04 November 1996
Supreme Court
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RAJ KUMAR KARANWAL Vs COMMR., MORADABAD DIVISION

Bench: K. RAMASWAMY,G.B. PATTANAIK
Case number: SLP(C) No.-021020-021020 / 1996
Diary number: 70902 / 1996


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PETITIONER: RAJ KUMAR KARANWAL

       Vs.

RESPONDENT: THE COMMISSIONER & ANR.

DATE OF JUDGMENT:       04/11/1996

BENCH: K. RAMASWAMY, G.B. PATTANAIK

ACT:

HEADNOTE:

JUDGMENT:                THE 4TH DAY OF NOVEMBER, 1996 Present :               Hon’ble Mr. Justice K.Ramaswamy               Hon’ble Mr. Justice G.B. Pattanaik      K.S. Chauhan and Anil Karnwal, Advs. for the Petitioner                          O R D E R      The following Order of the Court was delivered:                          O R D E R      The petitioner,  admittedly, had  made  a  bid  in  the auction for the year 1993-94, conducted on February 25, 1993 for a  sum of  Rs. 1,20,000/-  per annum. The said bid could not  be   worked  out  for  the  reason  that  the  previous contractor  had  approached  the  High  Court  and  had  the operation of  the contract  stayed which  period expired  by efflux of time. Consequently, for the years 1995-97, instead of conducting  fresh auction,  on an application made by the petitioner, the  Executive Engineer had recommended to grant lease  to   the  petitioner  for  the  same  amount  of  Rs. 1,20,000/- for  two years  as was done in the previous order which was  accepted by  the first respondent on September 2, 1995. On  subsequent instructions,  the first respondent had cancelled the  grant of  the lease  to the petitioner by his proceedings dated  October 28, 1995. When the petitioner had challenged the  legality thereof,  the High Court in W.P.No. 31606 of  1995 by  order dated  August 27, 1996 treating the grant of  contract to  the petitioner as an extension of the previous grant, held that the first respondent was devoid of power to extend the lease without obtaining prior permission of the State Government. Thus, this special leave petition.      It is  contended by  Mr. K.S.  Chauhan, learned counsel for the petitioner, that the first respondent having granted the lease  for the years 1995-97, had no power to cancel the same under  Rule 7  of the  U.P. Toll Tax Regulations Levy & Collection Rules,  1980 (for short, "the Rules") which gives absolute power  to the  Commissioner under  Rule 7  thereof. Therefore, without  any power  to review  his own order, the Commissioner is  devoid of power to cancel the same. We find no force in the contention.      Even assuming  that the view taken by the High Court is not sound  in law,  since it  is a fresh grant, the ultimate

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decision can be rested on the following circumstances. Rules 4,7,8 and 9 of the Rules reads as under :      "4. Procedure  for grant of lease.-      In accordance with the provision of      Section 2-C of the Act.      (i) The Governor or his nominee may      invite  auction   bids   from   the      persons desirous  of  taking  lease      for the  collection  of  the  tools      levied on  the bridge  specified in      the  notification   issued  by  the      Government.      (ii) The  Governor or  his  nominee      shall scrutinize  the auction  bids      and verify  the  status  any  other      particulars   submitted    by   the      applicants and  after examining the      documents or  papers  submitted  by      the applicants shall prepare a list      of the  suitable candidate  to whom      the lease contract may be granted.      (iii)     If   it   is   considered      necessary  the   Governor  or   his      nominee may  call any  bidders  for      negotiations.      (iv) The  Governor or  his  nominee      presently      the       Divisional      Commissioner,   will   select   any      person  out  of  the  list  of  the      bidders and  may order    that  the      said  person  contractor  shall  be      granted lease  on  respect  of  the      right  to   collect  tolls  on  the      specified road bridge.      (v) The  Governor, if  it considers      necessary, in  public interest  may      put to  public auction the lease of      the right  to collect  tolls on any      specified road  bridge. Such public      auction shall  be held after giving      prior    notice     in    important      newspapers   by    the   authorised      officer by  giving a minimum notice      of one month in the first instance.      If such occasion arises which makes      the  tenders/auction   to  be   re-      invited redone. a similar notice of      one month  for the  public  auction      may be issued.      (vi) The  Governor or  his  nominee      presently the Division Commissioner      shall have  the power  to accept or      reject  any   bid/tender  and   his      decision in  that respect  shall be      final.      (vii)  No   lease/contract  of  the      right to  collect the  tolls  under      the Act on any road bridge shall be      made for a period exceeding 5(five)      years at a time.      (viii) The  Governor or his nominee      shall require the lessee to furnish      security  equal   to  three  months      installment  of   auction  money  (      including earnest money).

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    (ix) The  lease/contract  shall  be      executed on the standard form.      (x)  The   cost  of  execution  and      registration of  the lease be borne      by the lessee.      7.  Vesting   to  powers  accepting      auction bids-  The powers accepting      auctions    and    entering    into      agreement on behalf of the Governor      of Uttar Pradesh shall be vested in      the Commissioner  of  the  Division      concerned or  any officer as may be      authorised by the Governor to do so      in this behalf.      8. Accepting of highest auction bid      if an  auction bid/negotiated offer      is not  the highest  one, the lower      auction  bid/negotiated  offer  can      only be  accepted after getting the      proper  approval   of   the   State      Government.      9. Extension  of  the  lease  -  No      Extension of  lease may  be granted      without the  prior sanction  of the      State Government".      Rule 4(i)  give power to the Governor or his nominee to invite auction  bids from  the persons  desirous  of  taking lease for  the collection  of the tolls levied on the bridge specified in the notification issued by the Government. Rule 4(ii) envisages  that the  Governor  or  his  nominee  shall scrutinize the  auction bids and verify the status and other particulars submitted  by the applicants and after examining the documents  or papers  submitted by the applicants, shall prepare a  list of  the suitable candidate to whom the lease contact may  be granted.  If it  is considered necessary the Governor or his nominee may call any bidder for negotiations under sub-rule  (iii). Under  sub-rule (iv)  power has  been given  to  select  nay  bidder  and  thereafter  the  person nominated has power to grant contract of lease in respect of the right  to collect  tolls on  the specified  road bridge. Sub-rule (v)  gives alternative  mode of  grant of  lease by public action  with which we are not concerned in this case. After the  grant of  the lease,  not exceeding five years as envisaged under  sub-rule (vii),  the lessee  shall  furnish security equal  to three months instalment of auction money. He shall  execute the  contract in  the standard  from under sub-rule  (ix).   After  execution  thereof,  the  power  of acceptance has been given to the Commissioner-Ist respondent under Rule  7  of  the  Rules.  If  the  auction  bid  after negotiation is  not the  highest one,  the lower auction bid can only be accepted after getting the approval of the State Government under Rule 8; extension of the lease is regulated under Rule 9.      Thus the  mode conducting auction is a complete code by itself regulating  the right  to collect  the tolls  on  the specified road  bridges by  public notification.  It is seen that the  first respondent was devoid of any power to accept any bid  for the  previous years  which expired by efflux of time except  in the  manner prescribed  under Rule 4 and the following  rules   thereafter.  The   action  of  the  first respondent,  therefore,  is  one  without  jurisdiction  and thereby it  is a  nullity. The  Government,  therefore,  was right in  directing the  first respondent  to have the order granting lease  by him  to the  petitioner, cancelled. We do not  find   any  illegality  in  the  action  taken  by  the

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respondent warranting interference.      The special Leave Petition is accordingly dismissed.