K. Venkatanarayana Vs. the Divisional Forest Officer Eluru - Court Judgment

Excerpt:
constitution - auction - article 226 of constitution of india - divisional forest officer issued notice for sale of usufruct of cashew-nut lease - petitioner successful bidder - sale to be conducted publicly - petitioner alleged to have participated in sale - bid knocked down in favour of petitioner - petitioner received resale notice for new date of auction - petition before high court as resale inadequate - anxiety to enhance revenues of state sufficient reason for refusal to accept highest bid - grant of relief would be abuse of article 226 - held, no justification in writ petition. - motor vehicles act (59 of 1988)section 149 (2): [v. gopala gowda & jawad rahim, jj] insurers entitlement to defend the action joint appeal by insured and insurer - held, the language employed in enacting sub-section (2) of section 149 appears to be plain and simple and there is no ambiguity in it. it shows that when an insurer is impleaded and has been given notice of the case, it is entitled to defend the action only on grounds enumerated in sub-section (2) of section 149 of the act, and no other grounds are available to it. the insurer is not allowed to contest the claim of the injured or heirs of the deceased on other grounds, which are available to the insured. if insurer is permitted to contest the claim on other grounds it would mean adding more grounds of contest to the insurer and will be negation of the intention of the legislature and annihilate mandate of the provisions of sections 170 and 149 of the act. the insured can pursue appeal only after giving up the insurer as the appellant and not otherwise. in the instant case, the insurer has not withdrawn from party array but has remained prosecuting the appeal with the insured on the grounds which are available only to the insured. therefore, the joint appeal as filed by the insured and the insurer is not maintainable. section 166: [v. gopala gowda & jawad rahim, jj] claim for compensation accident due to mechanical defect in the vehicle held, it is not in dispute that the claimant suffered injuries in an accident, which occurred during the course of his employment, albeit due to his negligence but law does not render him remediless. statutory right is conferred on him, accruing by virtue of his employment under insured to claim compensation under workmens compensation act. the insurer is statutorily duty bound to discharge the liability of the owner of the vehicle, to pay such compensation to the employee, as mandated under the provisions of section 149 of the act. the right of an injured employee or his dependents as the case may be to be compensated, when injury is suffered or death occurs during his employment, is recognised not only under workmens compensation act, but also under benevolent provisions under section 166 and 167 of the m.v. act. the right of driver to seek compensation is not restricted only to the workmens compensation act, it has been enlarged to enable such person to seek just compensation (sections 166 and 168), conferring upon him the right of election engrafted under section 167 of the act to choose either of the two forum. the only defence which the insurer could take is limit of its liability as enumerated under section 147 of the act, leading to contest, inter alia, only between insured and insurer and does not impact claimants right to recover the compensation determined by the tribunal which crystallizes into enforceable right against both. in the instant case, the claimant/driver has exercised right of election under section 167 of the act to seek compensation under section 166 of the act resulting in award passed by the tribunal. therefore, the insured and the insurer have no escape but to discharge the said award as directed. undisputedly, in this case as deduced for proved facts, the vehicle in question was not properly maintained by the owner and despite faulty brake system, the claimant had undertaken the hazardous journey to his peril at the behest of and at the instruction of the owner. the owner is therefore, tortfeasor. section 168: [v. gopala gowda & jawad rahim, jj] insurers limit of liability - held, it is well settled that the liability of the insurance company for payment of compensation can be statutory or contractual. is for the insurance company to show that the insurance policy was a statutory policy and not a contractual policy to restrict its liability. that issue was neither raised before the tribunal nor is raised in this appeal requiring decision. thus, if at all the insurer has any valid ground to restrict its liability, it can proceed against the insured but firstly it has to discharge the award as required under section 149 (1) of the act. where the owner/insured has failed to maintain the vehicle as per prescribed safety standards and has caused the claimant to drive the vehicle with mechanical defects, the owner would be the tortfeasor and the claimant can maintain a petition seeking compensation under the provisions of the act, instead of seeking compensation under the workmens compensation act. on facts, held, the material evidence on record, particularly, with regard to the income of the claimant, his age, medical evidence and the evidence relating to pecuniary loss has not been considered by the tribunal in the correct perspective, which has resulted in passing of the impugned award, disproportionate to the pecuniary loss and the loss of future income of the victim. the settled principles governing determination of compensation has been given a go-bye. compensation of rs.4,15,150/- awarded by the tribunal was enhanced to rs.8,20,000/-. - the only limitation on such discretion is that the state should not lose revenue in the process of arbitrary and wanton exercise of the power and that a person who has participated in a public sale in good faith shall not be denied his (share? they also approached the conservator of forests, rajahmundry on 17-12-1990 and complained