M/S N RAMACHANDRA REDDY Vs THE STATE OF TELANGANA
Bench: HON'BLE MR. JUSTICE ROHINTON FALI NARIMAN, HON'BLE MR. JUSTICE R. SUBHASH REDDY, HON'BLE MR. JUSTICE SURYA KANT
Judgment by: HON'BLE MR. JUSTICE R. SUBHASH REDDY
Case number: C.A. No.-006673-006673 / 2019
Diary number: 11424 / 2019
Advocates: SUMANTH NOOKALA Vs
C.A.@S.L.P.(c) No.8185 of 2019
REPORTABLE
IN THE SUPREME COURT OF INDIA
CIVIL APPELLATE JURISDICTION
CIVIL APPEAL NO. 6673 OF 2019 [Arising out of S.L.P.(C)No.8185 of 2019]
M/S N Ramachandra Reddy ...Appellant
Versus
The State of Telangana & Ors ...Respondents
J U D G M E N T
R. Subhash Reddy, J.
1. Leave granted.
2. This civil appeal is filed by the fourth
respondent in Writ Appeal No. 153 of 2019, aggrieved
by the order dated 13.03.2019, passed by the High
Court for the State of Telangana at Hyderabad,
allowing intra court appeal, filed under clause 15
of the Letters Patent.
3. The fourth respondent herein was the writ
petitioner in Writ Petition No. 23501 of 2018, on
the file of High Court of Judicature for the State
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of Telangana at Hyderabad, wherein it has challenged
the award of work of “construction of BT Road from
Gujed to Buddaguda, in Mahabubabad District of
Telangana State”. Writ Petition filed under Article
226 of the Constitution of India was dismissed by
the learned Single Judge, vide order dated
25.02.2019, against which, Letters Patent Appeal was
preferred under clause 15 of the Letters Patent. The
Division Bench of the High Court by order dated
13.03.2019 allowed the intra court appeal, which
order is impugned in this appeal.
4. Necessary facts in nutshell, for disposal of
this appeal are as under:
The Roads and Buildings Department of the First
Respondent-State of Telangana, floated a tender
notice dated 21.04.2018, inviting bids for
construction of “BT Road from Gujed to Buddaguda, in
Mahabubabad District of Telangana State”. Tender is
floated by Standard Bidding Document for Road
Connectivity Project for Left Wing Extremism
Affected Areas (RCPLWEA) for construction and
Maintenance - issued by the National Rural Roads
Development Agency, Ministry of Rural Development,
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Government of India. The appellant and the fourth
respondent participated in the tender process by
submitting the requisite documents. As per the
tender conditions, there is a requirement to furnish
necessary certificates from the District Officers of
R & B Department to exhibit proof of owning “Batch
Type Hot Mix Plant” of capacity 100-120 TPH and that
such “Batch Type Hot Mix Plant” shall be located
within a distance of 100 kilometers from the last
point of working reach, for which, bids are invited.
The relevant clause in the tender document under
Clause 4.4 B(b) reads as under:-
“Each bidder must demonstrate:
(i) “availability for construction work, either owned, or on lease or on hire, of the key equipment (except Batch Type Hot Mix Plant) stated in the Appendix to ITB including equipments required for establishing field laboratory to perform mandatory tests, and those stated in the Appendix to ITB; Note: For Batch Type Hot Mix Plant, as per G.O.Rt. No.211, T.R&B(R.1)Dept., Dt.21-04-2018
(a) The bidders shall exhibit proof of owning “Batch Type Hot Mix Plant” of capacity 100-120 TPH and such Batch Type Hot Mix Plant shall be located within a distance of 100 Kms from the last point of working reach for which bids are invited.
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(b) The bidders to furnish necessary certificates from the concerned District Officers of R & B where such plants have been located and the District Officers of R & B shall inspect and certify with route maps on the (1) location (2) distance from last point of work reach and (3) ownership of such plants for which the bidders are intending to bid.
(c) The Superintendent Engineer of R & B concerned shall ensure the veracity of such certificate/documents uploaded by the bidders in support of the eligibility criteria on machinery before finalizing the technical evaluation of the bids.”
5. The Bid Document consists of two parts, Part-I
& Part-II i.e technical bid and price bid
respectively.
