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PETITIONER: STATE OF ASSAM

       Vs.

RESPONDENT: TULSI SINGH

DATE OF JUDGMENT: 01/03/1962

BENCH:

ACT: Ferry--Settlement  of  by  auction--Rules--Duty  of  officer conducting sale--Special List maintained by Assam Government of  persons  suspected  or confirmed to  be  connected  with smuggling activities--Nature of document--If could be relied on  for  settling civil rights--High Court if  could  decide matter  entrusted to executive authorities--Indian  Evidence Act,  1872  (1 of 1872). s.35--Northern India  Ferries  Act, 1878 (17 of 1878), ss. 4,8,12, r. 19.

HEADNOTE: Under  s.  4 of the Northern India Ferries  Act,  1878,  the ferry  at  N  was declared to be a public  ferry.   Rule  19 framed under s. 12 of the Act provided that a sale of  ferry was generally to be auctioned to the highest bidder, and the acceptance  of a bid by the officer conducting the sale  was subject to the approval of the Chief Engineer who had to see whether  that officer had taken into consideration  all  the factors  mentioned  in  r. 19.  Ferry at N  was  put  up  to auction and sold to the second respondent whose bid was  the lowest,  Though the first respondent’s bid was the  highest, the officer conducting the sale, without forming an  opinion about  the  suitability of the first respondent on  his  own appreciation of materials as required under r. 19,  rejected first respondent’s bid straight away as his name appeared in the  "Special List".  This "Special List" was  prepared  and maintained  by the Government of Assam of persons  suspected or  confirmed to be connected with ’smuggling activities  so that no permit or license may be granted to such person  is. This  was  in  pursuance of the prohibition  policy  of  the Government.   The  first  respondent applied  to  the  Chief Engineer for accepting his bid and settling the ferry on him which  was  rejected, whereupon he moved the High  Court  of Assam  under  Art.  226.   The  High  Court  set  aside  the settlement  of the ferry in favour of the second  respondent as being violative of s. 8 of the Act and r. 19 and  further declared  that  the  first respondent was  entitled  to  the settlement as the highest bidder.  And Government came up in appeal by special leave to the Supreme Court,  509 ’The question is whether a bid of a person at the auction of ferry can straightaway be rejected by the officer conducting the sale merely for the reason that his name appears in  the special  list  and  whether the High Court  could  decide  a question  was entrusted to the executive  authorities  under the Act and make settlement of the ferry. Held, that the discretion conferred on the officer  conduct- ing  the  sale under s. 8 of the Northern Ferries  Act  read with   r.  19  framed  under  the  Act  is  wide   but   not

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unrestricted.  The discretion must be based on the  material before  him and relevant for his consideration and if, on  a consideration   thereof,   he  declines  to   exercise   his discretion to accept the bid, his decision is not liable  to be  reversed by the courts.  But where there is no  material before  him  on basis of which he rejects a bid  his  action amounts  to non-compliance with the provisions of r. 19  and cannot be upheld. Held,  further,  that the "Special List" maintained  by  the Government of Assam of persons suspected or confirmed to  be connected  with  smuggling  activities  is  not  a  document falling  within s. 35 of the Indian Evidence Act  and  while such  list  might  serve  a  purpose  in  guiding   Criminal Intelligence Department, it will be unsafe to rely on it for deciding civil rights of a person. Held, also, that even though the order of authorities is not in accordance with law, it was for the appropriate  authori- ties  to deal with the matter and the High Court could  not’ itself   decide   what  is  entrusted   to   the   executive authorities. Verappa  Pillai  v. Raman & Raman Ltd., [1952]  S.C.R.  583, followed.

JUDGMENT: CIVIL APPELLATE JURISDICTION : Civil Appeal No. 14 of 1962. Appeal  by special leave from the judgment and decree  dated July 11, 1961, of the Assam High Court in Civil Rule No.  64 of 1961. Naunit Lal, for the appellants. The respondent did not appear. 510 1962.  March 1. The Judgment of the Court was delivered by VENKATARAMA AIYAR, J.-The short question that arises for our decision  in  this appeal is whether the settlement  by  the Executive  Engineer, Golaghat in the State of Assam. of  the ferry at Neperpatty on the second "respondent, Phuka Chandra Gohain,  on  January  23, 1961 was in  accordance  with  the provisions   of  the  Northern  India  Ferries  Act,   1878. hereinafter  referred to as "the Act", and the rules  framed thereunder. The relevant provisions of the Act bearing on this  question might now be referred to.  Under s.4., the State  Government may, from time to time, declare what ferries shall be deemed public ferries.  Section 8 of the Act is as follows               "8.  The tolls of any public ferry  may,  from               time  to time, be let by public auction for  a               term   not  exceeding  five  years  with   the               approval  of  the Commissioner, or  by  public               auction, or otherwise than by public  auction,               for any term with the previous sanction of the               State Government.               The  lessee  shall conform to the  rules  made               under this Act for the management and  control               of  the ferry, and may be called upon  by  the               officer in whom the immediate  superintendence               of the ferry is vested, or, if the public body               under  section 7 or section 7A, then  by  that               body,  to  give  such security  for  his  good               conduct  and for the punctual payment  of  the               rent  as the officer or body, as the the  case               may be, thinks fit.               When  the tolls are put up to public  auction,               the said officer or body, as the case may  be,

