Municipal Corporation of Ludhiana Vs. Dinesh Kumar and anr. - 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 - as regards the amount of composition received, the municipal committee took the stand that this was in reference to the notice under section 195-a of the act and not as composition for under section 195 as well. 7. the lower appellate court too affirmed the findings of the trial court on facts as well as on law. once the municipal committee is found to have compounded by recovering suitable charges from the respondent in the proceeding commenced with the notice under section 395-a, it clearly tantamounts to the grant of permission to the owner to continue construction of the building and thus, the municipal committee can no more have any grouse in the matter i, thus, find no merit in the contention of the learned counsel for the appellant.n.k. kapoor, j.1. this judgment shall dispose of regular second appeal no. 1364 of 1979 and 1365 of 1979 as identical question of law has been raised in both the appeals. the facts have been taken from r. s. a. no. 1365 of 1979.2. this is defendant's appeal against the judgment and decree of the additional district judge, ludhiana, whereby the appeal filed against the judgment and decree of the trial court was dismissed.3. briefly stated, the plaintiffs filed suit for permanent injunction restraining the defendant municipal committee, from demolishing three shops and a passage as described in the heading of the plaint. the plaintiffs further stated that in pursuance of notices served upon them by the municipal committee requiring them to demolish the construction, they approached the municipal committee for composition and the municipal committee compounded the same and accepted a sum of rs. 180/- as composition fee on 29-3-1976. since the matter stands compromised, the notices were alleged to be illegal, mala fide and without jurisdiction.4. municipal committee put in appearance and alleged that the plaintiffs have raised construction without getting their plan sanctioned and so notice under section 195-a of the municipal act was issued to plaintiffs since the plaintiffs did not stop from raising any further construction, notice under section 195 of the act was also issued to the plaintiffs to demolish the construction. as regards the amount of composition received, the municipal committee took the stand that this was in reference to the notice under section 195-a of the act and not as composition for under section 195 as well.5. on the pleadings of the parties, the following issues were framed:(1) whether the plaintiffs are entitled to the injunction prayed for? opp.(2) relief.6. the trial court on the basis of evidence decided issue no. 1 in favour of the plaintiffs and so decreed the suit as prayed for.7. the lower appellate court too affirmed the findings of the trial court on facts as well as on law. the lower appellate court relied upon 'municipal committee, amritsar v. m/s. kishan chand hari ram, (1976) 78 p.l.r. 719, which, according to the lower appellate court squarely covered the matter in dispute.8. before me the learned counsel for the appellant has tried to distinguish the above-referred judgment contending that in the judgment cited, the plan had already been sanctioned but the construction raised was not in accordance with the sanctioned plan, whereas in the present case, the plaintiffs raised construction without getting their plan sanctioned in order to appreciate the contention raised, it would be appropriate to re produce the provisions of sections 195 and 195-a of the punjab municipal act, 1911, which are as follows:-'195. penalty for disobedience. -should a building be begun, erected or re-erected-(a) without sanction as required by section 189(1); or(b) without notice as required by section 189(2); or(c) when sanction has been refused;the committee may by notice delivered to the owner within six months from the completion of the building, require the building to be altered or demolished as it may deem necessary within the period specified in such notice; and should it be begun or erected:- (d) in contravention of the terms of any sanction granted; or(e) when the sanction has lapsed; or .......''195-a. power of committee to stop building operations.-(1) where a building is begun as described in section 195 but not completed, the committee may (by notice, to be delivered to the owner within six months from the commencement of the building, or from the contravention of the terms of any sanction, or any bye-law framed under section 190, as the case may be) require the building operations to be discontinued from the date of the service of such notice.(2) any person failing to comply with the terms of such notice shall be punishable with a fine which may extend to one thousand rupees and when the non compliance is a continuing one, with a further fine which may extend to fifty rupees for every day after the first during which the non-compliance continues.'9. section 195 contemplates three types of disobediences, i.e.,(a) where a building is erected, or re-erected without sanction as required by section 189(1);(b) without notice as required by section 189(2); or(c) when such sanction has been refused;and section 195-a of the act contemplates action by the committee stopping the person from commencement of the construction of the building or from the construction or the contravention of any terms of sanction or any law framed under section 190 as the case may be. section 195-a of the act further contemplates by serving a notice upon the person that he is directed to discontinue the building operation. so, on perusal of these sections, there is no distinction between the persons who raised construction without submitting any plan or raising construction when their plan though submitted has not been sanctioned, or from persons who raised construction but not in accordance with the sanctioned plan. both these sections, i.e. section 195 and 195-a of the act are co related and to some extent the powers vested in the committee under these provisions are overlapping. once the municipal committee is found to have compounded by recovering suitable charges from the respondent in the proceeding commenced with the notice under section 395-a, it clearly tantamounts to the grant of permission to the owner to continue construction of the building and thus, the municipal committee can no more have any grouse in the matter i, thus, find no merit in the contention of the learned counsel for the appellant. the appeal is, thus, wholly without any merit and is dismissed. no costs.