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SUPREME COURT OF INDIA
D.A. DESAI AND BAHARUL ISLAM, JJ.
Ram and Shyam Company, Appellant
Versus
State of Haryana and others, Respondents.
Civil Appeal No. 3751 of 1982, D/- 8-5-1985.
Advocates appeared
Mr. Soli J. Sorabjee, Sr. Advocate; Mr. K. B. Rohtagi and Mr. H. N. Salve, Advocates, with him, for Appellant; Mr. P. P. Rao, Sr. Advocate; Mr. Arun Madon, Mr. R. Venkataramani and Mr. A. Marriarputtam, Advocate, with him (for No. 4) Mr. L. N. Sinha, Attorney General and Mr. R. N. Poddar, Advocate with him, for Respondents.
Haryana Minor Minerals Act, 1973 – Constitution of India, 1950 – Article 136, 226, 32, 41 - Mines and Minerals Act, 1957 - Mysore Excise Act, 1901- Transfer of Property Act, 1882 - Section 55(5)(a) - Punjab Minor Mineral Concession Rules, 1964 - Rule. 28(1), 29, 30(2),(4), 28 - Industries - Contract - Extract Stones - Rate of Compensation - First respondent State of Haryana and second respondent Director of Industries are directed under and subject to as applicable to state to grant a right to appellant in form of contract usually entered into in similar cases to extract stones from Serai Khawaja on compensation howsoever described at rate of Rs. 25 lacs per year for a period of five years commencing and up to and inclusive - Appellant herein is directed to appear before second respondent within a week from today to execute contract and / or necessary documents, instruments and to carry out all formalities including making of deposits and / or payments, if any, required to be made under relevant provisions of Act and Rules - Fourth respondent is given time up to to clear out from area and this time is even to him as and by way of locus poenitentiae to wind-up his affairs as far as quarry involved in this appeal - Whether one Judge alone can give reasons - Whether there are legal or logical reasons in support of order or it is merely an arbitrary exercise of power - Whether his client is willing to make an affidavit incorporating, therein that if highest bid at a reauction - Whether by way of giving jobs or entering into contracts or issuing quotas or licences or granting other forms of largess, Government cannot act arbitrarily at its sweet will and, like a private individual - Whether appellant can complain of this by way of a writ - Held, Language ordinarily used in such rules is by public auction or private negotiations - Meaning of expression private negotiations must take its colour and prescribe its content by words which precede them - And at any rate disposal of State property in public interest must be by such method as would grant an opportunity to public at large to participate in it, State reserving to itself right to dispose it of as best subserve public weal - Viewed from this angle, disposal of contract pursuant to letter by fourth respondent to Chief Minister is objectionable for more than one reason - Writter has indulged into allegations, truth of which was not verified or asserted - Highest bidder whose bid was rejected on ground that bid did, not represent market price, was not given an opportunity to raise his own bid when privately a higher offer was received - If allegations made in letter influenced decision of Chief Minister, fair-play in action demands that appellant should have been given an opportunity to counter and correct same - Application of minimum principles of natural justice in such 4 situation must be read in statute and held to be obligatory - When it is said that even in administrative action, authority must act fairly, it ordinarily means in accordance with principles of natural justice variously described as fair play in action - That having not been done, grant in favour of fourth respondent must be quashed - Petition allowed.
Key Points: - The case holds that disposal of public property must be by method that allows public participation and must not be arbitrary or secret; unfair or back-door deals are quashed. (!) (!) (!) - Government action in awarding contracts or leases for public resources must be fair, non-arbitrary, non-discriminatory, and guided by rational standards; failure to meet these principles can invalidate the action. (!) (!) - The decision emphasizes fair play in action and natural justice, including opportunities to counter allegations and the right to a fair bidding process, especially when highest bids are rejected or private offers are accepted. (!) (!) - Auctions are intended to maximize public revenue; the government may reject highest bids if inadequate, but must do so fairly and transparently. (!) (!) - In cases of secret or preferential offers, the government must provide equal opportunity to bid and verify allegations before accepting any non-public offer. (!) (!) (!) - The writs and judicial review are appropriate to challenge arbitrary or unequal treatment in the distribution of state largesse. (!) (!)
Judgment
DESAI, J. :- As the matter brooked no delay, when the arguments were concluded, the court pronounced the order which reads as under :
"The appeal is allowed and the decision of the High Court of Punjab and Haryana at Chandigarh in L. P. A. No. 1232 of 1982 dated September 15, 1982 as well as the decision of the learned single Judge in Civil Writ Petition No. 2321 of 1981 dated August 30, 1982.
The writ petition filed by the present appellant succeeds. The Order of the Director of Industries dated May 25, 1981 granting a quarry lease to M/s Pioneer Crushing Co. (respondent No. 4) in resepect of Serai Khawaja Plot No. II Quarry (except the 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 Minerals 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 1, 1983 and up to and inclusive and ending with December 31, 1987.
The appellant herein is directed to appear before the second respondent within a week 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 up to December 31, 1982 to clear out from the area and this time is even to him as and by way of locus poenitentiae to wind-up his affairs as far as the quarry involved in this appeal.
In the circumstances of the case, there win be no order as to costs.
Reasons will follow."
Here are the reasons.
2. It must be confessed that reasons in support of the decision are delayed but without offering an alibi for the tardiness, one aspect which inhibited giving of the reasons may be mentioned. My learned colleague suddenly left the court and the doubt nagged me for some time whether one Judge alone can give the reasons. It was an agreed order. Before pronouncing the order broad discussion took place which showed identity of views on all points involved in the matter. In this background to give reasons which appealed to us though drawn up by one of us would any day provide a better choice than not to give reasons because it would always annoy and distress the party who lost the legal, battle whether there are legal or logical reasons in support of the order or it is merely an arbitrary exercise of power. However, what happened in the court in the presence of all parties and the learned counsel is res ipsa loquitur. What started before the court as a minor whisper, hardly audible, ended with the experience in a whispering galary where the whisper multiplied at the other end of the galary in volleying thunders. There would have been no qualms of conscience if the matter was disposed of sub silentio as to reasons because of the outcome of the courts exercise of jurisdiction under Art. 136. The reasons which dictated the choice, and indicated the path did stand in need of justification because the end product justified interference. The very outcome would provide the raison detre for the exercise of power. Yet to bow to the tradition to convince the protagonists of reasoned orders, these are the reasons.
3. Factually matrix first. The State of Haryana in exercise of the power conferred upon it by Haryana Minor Minerals (Vesting of Rights) Act, 1973 (1973 Act for short) grants lease for winning minor mineral vesting in it. The grant of the lease is regulated by Punjab Minor Mineral Concession Rules, 1964 (Rules for short) in
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