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1985 Supreme(SC) 189

D.A.DESAI, BAHARUL ISLAM
Ram And Shyam Company – Appellant
Versus
State Of Haryana – Respondent


Advocates:
A.MARIAPUTHAM, ARUN MADAN, HARISH N.SLAVE, K.B.ROHTAGI, L.N.Sinha, P.P.Rao, R.N.Poddar, R.VENKATARAMANA, SOLI J.SORABJI

Judgement Key Points

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. (!) (!)

What is the obligation of the State to grant public contracts by fair and open process and not by arbitrary or secret negotiations?

What is the standard of review for government action in disposal of public property to ensure it serves public interest and prevents favoritism or unfairness?

What constitutes fair play in action and natural justice in the context of auction and tender for minor mineral concessions?


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. I














































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