DURGA ASSOCIATES RAIPUR Vs. STATE OF U P

JUDGEMENT

(1.) IN order to appreciate the controversy giving rise to these petitions certain facts will have to be stated in some detail. The State of U.P. through opposite party No.2 invited lenders for collection of Sal Seeds from 14 Forest Divisions of U.P. enumerated in tender notice, Annexure 1 to the writ petition. In pursuance of the tender notice, the petitioners submitted their tender for several Divisions within the time fixed i.e. 20th April, 1981. The date of the opening of the tender was 21st April, 1981. On that date the tenders could not be opened as this Court passed an order in Writ Petn. No.1838 of 1981, Hind Trading Company v. State of U.P. and in Writ Petn. No.1897 of 1981, Oudh Sugar Mills Ltd. v. State of U.P. (reported in 1982 All LJ 572), staying the reopening of the tenders by the State of U.P. By a subsequent order dated 27 -4 -1981 this Court clarified the said order and allowed the opening of the tenders. The order, however, provided that until further orders the State of U.P. shall not accept any tenders. A copy of the said order passed by this Court is Annexure 2 to the Writ petition. In compliance of the order passed by this Court the State of U.P. opened the tenders on 28 -4 -1981. For two Forest Divisions the petitioners tender were highest. These Forest Divisions are South Pilibhit and South Kheri, On account of the stay order, the opposite parties did not take any steps to issue the letter of acceptance for collection of the Sal Seeds for three years even for these Forest Divisions which were not in dispute in the writ petitions referred to above. The petitioners intervened in the writ petitions as opposite parties and they prayed that since the period of operation for collection of Sal Seeds is very short i.e. from 1st April to 15th June, the petitions be finally disposed of. By order dated 15 -5 -1981 the aforesaid writ petitions were dismissed. In the year 1977 tenders were invited for the collection of Sal Seeds for a period of four years and the petitioners in those writ petitions prayed that having regard to the assurance given by the State Government that the lease may be extended up to 15 years, the lease in favour of the petitioners be extended. This argument was repelled by the Division Bench and while disposing of the writ petitions, the Division Bench observed that for the year 1981 onwards the State Government had taken a decision that the work of collection of Sal Seeds be given to the Forest Corporation if they were ready to do so without any special increase in staff and in the remaining areas the work of collection of Sal Seeds be given on lease for three years for which tenders be invited. It was also observed by the Division Bench that the decision to invite tenders for a period of three years was in the circumstances neither arbitrary nor unreasonable but in public interest, It was also observed that the decision to invite fresh tenders for three years was neither hit by Art.14 of the Constitution nor by principles of natural justice. After the decision rendered by the Division Bench on 15 -5 -1981, the petitioners approached opposite party No.2 and requested him to give a letter of acceptance opposite party No.2, however, declined to give any letter of acceptance, he, however, told the petitioners that final decision will be taken by opposite party No.1. The petitioners requested that an early decision in the matter may be taken. The petitioner was called by opposite party No.2 on 20 -5 -1981. The petitioner contacted the purest Secretary as well as State Minister for Forests. The petitioner was informed that with regard to the collection of Sal Seeds, the petitioner may contact the Chief Conservator of Forests. When the petitioner approached opposite party No.2 the latter pressurized the petitioners to surrender the North and South Gorakhpur and east and west of Bahraich Division even though the petitioners tenders were highest. The petitioners did not agree to these suggestions. The petitioners then submitted the letter dated 20 -5 -1981, a copy of which is Annex.5 to the writ petition. In the said letter, it was stated that after the decision in Writ petitions Nos.1838 and 1897 of 1981, the aggrieved parties approached the Supreme Court which rejected the application for Special leave to appeal to the Supreme Court and the judgment of High Court was confirmed. The petitioners, in these circumstances, prayed that they may be permitted to start the work of collection of Sal Seeds in the above Divisions. The petitioners request remained unheeded and another request was made to the opposite parties by means of Annexure 7 to the petition that the petitioners be permitted to start the work.

