{"id":244724,"date":"2001-09-03T00:00:00","date_gmt":"2001-09-02T18:30:00","guid":{"rendered":"https:\/\/www.legalindia.com\/judgments\/state-of-west-bengal-v-vs-on-3-september-2001"},"modified":"2016-01-10T07:19:07","modified_gmt":"2016-01-10T01:49:07","slug":"state-of-west-bengal-v-vs-on-3-september-2001","status":"publish","type":"post","link":"https:\/\/www.legalindia.com\/judgments\/state-of-west-bengal-v-vs-on-3-september-2001","title":{"rendered":"State Of West Bengal &#8230; V vs @ on 3 September, 2001"},"content":{"rendered":"<div class=\"docsource_main\">Supreme Court of India<\/div>\n<div class=\"doc_title\">State Of West Bengal &#8230; V vs @ on 3 September, 2001<\/div>\n<div class=\"doc_author\">Author: Raju<\/div>\n<div class=\"doc_bench\">Bench: Doraiswamy Raju, S.R.Babu<\/div>\n<pre>           CASE NO.:\nAppeal (civil) 6123  of  2001\nSpecial Leave Petition (civil)\t3716\t of  2001\nAppeal (civil)\t6124\t of  2001\nSpecial Leave Petition (civil)\t13473\t of  2001\n\n\n\nPETITIONER:\nSTATE OF WEST BENGAL\t\t\t\t\t\t\t     ... V.\n\n\tVs.\n\nRESPONDENT:\nDATE OF JUDGMENT:\t2001\n@\n03\/09\/2001\n\n\nBENCH:\nDoraiswamy Raju, S.R.Babu\n\n\n\n\nJUDGMENT:\n<\/pre>\n<p>Raju, J.\n<\/p>\n<p>\tSpecial leave granted.\n<\/p>\n<p>\tThese appeals have been filed by the National Highways<br \/>\nAuthority of India, who was not a party to the proceedings in the High<br \/>\nCourt, but with the permission granted by this Court and the State of<br \/>\nWest Bengal against the judgment dated 20.11.2000 in FMAT<br \/>\nNo.3607 of 1999, whereunder a Division Bench of the Calcutta High<br \/>\nCourt has not only stayed the action initiated by the Superintending<br \/>\nEngineer to re-bid the right to collect the toll in question but also<br \/>\nordered the continuance of the Receiver in respect of the possession<br \/>\nof the expressway and collection of toll charges, meeting the<br \/>\nexpenses and deposit with the State, etc., and a further direction to<br \/>\nthe State Government to take a decision in terms of Clause 15 of the<br \/>\nMemorandum No.15\/1(3)\/PR\/N\/DEW\/IE-12\/94(V) dt.11.3.1998.\n<\/p>\n<p>\tThe disputes between the parties relate to the right of collection<br \/>\nof toll charges from the vehicles using part of Durgapur Expressway<br \/>\nbetween 22 km. to the end point Palsit\t&#8211; a stretch of 48 km. of road<br \/>\non National Highway No.2, known as Durgapur Expressway.\t That<br \/>\nthe said stretch forms part of a National Highway which vest with the<br \/>\nCentral Government and the Central Government, in exercise of its<br \/>\npowers under Section 5 of the National Highways Act, 1956<br \/>\n[hereinafter referred to as &#8220;The Highways Act&#8221;], issued a Notification<br \/>\nto the extent that the functions in relation to the execution of works<br \/>\npertaining to this National Highway shall be exercisable also by the<br \/>\nState Government of West Bengal, subject to the condition that the<br \/>\nState Government concerned shall, in the exercise of such functions,<br \/>\nbe bound to comply with the rules for the time being in force made<br \/>\nunder the Act is indisputable.\tThe Parliament has enacted The<br \/>\nNational Highways Authority of India Act, 1988 [hereinafter referred to<br \/>\nas &#8220;The Highways Authority Act&#8221;] in order to get over the difficulties<br \/>\nexperienced from time to time in maintaining effectively the National<br \/>\nHighways through the &#8220;Agency System&#8221; pursuant to a delegation<br \/>\nNotification under Section 5 of the Highways Act in favour of the State<br \/>\nGovernments concerned. Among other things, the Central<br \/>\nGovernment also framed rules called, The National Highways (Fees<br \/>\nfor the use of National Highway Section and Permanent Bridge-<br \/>\nPublic Funded Project) Rules, 1997 [hereinafter referred to as &#8220;The<br \/>\nFee Collection Rules&#8221;].\t These Rules provide for fixation of rates of<br \/>\nfee by the Central Government, the display of rates for fees,<br \/>\nprocedure for collection &#8211; either departmentally or through<br \/>\nFranchisee, the manner of its remittance from time to time, and<br \/>\nsubmission of returns, etc.<\/p>\n<p>\tRules 6 to 8 of the Fee Collection Rules provide for collection of<br \/>\nfees departmentally, mode of collection and the manner of its<br \/>\nremittance.  