A.Aravindprabu(Principal) v. The Member Secretary,
IN THE HIGH COURT OF JUDICATURE AT MADRAS
DATED 04.11.2020
CORAM
THE HONOURABLE MR. JUSTICE M. SATHYANARAYANAN AND THE HONOURABLE MRS. JUSTICE R.HEMALATHA WP.No.2352 of 2020 A.Aravindprabu .. Petitioner rep by its Power Agent J.Jagan
Versus
1.The Member Secretary, Chennai Metropolitan Development Authority, No.1, Gandhi Irwin Road, Egmore, Chennai 600 008.
2.The Chief Executive Officer, Chennai Metropolitan Development Authority, Rep.by its Chairman, No.1, Gandhi Irwin Road, Egmore, Chennai 600 008.
3.The Chief Administrative Officer, Market Management Committee, Koyambedu Wholesale Market Complex, Chennai.
4.Chinnadurai .. Respondents 1/16
Prayer:- Writ petition has been filed under Article 226 of the Constitution of India praying for the issuance of Writ of Certiorarified Mandamus calling for the records Calling for the records of the 3rd respondent in respect of Addendum dated 06.01.2020 to the Tender Document dated 28.11.2019 and to quash the same and further direct the respondents 1 and 2 to allow the petitioner to bid for the Out Right purchase of Godown in Shop No. VG-88 situated at Koyambedu Wholesale Market Complex, Koyambedu, Chennai 600 107, Auction / Tender in pursuance to the Tender Document floated by the respondents without insisting the conditions incorporated in the Addendum dated 06.01.2020. For Petitioner : Mr.M.Raja Sekar For Respondents: Mr.P.H.Aravind Pandian assisted by Mr.Karthik Raja for R1 & R2 Mr.Velamurugan for R3 Mr.Santhanakrishnan for R4
ORDER
[Order of the Court was made by M.SATHYANARAYANAN, J.] The deponent of the affidavit namely, Mr.J.Jagan, is the Power of Attorney agent of the petitioner namely Mr.A.Aravindprabu. The petitioner in the affidavit filed in support of the present Writ Petition, among other things would aver as follows:
2. The petitioner had applied for the Godown-VG-88 to an extent of 4000 sq.ft for outright purchase under auction-cumtender floated by the 2nd respondent through online application and accordingly, the petitioner uploaded the online application on 28.11.2019.
3. The minimum upset price for the said godown has been fixed as 10 Crores 20 lakhs and the petitioner made an initial deposit of Rs.2,40,00,000/- represents 20% of the said price. The last date for downloading the tender document had been fixed from 28.11.2019 to 06.01.2020 upto 5 p.m and the filled price bid has to be physically deposited in the office of the 3rd respondent between 07.01.2020 to 08.01.2020 upto 5 p.m. A Demand 2/16
Draft for a sum of Rs.2,40,00,000/- was taken in favour of the 2nd respondent on 07.01.2020 and the petitioner went to the office of the 3rd respondent on 08.01.2020 at about 11 a.m to submit the same and as per the oral standing instruction, the prospective allottees along with the copies of original Demand Draft alone has to enter the office of the 3rd respondent, for submitting the tender form and the petitioner tried to submit the tender application in the office of the 3rd respondent, however, there were 20 rowdy elements and they threatened the petitioner with dire consequences not to submit the tender application and though the said fact has been brought to the knowledge of the respondents 1 and 2, they failed to take any action and however, the petitioner managed to submit the application through physically in the office of the 3rd respondent.
4. The petitioner was also made aware of the fact that the entire tender was floated to favour the 4th respondent, who had applied for the same Godown and further more, he was one among the occupants of the Godown in Shop No.VG-88 under the earlier allottee and unauthorisely converted the godown into 12 shops and he himself self styled the godown in Shop number as VG-88/1 to VG-88/12 and despite the said facts being came to the knowledge of the respondents, no action whatsoever has been taken.
5. The petitioner in the light of the illness faced by his parents was unable to settle at Chennai to follow up the matter and accordingly executed the Deed of Power of Attorney in favour of Mr.J.Jagan and he has also given a representation dated 27.01.2020 stating about the said facts.