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             or  the officer conducting the sale on his  or               its behalf, may. for reasons recorded in                511               writing,  refuse  to accept the offer  of  his               highest bidder, and may accept any other  bid,                             or may withdraw the tolls from auction."               Rule  19  framed under s.12 of the Act  is  as               follows:--               "The sale shall generally be by auction to the               highest  bidder.  The Officer  conducting  the               sale for sufficient reason recorded in writing               under his hand may refuse to accept the  offer               of the highest bidder or any bid.  The Officer               shall  in  accepting  the  bid  consider   the               following factors among others:-               (i)   Whether  the  bidder  is  a  native   or               domicile or an outsider.               (ii)  Whether the bidder has experience of the               ferry business.               (iii) Whether  he has landed property  in  his               own  name  within the district or  State,  can               speak  the regional language,  is  financially               sound and of good conduct, etc." The  ferry  at Neparpatty has been declared to be  a  public ferry under s.4 of Act.  On January 23, 1961, the  Executive Engineer,  Colaghat, put up the lease of the ferry  for  the year  1961-62 for public auction under s.8 of the  Act.   At the  auction, Tulsi Singh, the first respondent, gave a  bid for  Rs.  4,200/-, one Indra Deo Singh for Rs.  4,050/-  and Phukan  Chandra  Gobain,  the  second  respondent  for   Rs. 3,000/-.   The  Executive Engineer then made  the  following Order :-               "Sold  to  Shri Phukan Chandra Gohain  at  Rs.               3,000/-  (Rupees Three thousand’ only  as  the               two  other  highest bidders  fall  in  special               List." Under Rule 19(a), the acceptance of the bid by the 512 conducting  Officer is subject to the approval of the  Chief Engineer, and Rule 19(b) provides that he must, in doing so, ",consider  among others whether the Officer conducting  the sale  has taken into account and considered all the  factors mentioned in Rule 19 above." The Chief Engineer approved  of the  decision  of the executive Engineer dated  January  23, 1961, and the sale to the second respondent was con  firmed. Thereupon, on February 6,1961, the first respondent  applied to the Chief Engineer for accepting his bid and settling the ferry  on him.  By his Order dated April 7, 1961, the  Chief Engineer rejected this petition.  On May 9, 1961, the  first respondent filed in the High, Court of Assam a writ Petition under Art. 226 attacking the Order of the Executive Engineer dated January 23, 1961, settling the lease in favour of  the second respondent as contrary to the Act and the Rules,  and praying that it might be settled on him.  The learned Judges accepted  this  contention and set aside the  settlement  in favour of the second respondent as violative of s.8 and Rule 19,  and  further  declared that the  first  respondent  was entitled  to  the settlement under Rule 19  as  the  highest bidder.   It  is against this Judgment that this  appeal  by special leave is directed. The power of the Executive Engineer to settle public ferries is  derived  from  s.8  of the  Act  and  the  Rules  framed thereunder,  and  it  has  therefore  to  be  exercised   in accordance  therewith.   Under  Rule  19,  the  sale  should generally be by auction to the highest bidder and under this

