TaxTMI 
TaxTMI 
1985 (5) TMI 213
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....area of Green Field colonies) for the period ending with 31st March, 1984 is quashed and set aside. The first respondent the State of Haryana and the second respondent the Director of Industries are directed under and subject to the relevant provisions of the Haryana Minor Minerals (Vesting of Rights) Act, 1973 read with Punjab Minor and Mineral Concession Rules, 1964 as applicable to the State of Haryana to grant a right to the appellant in the form of contract usually entered into in similar cases to extract stones from Serai Khawaja Plot No. II on compensation howsoever described at the rate of Rs. 25 lacs per, year for a period of five years commencing from January I, 1983 and upto and inclusive and ending with December 31, 1987. The appellant herein is directed to appear before the second respondent within a weak from today to execute the contract and/or necessary documents, instruments and to carry out all formalities including the making of deposits and/or payments, if any, required to be made under the relevant provisions of the Act and Rules. The fourth respondent is given time upto December 31, 1982 to clear out from the area and this time is given to him as and by ....
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....ld on that day, appellant-Ram & Shyam Company gave the highest bid for Sarai Khawaja Plot No. II in the amount of Rs 1,52,000 p.a. The presiding Officer conducting the auction accepted the bid but the State Government did not confirm the same. A fresh auction was notified to be held on May 4, 1981. The appellant participated and gave the bid for the same plot, his highest bid rising to Rs 3,87,000 for a period of three years. The same routine followed. The Presiding Officer accepted the bid and the State Government declined to confirm the same. Then there happened something which cannot have any parallel or precedent in a constitutional democracy like ours but one could have profitably drawn parallel from the administration of old princely States. Respondent No. 4 wrote a letter dated May 9, 1981 (Anx. R-1 in the High Court) addressed to the Chief Minister, Haryana State setting out therein the history of various auctions, and casting serious aspersions on those who participated in the auction inter alia saying that the bidders at the auctions have formed a syndicate and want to monopolise the business by not outbidding each other so that the State gets uneconomical rent/royalty. I....
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....tion that if at the time of re-auction, the highest bid does not reach upto Rs 4,50,000 p.a. for which the lease is granted to the fourth respondent, would the Court make good the loss ? Apart from the rhetoric of the question, the issue raised was of primary importance. We, therefore, asked Mr. Sorabjee whether his client is willing to make an affidavit incorporating therein that if the highest bid at a reauction, if the court so directs, falls short of Rs 4,50,000 the appellant would agree and undertake to accept the contract at the value of Rs 5,50,000 p.a. Such an affidavit was immediately filed. In order to give the fourth respondent to whom contract under the impugned order was given, an opportunity whether he would like to raise his offer. Mr. P.P. Rao voiced his apprehension about his contentions. We assured him that without prejudice to his contentions, it would be open to his client to raise his offer. What transpired may be tabulated in a chart: Appellant's offer Respondent's offer 1. 5.50 lacs 2. 6 lacs 3. 6.50 lacs 4. 7 lacs 5. 7.53 lacs 6. 8 lacs 7. 8.50 lacs 8. 9 lacs 9. 10 lacs 10 ....
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....writ petition. The learned Single Judge as well as the Division Bench recalling the observations of this Court in Assistant Collector of Central Excise v. Jainson Hosiery Industries rejected the writ petition observing that 'the petitioner who invokes the extraordinary jurisdiction of the court under Art. 226 of the Constitution must have exhausted the normal statutory remedies available to him'. We remain unimpressed. Ordinarily it is true that the court has imposed a restraint in its own wisdom on its exercise of jurisdiction under Art. 226 where the party invoking the jurisdiction has an effective, adequate alternative remedy. More often, it has been expressly stated that the rule which requires the exhaustion of alternative remedies is a rule of convenience and discretion rather than rule of law. At any rate it does not oust the jurisdiction of the Court. In fact in the very decision relied upon by the High Court in The State of Uttar Pradesh v. Mohammad Nooh it is observed that there is no rule, with regard to certiorari as there is with mandamus, that it will lie only where there is no other equally effective remedy. It should be made specifically clear that where the order c....
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....tification in the Official Gazette, declare to be a minor mineral.' Minor minerals vest in the state in which the land is situated. The first respondent State of Haryana notified that an auction would be held for mineral quarries of Faridabad District. The appellant gave his bid at the auction so notified. It is an admitted position that his was the highest bid. Anyone conversant with auction would not be naive enough to believe that one can go on raising his own bid. His was the highest bid in the amount of Rs. 3,87,000 p.a. Though the Presiding Officer accepted the bid of the appellant, being the highest bid at the auction, yet the State Government in the exercise of the power conferred by cl. (4) of sub-r. (2) of Rule 30 declined to confirm the same presumably under the belief that the highest bid did not represent the adequate lease rent which the State Government was entitled to get. The right of the State Government not to confirm the bid as also its action of not confirming the highest bid of the appellant is not questioned. Therefore, various decisions laying down that the Government is not bound to accept the highest bid to which our attention was drawn by Mr. P.P. Rao, le....