Rule 9 provides for the collection of fees through<br \/>\nFranchisee to whom the Franchise to collect has been awarded<br \/>\nthrough auction for specific periods as the Central Government may<br \/>\nissue, as per terms and conditions of the agreement executed for<br \/>\nsuch purposes and remittance of the auction money collected from<br \/>\nthe Franchisee by the Executing Agency to the Pay and Accounts<br \/>\nOfficer (National Highways), Ministry of Surface Transport, New<br \/>\nDelhi.\tRule 5 mandates that all fees levied under the rules shall be<br \/>\ncollected by the Executing Agency concerned departmentally or<br \/>\nthrough Private Contractors &#8220;on the basis of competitive bidding on<br \/>\nbehalf of the Central Government&#8221;.  Executing Agency has been<br \/>\ndefined to mean, the National Highways Authority of India in the case<br \/>\nof those National Highways or part thereof entrusted to NHAI and<br \/>\nState Government or Union Territory, to which such functions are<br \/>\ndelegated under Section 5 of the Highways Act.\tSo far as the part of<br \/>\nthe Highway in question, though there had been earlier Notification<br \/>\nunder Section 5, as noticed supra, subsequently, the Central<br \/>\nGovernment has issued a Notification dated 4.2.1999, in exercise of<br \/>\nits powers under Section 11 of the Highways Authority Act, entrusting<br \/>\nthe stretch of the Highway under consideration to the National<br \/>\nHighways Authority of India and indisputably the NHAI became, as a<br \/>\nconsequence thereof, the Executing Agency in respect of the stretch<br \/>\nof the National Highway in the place of the State of West Bengal.\n<\/p>\n<p>\tTenders seem to have been called for in sealed covers, initially<br \/>\nfor the grant of franchise for collection of toll charges in respect of the<br \/>\nportion of the Highway under dispute.  Since, the highest bid offered<br \/>\nin a sum of Rs.1,51,000\/- per day was not acceptable to the<br \/>\nauthorities concerned for a second time bids were called for and<br \/>\nthough the highest bid in a sum of Rs.1,99,909\/- per day, was<br \/>\naccepted,  there has been violation of the terms and conditions of the<br \/>\ngrant, resulting in termination of the same and forfeiture of earnest<br \/>\nmoney.\tOnce again sealed tenders were called for and the 1st<br \/>\nrespondent, whose bid was for Rs.2,20,701\/- per day, was accepted<br \/>\nand entrusted with the collection of toll charges in question.\tA written<br \/>\ncontract was entered into on 13.11.97 for the purpose for a period of<br \/>\none year commencing from 13.12.97 between the 1st respondent and<br \/>\nthe State of West Bengal, which at that point of time happened to be<br \/>\nthe Executing Agency.  It is interesting to note that Clause 1 of the<br \/>\nterms and conditions of the agreement stipulated that the Agency for<br \/>\ntoll collection shall be for one year and in no case extension of the<br \/>\nperiod would be allowed.  However, the additional clauses agreed<br \/>\n(Addl. Clause 1) provided that the Agency for toll collection, which is<br \/>\nfor one year, &#8220;may be extended\/fresh agreement may be made<br \/>\nsubject to fulfillment&#8221; of clauses 8 and 9 of the terms and conditions<br \/>\nof the bid.  It also contained a clause for termination for non-payment<br \/>\nof advance bid money (Clause 5) and the power to terminate the<br \/>\nagreement (Clause 9) without showing any cause and call for a fresh<br \/>\nbid, by giving forty five days&#8217; notice with similar option to the<br \/>\ncollecting agent also to put an end by giving similar notice, if he is<br \/>\nunwilling to continue or unable to offer revised bid due to revision of<br \/>\nrates, if any &#8211; and in such eventualities, to handover vacant and<br \/>\npeaceful possession of site, structures and toll gates etc., forthwith on<br \/>\nreceipt of the notice of termination.\n<\/p>\n<p>\tFormal inauguration of toll collection was said to have been<br \/>\nmade on 12.12.97 and from 13.12.97, the 1st respondent-contractor<br \/>\ncommenced regular collections.\tThough, he was obliged to deposit<br \/>\nseven days bid money in advance, he committed defaults from<br \/>\ninception and started making several pleas to avoid compliance.