State of Haryana and anr. Vs. Budh Dev Yadav - 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 - the executing court has clearly recorded a finding that in the judgment and decree, there was no direction to pay interest on the principal amount. if it does so, it well be wholly illegal. in view of this decision, the impugned judgment of the executing court is clearly illegal.orders.d. agarwala, c.j.1. i have heard the learned dy. district attorney on behalf of the revisionist, state of haryana.2. an execution application had been filed by budh dev yadav, respondent, for the grant of interest on the amount decreed. the executing court has clearly recorded a finding that in the judgment and decree, there was no direction to pay interest on the principal amount. the judgment is completely silent and actually no interest was granted to the plaintiff on the principal amount. the question that arises for consideration is whether in the absence of a decree for interest in the main judgment which is sought to be executed, can the executing court grant interest?3. in state of punjab v. krishan dayal sharma, a.i.r. 1390 s.c. 2177. the hon'ble supreme court has taken the view that when the interest is not claimed in the suit and in case no direction is issued by the court in that regard, the executing court cannot grant interest. if it does so, it well be wholly illegal. the right of the decree-holder to obtain relief is determined in accordance with the terms of the decree. the executing court is bound by the terms of the decree. it cannot add or alter the decree on its notion of fairness or justice. in view of this decision, the impugned judgment of the executing court is clearly illegal.4. in regard to the second issue, the decree-holder did not press the same. in the circumstances, the revision is allowed, order dated 4-1-1991 passed by the senior sub-judge, gurgaon, is set aside and the execution petition is dismissed. the parties are directed to bear their own costs.

Judgment:
ORDER

S.D. Agarwala, C.J.

1. I have heard the learned Dy. District Attorney on behalf of the revisionist, State of Haryana.

2. An execution application had been filed by Budh Dev Yadav, respondent, for the grant of interest on the amount decreed. The executing court has clearly recorded a finding that in the judgment and decree, there was no direction to pay interest on the principal amount. The judgment is completely silent and actually no interest was granted to the plaintiff on the principal amount. The question that arises for consideration is whether in the absence of a decree for interest in the main judgment which is sought to be executed, can the executing court grant interest?

3. In State of Punjab v. Krishan Dayal Sharma, A.I.R. 1390 S.C. 2177. the Hon'ble Supreme Court has taken the view that when the interest is not claimed in the suit and in case no direction is issued by the Court in that regard, the executing court cannot grant interest. If it does so, it well be wholly illegal. The right of the decree-holder to obtain relief is determined in accordance with the terms of the decree. The executing court is bound by the terms of the decree. It cannot add or alter the decree on its notion of fairness or justice. In view of this decision, the impugned judgment of the executing court is clearly illegal.

4. In regard to the second issue, the decree-holder did not press the same. In the circumstances, the revision is allowed, order dated 4-1-1991 passed by the Senior Sub-Judge, Gurgaon, is set aside and the execution petition is dismissed. The parties are directed to bear their own costs.