Bookmark
PDF
Share
CaseIQ

Shagun Udyog, Pvt. Ltd., Heavy ... v. Shagun Udyog, Pvt Ltd , Heavy

Jharkhand High Court

Jan 8, 2007

Judgment

Subsequent
References

CaseIQ

Smart Summary (Beta)

Concise Analytical Summary of the Provided Opinion

Factual and Procedural Background

By a tender notice dated 26 July 2005, Heavy Engineering Corporation (HEC) invited tenders for disposal/auction sale of certain non‑ferrous metal wastes lying at its Foundry Forge Plant, Heavy Tools Plant and Heavy Machine Building Plant. The listed materials included brass-chips, mixed N.F.T/B, mixed N.F. ingot, mixed N.F. skull, dross, spillage and floor sweepings.

The writ petitioner claimed to be duly registered under the Hazardous Waste (Management & Handling) Rules, 1989 (H.W. Rules, 1989) and eligible to purchase the wastes, but alleged it could not meet the tender conditions. The writ petitioner further alleged that respondent No. 4 (the present appellant in this Letters Patent appeal) was not registered as an authorized re‑refiner or recycler and that allotting the tender to respondent No. 4 violated the H.W. Rules, 1989.

The appellant (respondent No. 4 in the writ petition) filed a counter affidavit asserting registration under Rule 5 of the H.W. Rules, 1989 and that it held a certificate from the Uttar Pradesh Pollution Control Board authorizing collection, reception, treatment, storage and destruction of hazardous wastes. The appellant's tender was finalized and a work order was issued on 6 February 2006; the appellant deposited Rs. 3.4 lakhs as security and a further Rs. 12.01 lakhs and lifted a substantial quantity of wastes.

The learned Single Judge, on 15 June 2006 in W.P.(C) 1018 of 2006, allowed the writ petition and prohibited HEC from selling the non‑ferrous metal wastes to respondent No. 4, cancelling the sale order in favour of respondent No. 4. The present appeal under Clause 10 of the Letters Patent challenges that judgment and order. The appellants' and HEC's counsel appeared before the Division Bench; the writ petitioner did not appear in the appeal.

Legal Issues Presented

Whether the sale / allotment of the non‑ferrous metal wastes by HEC to respondent No. 4 (appellant) was in violation of Rules 19 and 20 of the Hazardous Waste (Management & Handling) Rules, 1989 as alleged by the writ petitioner.
Whether respondent No. 4 (appellant) was required to be registered or authorized under Rule 5 of the H.W. Rules, 1989 to purchase or handle the materials put to tender, and whether it in fact possessed the requisite registration/authorization.
Whether an unsuccessful tenderer who participated in the tender process (the writ petitioner) can challenge the tender outcome in a manner that defeats the legitimate claim of a successful tenderer.

Arguments of the Parties

Writ Petitioner's Arguments

The writ petitioner asserted that it was duly registered under the H.W. Rules, 1989 and eligible to purchase the non‑ferrous wastes but could not comply with certain tender conditions.
The writ petitioner alleged that respondent No. 4 was not registered as an authorized re‑refiner or recycler and that allotment of the tender to respondent No. 4 violated the provisions of the H.W. Rules, 1989 (specifically Rules 19 and 20 as alleged).

Appellant's (Respondent No. 4's) Arguments

The appellant stated that it was duly registered under Rule 5 of the H.W. Rules, 1989.
The appellant contended that the products and scraps described in the tender as by‑products of copper waste non‑ferrous material did not, in its submission, fall within the category of non‑ferrous metal hazardous wastes so as to bar its purchase; alternatively, it asserted it was authorized under Rule 5 and possessed a certificate from the Uttar Pradesh Pollution Control Board for collection, reception, treatment, storage and destruction of hazardous wastes.
In the memo of appeal the appellant further contended it had been awarded work for transportation by a public sector company and operated a production unit of brass ingots with requisite licence from the Uttar Pradesh Pollution Control Board — facts relied upon to establish competence and eligibility to buy the materials.

Respondent HEC's Arguments

HEC stated in its counter affidavit that the tender conditions required registration with the State Pollution Control Board and that the appellant (respondent No. 4) was found registered with the Uttar Pradesh State Pollution Control Board for transportation of hazardous and non‑ferrous metal waste under the H.W. Rules, 1989.

