Gurmej Ram Vs. Harbans Singh and ors. - Court Judgment

Excerpt:
- administrative law - government contract: [vijender jain, c.j., rajive bhalla & sury kant, jj] government contract rejection of highest bid challenge as to held, state has no dominus status to dictate unilateral terms and conditions when it enters into contract. its actions must be reasonable, fair and just in consonance with rule of law. as a necessary corollary thereto, state cannot refuse to confirm highest bid without assigning any valid reason and/or by giving erratic, irrational or irrelevant reasons. the state is free to enter into a contract just like any other individual and the contract shall not change its legal character merely because other party to contract is state. though no citizen possesses a legal right to compel state to enter into a contract, yet latter can neither pick and choose any person arbitrarily for entering into such agreement nor can it discriminate between persons similarly circumstanced. similarly, where breach of contract at hands of state violates fundamental rights of a citizen or its refusal to enter into a contract is contrary to statutory provisions or public duty, judicial review of such state action is inevitable. likewise, if state enters into a contract in consonance with article 299 rights of the parties shall be determined by terms of such contract irrespective of fact that one of the parties to it is a state or a statutory authority. for these precise reasons the equitable doctrine of promissory estoppel has been made applicable against the government, as against any other private individual, even in cases where no valid contract in terms of article 299 was entered into between the parties. hence, if government makes a representation or a promise and an individual alters his position by acting upon such promise, the government may be required to make good that promise and shall not be allowed to fall back upon the formal defect in the contract, though subject to well known limitations like larger public interest. the state, thus, has no dominus status to dictate unilateral terms and conditions when it enters into contract and its actions must be reasonable, fair and just and in consonance with rule of law. as a necessary corollary thereto state cannot refuse to confirm highest bid without assigning any valid reason and/or by giving erratic, irrational or irrelevant reasons. -- consumer protection act, 1986 [c.a. no. 68/1986]. articles 14 & 300a: government contract noon-acceptance of highest bid held, it does not result in taking away right to property of highest bidder highest bid, per se, unless it is accepted by competent authority, and consequential sale certificate is issued, does not grant the highest bidder right to property of type which is protected under article 300a right to property is limited to confer highest bidder the right to challenge action of appropriate authority in refusing to accept highest or other bids. [air 1984 p&h 282 (fb) explained] articles 14 & 226: government contract rejection of highest bid held, highest bidder has locus standi to maintain writ petition and assail action of state government or its authorities by contending that his bid has been turned down for arbitrary, illegal or perverse reasons however in such matters, heavy onus would like on petitioner bidder to establish his allegations as state action shall always be presumed to be in accordance with law - 3 was decided against the plaintiff by recording a finding that the plaintiff had failed to prove that he was ready and willing to perform his part of the contract under issue no.n.c. jain, j.1. the facts giving rise to the filing of this second appeal may briefly be noticed in the first instance.2. the plaintiff appellant filed a suit in the trial court for possession of 2 kanals 10 marias of land situated in banga, tehsil nawanshahr, district, jullundur by way of specific performance of the agreement of sale dated 19th march, 1971. according to the plaintiff the aforesaid land was agreed to be sold by bhag singh father of defendant nos. 1 and 2 harbans singh and harjap singh, he being their attorney. a sum of rs. 1,000/- on account of earnest money was passed on to the attorney. according to the plaintiff-appellant the sale deed was to be executed upto 15.4.1971 after receiving payment of rs. 13,000/- from the plaintiff. according to the plaintiff, he was always ready and willing to perform his part of the contract. the land having been sold to defendant no. 4, the suit for specific performance was filed on 15.4 1974.3. the suit was resisted by defendant no. 4, the subsequent vendee. she denied that bhag singh was mukhtiar-am of defendant nos. 1 and 2 on 19.3.1971 and that he was competent to enter into agreement with the plaintiff to sell the land of defendant nos. 1 and 2 the execution of the agreement of sale by bhag singh was also denied it was further pleaded by defendant no. 4 that she was not aware of the agreement of sale in favour of the plaintiff and was thus bona fide purchaser for value on the pleadings of the parties, the following issues were framed by the trial court :-(1) whether bhag singh was general attorney of defendant nos. 1 and 2 on 19.3,1971 and was authorised to sell the land in dispute opp.(2) if issue no. 1 is proved whether bhag singh (onus objected to) executed the agreement in dispute dated 19.3.1971 in favour of the plaintiff regarding the suit land if so, on what terms opp. (3) whether the plaintiff was ready and willing to perform part of the contract opp.(4) whether the defendant no. 4 is bona fide purchaser for value without notice of the agreement dated 19.3.1971 opd 4.(5) whether the plaintiff is entitled to the refund of earnest money and damages if so, to what extent opp.(6) relief4. under issue no. 1 it was found by the trial court that bhag singh did not possess any power of attorney from defendant nos. 1 and 2 authorising him to sell the land in dispute on the day the agreement of sale was executed. finding under issue no. 2 was returned in favour of the plaintiff that the agreement of sale was executed by bhag singh on 19.3 1971 but no decree could apparently be passed on the basis of decision of issue no. 1 for the simple reason that it was not proved that bhag singh was holding any authority to sell the land in favour of defendant nos. i and 2. issue no. 3 was decided against the plaintiff by recording a finding that the plaintiff had failed to prove that he was ready and willing to perform his part of the contract under issue no. 4. defendant no. 4 was held to be bona fide purchaser for value without notice of the agreement of the sale dated 19 3.1971. under issue no. 5 it was held that the plaintiff was not entitled to the refund of any earnest money and balance. the first appeal filed by the plaintiff before the learned appellate court was dismissed by it by affirming the finding of the trial court on issue no. 1 only. aggrieved against the judgment and decree of the first appellate court, the plaintiff has come up in second appeal before this court.5. i have heard the learned counsel for the parties and have also gone through the evidence produced on the record of the case. after perusing the evidence, i am of the view that the finding of fact arrived at by the courts below under issue no. 1 is borne out from the evidence on the record of the case. the statements of p. w. 3 naval kishore advocate and p. w. 4 ram kishan sarin, advocate, to prove that bhag singh was the general attorney have rightly been discarded by the courts below. their statements do not prove that bhag singh who was the alleged general storney of defendant nos. 1 and 2 was authorised to enter into an agreement of sale of the disputed land with the plaintiff. both the aforesaid lawyers have only deposed that bhag singh was holding some power of attorney on the basis of which he filed on civil suit no. 253 of 1968 which was decided on 18.1.1969 their statements do not prove that bhag singh had authority in the power of attorney to mortgage or sell the property of defendant nos. 1 and 2. p. w. 3 naval kishore, advocate, stated that he did not read the power of attorney. in view thereof, even if this court believes for a moment that bhag singh was holding some power of attorney from his sons, it cannot safely be concluded that he had the authority to sell the land of defendant nos. 1 and 2 to the plaintiff. p. w. 3 naval kishore took the original power of attorney from the file of the civil suit but he could not tell as to whom the same was given. neither the original power of attorney nor its certified copy has been placed by the plaintiff on the record of the case. in the absence of power of attorney, it cannot safely be assumed whether bhag singh was holding special power of attorney or general power of attorney. may be bhag singh had special power of attorney only to institute a suit in 1968 which lapsed with the decision of the suit and may be for this reason that the power of attorney was taken back by the counsel. the chances of defendant nos. 1 and 2 cancelling the power of attorney of bhag singh cannot be ruled out either.6. for the reasons recorded above, the appeal is found to be devoid of any merit and the same is consequently ordered to be dismissed with no order as to costs.