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....ut in Part IV of the Constitution. But where disposal is for augmentation of revenue and nothing else, the State is under an obligation to secure the best market price available in a market economy An owner of private property need not auction it nor is he bound to dispose it of at a current market price. Factors such as personal attachment, or affinity kinship, empathy, religious sentiment or limiting the choice to whom he may be willing to sell, may permit him to sell the property at a song and without demur. A welfare State as the owner of the public property has no such freedom while disposing of the public property. A welfare State exists for the largest good of the largest number more so when it proclaims to be a socialist State dedicated to eradication of poverty. All its attempt must be to obtain the best available price while disposing of its property because the greater the revenue, the welfare activities will get a fillip and shot in the arm. Financial constraint may weaken the tempo of activities. Such an approach serves the larger public purpose of expanding welfare activities primarily for which the Constitution envisages The setting up of a welfare State. In this con....
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....be liable to be struck down as invalid. It must follow as a necessary corollary from this proposition that the Government cannot act in a manner which would benefit a private party at the cost of the State; such an action would be both unreasonable and contrary to public interest. The Government, therefore, cannot for example give a contract or sell or lease out its property For a consideration less than The highest that can be obtained for it, unless of course there are other considerations which render it reasonable and in public interest to do so. " (emphasis supplied) At one stage, it was observed that the Government is not free like an ordinary individual, in selecting recipient for its largesse and it cannot choose to deal with any person it pleases in its absolute and unfettered discretion. The law is now well-settled that the Government need not/deal with anyone, but if it does so, it must do so fairly and without discretion and without unfair procedure. Let it be made distinctly clear that respondent No. 4 was not selected for any special purpose or to satisfy ally Directive Principles of State Policy. He surreptitiously ingratiated himself by a back-door entry giving a....
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.... allegations without the verification of their the truth, which was not undertaken, would certainly amount to arbitrary action in the matter of distribution of State largesse which by the decisions of this Court is impermissible. Even though repeatedly, this Court has said that the State is not bound to accept the highest bid, this proposition of law has to be read subject to the observation that it can be rejected on relevant and valid considerations, one such being that the concession is to be given to a weaker section of the society who could not outbid the highest bidder. In the absence of it, the approach must be as clearly laid down by the Constitution Bench of this Court in K.N. Guruswamy v. The State of Mysore & Ors. In that case, the appellant and the fourth respondent were rival liquor contractors for the sale of the liquor contract for the year 1953-54 in the State of Mysore. The contract was auctioned by the Deputy Commissioner under the authority conferred upon him by the Mysore Excise Act, 1901. The appellant's bid was the highest and the contract was knocked down in his favour subject to formal confirmation by the Deputy Commissioner. The fourth respondent was presen....
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....hat is part and parcel of the policy of the Legislature. None of it can be ignored. We would there- fore in the ordinary course have given the appellant the writ he seeks. But, owing to the time which this matter has taken to reach us (a consequence for which the appellant is in no way to blame, for he has done all he could to have an early hearing), there is barely a fort night of the contract left to go. We were told that the excise year for this contract (1953-54) expires early in June. A writ would therefore be ineffective and as it is not our practice to issue meaningless writs we must dismiss this appeal and leave the appellant content with an enunciation of the law." Fact of no two cases are alike, but if one attempts to compare the situation, the conclusion is inescapable. Appellant's bid was the highest bid. It was in the amount of Rs. 3,87,000 p.a. Respondent No. 4 approached the Chief Minister with a slightly higher bid of Rs. 4,50,000 per year. This was granted without any reference to the appellant to raise his bid. Such a thing, if allowed to pass once is bound to be repeated because this method is open to the abuse of favouritism and nepotism and the loss of revenue ....
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.... the court cannot, as a super-auditor, take the Board of Directors to I l task. The function is limited to testing whether the administrative action has been fair and free from the taint of unreasonableness and has substantially complied with the norms of procedure set for it by rules of public administration." In a concurring opinion, Chandrachud, CJ. Observed that sales of public property, when the intention is to get the best price, ought to take place publicly. In State of Uttar Pradesh v. Shiv Charan Sharma & Ors. etc., this court observed that public auction with open participation and a reserved price guarantees public interest being fully subserved. Even though later on, learned Attorney General did not invite us to examine any specific contention on behalf of the State of Harayana, it may in passing be stated that with regard to transactions with the State, the principle enunciated in Sec. 55(5) (a) of the Transfer of Property Act would apply with greater vigour. Proceeding along it was submitted that if that is accepted and if it appears to the court that the State of Haryana did not appear to have full appreciation of the value of the property and the other part....