M/S SCIEMED OVERSEAS INC. Vs. BOC INDIA LIMITED & ORS.
Supreme Court of India
Special Leave Petition (Civil), 29125 of 2008, Judgment Date: Jan 11, 2016
REPORTABLE
IN THE SUPREME COURT OF INDIA
CIVIL APPELLATE JURISDICTION
PETITION FOR SPECIAL LEAVE TO APPEAL (C) NO. 29125 OF 2008
M/s Sciemed Overseas Inc. ….Petitioner
Versus
BOC India Limited & Ors. …Respondents
J U D G M E N T
Madan B. Lokur, J.
1. The only question for our consideration is whether the High Court was
correct in imposing costs of Rs. 10 lakhs on the petitioner for filing a
false or misleading affidavit in this Court. In our opinion, the imposition
of costs, although somewhat steep, was fully justified given that the High
Court also held that the contract in favour of the petitioner was awarded
improperly and was of a commercial nature, the last two findings not being
under challenge.
2. A global search of cases pertaining to the filing of a false
affidavit indicates that the number of such cases that are reported has
shown an alarming increase in the last fifteen years as compared to the
number of such cases prior to that. This ' is illustrative of the malaise
that is slowly but surely creeping in. This ‘trend’ is certainly an
unhealthy one that should be strongly discouraged, well before the filing
of false affidavits gets to be treated as a routine and normal affair.
3. The petitioner is aggrieved by a judgment and order dated 22nd
September, 2008 passed by the Division Bench of the High Court of Jharkhand
in L.P.A. No. 212 of 2008 only to the extent of imposition of costs.[1] In
our opinion, there is no merit in this petition and it deserves to be
dismissed.
4. The Rajendra Institute of Medical Sciences, Ranchi, (for short “the
RIMS”) issued a notice inviting tender on 10th February, 2007. The tender
was for installation and supply of a complete system of Centralized Liquid
Medical Oxygen with medical gas pipe line for Oxygen, Carbon Dioxide,
Nitrous Oxide and compressed air, etc. The work was to be executed on a
turnkey basis within 150 days in the 1000 bedded departments and wards of
the RIMS.
5. Responses to the notice inviting tender were submitted by the
petitioner (Sciemed Overseas) and respondent No.1 (BOC India). Their
tenders were processed by the RIMS and a memorandum dated 25th June, 2007
was issued by its Director informing Sciemed and BOC regarding opening of
the price bid of commercially and technically successful bidders.
6. According to BOC, the conditions of the technical bid were not
fulfilled by Sciemed and, therefore, there was no reason to invite it for
opening the price bid. A representation was made in this regard by BOC to
the RIMS but that was not considered and, therefore, BOC filed W.P.(C) No.
4203 of 2007 in the High Court of Jharkhand in respect of its grievance
against Sciemed and the RIMS.
7. The High Court considered the writ petition filed by BOC and by an
order dated 31st July, 2007 the writ petition was disposed of giving
liberty to BOC to file another representation in continuation of its
earlier representation to the RIMS. It was directed that both the
representations should be considered by the Director of the RIMS and an
appropriate reasoned order be passed thereon.
8. It is important to note that when the aforesaid writ petition was
disposed of on 31st July, 2007 no intimation was given to the High Court by
the RIMS or by Sciemed to the effect that about a week earlier, that is, on
25th July, 2007 a work order had already been issued to Sciemed in respect
of the notice inviting tender.
9. This fact was first brought to the notice of BOC when the Director of
the RIMS in his letter dated 8th September, 2007 informed BOC, in response
to the representations, that the work order had already been issued to
Sciemed on 25th July, 2007.
10. Under these circumstances, BOC preferred yet another petition being
W.P. (C) No. 4830 of 2007 challenging the issuance of the work order in
favour of Sciemed.
11. By an order dated 10th September, 2007 the High Court dismissed the
second writ petition filed by BOC holding that the question whether the
work order had or had not been issued to Sciemed was a question of fact.