<br \/>\nRegular and repeated defaults in the deposit of advance bid money<br \/>\nas well as actual bid money are attributed to him, driving the<br \/>\nauthorities to issue show-cause notices for taking appropriate action.<br \/>\nInstead of dealing with the officials, the 1st respondent seems to have<br \/>\napproached the Minister-in-Charge, for installment deposits and on<br \/>\nthe same date (5.1.98) approached the Minister with offer to pay<br \/>\nRs.2,90,000\/- per day when another stretch of 17 kms of the<br \/>\nDurgapur Expressway upto Dankuni is open for traffic and handed<br \/>\nover to him and for extension of the contract period to 40 years after<br \/>\nthe expiry of original period of one year, in addition to making several<br \/>\nother claims in utter disregard and against the terms of the very<br \/>\nwritten contract.  On 15.1.98, the Secretary PW and PW (Roads),<br \/>\nGovt. of West Bengal, appears to have directed the concerned<br \/>\nEngineer not to take penal action against the contractor till his<br \/>\nrepresentations to the Minister are decided.  As on 15.1.98, the<br \/>\narrears of tolls due from him are stated to be Rs.22,07,010\/-.<br \/>\nSurprisingly, on 11.3.98 the Joint Secretary PW and PW (Roads)<br \/>\nseems to have issued a Memorandum to the Chief Engineer,<br \/>\nDurgapur Expressway, directing him to allow the contractor to deposit<br \/>\nat the rate of Rs.1.10 lakh per day (an amount far less than the bid<br \/>\nwhich was not initially accepted as being low) for six months with<br \/>\neffect from 16.12.97 subject to the condition that he would pay at the<br \/>\noriginal contracted rate after six months and dues will be paid in 10<br \/>\nequal installments.  The very Joint Secretary issued another<br \/>\nMemorandum dated 11.3.98, permitting him to deposit bid money<br \/>\nwith effect from 16.12.97 and further ordering that the Toll Collector<br \/>\nwill be liable to continue to deposit bid money at the rate of<br \/>\nRs.2,90,000\/- per day, if Dankuni and 17 kms of Durgapur<br \/>\nExpressway is opened during currency of the present contract period,<br \/>\nprovided the toll charges are increased proportionately.  After<br \/>\nreferring to the payment schedule permitted under the other Memo<br \/>\ndated 11.3.98, several other concessions like dispensing with the<br \/>\nrequirement of deposit of bid money in advance and modifications of<br \/>\nthe earlier agreed terms seem to have been also indiscriminately<br \/>\nmade, of which strong reliance has been placed for the 1st<br \/>\nrespondent on para 15, which read as follows:\n<\/p>\n<p>&#8220;15. Subject to satisfactory performance of the<br \/>\ntoll collector during the contract period of one<br \/>\nyear, to be decided by PW (Roads)<br \/>\nDepartment, the Toll Collector will continue to<br \/>\ncollect toll charges on Durgapur Expressway<br \/>\nfor 30 (thirty) years to start with, beyond the<br \/>\ninitial contract period of one year, on a lease<br \/>\nbasis, (since the agency has been referred to<br \/>\nas leassee in condition 22 of the Annexure A)<br \/>\nsubject to renewal of the lease at the end of<br \/>\nevery three years to the satisfaction of PW<br \/>\n(Roads) Department.&#8221;\n<\/p>\n<p>\tSuch reckless favoritism seems to have been shown, despite<br \/>\nthe fact that as on 10.3.98, the arrears of toll due from 1st respondent<br \/>\nwas stated to be Rs.1,41,24,864\/-, unmindful of the interests of the<br \/>\nCentral Government, the beneficiary on whose behalf alone the State<br \/>\nGovernment was acting.\n<\/p>\n<p>\tThe Superintending Engineer concerned seems to have invited<br \/>\non 21.10.98 sealed bids for the selection of fresh franchise for<br \/>\ncollection of toll for the period commencing from 13.12.98 (for the<br \/>\nperiod subsequent to the one year duration of the contract with the 1st<br \/>\nrespondent).\n<\/p>\n<p>\tThe 1st respondent appears to have filed on 6.11.98 T.S. No.