{"id":115101,"date":"1985-05-08T00:00:00","date_gmt":"1985-05-07T18:30:00","guid":{"rendered":"https:\/\/www.legalindia.com\/judgments\/ram-and-shyam-company-vs-state-of-haryana-and-ors-on-8-may-1985"},"modified":"2019-01-28T12:24:51","modified_gmt":"2019-01-28T06:54:51","slug":"ram-and-shyam-company-vs-state-of-haryana-and-ors-on-8-may-1985","status":"publish","type":"post","link":"https:\/\/www.legalindia.com\/judgments\/ram-and-shyam-company-vs-state-of-haryana-and-ors-on-8-may-1985","title":{"rendered":"Ram And Shyam Company vs State Of Haryana And Ors on 8 May, 1985"},"content":{"rendered":"
Supreme Court of India<\/div>\n
Ram And Shyam Company vs State Of Haryana And Ors on 8 May, 1985<\/div>\n
Equivalent citations: 1985 AIR 1147, \t\t 1985 SCR Supl. (1) 541<\/div>\n
Author: D Desai<\/div>\n
Bench: Desai, D.A.<\/div>\n
           PETITIONER:\nRAM AND SHYAM COMPANY\n\n\tVs.\n\nRESPONDENT:\nSTATE OF HARYANA AND ORS\n\nDATE OF JUDGMENT08\/05\/1985\n\nBENCH:\nDESAI, D.A.\nBENCH:\nDESAI, D.A.\nISLAM, BAHARUL (J)\n\nCITATION:\n 1985 AIR 1147\t\t  1985 SCR  Supl. (1) 541\n 1985 SCC  (3) 267\t  1985 SCALE  (1)1237\n CITATOR INFO :\n R\t    1987 SC1109\t (30,38)\n RF\t    1988 SC 157\t (8)\n R\t    1989 SC 157\t (5)\n\n\nACT:\n     Constitution of  India, 1950,  Article 226-Jurisdiction\nof  High   Court-Petitioner  to\t  exhaust  normal  statutory\nremedies-Insistence on-When  arises-Rule  of  exhaustion  of\nalternative remedies-Whether  a rule  of law  or a  rule  of\nconvenience and discretion\n     Haryana Minor  Minerals (Vesting  of Rights)  Act, 1973\nand Punjab  Minor Mineral  Concession Rules,  1964, Rule 130\n(4)  (2)-Auction  of  minor  mineral  quarry-Chief  Minister\ndeclining to  confirm highest  bid-Awarding right to another\nperson without\tgiving opportunity  to the highest bidder in\nthe  earlier   auction,\t High  Court,  whether\tentitled  to\nInterfere in a writ\n     Administrative Law-Public\tProperty-Norms for  disposal\nof Principles of natural justice-Applicability of\n\n\n\nHEADNOTE:\n     The  State\t  Government-respondent\t No.   1  issued   a\nnotification for  auctioning a minor mineral quarry situated\nin the\tState. The  appellant offered the highest bid in the\namount of  Rs. 3.87  lakhs per\tannum as  rent\/royalty.\t The\nPresiding Officer  accepted the\t bid of\t the appellant.\t The\nState Government  however under\t the belief that the highest\nbid did\t not represent\tthe adequate  lease rent,  exercised\npowers under  clause (4)  of sub-rule  2 of  Rule 130 or the\nPunjab Minor  Mineral Concession  Rules 1964 and declined to\nconfirm the  same. Respondent  No. 4  wrote a  letter to the\nChief Minister\tcasting\t serious  aspersions  on  those\t who\nparticipated in\t the auction,  and made an offer that if the\ncontract for  a period of 5 years is given he was willing to\npay Rs. 4.5 lakhs per year. The Chief Minister accepted this\noffer.\n     Being aggrieved,  the appellant challenged the order of\nthe Chief  Minister, in\t a writ\t petition  before  the\tHigh\nCourt, contending  that respondent No. 4 had participated in\nthe  auction   and  made   false  allegations\tagainst\t the\nappellant, and without giving him any opportunity, the offer\nof respondent  No. 4  was accepted which has denied equality\nof  opportunity\t  to  the   appellant  in   the\t matter\t  of\ndistribution of the State largesse. The High Court following\nthe decision of this Court in Assistant Collector of Central\nExcise v.  Jainson Hosiery  Industries,<\/a>\t [1979]\t 4  SCC\t 22,\ndismissed the writ petition on the ground that the appellant\nhad an\talternative remedy  and that  he must have exhausted\nthe  normal   statutory\t  remedies   before   invoking\t the\nextraordinary jurisdiction under Article 226.\n542\n     Being aggrieved,  the appellant filed an appeal to this\nCourt and  during is hearing filed an affidavit, that if the\nCourt orders  re-auction, and if the highest bid falls short\nof Rs.\t4.5 lakhs  then he  would undertake  to\t accept\t the\ncontract at  the value of Rs. 5.5 lakhs per annum. The Court\nheld are auction and both the appellant and respondent No. 4\nparticipated there  in and the appellant offered the highest\nbid at the value of Rs. 25 lakhs.\n     Allowing the Appeal,\n^\n     HELD: 1.  (i) The\tCourt has imposed a restraint in its\nown wisdom on its exercise of jurisdiction under Article 226\nwhere the  party invoking  the jurisdiction has an effective\nadequate alternative  remedy. It  has been  expressly stated\nthat the  rule which  requires the exhaustion of alternative\nremedies is a rule of convenience and discretion rather than\na rule\tof law.\t It does  not oust  the jurisdiction  of the\nCourt  It   is\tmade  specifically  clear  where  the  order\ncomplained against  is alleged\tto be  illegal or invalid as\nbeing contrary\tto law,\t a petition  at the  instance  of  a\nperson adversely  affected would lie to the High Court under\nArticle 226  and such  a petition  cannot be rejected on the\nground that  an appeal\tlies to\t the higher  officer or\t the\nState Government.  An appeal  in all cases cannot be said to\nprovide in  all situations  an alternative effective remedy.\n[550 C-F]\n     In\t the  instant  case,  power  was  exercised  by\t the\nauthority set up under the rules to grant contract. The High\nCourt did  not pose  to itself\tthe question who would grant\nthe relief when the impugned order is passed at the instance\nof a  Chief Minister  of the State. This is therefore a case\nin which  the High  Court was  justified in throwing out the\npetition on  the untenable  ground that the appellant had an\neffective alternative remedy. [550 G-H]\n     Assistant Collector of Central Excise v Jainson Hosiery\nIndustries, [1979]  4 S.C.C.  22  and  The  State  of  Uttar\nPradesh v Mohammad Nooh, [1958] S.C.R. 595, referred to.\n     (2) (i)  There is\ta clear\t distinction between the use\nand disposal  of private  property and\tsocialist  property.\nOwner of  private property may deal with it in any manner he\nlikes without  causing injury  to  any\tone  else.  