Full Judgment Text
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PETITIONER:
PURXOMOMA RAMANATA QUENIN
Vs.
RESPONDENT:
MAKAN KALYAN TANDEL & ORS.
DATE OF JUDGMENT09/01/1974
BENCH:
KHANNA, HANS RAJ
BENCH:
KHANNA, HANS RAJ
KRISHNAIYER, V.R.
SARKARIA, RANJIT SINGH
CITATION:
1974 AIR 651 1974 SCR (3) 64
1974 SCC (2) 169
CITATOR INFO :
RF 1979 SC1628 (26)
ACT:
Constitution of India, Art. 14--Contracts with the
Government--Lease of distillery owned by the State to
members of public by tender--Government reserving right to
select any tender or reject all tenders without assigning
any reason--No violation of Art. 14.
Words and phrases--"Auction" and "Invitation to
tender"--Distinction between--Legislative diploma No. 1761,
Art. 9 para 2 framed by Portuguese Government.
HEADNOTE:
The Union territory of Goa, Daman and Diu invited tenders on
behalf of the president of India from the public for the
lease of the Daman distillery for a period of three Years.
Clause 7 of the terms and conditions of the tender appended
to the notice provided that the highest tender shall
ordinarily be accepted but the Government reserved the right
to select any tender or reject all tenders Without assigning
any reason therefor. The appellant tendered Rs. 3,25,000/-
while respondent No. 1 offered Rs. 3,51,545/- The lease of
the distillery was granted to appellant for Rs. 3,52,545/-
Rs. 1000/- more than the amount mentioned in the tender of
respondent No. 1, On challenge to the legality of the grant
of lease by Respondent No. 1 though a writ petition, the
Judicial Commissioner of Goa set aside the lease in favour
of appellant No. 1 and directed the Government to deal with
the tender of respondent No. 1 according to law. The main
reason which weighed with the learned Judicial Commissioner
was the submission made on behalf of The State that it was
prepared, without accepting the correctness of the con-
tentions of Respondent No. 1, to set aside the lease, if the
Court so desired. The Judicial Commissioner also held that
clause of the notice was ultravires, that giving lease to
the appellant by accepting more money than the highest bid
by a private deal was contrary to law and not assigning
reasons for the rejection of the tender of respondent No.1
was illegal. [68D]
Allowing the appeal by special leave,
HELD:(1) The Judicial Commissioner should not have, without
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giving some cogent reason, set aside the lease of the
distillery in favour of the appellant. The main reason
which weighed with the learned Judicial Commissioner in
setting aside the lease in favour of the appellant was the
submission made on behalf of the State that it was prepared.
without accepting the correctness of the contentions of res-
pondent No. 1, to set aside the lease if the Court so
desired. This circumstance was hardly sufficient to warrant
the setting aside of the lease in favour of the appellant.
The person who was primarily affected by the setting aside
of the lease was the appellant to whom the lease had been
granted. In the absence of any concurrence of the
appellant, the fact that the Government was prepared, if the
Court so desired, to set aside the lease, could hardly
provide valid basis for the setting aside of the lease.
[68D]
(11)Regarding the question of the validity of clause 7 and
the grant of lease in favour of the appellant even though
the tender of respondent No. 1 was for the highest amount,
the matter is not resintegra and is more or less concluded
by the pronouncements of this court. The view taken by this
Court is that a condition like that contained in clause 7
produced above is not violative of Article 14 of the
Constitution and that in matters relating to contracts with
the Government the latter is not bound to accept the tender
of the person who offers the highest amount. The
circumstance that those cases were decided in the context of
certain statutory provisions would not detract from the
binding effect of the general principles enunciated in those
cases. [68F ; 71H]
65
C.K. Achuthan v. The State of Kerala and others [1959]
Suppl. 1 S.C.R. 787, Trilochan Mishra etc. v. State of
Orissa and Ors. [1971]3 S.C.C. 153,State of Orissa and Ors.
v. Harinarayan Jaiswal and others, [1972] 2 S.C.C. 36,
Cooverjee B. Bharucha’s case [1954] S.C.R. 873 and Union of
India and Ors. v. M/s Bhimsen Walaiti Ram, [1970] 2 S.C.R.