6. Pursuant to tender notice, there were two
offers by the bidders i.e the fourth respondent as
well as the appellant herein. The technical bids
were opened on 18.05.2018 at 04:00 P.M. and as the
fourth respondent as well as the appellant were
qualified in the technical bid, the Part-II bid i.e
the price bid was opened on 31.05.2018 at 03:00 P.M.
7. In the price bid, the fourth respondent herein,
offered to execute the work at the cost of
Rs.31,51,27,865.82 whereas, the appellant offered
the cost of Rs.31,31,69,427.04 for executing the
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work. As much as the offer made by the appellant was
lowest, the Letter of Intent was issued to the
appellant.
8. As per the tender conditions, the appellant
herein has produced the document issued by the
Executive Engineer, Roads and Buildings Department,
Mahabubabad Division, showing distance from the
“Batch Type Hot Mix Plant” to that of the site at
99.05 kilometers. Disputing correctness of such
distance, the fourth respondent/ writ petitioner has
on 18.05.2018, filed a complaint before the
concerned authority i.e. the Chief Engineer. On such
complaint, the Chief Engineer, called for a
verification report from the Superintending
Engineer, R & B Circle, Warangal. As per the report
dated 30.05.2018 submitted by the Superintending
Engineer, the actual distance between the Hot Mix
Plant and the last point of working reach was shown
at 101.50 kilometers. In the same report, the
Superintending Engineer, Warangal, has also
mentioned that the distance when measured from an
alternate route, the actual distance from the Hot
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Mix Plant to the last point of working reach comes
to 99.90 kilometers.
9. In view of the dispute raised by the fourth
respondent again, about the correctness of distances
mentioned in the report submitted by the
Superintending Engineer, Warangal, the Chief
Engineer vide his letter dated 11.06.2018, requested
the Superintending Engineer, Karimnagar, to verify
the distance between the location from the point of
Hot Mix Plant, owned by the appellant, to that of
the last point of working reach of the site in
question.
10. Vide report dated 04.07.2018, the Superintending
Engineer, Karimnagar informed the Chief Engineer
that the distance between the Hot Mix Plant, owned
by the appellant and the last point of working reach
is 98.1 kilometers.
11. In the report dated 04.07.2018, filed by the
Superintending Engineer, Karimnagar, addressed to
the Chief Engineer, as the distance between Hot Mix
Plant owned by the appellant and the last point of
working reach was shown at 98.1 kilometers, same was
accepted by the authorities and tender was finalized
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in favour of the appellant. The fourth respondent
has questioned the same by way of Writ Petition
filed under Article 226 of the Constitution of
India.
12. The learned Single Judge of the High Court has
held that in absence of any specific mala fides
against any individual, the re-verification
undertaken, about the distance, by the Chief
Engineer, is not illegal. Learned Single Judge has
observed that when the tender conditions permit the
tenderer to make objection, which obviously, require
consideration, by necessary implication, permit the
tendering authority to re-verify and re-consider the
material submitted before him. It is observed that
when the fourth respondent has raised an objection
against the certificate issued in favour of the
appellant, no fault can be attributed to the
authorities in getting the re-verification done and
obtaining a report from an independent authority.
Having found that there is no illegality or
arbitrariness on the part of the authorities, in
decision-making process, learned Single Judge
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dismissed the Writ Petition vide order dated
25.02.2019.
13. When the said order is questioned by way of
intra court appeal under clause 15 of the Letters
Patent, the Division Bench of the High Court has
found fault with the report of the Superintending
Engineer, Warangal, to the extent in giving distance
particulars from the alternate route. Further, it is
observed that when the report of the Superintending
Engineer, Warangal, was not accepted, the Chief
Engineer should not have sought a second report from
the Superintending Engineer, Karimnagar. In the
order it is stated that the jurisdictional Engineer
is Superintending Engineer, Warangal but not
Superintending Engineer, Karimnagar. It is stated in
the order that since the report submitted by the
Superintending Engineer, Karimnagar was not legally
justified, as such, it could not have been relied on
to finalize tender in favour of the appellant.
14. On the aforesaid grounds, the Division Bench
allowed the intra court appeal, by impugned order,
with a direction to award the work in question, on
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the basis of a report submitted by the
Superintending Engineer, Warangal.