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provision  the ferry should normally have been settled  with the first respondent, who gave the highest bid.  Section  8, provides  that  the  Officer conducting the  sale  may,  for reasons  recorded in writing, refuse to accept the offer  of the highest bidder and accept any other bid.  The discretion thus conferred on the Officer, is wide but not indefinite or unrestricted.   Rule 19 provides that in accepting the  bid, he has to take into  513 account  certain  factors; and under Rule 19(b),  the  Chief Engineer has to satisfy himself that these factors have been taken  into consideration by the conducting Officer when  he accepted  the bid.  It is contended for the appellant  that, if there are materials before a conducting officer on  which he  could  refuse  to accept the highest bid  and  he  on  a consideration,  thereof  declines, in the  exercise  of  his discretion,  to accept it, his decision is not one which  is liable to be reviewed by the Court.  That is undoubtedly  so but when there are no materials before him on which he could act  under Rule 19, then that is a case not of  exercise  of discretion but of want of authority to settle under the Act. Now  the  only ground given in the Order dated  January  23, 1961,  for rejecting the bid of the first  respondent  which was the highest, is that his name is in the "special  list". It appears from the affidavit of the Chief Engineer that  in pursuance of the policy of prohibition followed in the State of Assam, the Government or Officers of the Government  have prepared  ,-lists  of persons suspected or confirmed  to  be connected  with smuggling activities", and that it was  "the policy  of  the Government not to grant taxi  permit,  stage carrier  permit, fisheries, ferries etc. to persons who  are listed to be suspected or confirmed opium smugglers".  It is this list that if; referred to as the ,’special list" in the order  of  the  Executive Engineer.  It is  argued  for  the appellant  that if a person is a smuggler, then he is not  a person  of good conduct, and the rejection of his bid  would be   justified  under  Rule  19(iii).   The  contention   is perfectly  sound,  and the authorities would  be  exercising their discretion properly in refusing to accept the bid of a smuggler, because, to put such a person in charge of ferries must help to evade the prohibition laws, and that would be a relevant  factor under Rule 19(iii).  But the difficulty  of the  appellant is that there are no materials on  which  the first respondent’ could be held to 514 be a smuggler.  It appears that he was prosecuted under s. 4 of the Assam Ganja and Bhang Prohibition Act but that  ended ’in  his discharge.  It is argued that though the  materials available   might  have  been  insufficient  to  sustain   a conviction  under the Act, they might be sufficient for  the authorities to take action under Rule 19.  That is  possible but  that is not the position in this case.   The  Executive Engineer did not form any opinion about the first respondent on his own appreciation of the materials.  He found his name in  the ",special list" and straightaway rejected  his  bid. Now  the  question  is whether on  this  material  an  Order rejecting  the highest bid could be made under Rule 19.   It is  not and cannot be argued that the "-special list"  is  a document  falling within s. 35 of the Evidence Act.  It.  is said  to be a confidential document.  It does not appear  on what  information  it is prepared or from what  sources  the information  is received.  Nor is anything disclosed  as  to the   procedure  adopted  by  the  Government  Officers   in preparing the list.  While such lists might  serve a purpose in  guiding  Criminal Intelligence Department,  it  will  be

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unsafe  to rely solely on them for deciding civil rights  of persons.   If  the "special list" is thus ruled out  as  not material on which an opinion could be formed, then there was nothing  else  on which the conducting  Officer  could  have rejected the offer of the highest bidder under Rule 19.   We are accordingly of opinion that the decision of the  learned Judges of the High Court that the rejection of the offer  of the highest bidder is not in accordance with s. 8 or Rule 19 is correct. The result of this conclusion is that the authorities  under the  Act  would have to be directed to consider  the  matter afresh  and give a decision in accordance with law, but  the learned  Judge,  have proceeded further  and  observed  that under Rule 19, the offer of the first respondent, being the 515 highest,  should be accepted.  The appellant  contends  that even  on the view that the Order of the  Executive  Engineer dated  January 23, 1961, is not in accordance with  law,  it was for the appropriate authorities to deal with the  matter and  make  a fresh settlement and that the Court  could  not itself decide what is entrusted to the executive authorities under  the  Act.   This, in our  opinion,  is  correct.   In Verappa Pillai v. Raman & Raman Ltd. (1) the question  srose with,  reference  to the grant of permits  under  the  Motor Vehicles Act.  The authorities constituted under the Act had made  an Order granting permits to one Verappa  Pillai,  and its validity was disputed by a rival applicant M/s Raman and Raman  Ltd.,  in an application under Art.  226..  The  High Court  of Madras had’ hold that the title of  the  applicant would  prevail over that of Verappa Pillai  and  accordingly set  aside the order of the authorities and direct grant  of the permits to the applicants.  On appeal to this Court,  it was held that such a direction was clearly in excess of  the powers  and  jurisdiction  of  the  High  Court.   We   must accordingly hold that the order of the High Court, in so far as it declared the rights of the highest bidder, is  errone- ous.  But, in view of the fact, that the lease was only  for the period 1961-62 and that would shortly be expiring, there is no need to direct a fresh consideration of the matter  by the authorities.  In the result, the appeal is dismissed. Appeal dismissed. (1) [1921] S.C.R. 583, 516