6. The last date for downloading the tender document as per the notification issued by the 2nd respondent was between 28.11.2019 to 06.01.2020 upto 5 p.m and at the closure hours on 06.01.2020, the 3rd respondent has published an Addendum stating among other things that the tenderer should be a license holder of Market Management Committee, Koyambedu Wholesale Market Complex and according to the petitioner, the five conditions in the Addendum came into being only for the benefit of the 4th respondent and the said conditions are also tailor made to suit his convenience.
7. The petitioner made a challenge to the Addendum dated 06.01.2020, with a consequential direction to quash the same and further direct the respondents 1 and 2 to allow the petitioner to bid for the out right purchase of the godown in Shop No.VG-88 situated at Koyambedu Wholesale Market Complex, Koyambedu, 3/16
Chennai 600 107, without insisting the conditions incorporated in the Addendum.
8. Originally, the Writ Petition was entertained by the learned Single Judge and the learned Single Judge having felt that the issues involve public interest, directed the matter to be listed before the Division Bench and the Division Bench, who entertained the same, had granted an interim order.
9. Mr.Karthik Rajan, learned Standing Counsel accepts notice on behalf of the respondents 1 and 2. Mr.Velumurugan, learned counsel accepts notice on behalf of the 3rd respondent and Mr.M.Sathanaraman, learned counsel accepts notice on behalf of the 4th respondent.
10. Mr.M.Rajasekar, learned counsel appearing for the petitioner made the following submissions. The impugned Addendum is not in accordance with law and rather contrary to the provisions of the Tamil Nadu Specified Commodities Markets (Regulation of Location) Act, 1996 (Tamil Nadu Act 24 of 1996), (in short 'the said Act'). The learned counsel appearing for the petitioner, who elaborates the said point has invited the attention of this Court to Section 2(14), Section 5, Section 8, Section 20 and 21 of the said Act and would submit that admittedly the 4th respondent have not been registered with the 3rd respondent and he is yet to be granted license and as such his application for tender should not to have been entertained by the 2nd respondent and as a natural corollary , he cannot be declared as a successful bidder.
11. In the light of the changes which took place on the date of submission of the tender application in the office of the 3rd respondent, a full fledged mechanism shall be put in place to prevent recurrent of such occurrence in future. Though the last date of the application was fixed on 06.01.2020, the fact remains that the tenders were opened only on 31.07.2020 and the said fact have not been made known to the other bidders and in a clandestine and secret method, the 4th respondent has been declared as a successful bidder on 04.08.2020. It is also fairly brought to the knowledge of this Court by the learned counsel appearing for the petitioner that subsequent to the filing of the Writ Petition, the petitioner did submit his representation dated 20.02.2020 to the 2nd respondent, pointing out the financial difficulties faced by him and on account of the same, also made a request to transfer the application form in favour of Mr.J.Jagan and he would submit that it cannot be cited as a power or disqualification and further submitted that the 4/16
additional condition incorporated to the Addendum, after the closing hours of downloading of the applications in the website, is in non-adherence to the above cited statutory provisions and prays for interference.
12. Per contra, Mr.P.H.Aravind Pandian, learned Additional Advocate General assisted by Mr.Karthik Rajan, learned Standing Counsel appearing for the respondents 1 and 2 would point out that from the contents of the letter dated 20.02.2020, submitted to the 2nd respondent by the petitioner, it is revealed that the petitioner is benami to Mr.J.Jagan, who has sworn to the affidavit as a Power of Attorney, however no practice has been followed to transfer the application in favour of somebody other than the applicant and in light of the said fact, the petitioner has no locus standi to maintain the Writ Petition.
13. The learned Additional Advocate General has drawn the attention of this Court to Sections 3, 5 and 8 of the said Act and would submit that since the Market Committee is in-charge of the Administration, for the purpose of ensuring fairness, additional condition has been incorporated and it should not be termed as contrary to law and also points out the legal position, which is open to the concerned authorities to formulate the tender condition and it cannot be the subject matter of judicial review in the Writ Petition filed under Article 226 of the Constitution of India.
The learned Additional Advocate General elaborates the argument further and would submit that under sub section 3 of Section 20 of the Act, every person other than the persons referred to in sub-section (2) intending to carry on the wholesale trade of such specified commodity in any market area shall also apply to the Chief Administrative Officer for registering his name with the market committee' and the exercise to be done by the Chief Administrative Officer, on receipt of the same is also given in Sub Section 5 of Section 20 of the Act.