15. Heard Sri B.Adinarayana Rao, learned senior
counsel appearing for the appellant, Sri R. Basant,
learned senior counsel appearing for the fourth
respondent/ writ petitioner and Sri S.Udaya Kumar
Sagar, learned counsel appearing for the State.
16. It is contended by Sri B.Adinarayana Rao,
learned senior counsel, appearing for the appellant
that as per the tender conditions, bidder must
demonstrate proof of owning ‘Batch Type Hot Mix
Plant’ of the capacity of 100-120 TPH, which shall
be located within a distance of 100 kilometers from
the last point of working reach, for which, bids are
invited. As per the tender conditions, bidders are
required to furnish necessary certificates, issued
by the District Officers of R & B Department.
17. It is not in dispute that the appellant owns a
Hot Mix Plant and at the request of the appellant,
the District Officers have issued a certificate. The
said certificate was to be filed along with ‘Part A’
of the documents, relating to technical bid.
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18. It is submitted that, as per the tender
conditions, the result of evaluation of Part-I of
the bids shall be made public on e-procurement
systems, following which, there will be a period of
five working days, during which any bidder may
submit complaint which shall be considered for
resolution before opening Part-II of the bid.
19. It is contended that in this case, initially a
certificate was furnished by the concerned District
Officer of R & B Department, showing the distance
below 100 kilometers but when a complaint is filed
by the fourth respondent/writ petitioner,
verification was done by calling a report from the
Superintending Engineer, Warangal.
20. It is submitted that Superintending Engineer, on
its own, has certified in his report dated
30.05.2018 that as per the original route, the
distance is 101.50 kilometers and by alternate
route, the distance is 99.90 kilometers, as per the
Google map.
21. It is further submitted that apart from the said
certification, an independent report is also called
for from the Superintending Engineer, Karimnagar,
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which is reported vide report dated 04.07.2018,
showing the distance between the ‘Hot Mix Plant’
owned by the appellant and the ‘last point of
working reach’ of the work in question, at 98.1
kilometers. It is submitted that when a complaint is
filed by the fourth respondent in terms of Para 22.6
of the Standard Bidding Document, it is always open
for the authorities to call for a report from the
independent authority other than the officers
concerned in the circle/division in question.
22. It is submitted by learned counsel that
accepting the report submitted by the Superintending
Engineer, Karimnagar, the price bid was opened and
the appellant has offered to execute the work at a
cost of Rs.31,31,69,427.04, as against the cost
quoted by the fourth respondent which is
Rs.31,51,27,865.82. In view of dispute raised by the
fourth respondent, the Chief Engineer concerned has
sought re-verification of the distance from the
Superintending Engineer, R & B Circle, Karimnagar,
who, vide report dated 04.07.2018, based on the Trip
Meter of the vehicle, had categorically opined that
the Hot Mix Plant of the appellant was located
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within 100 kilometers. It is submitted that there
being no specific mala fides, tendering authority
opened the price bid only after satisfying the
distance being less than 100 kilometers.
23. It is submitted that as per the tender
conditions, there is no prescribed procedure for
verification, in the event of any complaint by one
of the bidders, in terms of Para 22.6 of the
Standard Bidding Document. It is submitted that the
learned Single Judge has rightly refused to exercise
the jurisdiction under Article 226 of the
Constitution of India as much as there is no
illegality or arbitrariness in the decision-making
process. It is submitted that the well reasoned
order of the learned Single Judge is interfered in
the intra court appeal by impugned order, without
assigning valid reasons and findings recorded in the
impugned order run contrary to the tender
conditions.