about the collusive sale on 12-12-1990. as required by the conservator of forests, the complainants gave an undertaking in writing that if the auction sale was properly conducted it would reach far more than the highest bid in the sale conducted on 12-12-1990. satyanarayana offered rs. it shall always remind itself that the greatest good for the largest number should inform its actions rather than private aggrandisement of a few whatever their motivations be. there is an added responsibility for the state and its instrumentalities -where disposal is for augmentation of revenue and nothing else, the state is under an obligation to secure the best market price available in a market economy .all its attempts must be to obtain the best available price while disposing of its property' (ram & shyam co. nor can it be that a well articulated anxiety to preserve and protect public revenue be considered as an invasion of the rights of persons who would otherwise have earned larger commercial profits if the state and its officers were complacent or foolhardy. on the basis of the observations in the decisions of the supreme court referred to above, i am of the opinion that an anxiety to enhance the revenues of the state in commercial transactions if it is adequately supported by material is a sufficiently good reason to refuse to accept the highest bid and throw open the transaction for more effective commercial competition once again.order1. the divisional forest officer, eluru, had issued a 'short sale notice' of minor forest produce of eluru forest division for sale of usufruct of cashew-nut lease units, for the year 1991 at 11.00 a.m. on 12-12-1990. petitioner was the successful bidder for the year 1989-90. the sale was to be conducted publicly. petitioner and 13 others are alleged to have participated in the sale. the bid was knocked down in favour of the petitioner for rs. 73,000/- for item no. 5 and rs. 33,000/- for item no. 6, since he was the highest bidder. he had deposited an amount of rs. 33,000/-. the balance amount due out of the total bid amount of rs. 1,06,000/- was to be paid after further instructions. on 5-1-1991 petitioner received a resale notice dt. 28-12-1990 for the same items, which are however renumbered as items nos. 2 and 3, instead of 5 and 6. the sale was proposed to be conducted on 17-1-1991. petitioner filed w.p. no. 350/91 and the same was allowed on 26-2-1991. thereafter, the respondent issued a further notice dt. 10-3-1991 proposing the auction at 10.00 a.m. on 28-3-1991. petitioner submits that the reason mentioned in the resale is inadequate, that the rejection of his highest bid which was knocked down in the public sale is arbitrary and therefore the proposed resale on 28-3-1991 cannot be conducted. he also submits that the proposed resale is against the observations of the supreme court in m/s star enterprises v. city and industrial development corporation of maharashtra ltd., : [1990]2scr826 , to the effect that -'where the highest offer is rejected, the reasons sufficient to indicate the stand of the appropriate authority should be made available and ordinarily the same should be communicated to the concerned party unless there be any specific justification not to do so.'petitioner refers to the observation of mylearned brother syed shah mohammed quadri, j. in w.p. 350/91 that -'in the instant case, no justification is pleaded by the respondent for not communicating the rejection of the highest bid of thepetitioner.'2. in the present notice dt. 10-3-1991, the following reason is mentioned :'since the amounts offered by you inrespect of the said two cashew lease unitsnoted against each in the sales held on 12-12-1990, are inadequate and since there is pros-pect of augumenting more revenue in theresale to be held, these two lease units havenot been confirmed in your favour.'it was for that reason that resale is pro-posed to be conducted on 28-3-1991.3. petitioner participated in the auction pursuant to a sale notification. condition no. 15 of that notification provides that-'the divisional forest officer or the officer conducting the sale/ tender as the case may be shall have the power without assigning any reason to (a) prohibit any one from bidding/tendering at any stage of the tender auction (b) reject the highest or any bid/tender (c) accept the highest or any bid/tender (d) sell the units separately or club togethermore than one units or sell them after soarranging as he may consider necessary (e) announce any new condition or condi-tions at the commencement of the auction (f) open any new series other than mention-ed schedule 'a' attached here to and sell coupes during a year. condition no. 21 provides that-'sales/tenders subject to confirmation : the sales tenders are subject to confirmation by the divisional forest officer or conservator of forests or the chief conservator of forests as the case may be according to the bid/tender amount and the authority competent to confirm a sale/tender reserves to himself the right of rejecting the bidder/ tenderer are fore-warned that knocking down their bids/tenders is not an acceptance of the bids/tenders till written confirmation ordersof the competent authority are served on them. the amounts paid at the time of sales tenders in respect of bidder/tenderer, when bids/tenders are one finally confirmed will be refunded to them as early as possible and such amount will not bear any interest.'4. it is fairly clear from these conditions that the sale becomes final in favour of the highest bidder/tenderer only on confirmation by the competent authority. it is also clear that the officer conducting the sale is competent to reject the highest or any bid or tender or revise the sale in any manner, before the commencement of the auction or final sale. petitioner participated in the sale on 12-12-1990 subject to all these conditions.5. it is true that the reservation of power in a selling officer or the confirmation officer, cannot be arbitrarily exercised. it is also true that it shall not be