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2003 Supreme(All) 883
IN THE HIGH COURT OF ALLAHABAD
M. Katju and R. S. Tripathi, JJ.
SHRI SHANKAR TRANSPORT CO. - Appellant
Versus
MANAGING DIRECTOR, U. P. RAJYA BHANDARAN NIGAM - Respondents
C. M. W. P. 17480 Of 2003
Decided On : 04/23/2003
Amna Mumtaz, R.K.SRIVASTAVA
The main legal principle established is that the extension of time-bound contracts by public authorities must be avoided to prevent monopoly and uphold constitutional provisions of fairness, equality, and transparency.
Headnote:
Extension of Time-Bound Contract - Public Auction - Fairness, Equality, and Transparency
Fact of the Case:
The petitioner sought to quash a tender notice for the grant of a contract by the respondent U.P. Rajya Bhandaran Nigam for transport and handling work.
Finding of the Court:
The court found that the petitioner's contract had expired, and it opined that there cannot be an extension of the period of a time-bound contract granted by a public authority. It emphasized the need for a fresh public auction or tender after the expiration of the contract to ensure fairness, equality, and transparency, citing relevant case law.
Issues: The issue revolved around the extension of a time-bound contract and the requirement for a fresh public auction or tender after the expiration of the contract to uphold constitutional provisions.
Ratio Decidendi: The court held that allowing extensions of time-bound contracts could lead to monopoly and would violate constitutional provisions, emphasizing the need for fairness, equality, and transparency through a fresh public auction or tender.
Final Decision: The petition was dismissed, but the petitioner was allowed to participate in the forthcoming auction if eligible.
( 1 ) THE petitioner has prayed for quashing of the tender notice for grant of contract by the respondent U. P. Rajya Bhandaran Nigam of transport and handling work.
( 2 ) ADMITTEDLY, the petitioner had a contract only till 28. 1. 2003 when the period of the contract expired. Learned counsel for the petitioner states that the petitioners contract has been extended till 28. 1. 2004.
( 3 ) WE are of the opinion that once the period of a time-bound contract granted by a public authority has expired, there cannot be any extension of the period of the contract, but instead there must be a fresh public auction/public tender after advertisement in well-known newspaper having wide circulation in the area, otherwise there will be violation of Article 14 of the constitution of India. Such a procedure ensures fairness, equality and transparency as held in r. D. Shetty v. International Airport Authority of India and Ors. , AIR 1979 SC 1628. If extension of time-bound contract is permitted, there can be monopoly In favour of some one who will get the contract in his favour extended again and again. This would not only be violative of Article 14 of the Constitution of India but also Article 19 (1) (g), since ordinarily monopoly violates these constitutional provisions vide State of Rajasthan v. Mohan Lal Vyas, AIR 1971 SC 2068 ; rashid Ahmad v. Municipal Board, AIR 1950 SC 163 ; Hamid Raza v. State of M. P. , AIR 1960 sc 994 ; Rasbihari v. State of Orissa, AIR 1969 SC 1081,
( 4 ) THE petition is, therefore, dismissed. However, if the petitioner is eligible, he can also bid, amongst others, in the forthcoming auction.
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