<br \/>\n273 of 1998, before the Court of Civil Judge, Senior Division,<br \/>\nBurdwan, against the Authorities of the State Government not only<br \/>\nchallenging the notice inviting tenders but also for a declaration that<br \/>\nthere is a subsisting valid contract by and between the plaintiff and<br \/>\ndefendant for 30 years with effect from 16.12.98 by virtue of the<br \/>\nMemorandum dated 11.3.98; for a mandatory injunction to direct the<br \/>\nAuthorities to hand over 17 kms stretch of Calcutta-Durgapur<br \/>\nExpressway from Dankuni to Singur as and when ready; and for<br \/>\npermanent injunction restraining the defendant from taking any steps<br \/>\npursuant to the notice dated 21.10.98 inviting tenders.\t Relief in the<br \/>\nnature of ad-interim, prohibitory order of injunction also seems to<br \/>\nhave been sought.  Denying even reasonable time, as it is claimed, to<br \/>\nfile objections, interim order appears to have been granted on<br \/>\n12.11.98, permitting, at the same time, the 1st respondent to carry on<br \/>\ntoll collection in terms of the agreement dated 19.11.97, as modified<br \/>\nby the Govt. Memos dated 11.3.98 and further directing the<br \/>\nAuthorities to hand over the 17 km stretch of the Highway from<br \/>\nDankuni to Singur, on its completion, for collection of toll on the road<br \/>\nfrom Palsit to Dankuni.\t These orders were to be in force till the<br \/>\ndisposal of the injunction petition and the same was adjourned to<br \/>\n4.1.99 for hearing with permission to file objections, if any, in the<br \/>\nmeantime.\n<\/p>\n<p>\tBy this time, the Central Government, which came to know of<br \/>\nthis litigation, seems to have on 15.2.99 issued instructions to the<br \/>\nState Government to challenge the injunction order passed by the<br \/>\nCourt, expeditiously.  On 1.7.99, a request seems to have been also<br \/>\nmade to the State Government to initiate action to transfer toll<br \/>\ncollection arrangement as well the stretch of the National Highway in<br \/>\nquestion to the NHAI in view of the Notification dated 4.2.99<br \/>\nentrusting the Highway in question to NHAI.  On the willingness<br \/>\nexpressed by the State on 16.8.99, NHAI also has been directed by<br \/>\nthe Central Government to take necessary follow up action, indicating<br \/>\nfurther that the arrears due from the 1st respondent were said to be<br \/>\nRs.4,19,75,250\/- for 13.12.97 to 12.12.98; and Rs.35,31,210\/- for<br \/>\n13.12.98 to 18.1.99.  The State of West Bengal appears to have filed<br \/>\nMiscellaneous Appeal FMAT No.2360 of 1999 before the Calcutta<br \/>\nHigh Court, challenging the order dated 12.11.98.  A separate suit for<br \/>\nrecovery of the outstanding arrears from the 1st respondent for the<br \/>\nperiod upto 31.5.99 appears to have been also filed.  By a<br \/>\nMemorandum dated 24.8.99, the very Joint Secretary, PW (Roads)<br \/>\nDepartment, with reference to the issues raised by the Chief<br \/>\nEngineer, Durgapur Expressway, clarified the real position regarding<br \/>\nthe nature of action culminating in the issue of memo dated 11.3.98<br \/>\nby stating as hereunder:\n<\/p>\n<p>&#8220;His memo nos. 314-R\/DEW dated<br \/>\n21.10.1998 and 317-R\/DEW dated<br \/>\n21.10.1998 may be referred to.\tHis<br \/>\nSuggestion contained there regarding memo<br \/>\nunder reference has been carefully examined.\n<\/p>\n<p>M.R. Mondal who having been selected the<br \/>\ntoll collector Durgapur Expressway between<br \/>\nPalsit end and intersection with B.T.C. Road<br \/>\nat Singur through process of agreement<br \/>\nsubmitted certain representations in his letter<br \/>\nNo. MRM\/RD\/97-98\/36 dated 05.01.1998 in<br \/>\nterms of certain long term and short-term<br \/>\nconcessions and benefit in the operation of toll<br \/>\ncollection.  After careful consideration the<br \/>\nGovt. in its memo no. 15\/PR\/N\/DEW\/IE-12\/94<br \/>\n(V) dated 11.03.1998 placed certain proposals<br \/>\non the issue for further discussion subject to<br \/>\napproval by the competent authority, Ministry<br \/>\nof Surface Transport, Govt. of India.  But M.R.\n<\/p>\n<p>Mondal did not respond to the said memo and<br \/>\nno amended agreement has also executed.\n<\/p>\n<p>Thus, memo no. 15\/PR\/N\/DEW\/IE-12\/94 (V)<br \/>\ndated 11.03.1998 of P.W. (Roads) Deptt. has<br \/>\nno application in the matter of collection of toll<br \/>\ncharges from Durgapur Expressway by M.R.\n<\/p>\n<p>Mondal.\t This is without any prejudice to legal<br \/>\ncases pending before different courts of law in<br \/>\nthe matter of collection of toll charges.