Table of Precedents Cited

The opinion does not cite any judicial precedents (case law) by name; the materials quoted and discussed are statutory rules.

No precedents were cited in the provided opinion.

Court's Reasoning and Analysis

The Division Bench analyzed the matter on the following lines, relying only on the facts and statutory material set out in the judgment:

The learned Single Judge had relied upon Rules 19 and 20 of the H.W. Rules, 1989 in concluding that the sale order issued by HEC violated those rules and accordingly prohibited HEC from selling the wastes to respondent No. 4.
The Bench observed that both the appellant and the writ petitioner participated in the tender process and that the writ petitioner was declared unsuccessful; the appellant's tender was finalized and a work order dated 6 February 2006 was issued. The appellant had deposited the security amount (Rs. 3.4 lakhs), further payments (Rs. 12.01 lakhs) and had lifted substantial quantities pursuant to the work order.
The court recorded the well‑settled principle (as stated in the opinion) that a tenderer who has participated and been declared unsuccessful should not be permitted to challenge the tender in a way that defeats the claim of the successful tenderer. The Division Bench treated this principle as relevant to the propriety of granting the prohibitory relief that the Single Judge had issued.
The Bench examined the tender terms (annexure‑2 to the writ petition) and noted the invitation was for sale of by‑products of copper waste non‑ferrous materials. The court accepted that such article was a hazardous waste and that purchase at auction required an appropriate certificate from the State Pollution Control Board under Rule 5.
The court considered HEC's averment that the tender condition required registration with the Pollution Control Board and that the appellant was shown registered with the Uttar Pradesh State Pollution Control Board for transportation of hazardous and non‑ferrous metal waste under the H.W. Rules, 1989. The opinion also reproduces Rule 5 (Grant of authorization for handling hazardous wastes) and refers to its requirements for authorization, processing and renewal.
Taking into account the appellant's claim of registration/authorization and its production licence and the fact that the appellant had already been issued a work order and had taken delivery, the Bench concluded that the learned Single Judge should not have issued the prohibitory order — particularly because the writ petitioner, as an unsuccessful tenderer, moved the Court only after the tender process concluded.
The court additionally observed that if there was any violation of the H.W. Rules by HEC, it was open to the statutory authority under the Rules (i.e., the State Pollution Control Board or other designated authority) to take appropriate action. In other words, regulatory enforcement, not the extraordinary injunctive relief granted by the Single Judge in these facts, was the appropriate remedy for rule violations.
On the basis of these considerations — the appellant's registration/authorization assertions, the tender participation dynamics, and the availability of regulatory enforcement — the Division Bench concluded that the Single Judge had erred in law in issuing the prohibitory order and in setting aside the sale/order in favour of respondent No. 4.

Holding and Implications

Holding: The Division Bench allowed the Letters Patent appeal and set aside the impugned judgment of the learned Single Judge. The opinion states:

For the aforesaid reasons, this appeal is allowed and the impugned judgment passed by the learned Single Judge is set aside.

Direct consequences and implications drawn in the opinion:

The prohibitory order previously issued by the Single Judge preventing HEC from selling the specified non‑ferrous wastes to respondent No. 4 was held to be erroneous and the appeal was allowed to overturn that order.
The Bench emphasized that any alleged violation of the Hazardous Waste (Management & Handling) Rules, 1989 is a matter for the competent regulatory authority under the Rules to address; the court's decision did not purport to substitute judicial enforcement for regulatory action.
The opinion does not purport to lay down any new legal precedent beyond resolving the present contest between the parties; its effect is stated in terms of the disposition of this appeal and the setting aside of the Single Judge's order.

This summary has been prepared strictly on the basis of the content reproduced in the provided opinion. No facts, holdings, or precedent citations have been added beyond what the opinion itself supplies.

Show all summary ...

Page 1134

1. This appeal by the appellant (respondent No. 4 in the writ petition) under Clause 10 of the Letters Patent is directed against the judgment and order dated 15.06.2006 passed in W.P.(C) 1018 of 2006 whereby the learned Single Judge allowed the writ application filed by respondent No. 1 herein prohibiting and restraining the respondent-Heavy Engineering Corporation (in short HEC) from selling non-ferrous metal wastes to the present appellant.