exercised wantonly, so as to result in arbitrary rejection of the highest offer with consequent loss to the state. it appears to me that subject to these broad limitations, selling and confirming officers have got a rather wide area of discretion. the only limitation on such discretion is that the state should not lose revenue in the process of arbitrary and wanton exercise of the power and that a person who has participated in a public sale in good faith shall not be denied his (share?) in an unreasonable manner, without stating reasons which are relevant. that is exactly what my learned brother quadri, j. observed in the judgment in writ petition no. 350/1991.6. counsel for the petitioner invited my attention to a number of decisions bearing on this aspect viz., ram & shyam co. v. state of haryana, : air1985sc1147 , m/s star enterprise v. city & industrial development corporation of maharash-tra ltd., : [1990]2scr826 , and harminder singh arora v. union of india, : [1986]3scr63 .7. when the matter was posted for further hearing on 27-3-1991, counsel for the petitioner produced an affidavit filed by rami-chetty satyanarayana, seeking review of the judgment in w.p. no. 350/91. in that affidavit sri satyanarayana had asserted that he was one of the participants in the alleged public sale on 12-12-90, having deposited an amount of rs. 25,000/- as earnest money under rule 7 of a.p. forest contract (disposal of forest produce) rules, 1977. there were nine other participants who had deposited earnest money. according to the above affidavit, petitioner and some other participants formed a syndicate with a view to defraud the other bidders and with the collusion of the auctioning officer, manipulated the records in such a way as to show that there was a public sale and that the petitioner was the highest bidder. when two of the participants protested the officers insisted that they should deposit rs. 25,000/- each by demand draft, so that their request for resale may be considered. satyanarayana and another participant sri raju, immediately complied with that requirement. they also approached the conservator of forests, rajahmundry on 17-12-1990 and complained about the collusive sale on 12-12-1990. as required by the conservator of forests, the complainants gave an undertaking in writing that if the auction sale was properly conducted it would reach far more than the highest bid in the sale conducted on 12-12-1990. satyanarayana offered rs. 88,000/ - for one of the cashew-nut fruits. in addition to the amount of rs. 25,000/-which he had already deposited on 12-12-1990, he deposited a further amount of rs. 30,000/- on 17-12-90 and rs. 33,000/- on 28-12-90. similar offer was made by the other complainant raju, in respect of the other unit. it was on the basis of these offers that a public auction was proposed to be conducted on 17-1-1991. that was postponed to 18-2-1991 and thereafter to 28-2-1991. it was in the meantime that without impleading the complainants, the petitioner obtained a judgment on 26-2-1991. counsel submits that even though review petition was filed on 6-3-1991, that was withdrawn subsequently and it was in the meantime that the divisional forest officer had issued the notice for re-sale on 28-3-1991. counsel for the petitioner also submits that even though he was the highest bidder, he was kept completely in the dark about the complaint and therefore cancellation of his bid and the re-sale are violative of the principles of natural justice.i know of no rule that the state shall be gullible in its commercial enterprises; nor of any law that it shall not be prudent in its business transactions. it shall act competently and fairly, it shall be circumspect and combatant and above all it shall be worldly-wise. it shall always remind itself that the greatest good for the largest number should inform its actions rather than private aggrandisement of a few whatever their motivations be. there is an added responsibility for the state and its instrumentalities -- 'where disposal is for augmentation of revenue and nothing else, the state is under an obligation to secure the best market price available in a market economy ...all its attempts must be to obtain the best available price while disposing of its property' (ram & shyam co. v. state of haryana), : air1985sc1147 . the same was expressed earlier in fertilizer corporation kamgar union v. union of india, air 1981 sc 344: (1980 lab ic 1367). that principle was emphasised in the decision in m/s star enterprises v. city & industrial development corporation of maharashtra ltd. (supra).8. refusal by the state to succumb to profit oriented endeavours of individuals to the exclusion of competition from others cannot be termed as arbitrary; nor can it be that a well articulated anxiety to preserve and protect public revenue be considered as an invasion of the rights of persons who would otherwise have earned larger commercial profits if the state and its officers were complacent or foolhardy. on the basis of the observations in the decisions of the supreme court referred to above, i am of the opinion that an anxiety to enhance the revenues of the state in commercial transactions if it is adequately supported by material is a sufficiently good reason to refuse to accept the highest bid and throw open the transaction for more effective commercial competition once again.9. petitioner is naturally entitled to participate in the sale which is proposed to be conducted on 28-3-1991, only fact that he would have gained a larger profit if the previous sale was affirmed is no reason for him to approach this court under art. 226 of the constitution of india. grant of any relief to him will mean only a dip into the coffers of the state. it will be an abuse of art. 226 of the constitution of india if that were to happen. for all these reasons, i do not find any justification for the complaint which the petitioner has raised in this writ petition. i, therefore, dismiss the same. advocate's fee rs.200/-.10. petition dismissed.