14. Attention of this Court was also invited to sub section (C) of Section 21 of the said Act and would submit that no person shall carry on any wholesale trade of any specified commodity in any place in the market area other than in the market or special market, as the case may be, except under, and in accordance with the conditions of, a license granted to him in that behalf by the market committee under this Act.
15. In sum and substance, it is the submission of the learned Additional Advocate General that for the purpose of participating in the bid, it is not necessary that the person should have got a registered license. In terms of the above 5/16
provisions made, the 4th respondent is under obligation to comply with Sections 20 and 21 of the Act. Therefore, apprehension expressed by the petitioner in this regard, is wholly unfounded. The learned Additional Advocate General, on factual aspect would submit that there were totally 10 bidders in respect of the Godown in Shop No.VG-88/12, out of which, five of them had withdrawn the bids and among the remaining, five participants became the successful bidder and therefore, in the light of the fact that this Court, in exercising judicial review can only test the fairness in arriving at the decision, may not likely to interfere with the decision making process itself and hence prays for dismissal of the Writ Petition with costs.
16. The learned counsel appearing for the 4th respondent has drawn the attention of this Court to the counter affidavit and would submit that in the light of the petitioner's representation dated 20.02.2020, submitted to the 2nd respondent, he is not at all qualified to participate in the tender process and he cannot maintain the Writ Petition and in the light of the fact that his quotation was rightly knocked down in his favour and further the entire tender process was absolutely transparent and conducted as per law and the petitioner has filed unscrupulous litigation, prays for dismissal of this Writ Petition.
17. This Court has carefully considered the rival submissions and also perused the materials placed before it.
18. Insofar the allegation leveled by the petitioner in paragraph no.5 of the affidavit is concerned, in case of a high value of tender, sometimes, these kind of incidents tend to happen and therefore this Court calls upon the respondents 1 and 2 to take necessary and appropriate steps to prevent the likelihood of such kind of occurrence in future and the learned Additional Advocate General also undertakes to do the needful in this regard.
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8. Constitution of market committee.- Every market committee shall consist of a Chairman, ViceChairman and the following members, namely: (a). three representatives nominate by the Government from among the wholesale traders holding valid licenses for carrying wholesale trade in the market area;
(b.) three representatives nominated by the Government from among the members of the trade associations in the market area recognised by the local authority;
(c.) two non-officials nominated by the Government in consultation with the local authority; (d.) (i) in the [Chennai] Metropolitan Planning Area,- (A) the Commissioner, Corporation of [chennai], ex-officio or his nominee;
(B) the Chief Planner, [Chennai] Metropolitan Development Authority, exofficio and (C) the Chief Executive Officer, [Chennai] Metropolitan Development Authority, ex-officio; and (ii) in any other local area, the Commissioner or the Executive authority, of the local authority concerned, ex-officio;
(e) Director of Agricultural Marketing, exofficio or his nominee not below the rank of Deputy Director of Agricultural Marketing;
(f) two officials nominated by the Government in consultation with the local authority; and (g) the Chief Administrative Officer, ex-officio: Provided that the first market committee after the date of commencement of this Act shall be constituted without the members specified in clauses (a) and (b) and it shall be reconstituted in accordance with the provisions of this section as soon as the licenses are granted to the wholesale traders by the first market committee and the trade associations are formed in the market area.
20. Registration of whole sale traders: (1) The Chief Administrative Officer of every market committee shall maintain a register, for every specified commodity for registering the wholesale traders, in such form and in such manner as may be prescribed.
(2) As soon as may be, after any area is declared to be a market area for any specified commodity, the Chief Administrative officer shall issue a notice in 7/16
such form and publish it in such manner as may be prescribed, inviting all the wholesale traders actively engaged in the wholesale trade of such specified commodity in the local area, to apply in writing to him for registering themselves with the market committee. Such applications shall be invited within such period as may be prescribed, calling upon the applicants to adduce evidence that the applicants have been actively engaged in the wholesale trade of such specified commodity in the local area immediately before the date of publication of the notification under sub Section (1) of Section 4.
