Back
2003 Supreme(All) 2292
IN THE HIGH COURT OF ALLAHABAD
M. KATJU, A. K. GANGULY
VASHISHT KUMAR JAISWAL - Appellant
Versus
STATE OF U. P. - Respondents
C. M. W. P. 3797 Of 2003
Decided On : 10/21/2003
The judgment establishes the principle that transparency in public contracts is essential, and the Constitution prevails over delegated legislation in the hierarchy of laws.
Headnote:
LEASE - Mining Lease - U. P. Z. A. and L. R. Act, Article 14 of the Constitution - 1963 U. P. Minor Mineral (Concession) Rules - AIR 1985 SC 1147, AIR 1986 SC 1527, AIR 1988 SC 157, 2000 10 JT (SC) 481, 2001 All LJ 276, 2003 All LJ 1802 - The court emphasized the importance of transparency in public contracts and the necessity of advertising and holding public auction/tender to comply with Article 14 of the Constitution. It also highlighted the hierarchy of laws and the precedence of the Constitution over delegated legislation.
Fact of the Case:
The writ petition challenged the extension of a mining lease without following the necessary procedure of advertising and holding public auction/tender, as required by the U. P. Z. A. and L. R. Act and Article 14 of the Constitution.
Finding of the Court:
The court found that the lease extension without following the prescribed procedure violated Article 14 of the Constitution and emphasized the importance of transparency in public contracts.
Issues: Extension of mining lease without advertising and holding public auction/tender, violation of Article 14 of the Constitution, and the hierarchy of laws.
Ratio Decidendi: Once the period of a lease expires, there is no question of extension, and public contracts must be granted through advertising and public auction/tender to ensure transparency and compliance with Article 14 of the Constitution. The Constitution prevails over delegated legislation in the hierarchy of laws.
Final Decision: The court quashed the lease extension and directed the State government to advertise the contract for the lease and hold public auction/tender in compliance with the prescribed procedure.
( 1 ) HEARD learned counsel for the parties.
( 2 ) THIS writ petition has been filed against the impugned order dated 3-7-2003 (Annexure 1 to the petition) and lease deed dated 25-7-2003 in favour of respondents No. 5 and 6 during the pendency of the writ petition.
( 3 ) THE respondents No. 5 and 6 were granted mining lease for three years which started from 28th April, 2000 and hence it came to an end on 27-4-2003. We are not going into the various points urged before us because we are of the opinion that this petition deserves to be allowed on the short point that once the period of the lease in favour of respondents No. 5 and 6 expired on 27-4-2003 there is no question of extension of the lease, and instead there should have been a fresh public auction/public tender after advertising the same in well known newspapers having wide circulation. This procedure is essential, as otherwise Article 14 of the Constitution will be violated. Transparency in public administration also requires that such a procedure should be followed whenever any public contract is granted. It may be mentioned that the owner of the land is the State Government and a bhumidhar under the U. P. Z. A. and L. R. Act is not the owner of the land, but he is only tenant, the owner is the State as the land is vested in it under Section 4 of the U. P. Z. A. and L. R. Act. Hence it is not correct to say that the land belongs to the Bhumidhar.
( 4 ) LEARNED counsel for the respondents relied on a decision of the Supreme Court in Beg Raj Singh v. State of U. P. , 2003 (1)crc 362 : (AIR 2003 SC 833 ). In our opinion this decision is wholly distinguishable as Article 14 of the Constitution has not been considered therein at all.
( 5 ) IN Ziauddin v. Commissioner, moradabad, 2003 All LJ 1802 a Division bench of this Court has held that all contract of public property must ordinarily be granted by advertising in well known newspapers having wide circulation, and thereafter holding public auction/public tender so as to comply with Article 14 of the Constitution.
( 6 ) THIS view has been taken in A. S. Advertising Company v. Nagar Nigam, Meerut, 2001 (1) UPLBEC 125 : 2001 All LJ 274 as well as in Karan Singh v. State of U. P. , 2001 (1) UPLBEC 128 : 2001 All LJ 276. In these decisions we have referred to some earlier decisions of the Supreme Court and of this court.
( 7 ) IN Ram and Shyam Company v. State of Haryana, AIR 1985 SC 1147 and Shri harminder Singh v. Union of India, AIR 1986 sc 1527 the Supreme Court held that ordinarily a theka should be granted after advertising it in well known newspapers having wide circulation. In Haji T. M. Hassan rawther v. Kerala Financial Corporation, AIR 1988 SC 157 and Pashu Shav Chhedan audyogic Utpadan Sahkari Samiti v. Nagar palika, 1990 (1) UPLBEC 687 : 1990 All LJ 300; Swatantra Bihar Sahkari Avas Samiti v. State of U. P. , (1992) 1 All LR 32 : 1992 all LJ 634 : (AIR 1992 All 196) it was held that ordinarily a public auction is the fair way to grant public contracts.
( 8 ) IN Ram and Shyams case (supra) the supreme Court held that ordinarily public, contracts should not be given by public negotiations. The principles of granting such contracts was laid down by the Supreme court in Air India Ltd. v. Cochin International Airport Ltd. , (2000) 10 JT (SC) 481 : air 2000 SC 801 and ordinarily these principles should be followed. It has also been held that advertisement in an unknown or little known newspaper would also not be valid vide A. S. Advertising Co. v. Nagar nigam, (2001) 1 All WC 28 : 2000 All LJ 274. In the present case no good reason has been given for not advertising the theka for grant of Tehbazari, after the contract expired on 27-4-2003.
( 9 ) IN our opinion there must be transparency in these matters of grant of public contracts, otherwise Article 14 of the Constitution will be violated. It is only in rare and exceptional cases, and for good reasons, that a public contract should be granted without adve