That apart, BOC had also raised several other questions of fact. The High
Court was of the opinion that since the factual controversies could not be
adjudicated upon in its writ jurisdiction, there was no reason to entertain
the writ petition and it was, accordingly, dismissed.
12. Feeling aggrieved, BOC preferred L.P.A. No. 319 of 2007 which was
heard and dismissed by a Division Bench of the High Court on 10th October,
2007 thereby upholding the view taken by the learned Single Judge that the
second writ petition filed by BOC raised disputed questions of fact.
13. Feeling dissatisfied with the order passed by the Division Bench, BOC
preferred a petition for Special Leave to Appeal to this Court in which
leave was granted on 14th March, 2008. This Court disposed of the appeal
being Civil Appeal No.2028 of 2008 on that day itself holding that there is
hardly any disputed question of fact. On the contrary, the facts of the
case were evident from the documents already on record and oral evidence
was required to be led. Accordingly, this Court was of the view that the
matter ought to be heard on merits by the High Court and an appropriate
direction was given in this regard.
14. During the pendency of the Civil Appeal, an affidavit was filed on
20th February, 2008 by Sciemed through its proprietor Shailendra Prasad
Singh in which it was stated as follows:-
“It is submitted that the NIT, after having been relaxed and technical and
financial bids having been opened, the respondent No.5 was declared as the
lowest bidder by a margin of Rs.1.12 crores as compared to the petitioner
and the work order has already been acted upon and the project is almost
near completion and 85% of the amount has already been released to the
answering respondent, rendering the present SLP, in any case, infructuous
and liable to be rejected.”
15. It is this passage in the affidavit that has given rise to the
controversy before us.
16. Pursuant to the order passed by this Court, the writ petition filed
by BOC was taken up for consideration by a learned Single Judge of the High
Court. By an order dated 14th May, 2008, the learned Single Judge
dismissed the writ petition. While disposing of the writ petition, it was
held that though the decision making process by which Sciemed was declared
to be qualified was improper, it could not be held that the RIMS had acted
in an arbitrary, mala fide or discriminatory manner. The learned Single
Judge noted that Sciemed had stated before this Court that the work was
almost complete. The High Court observed that since the work awarded to
Sciemed had progressed to a considerable extent and a major portion of
money had been advanced or paid to Sciemed, therefore if the work order
were to be set aside it would involve dismantling and uprooting the system
that had so far been fixed which would not be in the interest of the
patients or the exchequer. Accordingly, the learned Single Judge declined
to interfere with the award of the contract to Sciemed but left it open to
BOC to file a suit for damages against Sciemed.
17. Feeling aggrieved, Sciemed preferred a Letters Patent Appeal before
the Division Bench of the High Court which came to be dismissed by the
impugned judgment and order dated 22nd September, 2008. While doing so,
the Division Bench of the High Court noted that the reason why the learned
Single Judge did not interfere with the award of the contract to Sciemed
was because of its statement made before this Court on affidavit that the
work was almost near completion. It was also noted that cancellation of
the award of contract at his stage would entail a heavy administrative and
financial burden on the Government and lead to increase and double
expenditure to the tune of crores of rupees.
18. However, the High Court, on the submission of learned counsel for BOC
decided to verify whether the installation and supply of the complete
system as per the notice of tender was near completion as stated by Sciemed
in its affidavit filed in this Court. For this purpose, the High Court
appointed a respected advocate of that Court as a one-man committee to
visit the work site and submit a report with regard to the extent of work
completed or at the stage of completion.
19. The learned advocate so appointed by the High Court submitted his
Report on 3rd July, 2008. It was stated in the Report, which was accepted
by the High Court, that the originating point/inlet of the main Liquid
Oxygen Gas Tank of the required specification had not yet been installed.
It was also found that a separate 3-Phase Electric Supply System for
commissioning the project had not yet been installed. In view of these two
major deficiencies, the commissioning of the complete system was being
delayed. Additionally, it was noted that the Oxygen Gas Tank was in
transit from Bangalore at that time.
