Ram Lal Etc. Vs. Udmi Ram Etc. - 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 - he contended that in the present case, the petitioners have failed to show that the courts below had exercised its jurisdiction illegally or with material irregularity.sat pal, j.1. in this case, the petitioners-plaintiffs filed a suit for declaration to the effect that land marked lmj, shown in the map measuring 70 square yards was a part of a thoroughfare and the said land sold by defendant no. 3 (municipal council, narnaul) in favour of defendant no. 1 (udmi ram aggarwal) vide sale deed dated 14.7.1990, was without jurisdiction, null and void and against public policy and public interest. along with the plaint, the plaintiffs filed an application under order 39 rules 1 and 2 and section 151 of the code of civil procedure for interim injunction. the said application was dismissed by the learned civil judge, junior division, narnaul, vide order dated 23.5.1997. against the said order dated 23.5.1997, the petitioners-plaintiff filed an appeal which was dismissed by the learned additional district judge, narnaul, vide order dated 12.11.1997. aggrieved by the aforesaid order the present petition has been filed by the plaintiffs.2. notice of motion was issued to the respondents on 26.11.1997 and meanwhile the parties were directed to maintain status quo. on 23.1.1998, an affidavit dated 13.12.1997 of smt. sharda aggarwal, wife of om parkash aggarwal on behalf of respondent no. 2 was filed in the court and the same was taken on record. in this affidavit, it has been stated that construction over the suit property was almost complete. the roof slab had already been laid and it was only flooring, plastering and tile terracing of the roof which remains to be done.3. mr. balhara, learned counsel for the petitioners submitted that the land in dispute was a thoroughfare and pathway and respondent no. 2 had encroached upon the said thoroughfare and pathway. he stated that the said land had been sold by the defendant-municipal council vide sale deed dated 14.7.1990 to respondent no. 2 but the municipal council had no authority to sell the said land. he further submitted that the question with regard to title of the suit land can be decided only during the course of trial of the suit and since the title of the suit land at present was disputed, the respondents-defendants nos.1 and 2 should be restrained from making any construction on the suit land. in support of his submission, the learned counsel placed reliance on a judgment of the supreme court in gangubai babiya chaudhary and ors. v. sitaram bhalchandra sukhtantar and ors., a.i.r. 1983 s.c. 742. he further submitted that in the year 1964, the site plan showed that the land in dispute was a rasta. he, therefore, contended that the admission of the defendants was a substantial evidence. in support of this submission, he placed reliance on the judgment of the supreme court in third john v. subramanyan v. the returning officer and ors., a.i.r. 1977 s.c. 172.4. learned counsel further submitted that the municipal council in connivance with defendants nos.1 and 2 had passed resolution no. 70, by which the site plan submitted by the private defendants for construction of shops on the suit land was approved but the said resolution was suspended by the deputy commissioner, mohindergarh, vide order dated 9.11.1995 under section 246 of the haryana municipal act, 1973, (hereinafter referred to as the act). he further submitted that even the order dated 9.11.1995 passed by the deputy commissioner, mohindergarh, had been approved by the commissioner, in terms of section 249 of the act. he, therefore, contended that the courts below were not correct in dismissing the application filed by the petitioners-plaintiffs for interim injunction.5. mr. sarin, learned senior counsel, appearing on behalf of the private respondents, submitted that the land in dispute belonged to the municipal council and vide sale deed dated 14.7.1990, the suit land was sold by the municipal counsel to the private respondents. he further submitted that the municipal council vide resolution dated 25.8.1995 approved by the site plan submitted by the private respondents for construction of shops, on the demised land and the order of the deputy commissioner suspending the resolution was passed on 9.11.1995. the learned counsel submitted that under section 205(5) of the act, the plans submitted by the private party even if are not approved by the municipal council, within sixty days from the date of submission, they are deemed to have been approved, and the approval granted cannot be withdrawn. in support of this submission, the learned counsel placed reliance on a judgment of this court in improvement trust, bathinda v. satinder kaur, 1991 p.l.j. 627 and a judgment of delhi high court in friends housing society and ors. v. delhi administration and ors., a.i.r. 1973 delhi 275.6. the learned counsel further submitted that the courts below have come to the conclusion that the petitioner-plaintiff was not entitled to grant of an interim injunction and in exercise of jurisdiction under section 115 of the code of civil procedure, the high court should not interfere even if the orders passed by the courts below are not right or are not in agreement with the statutory provisions unless the courts below have exercised its jurisdiction illegally or with material irregularity. he contended that in the present case, the petitioners have failed to show that the courts below had exercised its jurisdiction illegally or with material irregularity. in support of this submission, he placed reliance on a judgment of the supreme court in the managing director (mig), hindustan aeronatics ltd., bala nagar, hyderabad v. ajit parsad tarway, manager purchase and stores, hindustan aeronautics ltd., a.i.r. 1973 s.c. 76.7. lastly, the learned counsel drew may attention to the affidavit dated 13.12.1997 filed in the court on behalf of respondent no. 2 and submitted that the construction over the suit property was already complete except that the flooring, plastering and tile terracing of the roof was to be done. he also submitted that respondent no. 2 undertook to remove the construction over the suit land if the suit of the plaintiffs-petitioners was finally decreed against the defendants/respondents nos. 1 and 2.8. i have given my thoughtful consideration to the submissions made by the learned counsel for the parties and have perused the records. it is not disputed that the land in dispute has been sold by the municipal, council vide sale deed dated 14.7.1990 which was duly registered. the question whether the municipal council had authority to sell this land or not cannot be decided in the present proceedings arising from the application filed by the plaintiffs under order 39 rules 1 and 2 and section 151 of the code of civil procedure. it is also not disputed that the municipal council vide resolution dated 25.8.1995 had approved the site plan of the defendants nos. 1 and 2 and the order of the deputy commissioner dated 9.11.1995 suspending the resolution of the municipal council was passed after the expiry of sixty days. the question as to whether the resolution could be suspended after the expiry of sixty days by the deputy commissioner, again, cannot be decided in the present proceedings. further, in the affidavit dated 13.12.1997 filed on behalf of respondent no. 2, it has been stated that the construction over the suit property was complete except that flooring, plastering and tile terracing of the roof remained to be done. in view of these facts, i am of the opinion that it would be in the interest of justice that respondents nos. 1 and 2 are permitted to complete the work of flooring, plastering and tile terracing of the roof during the pendency of the suit. but they should not be permitted to make any further construction except the completion of said work.9. in view of the above discussion, the petition is partly allowed and the order passed by the courts below are modified to the extent that respondents nos.1 and 2 shall not make any further construction on the suit land during the pendency of the suit. however, they are permitted to complete the work of flooring, plastering and tile terracing of the roof over the suit property. it is further directed that during the pendency of the suit, the respondents nos. 1 and 2 shall not alienate or part with the possession of the shops constructed over the suit property. keeping in view the facts and circumstances of the case, the learned trial court is also directed to expedite the trial for the suit preferably within a period of six months from the date of the receipt of the copy of this order. parties are however left to bear their own costs.