594, relied on.
Century Spinning & Mfg. Co. and anr. v. The Ulhasnagar
Municipal Council & Anr. [1970] 3 S.C.R. 854, Rashbihar
Panda etc. v. State of Orissa. [1969] 3 S.C.R. 374, Dwarka
Prasad Laxmi Narain v. The State of Uttar Pradesh & Two Ors.
[1954] S.C.R. 803, and Guruswamy v. State of Mysore A.I.R.
1954 S.C. 592, distinguished.
No allegations were made in the writ petition by respondent
no. 1 that the act of the authorities in the grant of lease
of the distillery to the appellant was mala fide Nor has the
above act been shown to be vitiated by any such
arbitrariness as, should call for interference by this
Court. [73E]
(III)It does not appear that tenders were invited in
connection with the lease of the distillery in pursuance of
the provisions of Art. 9 of the Legislative Diploma No. 1761
framed by the Portuguese Government. According to para 2 of
Art. 9 the lease can be put to auction in the stipulated
conditions when it is found not convenient to renew the
previous one. The aforesaid paragraph, it would thus
appear, relates to auction-and not to calling of sealed
tenders. An auction is a manner of selling or letting
property by bids, and usually to the highest bidder by
public competition. An invitation to tender is a mere
attempt to ascertain whether an offer can be obtained within
such mar-gin as the building owner or employer is; willing
to adopt, or, in other words, is an offer to negotiate, an
offer to receive offers, an officer to chaffer. There is a
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difference between auction and invitation for tenders. As
there was no auction but only invitation for tenders in the
present case, it cannot be said that the lease was governed
by article 9 of the Legislative Diploma. [72B-E]
Halsbury’s Laws of England, third Edition, Vol. 2, pp. 69,
422, referred to.
JUDGMENT:
CIVIL APPELLATE JURISDICTION : Civil Appeals Nos. 844 and
845 (N) of 1973.
Appeals by special leave from the judgment and order dated
the 31st March, 1973 of the Court of the Judicial
Commissioner Goa, Daman and Diu at Panaji in Special Civil
Application Writ Petitions Nos. 8 and 9 of 1973.
P.H. Parekh, P. G. Navelkar and Sunanda Bhandare, for the
appellant.
B. R. L. Iyengar and P. C. Bhartari, for Respondent No. 1.
L. N. Sinha, Solicitor General of India and M. N. Shroff,
for the Respondent Nos. 2-4.
The Judgment of the Court was delivered by
KHANNA, J-This judgment would dispose of civil appeals No,
844 and 845 of 1973 which have been filed by special leave
against the judgment of learned Judicial Commissioner Goa,
Daman and Diu whereby he cancelled the leases of the
distilleries granted in favour of’ the appellant and
directed the Government to deal with the tender of
respondent No. 1 according to law in the light of the
observations made by the Judicial Commissioner. As the
question involved in the two appeals is identical, we may
set out the facts giving rise to civil appeal No. 844,
Learned counsel for the parties are agreed that the decision
in that civil appeal would also govern the other appeal.
66
There is a distillery installation owned by the State at
Daman. The Government has been leasing out the said
distillery for specified period to members of the public for
manufacture of country liquor. At the expiry of each lease,
the Government used to invite fresh tenders from the public
or the next lease and granted lease of the distillery to the
person whose tender was accepted. For a number of years
before 1973 the appellant’s tender in respect of the above
distillery was accepted by the Government as the amount
offered by him was the highest. The last lease in favour of
the appellant expired on January 31, 1973. Before that by
notice dated September 25, 1972 the Finance Secretary for
the Union Territory of Goa, Daman and Diu invited tenders on
behalf of the President of India from the public for the
lease of the said distillery for a period of three years
commencing from February 1, 1973 for the manufacture of
country liquor. The terms and conditions of tender as framed
by the Government were appended to the said notice. Clause 7
of those terms and conditions was as under
"The highest tender shall ordinarily be
accepted but the Government reserves the right
to select any tender or reject all tenders
without assigning any reason therefor.