\n<\/p>\n<p>Concerned parties are informed accordingly&#8221;\n<\/p>\n<p>\tOn 3.9.99, FMAT No. 2360 of 1999 came to be disposed of<br \/>\nwith a direction to the Trial Court to dispose of the injunction<br \/>\napplication, at an early date.\tBy an Order dated 5.10.99, the Trial<br \/>\nJudge vacated the interim injunction and dismissed the injunction<br \/>\npetition both on merits and also for the reason that the interim orders<br \/>\nwere obtained by misleading the Court.\tOn 11.10.99, the Authorities<br \/>\nof the State took over possession of the Highway in question and it is<br \/>\nstated that as on 10.10.99 the arrears due from the 1st respondent is<br \/>\nsaid to be Rs.8,39,08,440\/-.  Yet, at the intervention of the Minister-in-<br \/>\nCharge, the 1st respondent managed to get directions in his favour<br \/>\nand sought for restoration of the collection work to him.  The matter<br \/>\nwas pursued before the High Court in FMAT No.3607\/99 and by an<br \/>\norder dated 27.10.99, Shri Tarun Kumar Banerjee, Advocate, Ex-<br \/>\nChief Judge of City Civil Court, Calcutta, was appointed as Receiver<br \/>\nto supervise the collection of toll charges, until further orders.  Prior to<br \/>\nthis on 11.10.99, an order for maintaining the status quo also appears<br \/>\nto have been made.  The Special Leave Petition file by the State<br \/>\nagainst the order dated 27.10.99 in SLP (C) No.17123\/99 came to be<br \/>\ndismissed on 17.12.99 on the following terms:\n<\/p>\n<p>&#8220;Both the parties agree that the receiver after<br \/>\ncollecting the amount of toll shall pay the<br \/>\nentire amount to the State.  In that view of the<br \/>\nmatter, no orders are sought by the learned<br \/>\ncounsel for the petitioner.  The Special Leave<br \/>\nPetitions are disposed of accordingly.\n<\/p>\n<p>If there is any objection regarding the<br \/>\nexpenses incurred by the receiver or any<br \/>\nother amount spent by him, it shall be open to<br \/>\nthe petitioner to approach the High Court.&#8221;\n<\/p>\n<p>\tThe grievance of the State Government seems to be that the<br \/>\nReceiver is not able to cope up with the work and there had been<br \/>\ndefault in not only filing the returns properly but also in the remittance<br \/>\nof the amounts.\t The public exchequer continued to be the loser and<br \/>\nwith the Court Receiver on the job, the State was unable to properly<br \/>\nassess the quantum of collection and the ultimate loss of revenue to<br \/>\nthe public exchequer.  The Department appears to have taken a<br \/>\ncensus on the Durgapur Expressway from 8 a.m. on 12.6.2000 to<br \/>\n8 a.m. on 15.6.2000 and it was found that at Azapur near Palsit,<br \/>\naverage toll collection should have been Rs.4.95,575\/- per day.<br \/>\nSimilar census at Dankuni also, the other point of the Highway in<br \/>\nquestion, revealed that the collection should have been Rs.4,49,565\/-<br \/>\nper day.  The deposits made by the Receiver seem to have been,<br \/>\napart from the same being irregular and not systematic, were only in<br \/>\nthe range of Rs.70,000\/- to Rs.2,25,000\/- per day.\n<\/p>\n<p>\tThe Division Bench of the Calcutta High Court, as indicated<br \/>\nabove, disposed of the appeal on 20.11.2000, by giving certain<br \/>\ndirections, both learned Judges rendering separate but concurring<br \/>\nopinions.  Hence, the above appeals.\n<\/p>\n<p>\tHeard the learned Senior Counsel for the appellants as well as<br \/>\nthe respondents.  On an overall consideration of the indisputable<br \/>\nfacts on record and the submissions made on either side, we are<br \/>\nunable to persuade ourselves to appreciate or approve the manner of<br \/>\napproach adopted, the method of consideration undertaken and<br \/>\nstatements on some abstract principles of law, unmindful of the stage<br \/>\nof the proceedings and the serious as well as irretrievable public<br \/>\ndetriment that is bound to result from the conclusions arrived at and<br \/>\ndirections issued on a perfunctory understanding of the rights of<br \/>\nparties, the statutory provisions of the Act, Rules and Regulations<br \/>\ngoverning the issue.