Judgment:
ORDER

1. The Divisional Forest Officer, Eluru, had issued a 'Short Sale Notice' of minor Forest produce of Eluru Forest Division for sale of usufruct of cashew-nut lease units, for the year 1991 at 11.00 a.m. on 12-12-1990. Petitioner was the successful bidder for the year 1989-90. The sale was to be conducted publicly. Petitioner and 13 others are alleged to have participated in the sale. The bid was knocked down in favour of the petitioner for Rs. 73,000/- for item No. 5 and Rs. 33,000/- for item No. 6, since he was the highest bidder. He had deposited an amount of Rs. 33,000/-. The balance amount due out of the total bid amount of Rs. 1,06,000/- was to be paid after further instructions. On 5-1-1991 petitioner received a resale notice dt. 28-12-1990 for the same items, which are however renumbered as Items Nos. 2 and 3, instead of 5 and 6. The sale was proposed to be conducted on 17-1-1991. Petitioner filed W.P. No. 350/91 and the same was allowed on 26-2-1991. Thereafter, the respondent issued a further notice dt. 10-3-1991 proposing the auction at 10.00 a.m. on 28-3-1991. Petitioner submits that the reason mentioned in the resale is inadequate, that the rejection of his highest bid which was knocked down in the public sale is arbitrary and therefore the proposed resale on 28-3-1991 cannot be conducted. He also submits that the proposed resale is against the observations of the Supreme Court in M/s Star Enterprises v. City and Industrial Development Corporation of Maharashtra Ltd., : [1990]2SCR826 , to the effect that -

'Where the highest offer is rejected, the reasons sufficient to indicate the stand of the appropriate authority should be made available and ordinarily the same should be communicated to the concerned party unless there be any specific justification not to do so.'