But\t the\nsocialist or  if that word is jarring to some, the community\nor further  the public\tproperty has  to be  dealt with\t for\npublic purpose and in public interest. Tho marked difference\nlies in\t this that  while the  owner of private property may\nhave a\tnumber of  considerations which\t may permit  him  to\ndispose of  his property  for a\t song. On  the\tother  hand,\ndispose at  of public  property partakes  the character of a\ntrust in  that in its disposal their should be nothing hanky\npanky and  that it  must be  done at  the best price so that\nlarge  revenue\t coming\t into\tthe  offers   of  the  State\nadministration would  serve public  purpose viz. the welfare\nstate may  be able  to expand  its beneficient activities by\nthe availability  of larger  funds. This  is subject  to one\nimportant limitation that socialist property may be disposed\nat a  price lower  than the market price or oven for a token\nprice to  achieve some\tdefined constitutionally  recognised\nPublic purpose,\t one such being to achieve the goals set out\nin Part IV of the\n543\nConstitution. But  where disposal  is  for  augmentation  of\nrevenue and  nothing else,  the State is under an obligation\nto secure  the best  market  price  available  in  a  market\neconomy. [552 G-H; 553 A]\n     (ii) The  Government  is  not  free  like\tan  ordinary\nindividual, in\tselecting recipient  for its largesse and it\ncannot chose  to deal  with any\t person it  please a  in its\nabsolute and  unfettered discretion.  The law  is now  well-\nsettled that  the Government  need not deal with anyone, but\nif it  does so,\t it must do so fairly and without discretion\nand without  unfair procedure.\tEven though the State is not\nbound to accept the highest bid, this proposition of law has\nto be  read subject  to\t the  observation  that\t it  can  be\nrejected on  relevant and  valid  considerations,  one\tsuch\nbeing that the concession is to be given to a weaker section\nof the\tsociety who  could not outbid the highest bidder. In\nthe absence of it, the approach must be as clearly laid down\nby the\tConstitution Bench  of this Court in K. N. Guruswamy\nv. The\tState of  Mysore and  Ors. [19551  SCR\t305.  Before\ngiving up  the auction\tprocess and  accepting a private bid\nsecretly offered,  the authority must be satisfied that such\nan offer  if given  in open  would not\tbe outmatched by the\nhighest\t bidder.   In  the  absence  of\t such  satisfaction,\nacceptance of  an offer\t secretly  made\t and  sought  to  be\nsubstantiated on the allegations without the verification of\ntheir truth, which was not undertaken would certainly amount\nto arbitrary  action in\t the matter of distribution of State\nlargesse  which\t  by  the   decisions  of   this  Court\t  is\nimpermissible. 1554 G-H; 556 A-B; 555 G-H]\n     Trilochan Mishra etc v. State of Orissa and Ors. [1971]\n3 SCC  153, State  of Uttar Pradesh and Ors v. Vijay Bahadur\nSingh and Ors.<\/a> [1982] 2 SCC 365 and State of Orissa and Ors.\nv. Harinarayan\tJaiswal and  Ors.<\/a>  [1972]  3  SCR  784\theld\ninapplicable.\n     Raman  Dayaram   Shetty  v\t The  International  Airport\nAuthority of  India and\t Ors. [1979]  3 SCR 1014 and Kasturi\nLal Lakshmi  Reddy v.  State of\t Jammu and  Kashmir and Anr.<\/a>\n[1980] 3 SCR 1338 relied upon.\n     3. Rule  28 of  Punjab  Minor  and\t Mineral  Concession\nRules, 1964  permits contract  for  winning  mineral  to  be\ngranted by  the Government  by auction or tender. It is open\nto the State to dispose of the contract by tender. Even here\nthe expression\t'tender' does not mean a private secret deal\nbetween the  Chief Minister  and the  offerer. Tender in the\ncontext in  which the  expression is  used in rule 28, means\n'tenders to  be invited\t from intending\t contractors.' If it\nwas intended  by the  use of the expression 'tender' in Rule\n28 that\t contract can be disposed of by private negotiations\nwith select individual, its validity will be open to serious\nquestion. The  language ordinarily  used in such rules is by\npublic auction\tor private  negotiations. The meaning of the\nexpression 'private  negotiations' must\t take its colour and\nprescribe its  content by  the words which precede them. And\nat any\trate  disposal\tof  the\t State\tproperty  in  public\ninterest  must\t be  by\t  such\tmethod\tas  would  grant  an\nopportunity to the public at large to participate in it, the\nState reserving to itself the right to dispose it of as best\nsubserve the public weal. [559 F-H; 560 A-B\n544\n     Nand Kishore  Saraf v.  State  of\tRajasthan  and\tAnr.<\/a>\n[1965] 3  SCR 173  and Fertilizer  Corporation Kamgar  Union\n(Regd). Sindri\tand Ors. v. Union of India and Ors.<\/a> [1981] 1\nSCC 568 relied upon.\n     State of  Uttar Pradesh  v. Shiv Charan Sharma and Ors.<\/a>\netc. [1981] Supp. SCC 85 referred to.\n     4. In the instant case, it is clear that respondent No.\n4 was not selected for any special purpose or to satisfy any\nDirective Principles  of State\tPolicy.\t He  surreptitiously\ningratiated himself  by a  back-door entry  giving  a  minor\nraise in  the bid  and\tin  the\t process  usurped  the\tmost\nundeserved benefit  which was  exposed to  the hilt  in\t the\ncourt. A  unilateral offer, secretly made, not correlated to\nany reserved  price made  by  the  fourth  respondent  after\nmaking false  statement in  the letter\twas accepted without\ngiving any  opportunity to the appellant either to raise the\nbid or\tto point  out the falsity of the allegations made by\nthe fourth  respondent in  the letter as also the inadequacy\nof his\tbid. The  appellant suffered  an unfair treatment by\nthe  State   in\t discharging  its  administrative  functions\nthereby violating  the fundamental principle of fair play in\naction. When he gave the highest bid, he could not have been\nexpected  to   raise  his  own\tbid  in\t the  absence  of  a\ncompetitor. Any expectation to the contrary betrays a woeful\nlack of\t knowledge of  auction process.\t And then  some\t one\nsurreptitiously by  a secret  offer scored a march over him.\nNo opportunity\twas given  to him  either to  raise the bid.\nApplication of\tthe minimum principles of natural justice in\nsuch a\tsituation must be read in the Statute and held to be\nobligatory. When  it is\t said that  even  in  administrative\naction, the  authority must  act fairly, it ordinarily means\nin  accordance\t with  the  principles\tof  natural  justice\nvariously described  as fair play in action. That having not\nbeen done, the grant in favour of the fourth respondent must\nbe quashed. [554 H; 555 A-E; 560 D-E]\n\n\n\nJUDGMENT:\n<\/pre>\n
     CIVIL, APPELLATE JURISDICTION: Civil Appeal No. 3751 of
\n1982.\n<\/p>\n
     From the  Judgment and  Order dated  15.9.1982  of\t the
\nPunjab and Haryana High Court in L.P. A. No. 1232 of 1982.\n<\/p>\n
     Soli J.  Sorabjee Ram  K.B. Rohtagi and H.N. Salve, for
\nthe Appellant.\n<\/p>\n
     P.P.  Rao,\t  Arun\tMadon,\t R.  Venkataramani   and   A
\nMarriarputtam for the Respondent No. 4.\n<\/p>\n
     L.N. Sinha,  Attorney General  and R.N.  Poddar for the
\nRespondents.\n<\/p>\n
     The Judgment of the Court was delivered by
\n545<\/span>
\n     DESAI, J.\tAs the\tmatter brooked\tno delay,  when\t the
\narguments were\tconcluded, the\tCourt pronounced  the  order
\nwhich reads as under –\n<\/p>\n
\t  “The appeal  is allowed  and the  decision of\t the
\n     High Court\t of Punjab  and\t Haryana  at  Chandigarh  in