Pursuant to the notice the appellant and respondent No. 1
submitted closed tenders to the Government in the prescribed
form. The tenders were opened on December 20, 1972 in the
office of the Commissioner of Excise in the presense of the
tenderers. It was found that the tender of respondent No. 1
for an amount of Rs. 3,51,345 was the highest, while that of
the appellant for Rs. 3,25,000 was second. There was a
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third tenderer also, but his tender was the lowest and we
are no longer concerned with him. As respondent No. 1, whose
tender was for the highest amount, did not receive any
communication regarding the acceptance of his tender, he
wrote a letter on January 16, 1973 to the Finance Secretary
calling upon him to accept the tender of respondent No. 1
within 24 hours and to take necessary steps for the
execution of the lease. On January- 18, 1973 the Advocate of
respondent No. 1 sent notice to the Finance Secretary to
accept the tender ,of respondent No. 1. Respondent No. 1
then learnt that the distillery in question had been given
on lease to the appellant for Rs. 3,52,345, i.e., Rs. 1,000
more than the amount mentioned in the tender of respondent
No. 1.
Respondent No. 1 thereupon filed petition under articles 226
and 227 praying for the issuance of a writ to quash and set
aside the grant of lease of the distillery in question in
favour of the appellant and for directing the Government to
grant the lease of the distillery in favour of respondent
No. 1. According to respondent No. 1, it was incumbent upon
the Government to give reasons for the rejection of his
tender. It was further stated that in case the Government
relied upon clause 7 of the terms and conditions in support
of its action, the said clause was void for violation of
article 14 of the Constitution inasmuch as it enabled the
Government to reject the highest tender without assigning
any reason therefor.
67
The petition was resisted by the appellant as well as by the
State Government. It was stated in the reply filed on
behalf of the State Government that the invitation of
tenders did not give rise to any rights other than those
stipulated in the terms and conditions upon which the
tenders had been invited. As those rights were purely of a
contractual nature, no relief could be granted by the court
under its writ jurisdiction for alleged breach of contract.
According further to the affidavit, the acceptance of the
tender was solely within the discretion of the Government,
uncontrolled by any statutory obligation or limitation and
the rejection of the tender of respondent No. 1 created no
statutory rights in him. Clause 7 of the terms and
conditions was stated to be valid and not violative of
article 14. The tender of respondent No. 1 was stated to
have been rejected after the appellant had been informed
that his tender could be accepted provided he raised his
offer so as to pay an amount higher than that offered by the
person with the highest tender. The appellant accordingly
raised his and thereupon his tender was accepted. The
grounds for the rejection of the tender of respondent No. 1
were stated to have been recorded in the Me. It was,
according to the affidavit, for the Government to choose the
person to whom it would grant the lease and the party
aggrieved could not claim the protection of article 14.
The learned Judicial Commissioner in the course of his
judgment observed that the act of the Government in giving a
lease of the distillery to the appellant for Rs. 3,52,345,
i.e., Rs. 1,000 more than the highest bid, by a private deal
was not countenanced by law. The Judicial Commissioner then
referred to the submission which was made during the course
of arguments on behalf of the Government that the Government
was prepared to annul the lease granted in favour of the
appellant if the court were to so direct. The Judicial
Commissioner thereupon directed that the lease in favour of
the appellant be set aside. Dealing with the validity of
clause 7 reproduced above the learned Judicial Commissioner
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observed that, to the extent it gave power to the Government
to reject the highest tender without assigning any reason,
it was ultra vires and should be struck down. In the opinion
of the Judicial Commissioner, it was open to the Government
to assign reasons for the rejection of the tender of
respondent No. 1. Opportunity was thereafter to be given to
respondent No. 1 to show that the reasons assigned by the
Government were bad. The lease of the distillery granted in
favour of the appellant was accordingly set aside and the
Government was directed to deal with the tender of
respondent No. 1 according to law in the light of the
observations made by the learned Judicial Commissioner.
it may be stated that after the judgment of the Judicial
Commissioner, letter dated April 10, 1973 was addressed on
behalf of the Government stating that in pursuance of the
decision of the Judicial Commissioner the Government had
decided that the existing contract with the appellant be set
aside and the lease of the distillery be granted in favour
of respondent No. 1.