2. By a tender notice dated 26th July, 2005 the respondent-HEC invited tender for disposal/auction sale of its non-ferrous metal wastes, lying at its Foundry Forge Plant, Heavy Tools Plant and Heavy Machine Building Plant. The non-ferrous metals, as mentioned in the tender notice, consisted of materials, such as, brass-chips, mixed N.F.T/B, mixed N.F. ingot, mixed N.F. skull, dross and spillage and floor sweepings.

Page 1135

3. The case of the writ petitioner was that it is duly registered under the provisions of Hazardous Waste (Management & Handling) Rules, 1989 (in short H.W. Rules, 1989) and was eligible to purchase the non-ferrous metal wastes. Further case of the writ petitioner was that it submitted tender but due to some confusion it could not fulfill the conditions of the tender notice. It was alleged that respondent No. 4 is not registered as authorized Re-refiner or Recycler but yet the tender was allotted to respondent No. 4 in utter violation of the provision of H.W. Rules, 1989.

4. The appellant, who is respondent No. 4 in the writ petition, filed a detailed counter affidavit stating therein that the appellant firm is duly registered under Rule 5 of H.W. Rules, 1989. It wag further stated that the products and the scrapes which were described in the tender paper as by-product of copper waste non-ferrous material do not come under non-ferrous metal, is hazardous wastes and for that the appellant was authorized under Rule 5 of H.W. Rules and a certificate to that effect was also issued by the Uttar Pradesh Council of Control Board for collection, reception, treatment, storage and destruction of hazardous wastes.

5. After hearing the parties, the learned Single Judge, considering the fact that the present appellant (respondent No. 4) is not registered as Re-refiner or recycler under Rules, 1989, prohibited respondent-HEC from selling the non-ferrous metal wastes to the appellant. Consequently the sale order issued in favour of the respondent was cancelled by the learned Single Judge without giving any relief to the writ petitioner. Hence this appeal.

6. I have heard Mr. A.K. Das, learned Counsel appearing for the appellant, and Mr. Rajiv Ranjan, learned Counsel appearing for the respondent-HEC Ltd, Inspite of service of notice, the respondent writ petitioner has not appeared in this appeal.

7. From perusal of the impugned judgment of the learned Single Judge, it appears that considering the provisions of Rules, 19 and 20 of the H.W. Rule, 1989, the learned Single Judge held that the sale order issued by the respondent-HEC is in violation of the aforesaid rules.

8. At the very outset, I would like to mention here that pursuant to the tender notice issued by the respondent-HEC, both the appellant and the respondent writ petitioner along with others, submitted their tenders. The writ petitioner participation in the tender, but his bid was rejected due to non-fulfillment of the terms and conditions of the tender notice. The tender of the appellant was finalized and work order was issued on 6.2.2006. It has not been disputed that pursuant to the work order, the appellant lifted substantial quantity of wastes after depositing the security amount of Rs. 3.4 lacs and further deposited a sum of Rs. 12.01 lacs. It is only thereafter the writ petitioner, after participating in the tender and after having been declared unsuccessful, challenged the tender notice on the ground that the respondent-HEC cannot sell the non ferrous metal and wastes to any party, particularly the appellant on the ground of alleged violation of Rules 19 and 20 of the H.W. Rules, 1989. It is well settled that a tenderer, after participating in the tender and after being declared as unsuccessful tenderer, cannot be allowed to challenge the tender notice defeating the claim of the successful tenderer.

9. So far the question of violation of Rules, 19 and 20 of the H.W. Rules is concerned, it was categorically stated by the respondent-HEC in the counter affidavit that the tender condition only stipulated the requirement of registration with the Pollution Control Page 1136 Board and accordingly, the appellant (respondent No. 4) being the successful tenderer, was also found registered with the State Pollution Control Board of Uttar Pradesh for transportation of hazardous and non-ferrous metal waste under Hazardous Waste (Management & Handling) Rules, 1989. Rule 5 of the said Rules reads as under:

5. Grant of authorization for handling hazardous wastes. - (1) Hazardous wastes shall be collected, treated, stored and disposed of only in such facilities as may be authorized for this purpose.

(2) Every occupier handling, or a recycler recycling, hazardous wastes shall make an application in Form 1 to the member-Secretary, State Pollution Control Board or Committee, as the case may be or any officer designated by the State Pollution Control Board or Committee for the grant of authorization for any of the said activities.