\n     L.P.A. No.\t 1232 of  1982 dated  September 15,  1982 as
\n     well as  the decision  of the  learned Single  Judge in
\n     Civil Writ\t Petition No.  2321 of 1981 dated August 30,
\n     1982.\n<\/p><\/blockquote>\n
\t  The writ  petition filed  by the present appellant
\n     succeeds. The order of the Director of Industries dated
\n     May 25,  1981 granting  a quarry  lease to\t M\/s Pioneer
\n     Crushing Co.  (respondent No.  4) in  respect of  Serai
\n     Khawaja Plot  No. II  Quarry (except  the area of Green
\n     Field colonies)  for the period ending with 31st March,
\n     1984 is quashed and set aside.\n<\/p><\/blockquote>\n
\t  The first  respondent the State of Haryana and the
\n     second  respondent\t  the  Director\t of  Industries\t are
\n     directed under  and subject  to the relevant provisions
\n     of the  Haryana Minor Minerals (Vesting of Rights) Act,
\n     1973 read\twith Punjab  Minor  and\t Mineral  Concession
\n     Rules, 1964  as applicable\t to the\t State of Haryana to
\n     grant a  right to the appellant in the form of contract
\n     usually entered into in similar cases to extract stones
\n     from  Serai   Khawaja  Plot   No.\tII  on\tcompensation
\n     howsoever described  at the  rate of  Rs. 25  lacs per,
\n     year for a period of five years commencing from January
\n     I, 1983 and upto and inclusive and ending with December
\n     31, 1987.\n<\/p><\/blockquote>\n
\t  The appellant\t herein is directed to appear before
\n     the second\t respondent within  a  weak  from  today  to
\n     execute  the   contract  and\/or   necessary  documents,
\n     instruments and  to carry out all formalities including
\n     the  making   of  deposits\t and\/or\t payments,  if\tany,
\n     required to  be made  under the  relevant provisions of
\n     the Act  and Rules. The fourth respondent is given time
\n     upto December  31, 1982  to clear out from the area and
\n     this time\tis given  to him  as and  by  way  of  locus
\n     penitentae to  wind-up his affairs as far as the quarry
\n     involved in this appeal.\n<\/p><\/blockquote>\n
546<\/span><\/p>\n
\t  In the circumstances of the case, there will be no
\n     order as to costs.\n<\/p><\/blockquote>\n
\t  Reasons will follow.”\n<\/p><\/blockquote>\n
Here are the reasons.\n<\/p>\n
     It must  be confessed  that reasons  in support  of the
\ndecision are  delayed but  without offering an alibi for the
\ntardiness, one\taspect which inhibited giving of the reasons
\nmay be\tmentioned. My  learned colleague  suddenly left\t the
\nCourt and  the doubt  nagged me\t for some  time whether\t one
\nJudge alone  can give  the reasons.  It was an agreed order.
\nBefore pronouncing  the order  broad discussion\t took  place
\nwhich showed identity of views on all points involved in the
\nmatter. In this background to give reasons which appealed to
\nus though  drawn up  by one  of us  would any  day provide a
\nbetter choice  than not\t to give  reasons because  it  would
\nalways annoy  and distress  the party  who  lost  the  legal
\nbattle whether there are legal or logical reasons in support
\nof the order or it is merely an arbitrary exercise of power.
\nHowever, what  happened in  the Court in the presence of all
\nparties and  the learned  counsel is res ipsa loquiter. What
\nstarted before the Court as a minor whisper, hardly audible,
\nended with  the experience in a whispering gallery where the
\nwhisper multiplied  at the  other  end\tof  the\t gallery  in
\nvolleying thunders.  There would  have\tbeen  no  qualms  of
\nconscience if  the matter was disposed of sub-silentio as to
\nreasons because\t of the\t outcome of  the Court’s exercise of
\njurisdiction under  Art. 136. The reasons which dictated the
\nchoice\tand   indicated\t the  path  did\t stand\tin  need  of
\njustification\tbecause\t   the\t end\tproduct\t   justified
\ninterference. The  very outcome\t would\tprovide\t the  raison
\nd’etre for  the\t exercise  of  power.  Yet  to\tbow  to\t the
\ntradition to  convince the  protagenis of  reasoned  orders,
\nthese are the reasons.\n<\/p>\n
     Factually\tmatrix\t first.\t The  State  of\t Haryana  in
\nexercise of  the power\tconferred upon\tit by Haryana Mioner
\nMinerals (Vesting  of Rights)  Act,  1973  (‘1973  Act’\t for
\nshort) grants lease for winning minor mineral vestige in it.
\nThe grant  of the lease is regulated by Punjab Minor Mineral
\nConcession  Rules,   1964  (‘Rules’   for  short)  in  their
\napplication to\tthe State  of Haryana.\tA  notification\t was
\nissued on  December 26,\t 1980 specifying  that minor mineral
\nquarries at  various places  in Faridabad  District would be
\nauctioned on  February 20, 1981. At the auction held on that
\nday, appellant-Ram & Shyam Company
\n547<\/span>
\ngave the  highest bid  for Sarai  Khawaja Plot No. II in the
\namount of  Rs 1,52,000 p.a. The presiding Officer conducting
\nthe auction  accepted the  bid but  the State Government did
\nnot confirm  the same.\tA fresh\t auction was  notified to be
\nheld on May 4, 1981. The appellant participated and gave the
\nbid for the same plot, his highest bid rising to Rs 3,87,000
\nfor a  period of three years. The same routine followed. The
\nPresiding Officer  accepted the bid and the State Government
\ndeclined to  confirm the same. Then there happened something
\nwhich  cannot\thave  any   parallel  or   precedent  in   a
\nconstitutional\tdemocracy  like\t ours  but  one\t could\thave
\nprofitably drawn  parallel from\t the administration  of\t old
\nprincely States.  Respondent No.  4 wrote a letter dated May
\n9, 1981\t (Anx. R-1 in the High Court) addressed to the Chief
\nMinister, Haryana  State setting  out therein the history of
\nvarious auctions,  and casting\tserious aspersions  on those
\nwho participated  in the  auction inter alia saying that the
\nbidders at  the auctions have formed a syndicate and want to
\nmonopolise the business by not outbidding each other so that
\nthe State  gets uneconomical  rent\/royalty. It\twas  further
\nalleged that  ‘the  goondas  and  anti-social  elements\t are
\nassisting those\t monopolists\/bidders and successfully pushed
\nout a  party like  respondent  No.  4.\tThe  letter  further
\nproceeds to  make an offer\/that if the contract for a period
\nof five\t years is  given to  respondent No.  4 in respect of
\nSarai Khawaja  Plot No.\t 2, it is willing to pay Rs 4,50,000
\nper year.  There is also an offer for Sarai Khawaja Plot No.
\n1 with\twhich we  are not concerned. Promptly this offer was
\naccepted by the Chief Minister. The appellant challenged the
\naction of the Chief Minister in Writ Petition No. 2321\/81 in
\nthe Punjab and Haryana High Court inter alia contending that
\nthose who formed the firm styled as M\/s Pioneer Crushing Co.