24. In support of his arguments, Sri B. Adinarayana
Rao, learned senior counsel, has relied on the
following judgments:
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1. Tata Cellular v. Union of India.1
2. Raunaq International Ltd. v. I.V.R Constructions Ltd.2
3. Afcons Infrastructure Limited v. Nagpur Metro Rail Corporation Limited.3
4. Consortium of Titagarh Firema Adler v. Nagpur Metro Rail Corporation Ltd. (NMRCL).4
5. Municipal Corporation, Ujjain and Anr. v. BVG India Ltd. & Ors.5
and also judgment of this Court, in the case of The
Silppi Constructions Contractors v. Union of India
and Anr. Etc. Etc.6
25. On the other hand, Sri R.Basant, learned senior
counsel, appearing for the fourth respondent/writ
petitioner states that there are no grounds to
interfere with the impugned order passed by the
Division Bench of the High Court. It is submitted
that the Superintending Engineer, Warangal, in his
report dated 30.05.2018, has shown the distance at
101.50 kilometers, and at the same time, on his own,
also mentioned the distance to be at 99.90
kilometers measured from an alternate route. It is
11994(6) SCC 651. 21991(1) SCC 492. 32016(16) SCC 818. 42017(7) SCC 486. 52018(5) SCC 462. 6 SLP(c) Nos. 13802-13805 of 2019 decided on 21.06.2019.
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further submitted that the Chief Engineer has
committed error in calling the report from the
Superintending Engineer, Karimnagar, who is not the
concerned jurisdictional Superintending Engineer.
When it is found that, as per the initial
certificate submitted by the appellant, which shows
the distance to be more than 100 kilometers, there
is no reason or justification either to go by the
distance, as measured from the alternate route in
the report dated 30.05.2018, or to go by another
report of the Chief Engineer, which is based on the
information furnished by the Superintending
Engineer, Karimnagar.
26. Finally, it is submitted by Sri R. Basant,
learned senior counsel that there are no grounds to
interfere in the impugned order in this appeal,
filed under Article 136 of the Constitution of
India.
27. In support of his arguments, Sri R.Basant,
learned Senior counsel has also relied on the
following judgments:
1. Poddar Steel Corporation v. Ganesh Engineering Works.7
7 (1991)3 SCC 273.
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2. BSN Joshi & SWons Ltd. v. Nmair Coal Services Ltd. and Ors.8
3. Bakshi Security and Personnel Services Pvt. Ltd. v. Devkishan Computed Private Limited and others.9
4. Central Coalfields Limited and others v. SLL-SML and others.10
Further, he has also relied on the following
judgments:
5. Pritam Singh v. State.11
6. Penu Balakrishna Iyer & Ors. v. Ariya M. Ramaswamy Iyer & Ors.12
7. Shaikh Ali Hossain & Ors. v. Shaikh Showkat Ali & Anr.13
wherein, the scope of interference by this Court is
discussed under Article 136 of the Constitution of
India.
28. Having heard the learned senior counsels on both
sides, we have carefully perused the impugned order
passed by the Division Bench of the High Court and
the order passed by learned Single Judge and other
material placed on record.
8 (2006)11 SCC 548. 9 (2016)8 SCC 446. 10 (2016)8 SCC 622. 11 AIR 1950 SC 169. 12 AIR 1965 SC 195. 13 (2008)8 SCC 180.
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29. From a reading of the tender conditions relating
to work in question, it is clear that the bidders
shall exhibit proof of owning “Batch Type Hot Mix
Plant” of capacity of 100-120 TPH and such plant
shall be located within a distance of 100 kilometers
from the last point of working reach, for which,
bids are invited. In proof of owning such a plant
within 100 kilometers, bidders are required to
obtain necessary certificates from the concerned
District Officers of R & B Department, where such
plants have been located and the District Officers
of R & B Department shall inspect and certify with
route maps on the location; distance from the last
point of work reach; and ownership of such plants,
for which, bidders are intending to bid. It is clear
from the aforesaid condition, which is to be
construed as essential, that the bidder shall own a
‘Hot Mix Plant’ within a distance of 100 kilometers
from the last point of working reach. As per clause
22.6 of the tender conditions, the result of
evaluation of Part-I of the bids shall be made
public on e-procurement systems, following which,
there shall be a period of five working days, during
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which, any bidder may submit complaint, which shall
be considered, before opening Part-II of the bid. It
is clear from the aforesaid clause under tender
document, if any of the bidder disputes the distance
quoted by other bidder, it is open for such bidder
to make a complaint, which shall be considered,
before opening of Part-II of the bid. Once a
complaint is filed, there is no definite procedure
prescribed as to how such complaint is to be dealt.
