End of the Monopoly: High Court Slams ‘Pernicious’ Licensing Practices by APSRTC

In a landmark order, the High Court of Andhra Pradesh has struck down a tender notification issued by the Andhra Pradesh State Road Transport Corporation (APSRTC), casting a stern light on the state’s duty as a trustee of public assets. Justice Gannamaneni Ramakrishna Prasad, presiding over a series of writ petitions, ruled that the state cannot arbitrarily grant multiple business licenses to a single individual, as such actions foster monopolies and defeat the spirit of social and economic justice.

The Conflict: From Sub-letting to Courtrooms

The dispute began when the petitioner, V. Rabbani Basha, challenged the termination of his licenses for several "Open Spaces" at Yerraguntla Bus Station. The APSRTC had terminated these licenses alleging that the petitioner had grossly violated the terms of the agreement by sub-letting the spaces to third parties, rather than operating the businesses himself.

When the APSRTC initiated a fresh tender process in January 2024, Basha moved the High Court. However, the court found that the petitioner had indeed engaged in "pernicious" practices, including sub-letting and defaulting on rent, while simultaneously approaching the court to claim he was a victim of illegal encroachment.

Legal Tightrope: Can the State Act Like a Private Landlord?

The court’s analysis pivoted from the specific contractual dispute to the constitutional obligations of state instrumentalities. Citing a long line of Supreme Court jurisprudence—from Ramana Dayaram Shetty to Shanti Construction Pvt. Ltd. —the bench emphasized that the government is not a private individual free to select beneficiaries of its largesse at its "sweet will."

The court noted that when the State acts as a landlord, it must ensure fair competition. By granting multiple stalls to one person, the APSRTC failed to uphold the constitutional mandates of Articles 14, 38, and 39, which require that material resources of the community be distributed to sub-serve the common good and minimize inequalities in income.

Key Observations

The judgment features several critical insights into the nature of public contracts: * "The very practice adopted by the APSRTC by granting several licences in favour of one single person... is a pernicious practice, thereby giving scope to the Writ Petitioner to sub-let the Open Spaces to the third parties unauthorisedly." * "The State largesse is meant to be distributed in favour of persons who are in real need and it ought not to create any vested interest or monopoly in one person." * "A public tender is not a private bargain. It is instrument of governance, a mechanism through which the State discharges its solemn duty as trustee of public wealth." * "The government is not like a private individual who can pick and choose the person with whom it will deal, but the government is still a government when it enters into contract."

The Road Ahead: A New Standard for Bidding

The High Court proceeded to quash the tender notification (Sl.No.E2/797(1)2024-EPTO/Y) in its entirety. The court’s order serves as a corrective measure, mandating that the Respondent Corporation refund all deposits to the bidders.

More importantly, the court issued a clear directive for the future: the APSRTC must draft fresh tenders ensuring that a single person cannot bid for more than one license. With this ruling, the High Court has reinforced the "Public Trust Doctrine," asserting that government resources cannot be concentrated in the hands of a few, but must be utilized to provide equal opportunities for all citizens to engage in business, thereby embedding fairness into the very foundation of public procurement.

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Legal Precedents Cited: The Court heavily relied on Ramana Dayaram Shetty v. International Airport Authority of India (1979) to define the limits of State discretion, Kasturi Lal (1980) for the test of reasonableness, and the recent Shanti Construction Pvt. Ltd. v. State of Odisha (2025) to reiterate that public tenders must serve to maximize public value rather than serve as private bargains.