\nrespondent No.\t4, had\tparticipated in the auction and Then
\nmade false  allegations against\t the appellant whose bid was
\nthe highest  and without  giving him  any  opportunity,\t the
\noffer of  respondent No.  4 was\t accepted which\t has  denied
\nequality of  opportunity to  the appellant  in the matter of
\ndistribution of State largesse.\n<\/p>\n
     A\tlearned\t  Single  Judge\t  issued  a  notice  to\t the
\nrespondents calling  upon them\tto show\t cause why rule nisi
\nmay not be issued. In response to the notice, respondent No.
\n4  appeared   and  contended  that  the\t petitioner  had  an
\nalternative remedy  and on  this short\tground, the  learned
\nSingle Judge rejected the writ petition. A Division Bench of
\nthe High  Court in  the Letters\t Patent Appeal\tfiled by the
\nappellant
\n548<\/span>
\nconcurred with\tthe learned  Single Judge  and dismissed the
\nappeal. Hence this appeal by special leave.\n<\/p>\n
     At this stage it would be advantageous to refer in some
\ndetails what  transpired at  the hearing  of this  appeal in
\nthis Court. Let us at once recapitulate what happened in the
\ncourt because  that by\titself provides a tell-tale piece of
\nevidence compelling the court to interfere and set aside the
\nimpugned order.\t Mr. L.N  Sinha,  learned  Attorney  General
\nraised a  sort of  a preliminary  objection that  this Court
\nshould not  assist the syndicalists to join hands to deprive
\nthe  State  of\tits  legitimate\t revenue.  Then\t he  made  a
\npertinent observation  a interposing  an objection  when Mr.
\nSorabjee, learned  counsel for the petitioner was making his
\nsubmissions. The question posed was: if the Court interferes
\nand quashes  the grant\tin favour  of the fourth respondent,
\nthe only option open to the court would be to direct a fresh
\nauction. He  posed the\tfurther question that if at the time
\nof re-auction,\tthe highest  bid  does\tnot  reach  upto  Rs
\n4,50,000 p.a.  for which  the lease is granted to the fourth
\nrespondent, would  the Court make good the loss ? Apart from
\nthe rhetoric  of the  question,\t the  issue  raised  was  of
\nprimary\t importance.   We,  therefore,\tasked  Mr.  Sorabjee
\nwhether\t his   client  is   willing  to\t make  an  affidavit
\nincorporating  therein\t that  if   the\t highest  bid  at  a
\nreauction, if  the court  so  directs,\tfalls  short  of  Rs
\n4,50,000 the  appellant would  agree and undertake to accept
\nthe contract  at the  value of\tRs  5,50,000  p.a.  Such  an
\naffidavit was immediately filed. In order to give the fourth
\nrespondent to  whom contract  under the\t impugned order\t was
\ngiven, an  opportunity whether\the would  like to  raise his
\noffer. Mr.  P.P.  Rao  voiced  his  apprehension  about\t his
\ncontentions. We\t assured him  that without  prejudice to his
\ncontentions, it\t would be  open to  his client\tto raise his
\noffer. What transpired may be tabulated in a chart:
\nAppellant’s offer\t\t\tRespondent’s offer\n<\/p>\n
     1.\t  5.50 lacs\t\t\t2. 6 lacs\n<\/p>\n
     3.\t  6.50 lacs\t\t\t4. 7 lacs\n<\/p>\n
     5.\t  7.53 lacs\t\t\t6. 8 lacs\n<\/p>\n
     7.\t  8.50 lacs\t\t\t8. 9 lacs\n<\/p>\n
     9.\t  10 lacs\t\t\t10. 10.50 lacs
\n549<\/span>
\n     Court intervened  at this stage and said that the raise
\n     must be minimum at the rate of Rs 1 lac.\n<\/p>\n
     11.  12 lacs\t\t\t12. 14 lacs\n<\/p>\n
     13.  15 lacs\t\t\t14. 16 lacs\n<\/p>\n
     15.  17 lacs\t\t\t16. 18 lacs\n<\/p>\n
     17.  19 lacs\t\t\t18. 20 lacs\n<\/p>\n
     19. 21 lacs\t\t\t20. 22 lacs\n<\/p>\n
     21. 25 lacs.\n<\/p>\n
     Shock and\tsurprise was visible on the face of each one
\nin the\tcourt. Shock  was induced  by the  fact that  public
\nproperty was  squandered away for a song by persons in power
\nwho holds  the position\t of trust. Surprise was how judicial
\nintervention can  serve larger\tpublic interest.  One  would
\nrequire multi-layered blind-fold to reject the appeal of the
\nappellant or  any tenuous  ground so that the respondent may
\nenjoy and aggrandize his unjust enrichment. On this point we
\nsay no more.\n<\/p>\n
     Before we deal with the contentions, let us have a look
\nat the relevant provisions of the Act and the Rules.\n<\/p>\n
     Rule 28(1)\t of the\t Rules provides\t that contracts\t for
\nextraction of minor mineral may be granted by the Government
\nby auctioning  or tendering  for a  maximum period  of\tfive
\nyears after  which no  extension shall\tbe granted’ Sub-rule
\n(2) provides  that ‘the\t amount to  be paid  annually by the
\ncontractor to  the Government shall be determined in auction
\nor  by\ttender\tto  be\tsubmitted  for\tacceptance,  by\t the
\nauthority competent  to grant the contract.’ Rule 29 confers
\npower on  the Presiding\t Officer to reject or accept any bid
\nor tender  without assigning  any reason  to the  bidders or
\ntenderers. However, where the highest bid or tender is
\n rejected,  the reason\tshall however,\tbe reported  to\t the
\nGovernment. Rule  30 provides  for notifying of the proposed
\nauction on the notice board of the Director, Mining Officers
\nand at least in one newspaper having wide circulation in the
\nlocality nearest  to the  area in  question in\tthe regional
\nlanguage as  also in  the Government Gazette. Sub-cl. (4) of
\nsub-r. (2)  of Rule  30\t provided  that\t ‘no  bid  shall  be
\nregarded as  accepted unless  confirmed by Government.’ Rule
\n58 confers
\n550<\/span>
\npower on  the Government  to relax  any of the provisions of
\nthe Rules  in the  interest of mineral development or better
\nworking of the mine.\n<\/p>\n
     Before we deal with the larger issue, let me put out of
\nthe way the contention that found favour with the High Court
\nin rejecting  the writ petition. The learned Single Judge as
\nwell as\t the Division  Bench recalling\tthe observations  of
\nthis Court  in Assistant  Collector  of\t Central  Excise  v.