In the case on hand, it is clear from the material
on record that, when a complaint is filed by the
fourth respondent/writ petitioner, after evaluation
of Part-I of the bids, at first instance, a report
is prepared by the Superintending Engineer, Warangal
dated 30.05.2018, stating that as per the route
given by the appellant, distance is 101.50
kilometers and if measured from the alternate route
it comes to 99.90 kilometers. At this stage, it is
to be mentioned that, it is the specific case of the
appellant that it has not made any request for
measuring the distance from the alternate route. In
view of the variation in distance, from its earlier
report, it appears, the Chief Engineer has requested
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the Superintending Engineer, Karimnagar, to verify
and report. The Superintending Engineer, vide his
report dated 04.07.2018, informed the Chief Engineer
that he has measured the distance from the
‘odometer’ and the distance between the Hot Mix
Plant and the last point of working reach was 98.1
kilometers. Accepting the said report, bid of the
appellant was opened and it is clear from the record
that the appellant has quoted offer to execute the
work in question at Rs.31,31,69,427.04 whereas, the
fourth respondent has quoted at Rs.31,51,27,865.82
to execute the work. The offer of the appellant is
nearly Rupees Twenty Lakh less than the rate quoted
by the fourth respondent/writ petitioner.
30. The learned Single Judge, by observing that
there being no specific mala fides against any
individual, has held that, no fault can be
attributed to the Chief Engineer in getting the
re-verification done, by obtaining a report from the
independent authority. Further, by recording a
finding that the scope of interference in the matter
relating to tenders, in exercise of power conferred
under Article 226 of the Constitution of India, is
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confined to decision-making process only, has
dismissed the Writ Petition.
31. From a reading of the impugned order, it appears
that the Division Bench has reversed the order of
the learned Single Judge, only on the ground that
the report received from the Superintending
Engineer, Karimnagar, is not in accordance with the
procedure. The Division Bench of the High Court has
also held that the Chief Engineer had stepped out of
his jurisdiction, when he called a report from the
Superintending Engineer, Karimnagar.
32. We are not convinced, with such a view, as
expressed above, by the Division Bench of the High
Court. First of all, it is to be noticed that there
is no dispute that appellant owns a ‘Hot Mix Plant’,
as required in the tender conditions. It is his
specific case that the location of such Hot Mix
Plant is within 100 kilometers, as required. It is
true that when a complaint is made by the fourth
respondent/writ petitioner, it was found that the
distance is 101.50 kilometers from one route and
99.90 kilometers from the other route. From the
alternate route, shown in the report dated
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30.05.2018, submitted by the Superintending
Engineer, Warangal, it is at a distance less than
100 kilometers.
33. We find nothing wrong in the first report,
mentioning the distance from the alternate route. In
view of such discrepancy in the report, the Chief
Engineer has further called for a report from the
Superintending Engineer, Karimnagar, an independent
authority, who has further, after re-verification,
submitted a report dated 04.07.2018, stating that
the distance is only 98.1 kilometers. To make sure
whether the plant of the appellant is within the
distance of 100 kilometers or not, in compliance of
the tender conditions, in view of the dispute raised
by the fourth respondent/writ petitioner and the
report dated 30.05.2018, the Chief Engineer got
re-verified from an independent authority by
addressing to Superintendent Engineer, Karimnagar.
In absence of any prescribed procedure for
verification, it was fair on the part of the Chief
Engineer to call for a report from an independent
Superintending Engineer i.e. the Superintending
Engineer, Karimnagar. There is no definite procedure
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for verification in the event of any complaint filed
by any of the bidders, as contemplated under clause
22.6 of the tender conditions. The Division Bench
has committed an error, in recording a finding that,
calling for a report from the Superintending
Engineer, Karimnagar, by the Chief Engineer, is not
in accordance with the procedure.
34. Having regard to the nature of dispute, it was
always open for the Chief Engineer to call for a
report from an independent authority i.e.
Superintending Engineer, Karimnagar. Such a
procedure adopted by the Chief Engineer was fair and
cannot be said to be either illegal or arbitrary.
Such a report is made basis in the decision-making
process, to open the bid of the appellant in
Part-II.
35. In the case of Tata Cellular v. Union of India1,
while considering the scope of judicial review, in
matters relating to Government contracts-tenders,
this Court has held that the State’s decision/action
must be in consonance of Article 14 of the
Constitution of India. The scope is confined to
examine only the decision-making process and not the
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merits of the decision itself. It is specifically
held that courts cannot sit as appellate court while
exercising power of review in matters relating to
contracts and tenders.