(3) Every person other than the persons referred to in sub-section (2) intending to carry on the wholesale trade of such specified commodity in any market area shall also apply to the Chief Administrative Officer for registering his name with the market committee.
(4) The application for such registration shall be made in such form and shall be accompanied by such fees and documents as may be prescribed.
(5) The Chief Administrative Officer shall consider all applications received by him and if he is satisfied on making such further inquiry, if any, as he may deem fit that an applicant was actively engaged in, or intending to carry on, the wholesale trade, he shall include his name in the register maintained by him under Sub-section (1) and inform the applicant accordingly. Every such registered wholesale trader shall be eligible to get a license as provided in Section 21.
(6) If the Chief Administrative officer refuses to register the name of any person who has applied for the same, he shall communicate his decision in writing with reasons therefor to such person:
Provided that no order under this sub-section shall be passed unless the person concerned is given a reasonable opportunity of being heard.
(7) If the Chief Administrative Officer, on application make to him or information received by him or on his own motion, is satisfied after such inquiry as he deems fit, that any entry in the register is erroneous or defective in any particular or should be omitted on the ground that the person concerned has ceased to carry on the wholesale trade in such specified commodity, he may, after giving the affected person a reasonable opportunity of being heard, amend or omit the entry in the register.
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(8) Any person aggrieved by any decision of the chief Administrative Officer in this regard to the refusal of registration or amendment or omission of any entry of his name in the register, may make an appeal in writing to the local authority within such period as may be prescribed.
(9) The decision of the chief Administrative Officer in regard to such registration, and where an appeal is made against such decision, the decision of the local authority, shall be final.
21. Wholesale trading in specified commodity in market area to be regulated by license: (1) on and after the date specified by the local authority, by notification (hereafter in this section referred to as the notified date), no person shall, within a market area,- (a.) set up, establish or use, or continue or allow to be continued, any place for the wholesale trade of any specified commodity; or (b) operate as weighman, measurer, trader, warehouseman or in any other capacity in relation to the wholesale trading of any specified commodity; or (C) carry on any wholesale trade of any specified commodity in any place in the market area other than in the market or special market, as the case may be, except under, and in accordance with the conditions of, a license granted to him in that behalf by the market committee under this Act:
Provided that (i) all orders granting, renewing, refusing to grant or refusing to renew, cancelling or suspending any license shall be in writing and no order refusing to grant or renew or cancelling or suspending a license shall be made without giving the person concerned a reasonable opportunity of stating his case; (ii) the reasons for any such refusal, cancellation or suspension of a license shall be recorded in writing;
(iii) the market committee shall not refuse to grant an initial licence to any registered wholesale trader.
(2) Nothing contained in sub-section (1) shall apply to a warehousing corporation established or maintained by the State or Central Government or a warehouseman licensed under the Tamil Nadu Warehouses Act, 1951 (Tamil Nadu Act XV of 1951) in respect of storage, weighment or measurement of any specified commodity accepted for warehousing.
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(3) A license under Sub section (1) may be refused to a person, (a) whose license was cancelled, and a period of three years has not elapsed since the date of the cancellation; or (b) who has been convicted of an offence where such offence relates to his business or his intergrity as a man of business; or (c) in regard to whom the market committee is satisfied, after such enquiry as it considers adequate, that he is a benamidar for, or a partner with, any other person to whom a license may be refused under clause (a) or clause (b).
(4) If a market committee is satisfied, either on a reference made to it in this behalf, or otherwise, that (a) a license granted under sub-section (1) has been obtained by misrepresentation or fraud, or (b) the holder of a license has contravened, or failed to comply with, any of the provisions of this Act or the rules or by-laws made under this Act or any of the conditions of the licence, then, without prejudice to any other penalty to which the holder of the licence may be liable under this Act, the market committee may, subject to such rules as may be made in this behalf, cancel or suspend the licence, after giving the holder of the licence a reasonable opportunity of showing cause against such cancellation or suspension.
(5) any person aggrieved by the decision of the market committee;
(a) refusing to grant, or (b) cancelling or suspending, a license may, within such time as may be prescribed, appeal to the local authority and the local authority may make such order in the case as it may think fit.
