Kaka Ram Verma Vs. Indian Red Cross Society, Punjab Branch 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 - 2. learned counsel for the petitioner submits that in this case, the aforesaid post has not been abolished in good faith, rather it has been abolished with mala fide intention to terminate the services of the petitioner. it is the prerogative of an employer to create or abolish the post, but the abolition of a post should be made in good faith and not in a mala fide or arbitrary manner. i do not find any ground, on which the instant abolition of the post can be said to be mala fide or not in good faith. 4. in view of the above, i am of the opinion that abolition of the post was made in good faith and no interference is required in the order of termination of the services of the petitioner.satish kumar mittal, j.1. since 1979, the petitioner was working as training supervisor in st. john ambulance association, district centre, patiala, on temporary basis. he was imparting training to the children in the schools and students in the colleges and to drivers and policemen. due to financial crisis, the respondent society abolished the said post. the decision to abolish the said post has not been annexed with the petition. in pursuance of the said abolition, services of the petitioner have been terminated vide order dated 26.12.2008. in this petition, the petitioner has challenged his termination.2. learned counsel for the petitioner submits that in this case, the aforesaid post has not been abolished in good faith, rather it has been abolished with mala fide intention to terminate the services of the petitioner. therefore, he submits that the said abolition and the consequent termination of the services of the petitioner is not legal. in support of his contention, he has placed reliance upon a division bench decision of this court in state of haryana and ors. v. navneet verma 2004 (3) r.s.j. 170 and another decision of this court in navneet verma v. state of haryana .3. after hearing counsel for the petitioner and going through the contents of the petition, i do not find any force in the contention of counsel for the petitioner. it is the prerogative of an employer to create or abolish the post, but the abolition of a post should be made in good faith and not in a mala fide or arbitrary manner. in this case, the respondent society is in financial crisis. in view of this fact, they have decided to abolish the post. the respondent society is a charitable institution. in the facts and circumstances of the case. i do not find any ground, on which the instant abolition of the post can be said to be mala fide or not in good faith. mere allegation in the petition is not enough, until and unless it is substantiated by some material. i do not find any such material in this case. in view of this conclusion, the judgments cited by learned counsel for the petitioner do not help the petitioner.4. in view of the above, i am of the opinion that abolition of the post was made in good faith and no interference is required in the order of termination of the services of the petitioner.dismissed.