\nJainson\t Hosiery   Industries<\/a>  rejected\t the  writ  petition
\nobserving that ‘the petitioner who invokes the extraordinary
\njurisdiction of the court under Art. 226 of the Constitution
\nmust have  exhausted the normal statutory remedies available
\nto him’.  We remain  unimpressed. Ordinarily it is true that
\nthe court  has imposed\ta restraint in its own wisdom on its
\nexercise of  jurisdiction under\t Art. 226  where  the  party
\ninvoking  the\tjurisdiction  has   an\teffective,  adequate
\nalternative remedy. More often, it has been expressly stated
\nthat the  rule which  requires the exhaustion of alternative
\nremedies is a rule of convenience and discretion rather than
\nrule of\t law. At  any rate it does not oust the jurisdiction
\nof the\tCourt. In  fact in  the very decision relied upon by
\nthe High  Court in  The State  of Uttar\t Pradesh v. Mohammad
\nNooh<\/a> it\t is observed  that there  is no rule, with regard to
\ncertiorari as  there is with mandamus, that it will lie only
\nwhere there  is no other equally effective remedy. It should
\nbe made\t specifically clear  that where the order complained
\nagainst is  alleged  to\t be  illegal  or  invalid  as  being
\ncontrary to  law, a  petition at  the in  stance  of  person
\nadversely affected  by it, would lie to the High Court under
\nArt. 226  and such  a petition\tcannot be  rejected  on\t the
\nground that  an appeal\tlies to\t the higher  officer or\t the
\nState Government.  An appeal  in all cases cannot be said to
\nprovide in  all situations  an alternative  effective remedy
\nkeeping aside  the nice distinction between jurisdiction and
\nmerits. Look  at the  fact situation in this case. Power was
\nexercised formally  by the  authority set up under the Rules
\nto grant  contract but\teffectively and\t for  all  practical
\npurposes by  the Chief Minister of the State. To whom do you
\nappeal in a State administration against the decision of the
\nChief Minister\t? The clutch of appeal from Ceasar to Ceasar
\nwife can  only be bettered by appeal from one’s own order to
\noneself. Therefore  this is  a case  in which the High Court
\nwas not at all justified in throwing out the petition on the
\nuntenable ground
\n551<\/span>
\nthat the  appellant had an effective alternative remedy. The
\nHigh Court  did not  pose to  itself the question, who would
\ngrant relief  when the\timpugned  order\t is  passed  at\t the
\ninstance of the Chief Minister of the State. To whom did the
\nHigh Court  want the appeal to be filed over the decision of
\nthe Chief  Minister. There  was no answer aud that by itself
\nwithout anything  more would  be sufficient to set aside the
\njudgment of the High Court.\n<\/p>\n
     Turning to\t the  merits  of  the  case,  the  arguments
\ncovered a  much larger canvass than was anticipated when the
\nhearing\t opened.   It  was  submitted  that  India  being  a
\nSovereign  Socialist   Secular\tDemocratic   Republic,\t the
\nproperty of  the Union or of the Slate is socialist property
\nwhich would  imply that\t it is\tcommunity property and every
\ncitizen of  this country has vital interest in its effective
\nuse and legitimate disposal.\n<\/p>\n
     It was  never disputed  nor could it have been disputed
\nthat minerals  vest in the state. The minor minerals vast in
\nthe State where the land from which they are to be extracted
\nis situated  and minerals  other than minor minerals vast in
\nthe Union.  ‘Minor minerals’  have been defined in The Mines
\nand Minerals  (Regulation and  Development).  Act,  1957  to
\nmean, ‘building stores, gravel, ordinary clay, ordinary sand
\nother than  sand used for prescribed purposes, and any other
\nmineral which the Central Government may, by notification in
\nthe Official  Gazette, declare to be a minor mineral.’ Minor
\nminerals vest  in the  state in\t which the land is situated.
\nThe first  respondent State  of\t Haryana  notified  that  an
\nauction would  be held\tfor mineral  quarries  of  Faridabad
\nDistrict. The  appellant gave  his bid\tat  the\t auction  so
\nnotified. It  is an  admitted  position\t that  his  was\t the
\nhighest bid.  Anyone conversant\t with auction  would not  be
\nnaive enough  to believe  that one can go on raising his own
\nbid. His  was the  highest bid in the amount of Rs. 3,87,000
\np.a. Though  the Presiding  Officer accepted  the bid of the
\nappellant, being  the highest  bid at  the auction,  yet the
\nState Government  in the  exercise of the power conferred by
\ncl. (4)\t of sub-r.  (2) of  Rule 30  declined to confirm the
\nsame presumably\t under the  belief that\t the highest bid did
\nnot represent  the  adequate  lease  rent  which  the  State
\nGovernment was\tentitled to  get. The  right  of  the  State
\nGovernment not\tto confirm the bid as also its action of not
\nconfirming  the\t  highest  bid\t of  the  appellant  is\t not
\nquestioned. Therefore,\tvarious decisions  laying down\tthat
\nthe Government\tis not\tbound to  accept the  highest bid to
\nwhich our attention was drawn
\n552<\/span>
\nby Mr.\tP.P. Rao,  learned counsel for the fourth respondent
\nare of\tno relevance  in this  case. This Court in Trilochan
\nMishra etc.  v. State  of Orissa  & Ors.    State  of  Uttar
\nPradesh &  Ors. v.  Vijay Bahadur  Singh & Ors. and State of
\nOrissa &  Ors.<\/a> v.  Harinarayan Jaiswal\t& Ors. held that the
\nGovernment is  under no obligation to accept the highest bid
\nand that  no rights  accrue to the bidder merely because his
\nbid happened to be the highest. The Court also observed that
\nthe Government\thad  the  right,  for  good  and  sufficient
\nreason, not  to accept\tthe highest bid but even to prefer a
\ntenderer other\tthan the  highest bidder.  In Vijay  Bahadur
\nSingh’s case  the Court\t further  observed  that  the  power
\nconferred on  the Government  by the act to refuse to accept
\nthe higher  bid, cannot\t be confined  to inadequacy  of\t bid
\nonly. There  may be  variety of\t other good  and  sufficient
\nreasons to  reject the\tsame. The appellant has no grievance
\nthat even  though his  was the highest bid, the same was not
\naccepted nor  Mr. Sorabjee  on his  behalf contends that the
\nhighest bid  of the  appellant was rejected on grounds which
\nare either  irrelevant or  extraneous. This aspect therefore
\nneed not detain us any more.\n<\/p>\n
     Let us  put into  focus the clearly demarcated approach
\nthat distinguishes  the use and disposal of private property
\nand socialist  property. Owner\tof private property may deal
\nwith it in any manner he likes without causing injury to any
\none else.  But the  socialist or  if that word is jarring to
\nsome, the community or further the public property has to be
\ndealt with  for public\tpurpose and  in public interest. The
\nmarked difference  lies in  this that  while  the  owner  of
\nprivate property  may have  a number of considerations which
\nmay permit him to dispose of his property for a song. On the
\nother  hand,   disposal\t of  public  property  partakes\t the
\ncharacter of a trust in that in its disposal there should be
\nnothing hanky  panky and  that it  must be  done at the best
\nprice so  that larger revenue coming into the coffers of the
\nState administration  would serve  public purpose  viz.\t the
\nwelfare\t State\t may  be  able\tto  expand  its\t beneficient
\nactivities by  the availability\t of larger  funds.  This  is
\nsubject to  one important limitation that socialist property
\nmay be\tdisposed at  a price  lower than the market price or
\neven  for   a  token   price   to   achieve   some   defined
\nconstitutionally recognised  public purpose,  one such being
\nto achieve
\n553<\/span>
\nthe goals  set out in Part IV of the Constitution. But where
\ndisposal is  for augmentation  of revenue  and nothing else,
\nthe State  is under  an obligation to secure the best market
\nprice available\t in a  market economy  An owner\t of  private
\nproperty need  not auction  it nor is he bound to dispose it
\nof at  a current  market price.\t Factors  such\tas  personal
\nattachment,  or\t  affinity   kinship,\tempathy,   religious
\nsentiment or  limiting the  choice to whom he may be willing
\nto sell,  may permit  him to sell the property at a song and
\nwithout demur.\tA welfare  State as  the owner of the public
\nproperty has  no such  freedom while disposing of the public
\nproperty. A welfare State exists for the largest good of the
\nlargest number\tmore so\t when it proclaims to be a socialist
