Puri Oil Mills Limited Vs. Haryana State Agricultural Marketing Board 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 - it has been averred that the petitioner is liable to pay the market fee as well as the amount of hrdf. basic principle of justice is that nobody can be condemned unheard.ashok bhan, j.1. petitioner, who is engaged in the extraction of oil from oil-seeds, having its unit at bahadurgarh in district rohtak, has challenged the notice, annexure p-1, calling upon it to deposit rs. 50,315/- as market fee and rs. 25,157.50 as the haryana rural development fund (hereinafter referred to as 'the hrdf'), within a period of 7 days from the receipt of the said notice, inter alia, on the ground that the same has been issued in violation of rule 31(4) of the punjab agricultural produce markets (general) rules, 1962 (hereinafter referred to as 'the rules'), as applicable in the state of haryana. it has also been challenged on the ground of being violative of the principles of natural justice as no opportunity of hearing had been afforded to the petitioner before raising the demand or framing the assessment. challenge has also been made on the ground that no market fee and the hrdf was leviable at all. on receipt of the notice, annexure p-1, petitioner sent its reply, annexure p-2, denying its liability to pay the amount of market fee and the hrdf. it was prayed that the demand of market fee and the amount of the hrdf be withdrawn. 2. in the written statement filed, respondents have taken a preliminary objection that the writ petition be not entertained as an alternate remedy by way of appeal is available to the petitioner against the impugned notice, annexure p-1. on merits, the pleas raised have been controverted. it has been averred that the petitioner is liable to pay the market fee as well as the amount of hrdf. it has also been stated that the provisions of the act and the rules have already been upheld by this court. with the written statement filed, respondents have also attached an order, annexure r-1, dated 15.6.1996, which has been written in response to the letter, annexure p-2, written by the petitioner, stating therein :-'with reference to the above, you are hereby informed that your both the replies towards the show cause notice are totally baseless and without any force. the list enclosed with letter no. 191 dated 19.4.96 issued by this office, you have submitted ix forms with regard to any agricultural produce in this case and any agricultural produce whose market fee has not been paid. even if it may be purchased from any other state, there is no exemption from the payment of market fee. it is your responsibility to pay the market fee in accordance with law with regard to such agricultural produce in the office of the committee.with reference to your letter and according to the record of the committee, it is proved that you had been giving wrong information with regard to the purchase of agricultural produce to this office. you are, therefore, served with this notice to show cause within a period of seven days from the receipt of this notice as to why necessary action may not be taken against you under rule 31(4), 31(5), 31(8) and 31(9) of punjab agricultural produce markets (general) rules, 1962.you will be responsible for all the expenses. kindly note that if no reply is submitted within time, then it will be presumed that you have nothing to say in this regard and you will be responsible.'3. admittedly, no assessment has been framed and without framing the assessment no demand could be raised, against the petitioner. allegation against the petitioner was that it had purchased large quantity of sarson and toria from other states and that it had neither deposited the market fee and the hrdf, nor the ll forms in the office of the market committee, bahadurgarh. straightaway, it was asked to deposit the market fee and the hrdf within 7 days from the receipt of the notice, annexure p-1. with the notice, respondents had also attached the details of the transactions on which market fee and the hrdf had not been paid. petitioner was at least entitled to a notice calling upon it to explain the purchases made by it of sarson and toria from other states on which it had allegedly not paid the market fee and the hrdf. basic principle of justice is that nobody can be condemned unheard. in this case, petitioner has been fastened with the liability of more than rs. 75,000/- in an arbitrary manner without affording adequate opportunity to defend itself.4. for the reasons stated above, notice,, annexure p-1, being violativs of the principles of natural justice, is quashed. petitioner shall be at liberty to file its reply to the show cause notice, annexure r-1, within three weeks from today, which shall be dealt with by the market committee, bahadurgarh, respondent no. 2, in accordance with law, after affording adequate opportunity of hearing to the petitioner. respondent no. 2 shall also be at liberty to frame the assessment in accordance with law, after affording due opportunity to the petitioner.5. the writ petition stands allowed with no order as to costs.