68
It has been argued by Mr. Parekh on behalf of the appellant
that the Judicial Commissioner was not justified in setting
aside the lease in favour of the appellant without giving
any reason. Clause 7 reproduced above according to the
learned counsel, is valid and does not contravene article 14
of the Constitution. Respondent No. 1, it is further
stated, cannot be allowed to take the benefit of one part of
clause 7 without at the same time being bound by the other
part of that clause. Learned Solicitor General on behalf of
the Union of India has contended that clause 7 is valid and
binding upon the parties. As against that, Mr. lyengar on
behalf of respondent No. 1 has controverted the contentions
advanced on behalf of the appellant. The judgment of the
Judicial Commissioner, it is stated, does not suffer from
any infirmity. It has also been argued by the learned
counsel that the grant of lease of the distillery in
question is governed by the provisions of article 9 of
Legislative Diploma No. 1761 framed by the Portugese
Government.
There is, in our opinion, force in the contention advanced
on behalf of the appellant that the Judicial Commissioner
should not have without giving some cogent reason set aside
the lease of the distillery in favour of the appellant.
Perusal of the judgment shows that the main reason which
weighed with the learned Judicial Commissioner in setting
aside the lease in favour of the appellant was the
submission made on behalf of the State that it was prepared
without accepting the correctness of the contentions of
respondent No. 1 to set aside the lease if the court so
desired. This circumstance, in our opinion, was hardly
sufficient to warrant the setting aside of the lease in
favour of the appellant. The person who was primarily
affected by the setting aside of the lease was the appellant
to whom the lease had been granted. In the absence of any
concurrence of the appellant, the fact that the Government
was prepared if the court so desired, to set aside the lease
could hardly provide valid basis for the setting aside of
the lease.
So far as the question is concerned about the validity of
clause 7 and the grant of lease in favour of the appellant
even though the tender of respondent No. 1 was for the
highest amount, we find that the matter is not res integra
and is more or less concluded by the pronouncements of this
Court. In C. K. Achuthan v. The State of Kerala &
Ors.(1)the facts were as under. The petitioner and the
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third respondent, Co-operative Milk Supplies Society
Cannanore submitted tenders for the supply of milk to the
Government Hospital at Cannanore for the year 1948-49. The
Superintendent who scrutinised the tenders, accepted that of
the petitioner and communicated the reasons for the decision
to the Director of Public Health. The contract in favour of
the petitioner was subsequently cancelled in pursuance of
the policy of the Government that in the matter of supply to
Government medical institutions the Co-operative Milk
Supplies Union was to be given contract on the basis of
prices fixed by the revenue Department. The petitioner
challenged the decision of the Government in petition under
article 32
(1) [1959] Suppl. 1 S.C.R. 787.
69
of the Constitution on the ground, inter alia, that there
had been discrimination against him, vis-a-vis the third
respondent and, as such, there was contravention of article
14, 19(1)(g) and 31 of the Constitution. Rejecting the
contention the Constitution Bench of this Court speaking
through Hidayatullah J. (as he then was) observed:
"The gist of the present matter is the breach,
if any, of the contract said to have been
given to the petitioner which has been
cancelled either for good or for bad reasons.