(6) A license granted under sub-section (1) shall be valid for a period of three years and may be renewed, from time to time, and the provisions of this Act shall, so far as may be, apply in relation to the renewal of a license as they apply in relation to the grant of a license.
(7) Every person to whom a license is granted under sub-section (1) shall comply with the provisions of this Act, the rules and by-laws made under this Act and the conditions specified in the license.
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(8)(a) Notwithstanding anything contained in any law for the time being in force, no local authority, including the [chennai] City Municipal Corporation constituted under the [Chennai] City Municipal Corporation Act, 1919 (Tamil Nadu Act IV of 1919) having jurisdiction over the market area, shall, on and after the notified date, establish, authorise or continue, or allow to be established, authorised or continued, any place in the local area including the market area as a market or a place to carry on the wholesale trade in respect of any specified commodity and any permission or license already granted by such local authority shall stand cancelled on the notified dated.
(b) upon such cancellation of any permission or license, if the holder of such permission or license refuses to discontinue his wholesale trade in respect of any specified commodity in the place referred to in clause(a), the market committee may, by notice in writing, direct such person, within a period of one month or such further period as may be specified therein, to stop carrying on the wholesale trade in such place.
(c) If any direction given under clause (b) is not complied with, within the time specified in the notice, the market committee may, without prejudice to any penalty that may be imposed for any contravention of the provisions of this section, have such direction carried into effect at its cost and have the amount thereof recovered from the defaulter in the same manner as arrears of land revenue.
(d). Upon such cancellation of any permission or license, the holder of such permission or licence shall not be entitled to claim and receive any compensation, but shall be entitled to claim and receive such amount towards refund of the fees paid by him as is proportional to the unexpired period of such permission or license.''
19. As rightly contended by the learned Additional Advocate General appearing for the respondents 1 and 2 that in the event of tenderer becoming a license holder or member of the Market Committee, there is every likelihood of repeated buyer and in order to exclude the same, condition No.3 came to be incorporated in the Addendum. Condition No.2, which says that 'the application made by company/individual should have been in existence already in the perishable trade for the past 5 years as on December 2019 for running the godown'. It is the 11/16
submission of the learned Additional Advocate General that since prescription of the conditions for tenders falls with the exclusive domain of the Tender Floating Authority, it cannot be found faulted with.
20. It is also a well settled position of law that prescription or incorporation of the conditions for tenders, falls with the exclusive domain of the Tender Floating Authority and in normal circumstances, this Court cannot interfere with the same and rather rewrite the conditions.
21. In Sub Section 3 of Section 20 of the Act, every other person that the persons referred to in sub-section (2) intending to carry on the wholesale trade of such specified commodity in any market area shall also apply to the Chief Administrative Officer for registering his name with the market committee and in terms of Sub Section 5 of Section 20, every such registered wholesale trader shall be eligible to get a license as provided in Section 21. Sub Section 1(C) of Section 21 stipulates, no person shall carry on any wholesale trade of any specified commodity in any place in the market area other than in the market or special market, as the case may be, except under, and in accordance with the conditions of, a license granted to him in that behalf by the market committee under the Act.
22. In the considered opinion of this Court, it may not be necessary on the part of the bidders to get the registration as well as license in terms of the above said provision of the Act, however, makes it clear that once the person intends to carryout wholesale trade in the Koyambedu Wholesale Market Complex, which is under the control of the 3rd respondent, concerned persons is under obligation to comply with the terms of the above cited statutory provisions and the said fact has also been conceded by the learned Additional Advocate General on instructions. After filing of the Writ Petition, the petitioner had submitted a representation dated 20.02.2020 to the 2nd respondent, praying for substitution of the name of Mr.J.Jagan, who has sworn to the affidavit on behalf of the petitioner in the capacity as Power of Attorney.
In the light of the fact that he has submitted representation for substitution of name, as rightly pointed out by the learned Additional Advocate General there cannot be any substitution of the applicant in a tender and it is also to be noted at this juncture that under condition no.2.4 of terms and conditions of the tender, applicant can submit more than one application for allotment and however, the same has not been done in this case.
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23. Now coming to the objection raised by the petitioner that the date of opening of tenders has not been informed to the petitioner and hence he has been put to prejudice, in the considered opinion of this Court, the said point may not come to the aid of the petitioner, in the light of the representation dated 20.02.2020, for the reason that on the date of opening of the tender, in real and technical sense, he may not be called as a person interested to participate in the tender, on account of the request made in the above said representation.
