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2003 Supreme(All) 2291
2005 (2) AWC 1779 (LB)
(ALLAHABAD HIGH COURT—LUCKNOW BENCH)
M. Katju and K. S. Rakhra, JJ.
C.M.W.P. No. 3797 (MB) of 2003
Decided on October 21, 2003
Vashisht Kumar Jaiswal
Versus
State of U. P. and others
Counsel for the Petitioner: Akhilesh Kalra.
Counsel for the Respondents: S. D. Srivastava.
The main legal point established in the judgment is the necessity for transparency in public contracts and the precedence of the Constitution over delegated legislation.
Headnote:
lease - Mining Lease - U.P. Minor Mineral (Concession) Rules, 1963 - Article 14 of the Constitution, U.P.Z.A. and L.R. Act, The Pure Theory of Law - [Rules 6 and 8 (i) (b) of the U. P. Minor Mineral (Concession) Rules, 1963, U.P.Z.A. and L.R. Act, Article 14 of the Constitution] - The court discussed the expiration of the mining lease and the necessity for a fresh public auction/public tender after advertising in well-known newspapers to comply with Article 14 of the Constitution. It referred to various decisions and legal principles to emphasize the importance of transparency in public contracts and the violation of Article 14 if such procedures are not followed. The court also highlighted the hierarchy of laws and the precedence of the Constitution over delegated legislation, quashing the lease and directing the State Government to follow the prescribed procedure.
Fact of the Case:
The writ petition was filed against the impugned order and lease deed in favor of respondent Nos. 5 and 6, arguing that the lease should not have been extended and a fresh public auction/public tender was necessary to comply with Article 14 of the Constitution.
Finding of the Court:
The court found that the lease in favor of respondent Nos. 5 and 6 should be quashed and directed the State Government to follow the prescribed procedure of advertising the contract for the lease in two well-known newspapers and holding a public auction/public tender.
Issues: Expiration of mining lease, necessity for a fresh public auction/public tender, compliance with Article 14 of the Constitution, and the hierarchy of laws.
Ratio Decidendi: The court held that once the period of a lease expires, there is no question of renewal and a fresh public auction/public tender is essential to comply with Article 14 of the Constitution. It emphasized the importance of transparency in public contracts and the precedence of the Constitution over delegated legislation.
Final Decision: The petition was allowed, and the lease granted in favor of respondent Nos. 5 and 6 was quashed. The State Government was directed to follow the prescribed procedure for granting the lease.
M. Katju, J.—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 respondent Nos. 5 and 6 during the pendency of the writ petition.
3. The respondent Nos. 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 respondent Nos. 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. and others, 2003 (1) AWC 5 : 2003 (1) CRC 362. 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 and others, 2003 (1) AWC 5 : 2003 ALJ 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) AWC 281 : 2001 (1) UPLBEC 125 : 2001 All LJ 274, as well as in Karan Singh v. State of U. P., 2001 (1) AWC 224 : 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. Karala Financial Corporation, AIR 1988 SC 157 and Pashu Shav Chhedan Audyogic Utpadan Sahkari Samiti v. Nagar Palika, 1990 (1) AWC 734 (LB) : 1990 (1) UPLBEC 687 : 1990 All LJ 300 ; Swatantra Bihar Sahkari Avas Samiti v. State of U. P., 1992 (1) AWC 167 : 1992 (1) ALR 32 : 1992 All LJ 634, it was held that ordinarily public auction is the fair way to grant public contracts.
8. In Ram and Shyam’s 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., JT 2000 (10) 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) AWC 28 : 2001 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 27.9.2003.
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