Petitioner refers to the observation of mylearned brother Syed Shah Mohammed Quadri, J. in W.P. 350/91 that -

'In the instant case, no justification is pleaded by the respondent for not communicating the rejection of the highest bid of thepetitioner.'

2. In the present notice dt. 10-3-1991, the following reason is mentioned :

'Since the amounts offered by you inrespect of the said two cashew lease unitsnoted against each in the sales held on 12-12-1990, are inadequate and since there is pros-pect of augumenting more revenue in theresale to be held, these two lease units havenot been confirmed in your favour.'

It was for that reason that resale is pro-posed to be conducted on 28-3-1991.

3. Petitioner participated in the auction pursuant to a sale notification. Condition No. 15 of that notification provides that-

'The Divisional Forest officer or the officer conducting the sale/ tender as the case may be shall have the power without assigning any reason to

(a) Prohibit any one from bidding/tendering at any stage of the tender auction

(b) Reject the highest or any bid/tender

(c) Accept the highest or any bid/tender

(d) Sell the units separately or club togethermore than one units or sell them after soarranging as he may consider necessary

(e) Announce any new condition or condi-tions at the commencement of the auction

(f) open any new series other than mention-ed Schedule 'A' attached here to and sell coupes during a year.

Condition No. 21 provides that-

'Sales/tenders subject to confirmation : The sales tenders are subject to confirmation by the Divisional Forest Officer or Conservator of Forests or the Chief Conservator of Forests as the case may be according to the bid/tender amount and the authority competent to confirm a sale/tender reserves to himself the right of rejecting the Bidder/ tenderer are fore-warned that knocking down their bids/tenders is not an acceptance of the bids/tenders till written confirmation ordersof the competent authority are served on them. The amounts paid at the time of sales tenders in respect of bidder/tenderer, when bids/tenders are one finally confirmed will be refunded to them as early as possible and such amount will not bear any interest.'

4. It is fairly clear from these conditions that the sale becomes final in favour of the highest bidder/tenderer only on confirmation by the Competent Authority. It is also clear that the Officer conducting the sale is competent to reject the highest or any bid or tender or revise the sale in any manner, before the commencement of the auction or final sale. Petitioner participated in the sale on 12-12-1990 subject to all these conditions.

5. It is true that the reservation of power in a selling officer or the confirmation officer, cannot be arbitrarily exercised. It is also true that it shall not be exercised wantonly, so as to result in arbitrary rejection of the highest offer with consequent loss to the State. It appears to me that subject to these broad limitations, selling and confirming officers have got a rather wide area of discretion. The only limitation on such discretion is that the State should not lose revenue in the process of arbitrary and wanton exercise of the power and that a person who has participated in a public sale in good faith shall not be denied his (share?) in an unreasonable manner, without stating reasons which are relevant. That is exactly what my learned brother Quadri, J. observed in the judgment in Writ Petition No. 350/1991.

6. Counsel for the petitioner invited my attention to a number of decisions bearing on this aspect viz., Ram & Shyam Co. v. State of Haryana, : AIR1985SC1147 , M/s Star Enterprise v. City & Industrial Development Corporation of Maharash-tra Ltd., : [1990]2SCR826 , and Harminder Singh Arora v. Union of India, : [1986]3SCR63 .