36. In the case of Afcons Infrastructure Limited v.
Nagpur Metro Rail Corporation Limited and Another3,
this Court found fault in the High Court, in
interfering with the decision of the authority in a
matter relating to contracts and tenders, without
there being any mala fides or irrationality or
perversity in the procedure adopted by the
authorities.
37. In the case of Consortium of Titagarh Firema
Adler v. Nagpur Metro Rail Corporation Ltd.4, while
considering the scope of judicial review, in matters
relating to power of contracts, this Court has held
that exercise of power of judicial review is called
for, if the approach is arbitrary or mala fide or
procedure adopted is meant to favour someone.
38. Further, in the case of Municipal Corporation,
Ujjain and Anr. v. BVG India Ltd. & Ors.5, this Court
has held that, while considering the scope of
judicial review, in matters relating to contracts,
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it is held that the same is restricted to
decision-making process but not the decision itself.
It is held that the High Court cannot act as
appellate court to review tender evaluation and set
aside the award of tender.
39. All the judgments referred above, support the
case of the appellant, as much as, we are of the
view that the procedure adopted by the tendering
authority is fair, just and reasonable. In absence
of any specific mala fides and grant of exemption
from any essential conditions of tender, authorities
have acted within their authority, as such, it
cannot be construed either as a relaxation or
violation of tender conditions.
40. The learned senior counsel, Sri Basant,
appearing for the fourth respondent/writ petitioner,
has relied on the judgments in the case of Poddar
Steel Corporation v. Ganesh Engineering Works7, BSN
Joshi & SWons Ltd. v. Nmair Coal Services Ltd. and
Ors8 Bakshi Security and Personnel Services Pvt. Ltd.
v. Devkishan Computed Private Limited and Ors.9;
Central Coalfields Limited and others v. SLL-SML and
others10, in support of his arguments that the
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essential clauses of a tender should be enforced
strictly and no deviation is permissible under law.
41. We are of the view that the above said judgments
have no application to the facts of this case, for
the reason that, it is not a case of violation of
any tender conditions. Further, pleading that no
case is made out by the appellant for interference
under Article 136 of the Constitution of India,
learned counsel, in support of his argument, has
relied on judgment in the case of Pritam Singh v.
State11; Penu Balakrishna Iyer & Ors. v. Ariya M.
Ramaswamy Iyer & Ors.12; Shaikh Ali Hossain & Ors. v.
Shaikh Showkat Ali & Anr.13
42. With reference to the same, it is to be noticed
that the power conferred on this Court, under
Article 136 of the Constitution of India, is the
corrective jurisdiction to settle the law. Further,
it is to be noticed that when the learned Single
Judge of the High Court has found that the process
of re-verification done by the Chief Engineer, on
the dispute in question, is fair and acceptable for
arriving at a decision, but the Division Bench has
set aside such order, only on the ground that the
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report is called for from the Superintending
Engineer, Karimnagar, who is not the concerned
Engineer, as per the procedure. In absence of any
prescribed procedure to deal with complaints, it was
fair on the part of the Chief Engineer, in calling a
report from the independent authority, other than
the jurisdictional officers. As the issue does not
relate to strict construction of territorial
jurisdiction, it is always open for the
decision-making authority, to have a report from the
independent authority, to arrive at the just
decision.
43. Further, in the case of Management of Narendra &
Company Pvt. Ltd. v. Workmen of Narendra & Company14,
while considering the scope of the intra court
appeal, this Court has held that, unless Appellate
Bench concludes that findings of the learned Single
Judge are perverse, it shall not disturb the same.
44. For the aforesaid reasons, we allow this appeal
and set aside the order dated 13.03.2019 passed in
Writ Appeal No. 153 of 2019, by the High Court of
Telangana at Hyderabad and confirm the order dated
14 (2016) 3 SCC 340
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25.02.2019 passed by the learned Single Judge in
Writ Petition No. 23501 of 2018. No order as to
costs.
...................J. [S. Abdul Nazeer]
...................J. [R. Subhash Reddy]
New Delhi; August 28,2019
26