24. Mr.Rajasekar, learned counsel appearing for the petitioner, by way of alternate submission would submit that since the petitioner made the initial deposit of Rs.2,40,00,000/- on 07.01.2020, the said amount should have been refunded to him without any loss of time. In respect of the same, the learned Additional Advocate General would submit that in the light of the subsequent development in the form of representation dated 20.02.2020, his application is deemed to be rejected and in that event, it is open to the 2nd respondent to deduct 10% and pay the balance.
25. However, this Court, taking into consideration of the fact that the tender was opened belatedly on 31.07.2020 and in the light of the financial difficulties pleaded by the petitioner in his representation, is of the considered view that the 2nd respondent shall refund a sum of Rs.2,40,00,000/- without any interest in terms of condition no.2(iv) of terms and conditions of the tender within a period of four weeks from the date of receipt of a copy of this order.
26. In 2012 (8) SCC 216 (Michhigan Rubber (India) Limited Vs. State of Karnataka and Others), the Hon'ble Supreme Court of India had considered the nature and scope of judicial review in tender process and in paragraph no.23, after taking into consideration the earlier decisions, also observed as follows: ''23.From the above decisions, the following principles emerge:
(a) The basic requirement of Article 14 is fairness in action by the State, and nonarbitrariness in essence and substance is the heartbeat of fair play. These actions are amenable to the judicial review only to the extent that the State must act validly for a discernible reason and not whimsically for any ulterior purpose. If the State acts within the bounds of reasonableness, it would be legitimate 13/16
to take into consideration the national priorities;
(b) Fixation of a value of the tender is entirely within the purview of the executive and the courts hardly have any role to play in this process except for striking down such action of the executive as is proved to be arbitrary or unreasonable. If the Government acts in conformity with certain healthy standards and norms such as awarding of contracts by inviting tenders, in those circumstances, the interference by courts is very limited;
(c) In the matter of formulating conditions of a tender document and awarding a contract, greater latitude is required to be conceded to the State authorities unless the action of the tendering authority is found to be malicious and a misuse of its statutory powers, interference by courts is not warranted;
(d) Certain preconditions or qualifications for tenders have to be laid down to ensure that the contractor has the capacity and the resources to successfully execute the work; and (e) If the State or its instrumentalities act reasonably, fairly and in public interest in awarding contract, here again, interference by court is very restrictive since no person can claim a fundamental right to carry on business with the Government.
24.Therefore, a court before interfering in tender or contractual matters, in exercise of power of judicial review, should pose to itself the following questions: (i) Whether the process adopted or decision made by the authority is mala fide or intended to favour someone; or whether the process adopted or decision made is so arbitrary and irrational that the court can say: "the decision is such that no responsible authority acting reasonably and in accordance with relevant law could have reached"? and (ii) Whether the public interest is affected?
If the answers to the above questions are in the negative, then there should be no interference under Article 226.''
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27. In the considered opinion of this Court, the Addendum which came into being on 06.01.2020, have not disclosed any arbitrary decision or malafide act on the part of the official respondents. In the light of the well settled legal position as to the scope of interference / judicial review in tender matters and also in the light of the reasons assigned, this Court is unable to come to the aid of the petitioner.
28. In the result, the Writ Petition is dismissed. No costs. Consequently connected miscellaneous petition is closed. Sd/- Assistant Registrar (CS V ) /true copy/ Sub Asst. Registrar sk To 1.The Member Secretary, Chennai Metropolitan Development Authority, No.1, Gandhi Irwin Road, Egmore, Chennai 600 008.
2.The Chief Executive Officer, Chennai Metropolitan Development Authority, Rep.by its Chairman, No.1, Gandhi Irwin Road, Egmore, Chennai 600 008.
3.The Chief Administrative Officer, Market Management Committee, Koyambedu Wholesale Market Complex, Chennai.
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+2 ccs to Mr.Mr.M.Rajasekhar Advocate sr35790 +1 cc to Mr.M.Velmurugan Advocate sr35922 W.P.No.2352 of 2020 gj(co) aa08/12/2020 16/16