution, seeking a certificate to go in appeal to the Supreme Court. We have

followed the principles firmly established by the several decisions of the Supreme

Court to the facts of the case and therefore we dont think this is a case for issuance

of any certificate to go in appeal to the Supreme Court. The application is rejected.