Sher Singh and ors. Vs. Mehma 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 lawv.k. jhanji, j.1. petitioners filed suit for declaration. the suit was contested by the respondents. after framing of the issues, the case was fixed for 9th february, 1982 for the evidence of the parties. on 9th february, 1982, evidence was not present and, therefore, counsel for the parties sought adjournment. case was adjourned to 30th march, 1982 for the evidence of the plaintiff subject to payment of costs of rs. 25/-. on 30th march, 1982 one pw was recorded. however, zimni order does not show that the costs awarded on 9th february, 1982 were paid or not. in the zimni order, there is no indication also whether defendants or their counsel pressed for payment of costs or not. the case was consequently adjourned to 14th june 1982 for the remaining evidence. on 14th june 1982 remaining evidence was not present. case was adjourned to 30th august, 1982, on payment of costs of rs 30/-. on 30th august, 1982 costs awarded on 14th june, 1982, were paid. however, on that very date that is on 30th august, 1982, defendants filed an application praying therein that the suit be dismissed under section 35b as the plaintiff did not pay costs awarded on 9th february, 1982. application on contest, was allowed and the suit was consequently dismissed under section 35b by the trial court. this order is being impugned here in this civil revision.2. after hearing the learned counsel for the parties, i am of the view that this revision deserves to succeed.3. in the present case, as already noticed, on 30th march, 1982 the issue as to payment of costs awarded on 9th february, 1982 was not raised by either of the parties nor taken notice of by the court, in my view, thereafter an any subsequent date the same could not be raised or that section 35b will continue to apply with all its rigorous. the statutory object in making express provision that lies in section 35b is to secure the prosecution of the matter and not to punish the party against whom costs were awarded. it is not to enable the party to make a gain or profit out of the litigation by having costs. the defendants having waived their right by not raising the question of payment of costs on the next date of hearing, cannot be allowed to agitate or make grievance for the same on any subsequent date.4. consequently, the impugned order cannot be sustained and the same is hereby set aside. the civil revision is allowed. no costs.5. the trial court is directed to decide the suit on merits in accordance with law.6. parties through their counsel are directed to appear before the trial court on 30th september, 1992.