Ajmer Singh Vs. State of Haryana 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 - i am therefore, of the opinion that the petitioner cannot be held liable to make good the loss incurred by the society.t.h.b. chalapathi, j.1. this petition is filed to issue a writ to quash the order of the joint secretary (co-operation), haryana, chandigarh, dated 29.5.1981 (annexure p.3),2. the petitioner was working as a salesman with the dadupur head co-operative credit service society ltd. dadupur. tehsil jagadhir, district ambala during the year 1973. the said society was supplied fertilizers of the value of rs. 8640.60 paise by the jagadhri co-operative marketing and processing society ltd. jagadhir, ambala district. the said fertilizer was stored in a godown situated near a rivulet. during the month of july, 1973, there were heavy rains in the locality and the fertilizers were washed away due to the flood in the som river, thereby there was a loss of fertilizer stored in the godowns of the society. as the cost of the fertilizer supplied by the jagadhri co-operative marketing and processing society ltd. remained unpaid, the jagadhir co-operative marketing and processing society ltd. raised a dispute under section 55 of the punjab co-operative societies act (applicable to haryana) for recovery of the said amount agaiast the said society and the salesman. the said dispute was referred to the inspector co-operative societies, chhachhroli as arbitrator. by his order dated 26.12.79, the arbitrator hold that the salesman cannot be held responsible because he has not asked for the fertilizer to be supplied and that the actual loss of the fertilizer amounting to rs. 9640.60 paise have to be borne equally by both the societies as the loss was suffered due to the heavy rains for which the salesman cannot be held responsible. the said order was also confirmed by the assistant registrar, co-operative societies by his order dated 23.7.1979. on further revision, the joint secretary (co-operation) allowed the revision of the jagadhri co-operative marketing and processing society ltd. and directed that the disputed amount be recovered from the dadupur head co-operative credit service society ltd. and the sales man (the petitioner herein) jointly and individually, aggrieved by this order making him liable to pay the amount representing the loss of the fertilizer, the petitioner filed the present writ petition to quash the order of the joint secretary (co-operation) haryana. there is no dispute that some fertilizer worth rs. 8640.60 paise was supplied by the jagadhri co-operative marketing and processing society ltd. to dadupur head-co-operative credit service society ltd. the petitioner was a salesman of the said society. the fertilizers supplied to the dadupur head cooperative credit service society were stocked in its godowns. there is no dispute that during july, 1973, there were heavy rains and there were floods in the rivulet near the godown of the dadupur society, thereby causing loss to the fertilizer. under these circumstances, the salesman in no way is responsible for the storing of the fertilizer supplied to dadupur head co-operative society ltd. by the jagadhri co-operative marketing and processing society ltd. the fertilizers were stocked in the godown belonging to the dadupur head co-operative credit service society ltd. and due to heavy rains and flood in the rivulet which was near the godown the fertilizers were washed away in the floods. if there was loss, the same has to be born by the dadupur head co-operative credit service society ltd. but not by the salesman of the society in his individual capacity. an employee of the society will be held responsible if there is any negligence in the discharge of his duties or if he has mis-appropriated or if the society suffered any loss due to any negligence of the employee. it is not the case of any body that the petitioner conducted himself in a negligent manner thereby causing loss to the society. i am therefore, of the opinion that the petitioner cannot be held liable to make good the loss incurred by the society. because the damage of the fertilizer was due to floods, the order of the joint secretary (co-operation), haryana making the petitioner liable to pay the costs of the fertilizer to the dadupur head co-operative credit service society ltd. individually is liable to be set-aside. i accordingly allow the writ petition, quash the order of the joint secretary (co-operation) haryana (ann.p.3) in so far as it makes the petitioner liable to pay the loss individually. however, there will be no order as to costs.