Supreme Court

Rajasthan State Warehousing Corporation Vs. Star Agri warehousing and Collateral Management Limited and Ors.

MANU/SC/0496/2020

24.06.2020

Contract

Before entertaining a writ petition and passing any interim orders, Court must carefully weigh conflicting public interests

The present appeals are directed against the interim order passed by the High Court whereby in an intra-court appeal, the High Court passed an order of status quo with a further direction that other formalities may proceed but the contract shall not be signed with the leave of the Court. The Rajasthan State Warehousing Corporation Ltd. is in appeal aggrieved against the said interim order.

There is no merit in the argument that the Special Leave Petitions are directed against an interim order, therefore, this Court should not interfere in the order passed. Though present Court does not generally interfere in an interim order passed in an appeal Under Article 136 of the Constitution, 1950 but when after the dismissal of the writ petition, the Division Bench has passed an order of stay without recording any reason affecting revenue of the State, this Court cannot not permit the public interest to suffer.

The question of grant of interim stay in contractual matters was examined by this Court in a judgment reported as Raunaq International Ltd. v. I.V.R. Construction Ltd. and Ors., The Court held that, before entertaining a writ petition and passing any interim orders in such petitions, the court must carefully weigh conflicting public interests. Only when it comes to a conclusion that there is an overwhelming public interest in entertaining the petition, the court should intervene.

Since the matters are pending for final determination before the High Court, present Court refrains from making any comment upon the merits of the arguments raised by the parties. The fact remains that, once the bidding process is complete, the Appellant is entitled to take work from the successful bidders rather than taking work from the short-term tenderers who were granted contract in exigency of the situation. In the matters of contract, the grant of interim order to restrain the successful bidders from executing the contract is not in public interest, more so, when the tender is for storage of food articles in the warehouses of the State Government undertaking.

Therefore, the grant of interim order which impinges upon the grant of contract by the Appellant is not in public interest that too without recording any reasons when the Writ Petition was dismissed by the Learned Single Judge. Consequently, the orders granting status quo is set aside while allowing the present appeals. However, the grant of contract shall be subject to the orders which may be passed by the High Court in the intra-court appeals pending before it.

Relevant

Raunaq International Ltd. v. I.V.R. Construction Ltd. and Ors. MANU/SC/0770/1998

Tags : Public interest Interim order Legality

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