20. On a consideration of the Report, the High Court took the view that
Sciemed had given a false affidavit in this Court to the effect that the
work was near completion. In this view of the matter, the High Court
dismissed the appeal filed by Sciemed and imposed costs of Rs. 10 lakhs to
be deposited with the Jharkhand State Legal Services Authority.
21. At this stage, it is important to mention that Sciemed through its
proprietor Shailendra Prasad Singh son of Rameshwar Prasad Singh, had filed
an affidavit on or about 10th July, 2008 in the High Court in which it was
explained that the statement made in this Court on affidavit was because
the deponent was of the view that the installation of the complete system
of gas pipeline is one part of the award and installation of liquid oxygen
tank is a separate work. It was stated that the affidavit filed in this
Court was due to some misconception and was not with a view to mislead this
Court. In other words, the deponent sought to justify his affidavit in this
Court notwithstanding the Report of the learned advocate. The deponent
after giving the above explanation, tendered an unconditional and
unqualified apology to the High Court for the statement regarding the near
completion of the project.
22. The High Court did not accept the apology given by the proprietor of
Sciemed and, therefore, imposed costs of Rs.10 lakhs on Sciemed.
23. While impugning the order passed by the High Court, it was submitted
by the learned counsel for Sciemed that in fact the statement made in the
affidavit filed in this Court was not a false statement but was bona fide
and not a deliberate attempt to mislead this Court. It was also submitted
that the allegedly false or misleading statement had no impact on the
decision taken by this Court and should, therefore, be ignored.
24. We are unable to accept either contention raised by learned counsel.
25. The correctness of the statement made by Sciemed was examined
threadbare not only by the learned Single Judge but also by the Division
Bench and it was found that a considerable amount of work had still to be
completed by Sciemed and it was not as if the work was nearing completion
as represented to this Court. Additionally, the Report independently given
by the learned advocate appointed to make an assessment, also clearly
indicated that a considerable amount of work had still to be performed by
Sciemed. The Report was not ex parte but was carefully prepared after an
inspection of the site and discussing the matter with Shailendra Prasad
Singh the proprietor of Sciemed and an engineer of Sciemed as well as
officers from the RIMS.
26. The conclusion drawn by the learned advocate after a thorough
inspection and discussion of the issues is as follows:-
“From a detailed inspection of the entire Liquid Oxygen Gas System as
required to be installed under the tender conditions land the work Order, I
was able to gather that at the originating point/inlet the main Liquid
Oxygen Gas Tank of the required specification has not yet been installed.
I also found that a separate 3-Phase Electric Supply System for
commissioning of the project has not yet been installed and is reportedly
in the process. I was informed by the hospital authorities that the 3-
Phase electricity connection is to be supplied by the hospital authorities
and are not required under the tender conditions or work order to be done
on the part of the Contractor i.e. M/s Sciemed Overseas Inc. On the part
of the Contractor i.e. respondent no.5 I was repeatedly informed that the
delay in the execution of the work has occasioned primarily due to repeated
thefts of the costly Copper pipes, whitewashing and distemper work underway
in the RIMS and also the operational and practical difficulties in
installation in the ICU’s, OT’s, Labour Rooms in the Gynae Department which
had to be vacated by the hospital authorities completely after much
persuasion, before any installation could be carried out.
It appears that on account of delay in installation of the Main Liquid
Oxygen Tank and the 3 Phase electrical connection, the commissioning of the
complete system of Liquid Medical Oxygen Gas together with other gases.
Vacuum and Air are being delayed. The entire outlet system upto the
individual outlets have been put in place as already stated above. I also
noticed that at the point of the final outlets at the end of the Branch
pipeline at the Bed heads wherever they are specified by the Work Order,
the double lockout with parking facility has been installed but the
electrical switches for which space is left in the panel has not yet been
fixed.”
27. After the Report was filed in the High Court, Sciemed also realized
that it had in fact misled this Court. Nevertheless, Sciemed tried to
justify the false or misleading affidavit filed in this Court. After
giving the justification, Sciemed tendered an unconditional and unqualified
apology through Shailendra Prasad Singh, proprietor of Sciemed. There was
no need for the proprietor to have tendered an unconditional and
unqualified apology unless there was an admission that the statement made
before this Court was false or misleading. It would have been a different
matter if Sciemed had tendered an unconditional and unqualified apology
without tendering a justification.
