Negotiated lease of State land upheld where the decision was rational, bona fide, and justified by public interest despite no auction.

State disposal of acquired land by negotiated long-term lease was upheld because the transfer was supported by a rational, bona fide public-interest decision, fixed on prevailing market value, and linked to an industrial export-oriented project with expected employment and foreign exchange benefits. The Court held that public auction or tender is ordinarily preferable for State property, but not an invariable requirement; departure is permissible where there is no statutory bar and the record shows no mala fides, extraneous considerations, or public injury. No violation of Article 14 was established.

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Issues: Whether the State's grant of a long-term lease of surplus acquired land to a private party without public auction or tender was arbitrary, illegal, or violative of Article 14.

Analysis: The land had vested in the State after acquisition, and in the absence of any pleaded statutory restriction, the validity of the transfer depended on whether the decision was shown to be tainted by extraneous considerations, mala fides, or public injury. The material on record indicated that the lease was granted after negotiations for an industrial and export-oriented project, at a value fixed on the basis of the prevailing market price, with expected employment generation and foreign exchange earnings. The Court held that while public auction or tender is ordinarily desirable for disposal of State property, it is not an invariable rule, and departure from it can be justified where the State demonstrates a rational, bona fide, and public-interest-based decision-making process.

Conclusion: The lease transaction was neither arbitrary nor illegal, and no violation of Article 14 was established.

Final Conclusion: The challenge to the State's decision to lease the land failed, and the impugned action was upheld as a permissible exercise of governmental discretion in the public interest.

Ratio Decidendi: Disposal of State property by negotiation is valid if the decision is rational, non-arbitrary, and justified by public interest, even though auction or tender is generally preferable.

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