\nState dedicated\t to eradication\t of poverty. All its attempt
\nmust be\t to obtain  the best available price while disposing
\nof its property because the greater the revenue, the welfare
\nactivities will\t get a fillip and shot in the arm. Financial
\nconstraint may\tweaken the  tempo  of  activities.  Such  an
\napproach serves\t the  larger  public  purpose  of  expanding
\nwelfare activities  primarily  for  which  the\tConstitution
\nenvisages The  setting\tup  of\ta  welfare  State.  In\tthis
\nconnection we  may profitably refer to Ramana Dayaram Shetty
\nv. The\tInternational Airport  Authority of India and Ors<\/a> in
\nwhich Bhagwati, J. speaking for the Court observed:\n<\/p>\n
\t  “It must,  therefore. be  taken to be the law that
\n     where  the\t Government  is\t dealing  with\tthe  public,
\n     whether by\t E way\tof  giving  jobs  or  entering\tinto
\n     contracts or  issuing quotas  or licences\tor  granting
\n     other forms  of largesse,\tthe  Government\t cannot\t act
\n     arbitrarily at  its sweet\twill  and,  like  a  private
\n     individual, deal  with any\t person it  pleases, but its
\n     action must  be in\t conformity with  standard or  norms
\n     which is  not arbitrary,  irrational or irrelevant. The
\n     power or  discretion of the Government in the matter of
\n     grant of  largesse including  award to jobs, contracts,
\n     quotas, licences  etc., must be confined and structured
\n     by rational,  relevant and\t non-discriminatory standard
\n     or\t norm  and  if\tthe  Government\t departs  from\tsuch
\n     standard or  norm in  any particular case or cases, the
\n     action of\tthe Government\twould be liable to be struck
\n     down, unless it can be shown by the Government that the
\n     departure was  not arbitrary,  but was  based  on\tsome
\n     valid principle  which in\titself was  not\t irrational,
\n     unreasonable or discriminatory.<\/p><\/blockquote>\n
554<\/span><\/p>\n
     At another\t place it  was observed\t that the Government
\nmust act  in public  interest, it  cannot act arbitrarily or
\nwithout reason and if it does so, its action would be liable
\nto be  invalidated. It\twas further observed that the object
\nof holding  the auction\t is generally  to raise\t the highest
\nrevenue. The  Government is  entitled to  reject the highest
\nbid if it thought that the price offered was inadequate. But
\nafter  rejecting  the  offer,  it  is  obligatory  upon\t the
\nGovernment to  act fairly  and at  any rate  it\t cannot\t act
\narbitrarily. Following\tthis line of thought, in Kasturi Lal
\nLakshmi Reddy  v. State\t of Jammu  & Kashmir  and Anr.<\/a> while
\nupholding the  order of\t the Government\t of Jammu  & Kashmir
\ndated April  27, 1979  allotting to the second respondent 10
\nto 12  lacs blazes annually for extraction of resin from the
\ninaccessible  chir  forests  in\t Poonch,  Reasi\t and  Ramban
\nDivisions of the State for a period of 10 years on the terms
\nand conditions set out in the order, observed as under:\n<\/p>\n
\t  “Where any  governmental action  fails to  satisfy
\n     the  test\t of  reasonableness   and  public   interest
\n     discussed above  and is  found to\tbe  wanting  in\t the
\n     quality of\t reasonableness or lacking in the element of
\n     public interest,  it would\t be liable to be struck down
\n     as invalid.  It must  follow as  a necessary  corollary
\n     from this proposition that the Government cannot act in
\n     a manner  which would  benefit a  private party  at the
\n     cost of  the  State;  such\t an  action  would  be\tboth
\n     unreasonable  and\tcontrary  to  public  interest.\t The
\n     Government,  therefore,   cannot  for  example  give  a
\n     contract or  sell or  lease  out  its  property  For  a
\n     consideration  less   than\t The  highest  that  can  be
\n     obtained for  it, unless  of  course  there  are  other
\n     considerations which render it reasonable and in public
\n     interest to do so.\n<\/p><\/blockquote>\n
\t\t\t\t       ” (emphasis supplied)
\nAt one\tstage, it  was observed\t that the  Government is not
\nfree like an ordinary individual, in selecting recipient for
\nits largesse and it cannot choose to deal with any person it
\npleases in  its absolute  and unfettered discretion. The law
\nis now\twell-settled that  the Government need not\/deal with
\nanyone, but  if it does so, it must do so fairly and without
\ndiscretion and\twithout unfair\tprocedure. Let\tit  be\tmade
\ndistinctly clear  that respondent No. 4 was not selected for
\nany special  purpose or to satisfy ally Directive Principles
\nof State Policy. He
\n555<\/span>
\nsurreptitiously ingratiated  himself by\t a  back-door  entry
\ngiving a  minor raise  in the bid and in the process usurped
\nthe most undeserved benefit which was exposed to the hilt in
\nthe court. Only a blind can refuse to perceive it.<\/p><\/blockquote>\n
     Approaching the  matter from  this angle,\tcan there be
\nany doubt  that the appellant whose highest bid was rejected
\nby the Government should have no opportunity to improve upon
\nhis bid more so when his bid was rejected on the ground that
\nit did\tnot represent  adequate market consideration for the
\nconcession to  extract minor  mineral. A  unilateral  offer,
\nsecretly made,\tnot correlated to any reserved price made by
\nthe fourth  respondent after  making false  statement in the
\nletter was  accepted Without  giving any  opportunity to the
\nappellant either  to raise  the bid  or\t to  point  out\t the
\nfalsity of  the allegations made by the fourth respondent in
\nthe letter  as also the inadequacy of his bid. The appellant
\nsuffered an unfair treatment by the State in discharging its
\nadministrative functions  thereby violating  the fundamental
\nprinciple of  fair play\t in action. When he gave the highest
\nbid, he could not have been expected to raise his own bid in
\nthe absence of a competitor. Any expectation to the contrary
\nbetrays a  woeful lack\tof knowledge of auction process. And
\nthen some  one surreptitiously\tby a  secret offer  scored a
\nmarch over  him. No  opportunity was  given to him either to
\nraise the  bid or  to controvert  and correct  the erroneous
\nstatement.\n<\/p>\n
     What happened  in this  case must open the eyes both of
\nthe Government\tas well\t as the\t people\t at  large.  How  an
\nuncontrolled  exercise\tof  executive  power  to  deal\twith
\nsocialist property  in which entire community’s interest was
\nsacrificed so  as to cause huge loss to the public exchequer
\nwould have  gone unnoticed  but for  the  vigilance  of\t the
\nappellant who no doubt is not altruistic in its approach but
\nits business  interests goaded\tit to  expose the  unsavoury
\ndeal. Conceding\t that on  weighty and  valid considerations,
\nthe highest  bid can to rejected by the State one such which
\ncan be\tforeseen is  that the highest bid does not represent
\nthe adequate  market price  of the  concession,\t yet  before
\ngiving up  the auction\tprocess and  accepting a private bid
\nsecretly offered,  the authority must be satisfied that such
\nan offer  if given  in open  would not\tbe outmatched by the
\nhighest\t bidder.   In  the  absence  of\t such  satisfaction,
\nacceptance of  an offer\t secretly  made\t and  sought  to  be
\nsubstantiated on the allegations without the verification of
\ntheir the  truth, which\t was not undertaken, would certainly
\namount to  arbitrary action in the matter of distribution of
\nState largesse which by the decisions of this Court is
\n556<\/span>
\nimpermissible. Even  though repeatedly,\t this Court has said
\nthat the  State is not bound to accept the highest bid, this
\nproposition of law has to be read subject to the observation
\nthat  it   can\t be   rejected\t on   relevant\t and   valid
\nconsiderations, one  such being that the concession is to be
\ngiven to  a weaker  section of\tthe society  who  could\t not
\noutbid the  highest  bidder.  In  the  absence\tof  it,\t the
\napproach must  be as  clearly laid  down by the Constitution
\nBench of this Court in K.N. Guruswamy v. The State of Mysore
\n& Ors. In that case, the appellant and the fourth respondent
\nwere rival  liquor contractors\tfor the\t sale of  the liquor
\ncontract for  the year\t1953-54 in  the State of Mysore. The
\ncontract was  auctioned by the Deputy Commissioner under the
\nauthority conferred upon him by the Mysore Excise Act, 1901.