28. As far as the alternative submission of the learned counsel is
concerned, we are not in a position to accept this submission also
particularly if the entire matter is looked at in a broad conspectus.
29. In the first instance, the work order was issued to Sciemed on 25th
July, 2007 but this was not disclosed to the High Court when it disposed of
W.P.(C) No.4203 of 2007 on 31st July, 2007. Had the factual position been
disclosed to the High Court, perhaps the outcome of the writ petition filed
by BOC would have been different and the issue might not have even
travelled up to this Court. Furthermore, apparently to ensure that work
order goes through, a false or misleading statement was made before this
Court on affidavit when the matter was taken up on 14th March, 2008 to the
effect that the work was nearing completion. It is not possible to accept
the view canvassed by learned counsel that the false or misleading
statement had no impact on the decision rendered by this Court on 14th
March, 2008. We cannot hypothesize on what transpired in the proceedings
before this Court nor can we imagine what could or could not have weighed
with this Court when it rendered its decision on 14th March, 2008. The
fact of the matter is that a false or misleading statement was made before
this Court and that by itself is enough to invite an adverse reaction.
30. In the case of Suo Moto Proceedings Against R. Karuppan, Advocate[2]
this Court had observed that the sanctity of affidavits filed by parties
has to be preserved and protected and at the same time the filing of
irresponsible statements without any regard to accuracy has to be
discouraged. It was observed by this Court as follows:
“Courts are entrusted with the powers of dispensation and adjudication of
justice of the rival claims of the parties besides determining the criminal
liability of the offenders for offences committed against the society. The
courts are further expected to do justice quickly and impartially not being
biased by any extraneous considerations. Justice dispensation system would
be wrecked if statutory restrictions are not imposed upon the litigants,
who attempt to mislead the court by filing and relying upon false evidence
particularly in cases, the adjudication of which is dependent upon the
statement of facts. If the result of the proceedings are to be respected,
these issues before the courts must be resolved to the extent possible in
accordance with the truth. The purity of proceedings of the court cannot
be permitted to be sullied by a party on frivolous, vexatious or
insufficient grounds or relying upon false evidence inspired by extraneous
considerations or revengeful desire to harass or spite his opponent.
Sanctity of the affidavits has to be preserved and protected discouraging
the filing of irresponsible statements, without any regard to accuracy.”
31. Similarly, in Muthu Karuppan v. Parithi Ilamvazhuthi[3] this Court
expressed the view that the filing of a false affidavit should be
effectively curbed with a strong hand. It is true that the observation was
made in the context of contempt of Court proceedings, but the view
expressed must be generally endorsed to preserve the purity of judicial
proceedings. This is what was said:
“Giving false evidence by filing false affidavit is an evil which must be
effectively curbed with a strong hand. Prosecution should be ordered when
it is considered expedient in the interest of justice to punish the
delinquent, but there must be a prima facie case of “deliberate falsehood”
on a matter of substance and the court should be satisfied that there is a
reasonable foundation for the charge.”
32. On the material before us and the material considered by the High
Court, we are satisfied that the imposition of costs by the High Court was
justified. We find no reason to interfere with the impugned judgment and
order. The petition is dismissed.
33. However, we grant six weeks to the petitioner to make the deposit of
costs as directed by the High Court with the Jharkhand Legal Services
Authority (JHALSA). On the deposit being made, the JHALSA should forward
the amount to BOC India. The matter should be listed in the High Court
after eight weeks for compliance.
.....…………………….J
(Madan B. Lokur)
.....…………………….J
(R.K. Agrawal)
New Delhi;
January 11, 2016
-----------------------
[1]
[2] BOC India Limited v. State of Jharkhand, MANU/JH/0938/2008
[3]
[4] (2001) 5 SCC 289
[5]
[6] (2011) 5 SCC 496