There is no discrimination, because it is
perfectly open to the Government, even as it
is to a private party, to choose a person to
their liking, to fulfil contracts which they
wish to be performed. When one person is
chosen rather than another, the aggrieved
party cannot claim the protection of Art. 14,
because the choice of the person to fulfil a
particular contract must be left to the
Government. Similarly, a contract which is
held from Government stand on no different
footing from a contract held from a private
party. The breach of the contract, if any,
may entitle the person aggrieved to sue for
damages or in appropriate cases, even specific
performance but he cannot complain that there
has been a deprivation of the right to
practice any profession or to carry on any
occupation, trade or business, such as is
contemplated by Art. 19(1)(g). Nor
has it
been shown how Art. 31 of the Constitution may
be invoked to prevent cancellation of a
contract in exercise of powers conferred by
one of the terms of the contract itself."
In Trilochan Mishra, etc. v. State of Orissa & Ors.(1) this
court dealt with the validity of section 3(2)(a) and section
8 (1) of the Orissa Kendu Leaves (Control of Trade) Act,
1961 as amended by the ’Orissa Kendu Leaves (Control of
Trade) Amendment Act, 1969 as well as the validity of the
rules framed under that Act. The petitioner in that case
also sought a declaration that the revised policy in the
matter of the sale of Kendu leaves was arbitrary,
discriminatory and mala fide. One of the grievances of the
petitioner in that case was that the bid of person making
the highest tenders were not accepted. Repelling the
contention advanced on behalf of the petitioner, Mitter J.
who gave the judgment of the Court on behalf of the Consti-
tution Bench observed
"With regard to the girevance that in some
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cases the bids of persons making the highest
tenders were not accepted, the facts are that
persons who had made lower bids were asked to
raise their bids to the highest offered before
the same were accepted. Thus there was no
loss to Government and merely because the
Government preferred one tender to another no
complaint can be entertained. Government
certainly has a right to enter into a contract
with a person well known to it and specialty
one who has faithfully performed his contracts
in the past in preference to an undesirable or
unsuitable
(1) [1971] 3 S.C.R. 153.
70
or untried person. Moreover, Government is
not bound to accept the highest tender but may
accept a lower one in case it thinks that the
person offering the lower tender is on an
overall consideration to be preferred to the
higher tenderer."
In State of Orissa & Ors. v. Harinarayan Jaiswal & Ors.(1)
the respondents were the highest bidders at an auction held
by the Orissa Government through the Excise Commissioner,
for the exclusive privilege of selling by retail the country
liquor in some shops. The Government of Orissa had reserved
the right either to accept or reject the highest bid and had
actually rejected the bids of the respondents and later on
the privilege was sold by negotiation to some others. One
of the contentions taken on behalf of the writ petitioners
in that case was that the power retained by the Government
"to accept or to reject any bid without assigning any reason
therefor" was an arbitrary power and therefore, violative of
articles 14 and 19(1)(g). Hegde J. speaking for this Court
rejected that contention in the following words :
"One of the contentions taken on behalf of the
writ petitioners was that the power retained
by the Government ’to accept or to re
ject any
bid without assigning any reason therefor’ in
clause (6) of the order made by the Government
on January 6, 1971, in exercise of its powers
under section 29(2) of the Act was an
arbitrary power and therefore it is violative
of articles 14 and 19(1)(g). This contention
has been upheld by the High Court. It was
urged on behalf of the writ petitioners that
they have a fundamental right to carry on
trade or business in country liquor. That
right can be regulated only by imposing reas-
onable restrictions in the interest of the
general public. It was further urged that the
power retained by the Government to accept or
to reject the highest bid without assigning
any reason is an unguided power and hence it
is violative- of article 14. These contentions
were accepted by the High Court. To us, none
of these contentions appear to be well
founded. As seen earlier section 22 of the
Act confers power on the Government to grant
to any person on such conditions and for such
period as it may think fit the exclusive
privilege of selling in retail any country
liquor. Section 29 empowers the Government to
accept payment of a sum in consideration for
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the grant of any exclusive privilege under
section 22 either by calling tenders or by
auction or otherwise as it may by general or
special order direct. The powers conferred on
the State Government by section 22 and section
29 are absolute powers. As seen earlier, the
validity of those provisions has not been
challenged before us. Under section 29(2) the
Government had power to dispose of any of the
exclusive privileges mentioned in section 22
either by auction or otherwise as it may by
general or special order direct. That being
the amplitude of the power of the Government,
we fail to see how the Government can be said
(1) [1972] 2 S.C.C. 36.