(2.) ON 22 -5 -1981 the petitioners contacted the Forests Secretary on telephone and sought his permission to discuss the matter with him personally. In para 12 of the writ petition it has been stated by the petitioner that the Forest Secretary told the petitioner that whatever Forest Divisions have been given to the petitioner, he should remain contented with them and no useful purpose will be served by making efforts for other divisions as the Government had already taken the decision to give the letter of acceptance to other tenderers and will issue the same on 23 -5 -1981. The grievance in the petition is that the petitioners are the highest bidders and for no ostensible reason the opposite parties were trying to give tender to other persons whose bid was not as high as that of the petitioners. The petitioners case is that they have come to know that the opposite parties were not taking any steps to accept the petitioners bid on account of political influence exercised on me said opposite parties by the proprietors of the Hind Trading Co. and Oudh Sugar Mills Ltd. who were litigating for the grant of lease for 11 years and who do not want that the said divisions go out of their hands. The petitioners maintain that although their bid is the highest, the matter of grant of contract has been delayed. The petitioners are ready to deposit the requisite amount and to enter into the agreement. Their further contention is that since the petitioners bid is the highest, they have a legitimate right to compel the opposite parties to allow them to start the work for collection of Sal Seeds. The inaction of the opposite parties in not granting the contract to the petitioners is an arbitrary action which is likely to cause irreparable loss which cannot be compensated in terms of money. According to the petitioners the activities of the Government have a public element and, therefore, there should be fairness and equality if the State enters into contract with private parties. In doing so, the State is required to act fairly and without discrimination. It is further contended by the petitioners that once the decision was taken by the State Government to lease out the forest ranges for collection of Sal Seeds by public auction, the Government cannot reject the highest tenders except when it finds that the offer is inadequate or there are justifying circumstances for not accepting the highest bid. Since the petitioners bid happens to be the highest and the opposite parties have not disclosed any reason why the highest bid should not be accepted, there is no legal justification for the opposite parties for not accepting the bid of the petitioners. It is also contended by the petitioners that the work of collection of Sal Seeds starts each year in the month of April and lasts till the month of June when the monsoon starts and if the petitioners are not allowed to start the work, they would suffer irreparable loss.

(3.) ON 23 -3 -1981 the petitioners presented the instant writ petition before this Court and prayed for a writ of mandamus directing the opposite parties to give the letter of acceptance for collection of Sal Seeds for the South Kheri Forest Division to the petitioners they being the highest tenderers and further prayed that the opposite parties be required to execute the deed of agreement. On 23 -5 -1981 this Court passed an interim order directing the petition to come up lot orders on 26 -5 -1981 and till that date the opposite parties were directed not to issue the letter of acceptance to any tenderer except one whose tender was highest. It may be noted that in spite of this order, the opposite parties on 30 -5 -1981 proceeded to reauction the lots in question and did not accept the petitioners highest bid for no ostensible reason. The argument of the learned counsel for the petitioners is that in spite of the stay order passed by this Court, the opposite parties proceeded to reauction the lots in question. According to the petitioners, this action on the part of the opposite parties is arbitrary and is not informed by reasons. It is conceded by the petitioners that it was open to the opposite parties to have rejected the petitioners highest bid but that could be done if there were justifiable reasons for not accepting the highest bid, It is further maintained that once the State Government had taken a decision that the auction for the year 1981 shall be held by inviting tenders and the contract shall be executed in favour of the highest bidder, the opposite parties without any justification could not depart from the practice and proceed to reauction the lots. The petitioners claim that since they are the highest bidders and since for no justifiable reason the lots have been reauctioned, the action of the State Government in re -auctioning the lots in dispute is liable to be quashed as being unjustifiable and discriminatory and that the opposite parties be required to execute the contract for three years in their favour.