\n<\/p>\n<p>\tThe observations of the learned Judges of the Division Bench<br \/>\non the question of existence of `prima facie case&#8217; to justify or warrant<br \/>\nthe grant of the prohibitory as well as mandatory directions of the<br \/>\nnature issued in the case, in our view, suffer from serious self-<br \/>\ncontradictions, apart from impermissibility of several assumptions<br \/>\nmade in this regard on the basis of perfunctory and inchoate<br \/>\nmaterials which could not provide any basis in law for such claims.<br \/>\nAll relevant materials also do not seem to have been adverted to in<br \/>\ntheir proper and legal perspective and the conclusions arrived at<br \/>\nappears to have arrived at throwing to winds the elementary and<br \/>\nbasic principles of law pertaining to the creation of contractual<br \/>\nrelationship between the parties.  The judgment under challenge also<br \/>\nseems to be oblivious to the obvious facts emanating from records<br \/>\nthat those materials relied upon for the plaintiff-contractor do not, in<br \/>\nlaw, constitute any or sufficient basis of evidence, which could<br \/>\nestablish even if not rebutted by evidence adduced on the other side,<br \/>\nthe plaintiff&#8217;s case for an extended term in law.  The fact that<br \/>\nsubstantial mischief or injury is likely to be necessarily caused by the<br \/>\ngrant of the order, under challenge, unlike in the case of refusal of the<br \/>\nrelief, and that the grant would lead to irreparable loss and damage to<br \/>\nthe interest of the State as well as public interest, seems to have<br \/>\nbeen completely lost sight of notwithstanding the serious violations of<br \/>\nthe conditions and terms of the contract between parties.\n<\/p>\n<p>\tThe learned Judges of the Division Bench of the High Court<br \/>\nought to have seen that there can be no legal impediment for the<br \/>\nDepartment to make preparations ahead of the period of expiry of the<br \/>\none year contract given in favour of the plaintiff to facilitate the<br \/>\nentrustment of the task of collecting the toll in question for the period<br \/>\nsubsequent thereto, to a newly selected contractor at competitive<br \/>\nrates.\tThe Division Bench further overlooked the vital legal<br \/>\nproposition that the Memorandum dated 11.3.1998 of the Joint<br \/>\nSecretary cannot, per see, have the legal consequence of bringing<br \/>\ninto existence an extended period of contract and that too for 30<br \/>\nyears though said to be renewable periodically every three years.  On<br \/>\na proper consideration of the Memorandum dated 11.3.1998, which<br \/>\nwas also stated to have been never communicated to the plaintiff,<br \/>\nand the subsequent Memorandum dated 24.8.1999 of the very Joint<br \/>\nSecretary, who issued the earlier Memo, that Memorandum dated<br \/>\n11.3.1998 contained only certain proposals and not any final orders<br \/>\nof extension or renewal of the contract as assumed in the judgment<br \/>\nunder challenge.  Paragraph 15 of the Memorandum dated<br \/>\n11.3.1998, which has been relied upon as the basis for claiming an<br \/>\nextended period of contact, itself has been misconstrued out of<br \/>\ncontext though by itself, it cannot have the effect of bringing into<br \/>\nexistence such an extended term of contract to warrant or justify the<br \/>\ngrant of the directions of the nature in the present case.  Even<br \/>\nassuming for consideration without accepting that paragraph 15 of<br \/>\nthe Memorandum dated 11.3.1998 had any effect, it can by no stretch<br \/>\nof imagination be construed to bring into existence ipso facto an<br \/>\nextended period of contract beyond the one year period for which<br \/>\nalone the contract had been given to the plaintiff in this case.  An<br \/>\norder passed but retained in file without being communicated to the<br \/>\nplaintiff can have no force or authority whatsoever and the same has<br \/>\nno valid existence in the eye of law or claim to have come into<br \/>\noperation and effect.  No reliance can be placed on the same to even<br \/>\nassert a claim based on its contents.  If its utility depended upon a<br \/>\ndecision to be taken on the performance of the plaintiff by the<br \/>\nCompetent Authority, neither the authority could be compelled to take<br \/>\na decision nor any concrete rights could be said to have been<br \/>\nacquired by the plaintiff, to warrant the grant of the type of directions<br \/>\ngiven in this case.   