\nThe appellant’s\t bid was  the highest  and the\tcontract was
\nknocked down in his favour subject to formal confirmation by
\nthe Deputy  Commissioner. The  fourth respondent was present
\nat the\tauction but  did not  bid. Instead  of that  he went
\ndirect to  the Excise  Commissioner and made a higher offer.
\nThe Excise  Commissioner cancelled the sale of favour of the
\nappellant and  directed\t the  Deputy  Commissioner  to\ttake
\naction under  the relevant  rule. The  latter  accepted\t the
\ntender of the respondent. The appellant moved the High Court
\nfor a writ of mandamus which was dismissed. In appeal by the
\ncertificate, it\t was urged  on behalf  of the State that the
\nDeputy Commissioner  acted within  the ambit  of his  powers
\nunder  the   relevant  rule   which  gave  him\tan  absolute
\ndiscretion either  to re-auction  or to act otherwise and no
\nfetters are  placed upon  the ‘otherwise’  method. The court
\nnegatived   this   contention\tobserving   that   arbitrary
\nimprovisation of  an ad hoc procedure to meet the exigencies
\nof a  particular case  is ruled out. Therefore, the grant of
\nthe contract  to the  fourth respondent was wrong. Repelling
\nthe contention\tthat a\twrit petition at the instance of the
\nappellant would\t not be maintainable, the Constitution Bench
\nobserved as under:\n<\/p>\n
\t  “The next  question is  whether the  appellant can
\n     complain of  this by  way of a writ. In our opinion, he
\n     could have\t done so  in an ordinary case. The appellant
\n     is interested  in these contracts and has a right under
\n     the laws of the State to receive the same treatment and
\n     be given  the same chance as anybody else. Here we have
\n     Thimmappa who  was present\t at the\t auction and who did
\n     not bid-not  that it  would make  any difference  if he
\n     had,
\n557<\/span>
\n     for the  fact remains that he made no attempt to outbid
\n     the appellant. If he had done so it is evident that the
\n     appellant would  have raised his own bid. The procedure
\n     of tender\twas not\t open  here  because  there  was  no
\n     notification and  the furtive method adopted of setting
\n     a matter  of this\tmoment behind  the  backs  of  those
\n     interested and anxious to compete is unjustified. Apart
\n     from all  else, that  in itself would in this case have
\n     resulted in  a loss  to the  State because,  as we have
\n     said, the mere fact that the appellant has pursued this
\n     with such\tvigour shows  that he would have bid higher.
\n     But deeper\t considerations are  also at  stake, namely,
\n     the  elimination\tof  favouritism\t  and  nepotism\t and
\n     corruption: not that we suggest that occurred here, but
\n     to permit\twhat has  occurred in  this case would leave
\n     the  door\twide  open  to\tthe  very  evils  which\t the
\n     Legislature in  its wisdom has endeavored to avoid. All
\n     that  is\tpart  and   parcel  of\tthe  policy  of\t the
\n     Legislature. None of it can be ignored. We would there-
\n     fore in  the ordinary  course have\t given the appellant
\n     the writ  he seeks.  But, owing  to the time which this
\n     matter has\t taken to  reach us (a consequence for which
\n     the appellant  is in  no way  to blame, for he has done
\n     all he could to have an early hearing), there is barely
\n     a fort  night of  the contract left to go. We were told
\n     that  the\texcise\tyear  for  this\t contract  (1953-54)
\n     expires early  in\tJune.  A  writ\twould  therefore  be
\n     ineffective and  as it  is not  our practice  to  issue
\n     meaningless writs we must dismiss this appeal and leave
\n     the appellant content with an enunciation of the law.”<\/p><\/blockquote>\n
     Fact of  no two cases are alike, but if one attempts to
\ncompare\t the   situation,  the\tconclusion  is\tinescapable.
\nAppellant’s bid was the highest bid. It was in the amount of
\nRs. 3,87,000  p.a. Respondent  No. 4  approached  the  Chief
\nMinister with  a slightly  higher bid  of Rs.  4,50,000\t per
\nyear.  This   was  granted  without  any  reference  to\t the
\nappellant to raise his bid. Such a thing, if allowed to pass
\nonce is\t bound to be repeated because this method is open to
\nthe abuse  of favouritism  and\tnepotism  and  the  loss  of
\nrevenue in this case to the State is enormous. What happened
\nin tho\tcourt staggered\t everyone. Learned  Attorney General
\nShri L.N.  Sinha, who questioned the competence of the court
\nto deal\t with  the  matter  when  he  witnessed\t the  rising
\ncrescendo of the auction in the
\n558<\/span>
\ncourt and  the bid  reached Rs. 12 lacs per year, he quietly
\nleft the  court frankly\t stating that  he does\tnot wish any
\ncontention to  be raised  on behalf of the State of Haryana.
\nApprehension voiced  by the Constitution Bench has literally
\ncome true  in this case. This view of the Constitution Bench
\nwas reaffirmed in Nand Kishore Saraf v. State of Rajasthan &
\nAnr., the<\/a> only distinguishing feature of the case being that
\nthe highest  bid of  the  appellant  was  rejected  and\t the
\ncontract was  given to\tDharti\tDan  Shramik  Theka  Sahkari
\nSamiti Ltd.,  a cooperative  Society of\t the workmen. Though
\nthe court  did not  so specifically  state,  it\t upheld\t the
\nrejection of  the highest bid of the appellant on the ground
\nthat  the   benefit  of\t  the  concession  was\tgiven  to  a
\ncooperative society  formed by\tthe weaker  section  of\t the
\nsociety and  thereby it serves the public purpose as set out
\nin Art.\t 41 of the Directive Principles of the State Policy.