Provided that an occupier or a recycler not having a hazardous wastes treatment and disposal facility of his own and is operating in an area under the jurisdiction assigned by the State Pollution Control Board or Committee, as the case may be, for a common Treatment, Storage and Disposal Facility (TSDF) shall become a member of this facility and send his waste to this facility to ensure proper treatment and, disposal of hazardous wastes generated failing which the authorization granted to the said occupier or recycler in accordance with this sub-rule may be cancelled after giving a reasonable opportunity to such occupier or recycler, as the case may be, of being heard or shall not to be granted by the State Pollution Control Board or Committee, as the case may be.

(3) any person who intends to be an operator of a facility for the collection, reception, treatment, transport, storage and disposal of hazardous wastes, shall make an application in Form 1 to the member-Secretary, State Pollution Control Board or Committee for the grant of authorization for all or any of the above activities specified in this rule.

(4) The Member Secretary, State Pollution control Board or any officer designated by the Board or Committee shall not issue an authorization unless it is satisfied that the operator of a facility or an occupier, as the case may be, possesses appropriate facilities, technical capabilities and equipment to handle hazardous wastes safely.

(4A) The authorization application complete in all respects shall be processed by the State Pollution Control Boards within nineteen days of the receipt of such application.

(5) The authorization to operate a facility shall he issued in Form 2 and shall be subject to conditions laid down therein.

(6) (i) An authorization granted under this rule shall, unless suspended or cancelled; be in force during the period of its validity as specified by the State Pollution Control Board or Committee from the date of issue or from the date of renewal, as the case may be.

(ii) An application for the renewal of an authorization shall be made in Form 1, before its expiry.

(iii) The authorization shall continue to be in force until it is renewed or revoked.

Page 1137 (7) The Member secretary, State Pollution Control Board or any officer designated by the Board or Committee may, after giving reasonable opportunity of being heard to the applicant, refuse to grant any authorization:

(8) The member-Secretary, State Pollution Control Board or any officer designated by the Board shall renew the authorization granted under Sub-rule (6), after examining each case on merit subject to the following.

(i) on submission of annual returns by the occupier or operator of facility in Form 4;

(ii) on steps taken, by the applicant wherever feasible, for reduction and prevention in the waste generated or for recycling or reuse;

(iii) on fulfillment of conditions prescribed in the authorization regarding management in an environmentally sound manner of wastes (9) Every State Pollution control Board or Committee shall maintain a register containing particulars of the conditions imposed under these rules for any disposal of hazardous wastes, on any land or premises and it shall be open for inspection during office hours to any person interested or affected or a person authorized by him in this behalf. The entries in the register shall be considered as proof of grant of authorization for management and handling of hazardous wastes on such land or premises and the conditions subject to which it was granted.

10. From perusal of the tender notice, which was annexed as annexure-2 to the writ petition, it appears that tender was invited for the sale of bye-products of copper waster non-ferrous materials. The said article is a hazardous waste and for auction purchase of the same, a tenderer is required to obtain the certificate from the State Pollution control Board under Rule 5 of the said Rules. In para. 12 of the Memo of Appeal, the appellant has contended that it has been awarded work for transportation of furnaces and slag and other items by a public sector company owned by Government of West Bengal. The appellant has got production unit of Brass Ingots for which the petitioner has got requisite licence under the Uttar Pradesh Pollution Control Board. For the aforesaid reasons, in our view, therefore, the Appellant was competent and eligible to purchase the materials from the respondent HEC. The learned Single Judge, therefore, ought not to have issued a prohibitory order, particularly when the writ petitioner after participating in the tender and after having been declared unsuccessful, moved the Court for a declaration that the tender allotted to the respondent (appellant) is in violation of the Rules.

11. Be that as it may, if there is violation of the Hazardous Waste (Management & Handling) Rules, 1989, it is for the, authority under the Rules to take action against the respondent-HEC for violating the Rules.

12. After having considered the entire facts and circumstances of the case, we are of the view that the learned Single Judge has erred in law in passing the impugned judgment and issuing prohibitory order against the respondent.

13. For the aforesaid reasons, this appeal is allowed and the impugned judgment passed by the learned Single Judge is set aside.

D.K. Sinha, J.

14. I agree.