It is really surprising that the discretionary power<br \/>\nto grant injunction, be it of prohibitory or mandatory nature, has been<br \/>\navailed of to bring into existence and force upon the State a new<br \/>\ncontract, which could never have been the intention of the State itself.\n<\/p>\n<p>\tThe relevant and vital facts apparent on record and the stark<br \/>\nrealities of the case go to show that the plaintiff has been entrusted<br \/>\nwith the contract for collecting the toll in question only for a period of<br \/>\none year from 13.12.1997 and that as per the provisions of law<br \/>\nnoticed supra, such collection by the Executing Agency<br \/>\ndepartmentally or through franchisee as in this case, is to be for and<br \/>\non behalf of the Central Government and the amounts have to be<br \/>\nremitted to the Central Government, which only is the beneficiary of<br \/>\nsuch collection.   When the statutory rules provided for collection<br \/>\nthrough franchisee and the selection of the contractor only through<br \/>\npublic auction under the instructions for specific periods as the<br \/>\nCentral Government may issue, at competitive rates and in this case<br \/>\nsuch grant was made on behalf of the Central Government for one<br \/>\nyear initially, there can be no extension granted in law by the<br \/>\nExecuting Agency without the prior instructions or approval of the<br \/>\nCentral Government.  It would be futile for anyone to claim or for<br \/>\nCourts to countenance any claim that without reference to the Central<br \/>\nGovernment on whose behalf the State Government was acting as<br \/>\nExecuting Agency could under the pretext of a proposed extension<br \/>\nproceed to extend the same for 30 years with a provision for<br \/>\nperiodical review of three years unmindful of the financial interest of<br \/>\nthe Central Government and the ultimate loss that may result to the<br \/>\npublic exchequer.  The mere fact that if departmentally the collection<br \/>\nis made by the Executing Agency it can be in perpetuity in the sense<br \/>\nthat as long as the Executing Agency is continuing to be the Agency,<br \/>\na person like the plaintiff, who has been entrusted for the task only for<br \/>\none year, cannot seek umbrage under clause (11) of the Rule.  Unlike<br \/>\ncontracts entered into in exercise of the executive power of the State<br \/>\nwherein terms can be stipulated and settled at the will and pleasure<br \/>\nof the State, a franchise or contract envisaged for the collection of toll<br \/>\nin question is limited and circumscribed by the provisions of the Fee<br \/>\nCollection Rules, 1997 and what could be only the subject-matter of<br \/>\nan auction, selection and grant on the basis of competitive rates of<br \/>\nthe bid cannot be the subject of whim and fancy of any authority,<br \/>\nparticularly when public interest and public exchequer of the Central<br \/>\nGovernment is and will be at stake.  Thus, without the concurrence of<br \/>\nthe Central Government, which also has to be necessarily<br \/>\ninconformity with the statutory rules governing the same, there cannot<br \/>\nbe any extension granted in favour of the plaintiff and the High Court<br \/>\ncould not have directed the doing of a thing not permissible in or<br \/>\ncontrary to the statutory rules.\n<\/p>\n<p>\tIt is now an indisputable fact on record that the Central<br \/>\nGovernment has issued a statutory Notification dated 4.2.1999<br \/>\npublished in the Government of India Gazette of even date, in<br \/>\nexercise of its powers under Section 11 of NHAI Act entrusting the<br \/>\nHighways including the stretches in question, to the National<br \/>\nHighways Authority of India and that with the said Notification, the<br \/>\nstatus of the State Government as Executing Agency has come to an<br \/>\nend, though the plaintiff, first respondent herein, seeks to place<br \/>\nreliance upon Section 12(1)(a) of the National Highways Act.  In our<br \/>\nview, the said provision will have no relevance or application to the<br \/>\ncase on hand.  The transitional provision in the form of transfer of<br \/>\nassets and liabilities of the Central Government to the authority,<br \/>\nwould take in only subsisting rights already acquired or obligations<br \/>\nand liabilities incurred as on the date of publication of the Notification<br \/>\nand that too in accordance with law and not in derogation of law.   