7. When the matter was posted for further hearing on 27-3-1991, counsel for the petitioner produced an affidavit filed by Rami-chetty Satyanarayana, seeking review of the judgment in W.P. No. 350/91. In that affidavit Sri Satyanarayana had asserted that he was one of the participants in the alleged public sale on 12-12-90, having deposited an amount of Rs. 25,000/- as earnest money under Rule 7 of A.P. Forest contract (Disposal of Forest Produce) Rules, 1977. There were nine other participants who had deposited earnest money. According to the above affidavit, petitioner and some other participants formed a syndicate with a view to defraud the other bidders and with the collusion of the auctioning officer, manipulated the records in such a way as to show that there was a public sale and that the petitioner was the highest bidder. When two of the participants protested the officers insisted that they should deposit Rs. 25,000/- each by Demand Draft, so that their request for resale may be considered. Satyanarayana and another participant Sri Raju, immediately complied with that requirement. They also approached the Conservator of Forests, Rajahmundry on 17-12-1990 and complained about the collusive sale on 12-12-1990. As required by the Conservator of Forests, the complainants gave an undertaking in writing that if the auction sale was properly conducted it would reach far more than the highest bid in the sale conducted on 12-12-1990. Satyanarayana offered Rs. 88,000/ - for one of the cashew-nut fruits. In addition to the amount of Rs. 25,000/-which he had already deposited on 12-12-1990, he deposited a further amount of Rs. 30,000/- on 17-12-90 and Rs. 33,000/- on 28-12-90. Similar offer was made by the other complainant Raju, in respect of the other unit. It was on the basis of these offers that a public auction was proposed to be conducted on 17-1-1991. That was postponed to 18-2-1991 and thereafter to 28-2-1991. It was in the meantime that without impleading the complainants, the petitioner obtained a judgment on 26-2-1991. Counsel submits that even though review petition was filed on 6-3-1991, that was withdrawn subsequently and it was in the meantime that the Divisional Forest Officer had issued the notice for re-sale on 28-3-1991. Counsel for the petitioner also submits that even though he was the highest bidder, he was kept completely in the dark about the complaint and therefore cancellation of his bid and the re-sale are violative of the principles of natural justice.

I know of no rule that the State shall be gullible in its commercial enterprises; nor of any law that it shall not be prudent in its business transactions. It shall act competently and fairly, it shall be circumspect and combatant and above all it shall be worldly-wise. It shall always remind itself that the greatest good for the largest number should inform its actions rather than private aggrandisement of a few whatever their motivations be. There is an added responsibility for the State and its instrumentalities -- 'where disposal is for augmentation of revenue and nothing else, the State is under an obligation to secure the best market price available in a market economy ...All its attempts must be to obtain the best available price while disposing of its property' (Ram & Shyam Co. v. State of Haryana), : AIR1985SC1147 . The same was expressed earlier in Fertilizer Corporation Kamgar Union v. Union of India, AIR 1981 SC 344: (1980 Lab IC 1367). That principle was emphasised in the decision in M/s Star Enterprises v. City & Industrial Development Corporation of Maharashtra Ltd. (supra).

8. Refusal by the State to succumb to profit oriented endeavours of individuals to the exclusion of competition from others cannot be termed as arbitrary; nor can it be that a well articulated anxiety to preserve and protect public revenue be considered as an invasion of the rights of persons who would otherwise have earned larger commercial profits if the State and its officers were complacent or foolhardy. On the basis of the observations in the decisions of the Supreme Court referred to above, I am of the opinion that an anxiety to enhance the revenues of the State in Commercial transactions if it is adequately supported by material is a sufficiently good reason to refuse to accept the highest bid and throw open the transaction for more effective commercial competition once again.

9. Petitioner is naturally entitled to participate in the sale which is proposed to be conducted on 28-3-1991, only fact that he would have gained a larger profit if the previous sale was affirmed is no reason for him to approach this Court under Art. 226 of the Constitution of India. Grant of any relief to him will mean only a dip into the coffers of the State. It will be an abuse of Art. 226 of the Constitution of india if that were to happen. For all these reasons, I do not find any justification for the complaint which the petitioner has raised in this writ petition. I, therefore, dismiss the same. Advocate's fee Rs.200/-.

10. Petition dismissed.