71
to have conferred on itself arbitrary power
under clause (6) of its order made on January
6, 1971, when it provided that :
"No sale shall be deemed to be final unless
confirmed by the State Government who shall be
at liberty to accept or reject any bid without
assigning any reason therefor."
Even apart from the provisions of sections 22 and 29, this
Court took the view that the power retained by the
Government under clause (6) reproduced above was not
unconstitutional. It was observe in this context
"Even apart from the power conferred on the
Government under sections 22 and 29 we fail to
see how the power retained by the Government
under clause (6) of its order, dated J
anuary 6,
1971, can be considered as unconstitutional.
As held by this Court in Cooverjee B.
Bharucha’s case(1) one. of the important
purposes of selling the exclusive right to
sell liquor in wholesale or retail is to.
raise revenue. Excise revenue forms an
important part of every State’s revenue. The
Government is the guardian of the finances of
the State. It is expected to protect the
financial interest of the State. Hence quite
naturally, the legislature has empowered the
Government to see that there is no leakage in
its revenue. It is for the Government to
decide whether the price offered in an auction
sale is adequate. While accepting or
rejecting a bid, it is merely performing an
executive function. The correctness of its
conclusion is not open to judicial review. We
fail to see how the plea of contravention of
article 19(1)(g) or article 14 can arise in
these cases. The government’s power to sell
the exclusive privilege set out in section 22
was not denied. It was also not disputed that
those privileges could be sold by public
auction. Public auctions are held to get the
best possible price. Once these aspects are
recognised, there appears to be no basis for
contending that the owner of the privileges in
question who had offered to sell them cannot
decline to accept the highest bid if he thinks
that the price offered is inadequate. There
is no concluded contract till the bid is
accepted. Before there was a concluded
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contract, it was open to the bidders to
withdraw their bids-see Union of India and
Ors. v. M/s. Bhimsen Walaiti Ram.(2) By
merely giving bids, the bidders had not
acquired any vested rights. The fact that the
Government was the seller does not change the
legal position once its exclusive right to
deal with those privileges is conceded. If
the Government is the exclusive owner of those
privileges, reliance on article 19(1)(g) or
article 14 becomes irrelevant."
,It would appear from the above that the view taken by this
Court is that a condition like that contained in clause 7
reproduced above is not violative of article 14 of the
Constitution and that in matters relating to contracts with
the Government, the latter is not bound
(1) (1954) S.C.R. 873.
(2) [1970] 2 S.C.R. 594.
72
to accept the tender of the person who offers the highest
amount. Mr. lyengar has tried to distinguish the above
mentioned cases on the ground that they were decided in the
context of certain statutory provisions. This circumstance,
in our opinion, would not detract from the binding effect of
the general principle enunciated in those cases.
We may now deal with the contention of Mr. lyengar that the
lease of distilleries is governed by para 2 of article 9 of
Legislative Diploma No. 1761. In this connection we find
that the judgment of the learned Judicial Commissioner does
not show that any such ground was urged before him. Mr.
Parekh on behalf of the appellant submits that the said
Legislative Diploma was no longer in force at the time the
distillery was, leased in favour of the appellant. It is,
in our opinion, not necessary to go into this aspect because
it does not appear that tenders were invited in connection
with the lease of the distillery in pursuance of the
provisions of article 9 of the Legislative Diploma.