\nIn Fertilizer  Corporation Kamgar  Union (Regd),  Sindri and
\nOrs. v. Union of India & Ors., Krishna Iyer, J.<\/a> speaking for
\nhimself and Bhagwati, J. Observe as under:\n<\/p>\n
\t  “A pragmatic\tapproach to social justice compel us
\n     to interpret constitutional provisions, including those
\n     like Articles  32 and  226, with  a view  to  see\tthat
\n     effective policing of the corridors of power is carried
\n     out by  the court\tuntil other ombudsman arrangements-a
\n     problem with  which Parliament  has been  wrestling for
\n     too long-\temerges. I  have dwelt at a little length on
\n     this policy  aspect and  the court\t process because the
\n     learned Attorney  General challenged  the\tpetitioner’s
\n     locus standi  either  qua\tworker\tor  qua\t citizen  to
\n     question in court the wrong doings of the public sector
\n     although he  maintained that  what had been done by the
\n     Corporation  was\tboth  bona   fide  and\tcorrect.  We
\n     certainly agree  that judicial  interference  with\t the
\n     administration cannot  be meticulous in our Montesquien
\n     System of\tseparation of powers. The court cannot usurp
\n     or abdicate, and the parameters of judicial review must
\n     be\t clearly   defined  and\t  never\t exceeded.   If\t the
\n     Directorate of  a Government  company has acted fairly,
\n     even if  it has  faltered\tin  its\t wisdom,  the  court
\n     cannot, as a super-auditor, take the Board of Directors
\n     to I l task. The function is limited to testing whether
\n     the
\n559<\/span>
\n     administrative action  has been  fair and free from the
\n     taint  of\t unreasonableness  and\t has   substantially
\n     complied with  the norms  of procedure  set for  it  by
\n     rules of public administration.”\n<\/p><\/blockquote>\n
In a  concurring opinion,  Chandrachud,\t CJ.  Observed\tthat
\nsales of  public property,  when the intention is to get the
\nbest price, ought to take place publicly.\n<\/p>\n
     In State  of Uttar Pradesh v. Shiv Charan Sharma & Ors.<\/a>
\netc., this  court observed  that public\t auction  with\topen
\nparticipation  and   a\treserved   price  guarantees  public
\ninterest being fully subserved.\n<\/p>\n
     Even though  later on, learned Attorney General did not
\ninvite us  to examine  any specific  contention on behalf of
\nthe State of Harayana, it may in passing be stated that with
\nregard\tto   transactions  with\t the  State,  the  principle
\nenunciated in Sec. 55(5) (a) of the Transfer of Property Act
\nwould apply  with greater  vigour. Proceeding  along it\t was
\nsubmitted that\tif that is accepted and if it appears to the
\ncourt that  the State of Haryana did not appear to have full
\nappreciation of\t the value  of the  property and  the  other
\nparty i.e.  respondent No. 4 by reason of its profession was
\naware  of   the\t same\tand  the  resulting  transaction  is
\nmaterially unfair,  then  such\ta  case\t falls\toutside\t the
\nprinciple enunciated by the decision of this court, on which
\nreliance was  placed on\t behalf of  the respondent No. 4. We
\nconsider it unnecessary in the facts of this case to examine
\nthis aspect.\n<\/p>\n
     The position  that emerge\tis this. Undoubtedly rule 28
\npermits contracts  for winning\tmineral to be granted by the
\nGovernment by auction or tender. It is true that auction was
\nheld. It  is  equally  true  that  according  to  the  State
\nGovernment, the\t highest bid  did not  represent the  market
\nprice of  the concession. It is open to the State to dispose
\nof the contract by tender. Even here the expression ‘tender’
\ndoes not mean private secret deal between the Chief Minister
\nand  the  offerer.  Tender  in\tthe  context  in  which\t the
\nexpression is  used in\trule 28, meant tenders to be invited
\nfrom intending\tcontractors.’ If  it was intended by the use
\nof the\texpression ‘tender’  in rule 28 that contract can be
\ndisposed of  by private negotiations with select individual,
\nits validity will be open to serious question. The
\n560<\/span>
\nlanguages ordinarily used in such rules is by public auction
\nor private  negotiations.  The\tmeaning\t of  the  expression
\n‘private negotiations’\tmust take  its colour  and prescribe
\nits content by the words which precede them. And at any rate
\ndisposal of the state property in public interest must be by
\nsuch method  as would  grant an opportunity to the public at
\nlarge to  participate in  it, the  State reserving to itself
\nthe right to dispose it of as best subserve the public weal.
\nViewed\tfrom  this  angle,  the\t disposal  of  the  contract
\npursuant to the letter by the fourth respondent to the Chief
\nMinister is  objectionable for\tmore than  one\treason.\t The
\nwriter has indulged into allegations, the truth of which was
\nnot verified  or asserted.  The highest bidder whose bid was
\nrejected on  the ground\t that the  bid did not represent the
\nmarket price,  was not given an opportunity to raise his own
\nbid when  privately a  higher offer  was  received.  If\t the
\nallegations made  in the  letter influenced  the decision of
\nthe Chief  Minister, fair-plan\tin action  demands that\t the
\nappellant should  have been  given an opportunity to counter
\nand correct  the same. Application of the minimum principles
\nof natural  justice in\tsuch a situation must be reading the
\nstatute and held to be obligatory. When it is said that even
\nin administrative  action, the authority must act fairly, it
\nordinarily  means  in  accordance  with\t the  principles  of
\nnatural justice\t variously described  as fair play in action
\nThat having not been done, the grant in favour of the fourth
\nrespondent must be quashed.\n<\/p>\n
     Apart from\t various considerations\t herein examiner, if
\nany other  view is  taken in  the facts and circumstances of
\nthis case,  it may  provide a  classic\texample\t of  ostrich
\nburying its face in sand and declining to see the reality.\n<\/p>\n
M.L.A.\t\t\t\t\t     Appeal allowed,\n561<\/span>\n\n\n\n<\/pre>\n","protected":false},"excerpt":{"rendered":"
Supreme Court of India Ram And Shyam Company vs State Of Haryana And Ors on 8 May, 1985 Equivalent citations: 1985 AIR 1147, 1985 SCR Supl. (1) 541 Author: D Desai Bench: Desai, D.A. PETITIONER: RAM AND SHYAM COMPANY Vs. RESPONDENT: STATE OF HARYANA AND ORS DATE OF JUDGMENT08\/05\/1985 BENCH: DESAI, D.A. BENCH: DESAI, D.A. […]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_lmt_disableupdate":"","_lmt_disable":"","_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[30],"tags":[],"class_list":["post-115101","post","type-post","status-publish","format-standard","hentry","category-supreme-court-of-india"],"yoast_head":"\nRam And Shyam Company vs State Of Haryana And Ors on 8 May, 1985 - Free Judgements of Supreme Court & High Court | Legal India<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.legalindia.com\/judgments\/ram-and-shyam-company-vs-state-of-haryana-and-ors-on-8-may-1985\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Ram And Shyam Company vs State Of Haryana And Ors on 8 May, 1985 - 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