So<br \/>\nfar as the case on hand is concerned, the plaintiff could not<br \/>\nlegitimately claim to have acquired any rights by virtue of the<br \/>\nMemorandum dated 11.3.1998 which has no force or sanctity in law<br \/>\nand the Central Government or the NHAI cannot be said to have<br \/>\nincurred any obligation or liability thereby, stepping into the shoes of<br \/>\nthe State Government which acted as an Executing Agency for the<br \/>\nperiod commencing from 4.2.1999.  We are unable to appreciate as<br \/>\nto how the Division Bench, in the teeth of concrete and clinching<br \/>\nmaterial that from the inception of the contract the first respondent<br \/>\nplaintiff had been playing foul and has been devising methods and<br \/>\nways to avoid his responsibilities and has been shown to be guilty of<br \/>\nserious lapses in depositing regularly the amounts due, could have<br \/>\nbeen given any protection by issuing directions of the nature under<br \/>\nchallenge in these appeals.   The obvious impracticalities involved in<br \/>\nthe appointment of an Advocate-Receiver to supervise such a<br \/>\nstupendous task of the nature in question seems to have also been<br \/>\noverlooked and escaped the attention of the Court and no serious<br \/>\nthought seems to have been also bestowed upon the materials<br \/>\nbrought to its notice even about the inability of the Advocate-Receiver<br \/>\nto effectively function to safeguard the financial interest of the public<br \/>\nexchequer.\n<\/p>\n<p>\tFor the reasons stated above, we are of the view that the<br \/>\njudgments under challenge have not only the effect of conferring an<br \/>\nundue, undeserved and unjustified benefits and rights on the plaintiff,<br \/>\nfirst respondent herein, but also have the consequence of doing<br \/>\ngrave injustice to public interest and great loss to public Revenue.<br \/>\nWe are also of the view that not only the order of the Division Bench<br \/>\ndated 20.11.2000 is liable to be set aside, but consequential direction<br \/>\nshould be issued to retrieve the situation before any further<br \/>\nirreparable damage is caused to the public exchequer.<br \/>\nConsequently, we order :-\n<\/p>\n<p>\t1. The order dated 20.11.2000 of the Division Bench is hereby<br \/>\nset aside and that of the learned Trial Judge is restored.\n<\/p>\n<p>\t2. The Advocate-Receiver appointed by the High Court shall<br \/>\nstand discharged forthwith and he shall cease to function as such<br \/>\nfrom the day the authorities of the NHAI directly assume supervision<br \/>\nand control of the Highway and the collection of toll in question, under<br \/>\nintimation to the Receiver.\n<\/p>\n<p>\t3. The authorities of the NHAI, who has jurisdiction and control<br \/>\nover the stretch of the Highways pursuant to the notification, are<br \/>\nhereby authorized and permitted to assume the right to collect and<br \/>\nregulate\/control the collection of toll by serving a letter to that extent<br \/>\non the Advocate-Receiver and on such service, the Advocate-<br \/>\nReceiver shall stand discharged for all purposes, except for rendering<br \/>\naccounts to the collections already made to the authorities of the<br \/>\nNHAI.  If there is any dispute in this regard, it shall be worked out by<br \/>\nobtaining appropriate directions from the Calcutta High Court, which<br \/>\nappointed the Receiver.\n<\/p>\n<p>\tConsequently, the appeals shall stand allowed on the above<br \/>\nterms.\tNo costs.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>Supreme Court of India State Of West Bengal &#8230; V vs @ on 3 September, 2001 Author: Raju Bench: Doraiswamy Raju, S.R.Babu CASE NO.: Appeal (civil) 6123 of 2001 Special Leave Petition (civil) 3716 of 2001 Appeal (civil) 6124 of 2001 Special Leave Petition (civil) 13473 of 2001 PETITIONER: STATE OF WEST BENGAL &#8230; V. [&hellip;]<\/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-244724","post","type-post","status-publish","format-standard","hentry","category-supreme-court-of-india"],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v27.6 - https:\/\/yoast.com\/product\/yoast-seo-wordpress\/ -->\n<title>State Of West Bengal ... 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