Extension of fixed period contracts should not be allowed as it would result in a monopoly, violate constitutional provisions, and potentially lead to corruption.

M. KATJU AND PRAKASH KRISHNA, JJ.

( 1 ) HEARD learned counsel for the petitioner and the learned standing counsel for the Central government.

( 2 ) THE petitioner had been granted Mail Motor Contract for the period 11. 10. 1995 to 10. 10. 2000. Admittedly, that period has expired and now the respondents have, invited fresh tenders.

( 3 ) LEARNED counsel for the petitioner submitted that the petitioner had applied for extension of the period of contract and that period had been extended vide Annexure-5 to the writ petition and the petitioner has also deposited rupees thirty thousand.

( 4 ) IN our opinion, there cannot be any extension of a fixed period contract. After the fixed period has expired, there must be a fresh public auction/ public tender after advertising it in well-known newspapers having wide circulation so that all eligible persons can apply for the said contract. If extension of the fixed period is granted, it will result in a monopoly in favour of a person and exclude others from applying for the contract. This, in our opinion, will be violative of Articles 14 and 19 (1) (g) of the Constitution. The purpose of granting a fixed period contract is that after that period expires a party has no right of getting extension, but there will be fresh auction-tender after advertising it in well known newspapers having wide circulation so that all eligible persons can apply. If this principle is not accepted, Article 14 of the Constitution and the decision of supreme Court in Rammanas case, AIR 1979 SC 1628. will be violated. Moreover, it will be an incentive to corruption because the person who is holding a contract may be motivated to give some illegal gratification to the relevant authority for getting extension of his contract. We cannot approve of this kind of practice, which we regard as illegal.

( 5 ) WE therefore, direct the State and the Central Governments, that in future whenever there is a fixed period contract, then after that fixed period expires, there should not be any extension or renewal of the contract, but there should be fresh public auction/public tender after wide publication in at least 2 well-known news-papers so that the provisions of Articles 14 and 19 (1) (g) of the Constitution can be complied with.

( 6 ) THIS writ petition is dismissed with the aforesaid observation.

( 7 ) LET a copy of this judgment be sent through the Registrar General of this Court to the Chief secretary, Law Secretary, U. P. Government Lucknow as well as the Law Secretary, Union of india, New Delhi.

( 8 ) THE amount of security deposited by the petitioner for getting extension shall be refunded forthwith.

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