According to para 2 of article 9 upon which reliance has
been placed by Mr. Iyengar, the lease can be put to auction
in the stipulated conditions when it is found not convenient
to renew the previous one. The aforesaid paragraph, it
would thus appear, relates to auction and not to calling of
sealed tenders. An auction, as stated in Halsbury’s Laws of
England, Third Edition, Vol. 2, page 69, is a manner of
selling or letting property by bids, and usually to the
highest bidder by public competition. An invitation to
tender is a mere attempt to ascertain whether an offer can
be obtained within such margin as the building owner or
employer is willing to adopt, or, in other words, is an
offer to negotiate, an offer to receive offers, an offer to
chaffer (see Halsbury’s Laws of England, Third Edition, page
422). There is, in our opinion, difference between auction
and invitation for tenders. As there was no auction but
only invitation for tenders in the present case, it cannot
be said that the lease of the distillery was governed by
article 9 of the Legislative Diploma.
It has been argued by Mr. lyengar that there must have been
some negotiation between the Government and the appellant as
a result of which the appellant raised his offer to that it
might exceed that of respondent No. 1. This may have been so
but it was apparently with a view to ensure that the
pecuniary interest of the Government did not suffer as a
result of the rejection of the tender of respondent No. 1.
The appellant was consequently made to pay Rs, 1,000 more
than what had been offered by respondent No. 1.
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Mr. lyengar has referred to some of the decisions of this
Court, but none of them, in our opinion, is of any material
assistance to respondent No. 1. In Century Spinning &
Manufacturing Company Ltd. & Anr. v. The Ulhasnagar
Municipal Council & Anr.(1) this Court observed that a pubic
body is not exempt from the liability to carry out its
obligations arising out of representation made by it when a
citizen who relies upon that representation alters his
position to his prejudice. No such question arises in the
present case because it is not shown that respondent No. 1
has altered his position to his prejudice by relying upon
any representation made by the authorities.
(1) [1970] 3 S.C.R. 854.
73
In Rashbihar Panda etc. v. State of Orissa(1) this Court
dealt with a Government scheme for sale and disposal of
Kendu leaves. It was found that the right to make tenders
for the purchase of Kendu leaves was restricted to those
persons who had obtained contracts in the previous year.
The scheme was held to be violative of articles 14 and
19(1)(g) because it gave rise to monopoly in Kendu leaves to
certain traders. The dictum laid down in the above case
cannot be of much assistance because there was no such
restriction in the present ,case with regard to the making
of the tenders.
Dwarka Prasad Laxmi Narain v. The State of Uttar Pradesh &
Two Ors.(2) related to the validity of clause 4(3) of the
Uttar Pradesh Coal Control Order, 1953 according to which
the licensing authority was given absolute power-in the
matter of grant revocation, cancellation or modification of
the licences issued under that Order. No such question
arises in the present case.
The last case referred to on behalf of respondent No. 1 is
Guruswamy v. State of Mysore.(3) In that case a liquor
contract was knocked down in an auction by the Deputy
Commissioner in favour of A who was the highest bidder. B
who was present at the auction but did not bid, saw the
Excise Commissioner and offered Rs. 5000/- in excess of A’s
bid. B’s offer was accepted and A’s bid was cancelled. It
was held that the cancellation of A’s bid though irregular
was proper as A had obtained no right to the licence by the
mere fact that the contract had been knocked down in his
favour. The action of the Deputy Commissioner in giving
contract to B was held to be wrong as it was found to be
contrary to the rules framed under the Mysore Act. No such
contravention of a statutory rule has been shown in the
present case because of the lease of the distillery in
question to the appellant.
It may be stated that no allegations were made in the writ
petition by respondent No. 1 that the act of the authorities
in the grant of lease of the distillery in question to the
appellant was mala fide. There arises consequently no
occasion for us to go into that aspect. Nor has the above
act been shown to be vitiated by an such arbitrariness as
should call for interferences by the Court. Indeed, as
mentioned earlier, the matter is concluded by the decisions
of this Court.
As a result of the above, we accept the appeals, set aside
the judgment of the learned Judicial Commissioner and
dismiss the petitions under article 226 filed by
respondent No. 1. Looking to all the circumstances, we leave
the parties to bear their own costs throughout.
S.B.W.
Appeals allowed.
(1) [1969] 3 S.C.R. 374.
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(2) [1954] S.C.R. 803.
(3) A.I.R. 1954 S.C. 592.
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