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PETITIONER: STATE OF ORISSA AND ORS.

       Vs.

RESPONDENT: HARINARAYAN JAISWAL AND ORS.

DATE OF JUDGMENT14/03/1972

BENCH: HEGDE, K.S. BENCH: HEGDE, K.S. REDDY, P. JAGANMOHAN

CITATION:  1972 AIR 1816            1972 SCR  (3) 784  1972 SCC  (2)  36  CITATOR INFO :  E&R        1974 SC 651  (11)  R          1975 SC 380  (21,35)  R          1975 SC1121  (51,53)  RF         1975 SC2008  (25)  R          1977 SC 722  (17,24,28)  RF         1978 SC1457  (64)  RF         1979 SC1628  (35,36)  F          1980 SC 614  (15)  D          1985 SC1147  (11)  R          1987 SC 251  (29)  RF         1988 SC 771  (5)  RF         1990 SC1927  (5)

ACT: Bihar and Orissa Excise Act, 1915 as amended upto October 6, 1970, Ss. 22 and 29--Scope of--Order made under s. 29 giving power  to  Government  to  accept  or  reject  bid   without assigning   any   reason--violative   of   Arts.   14    and 19(1)(g)--Power  of  Government  to sell  the  privilege  of selling country liquor by private negotiation--Scope of.--

HEADNOTE: The  first  respondent was carrying on business  of  selling country  liquor.  In exercise of the powers conferred by  s. 29(2)  of  the  Bihar  and  Orissa  Excise  Act,  1915,  the appellant  issued an Order and in pursuance of that Order  a date  was  notified  for  selling  by  public  auction   the exclusive privilege. of selling by retail, country liquor in 8 shops.  The respondent was the highest bidder but his  bid was  rejected  because the Government was of the  view  that inadequate prices had been offered as a result of  collusion between  the bidders.  Thereafter, tenders were  called  for and the appellant accepted the tender in respect of one shop and rejected the others as it was again of the opinion  that the price offered was inadequate.  Thereafter, the remaining 7 shops were’ sold by private negotiation for  substantially higher prices. A  writ petition filed by the respondent in the  High  Court was allowed mainly on the ground that the power centered  on the Government by cl. (vi) of the Order, that no sale  shall be  deemed  to be final unless confirmed by  the  State  who shall  be at liberty to accept or reject  without  assigning

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any reason, was an unguided power violative of Arts. 14  and 19(1) (g). Allowing the appeal to this Court, HELD  :  (1)  Section 22 of the Act  confers  power  on  the Government to grant to any person on such conditions and for such  period as it may think fit the exclusive privilege  of selling  in  retail country liquor; and s. 29  empowers  the Government  to accept payment in consideration of the  grant either  by calling tenders or by auction or otherwise as  it may  by general order direct.  The powers conferred  on  the State  Government  by  ss.  22 and  29  are  absolute.   The Government  cannot  be  said to  have  conferred  on  itself arbitrary power under cl. (vi) of its Order, passed under s. 29(2),  because, the power that the Government reserved  for itself  under  that  clause is nothing more  than  what  was conferred  on  it  by the Legislature  under  the  sections. Since  the validity of the sections was not  challenged  the validity of the Order could not also be challenged. [792  B- F] (2) Even otherwise, one of the important purposes of selling the exclusive right to sell liquor in wholesale or retail is to  raise  revenue; and excise ’revenue forms  an  important part of every State’s revenue.  The Government is a guardian of the finances of the State and is expected to protect  its financial  interests.  The fact that the prices  fetched  by the  sale  of  the privilege to sell country  liquor  is  an excise  revenue does not change the nature of the  right  in the Government.  Therefore, the 785 Legislature  has empowered the Government to see that  there is no leakage in the revenue.  It was for the Government  to decide  whether the price offered in an auction is  adequate and the conclusion reached by the Government does not affect anyone’s rights. [793 D-F; 794 F-G] (3) Public auctions are held to get the best possible  price and there is no completed contract till the bid is accepted. There is, therefore, no basis for, contending that the owner of  the  privileges  who had offered  to  sell  them  cannot decline  to  accept the highest bid if he  thinks  that  the price  offered  is inadequate, and, it makes  no  difference that the Government was the seller. [793 G-H; 794 A] (4) If the Government is exclusive owner of the  privileges, the  respondent  could not rely on Art.  14 and  19(1)(g), because, citizens cannot have any fundamental right to trade or  carry on business in the properties or rights  belonging to Government, nor can there be any infringement of Art.  14 if Government tries to get the best available price for  its valuable,  rights.  Further there is no inherent right in  a citizen  to sell intoxicating liquor by retail. [793 A;  794 A-B] Coverjee  B.  Bharucha v. The Excise  Commissioner  and  the Chief Commissioner, Ajmer and Ors., ’ [1954] S.C.R. 873  and Union of India and Ors. v. M/s.  Bhimsen Walait Ram,  [1970] 2 S.C.R. 594, followed. (5)  Assuming  that the question of  arbitrary  or  unguided power  can be raised it should be remembered that the  power to accept or reject the highest bid is given to the  highest authority  in  the State, namely, the Government,  which  is expected  to safeguard the finances of the State and  it  is not a case of delegated power but of power conferred by  the Legislature.  While accepting or rejecting a bid  Government is  performing an executive function and the correctness  of its  conclusion  is not open to Judicial  review  where  the power  is not used for any collateral purpose. [793 F-,  794 C-E]

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(6)  The  real conclusion. of the Government  was  that  the price  fixed  was inadequate and hence High Court  erred  in thinking that the Government was bound to satisfy the  Court that there was collusion between the bidders. [794 E-F] Barrium  Chemicals  Ltd. and Anr. v. Company Law  Board  and Ors. [1966] Supp.  S.C.R. 311 and Rohtas Industries Ltd.  v. S. T. Agarwal, [1969] 1 S.C.C. 325 referred to. (7) The Government was not precluded, having had recourse to the  auction method once, from either calling for tender  or selling  by negotiations.  Once the Government  declines  to accept  the  highest bid or the tender  price  offered,  the government was free to have recourse to other methods.   The pow(*  given to the Government to sell in such other  manner as  it thinks fit is a very wide and unrestricted power  and includes  within  it  the power to; sell  the  privilege  by private negotiation. [795 A-B] (8) The Government is not required by s. 29 (2) (a) to  make an  order  that  the  privilege  will  be  sold  by  private negotiation, since, it makes no sense to require  Government to  first make an order that it is going to negotiate.   The section only says that the State Government ’may by  general or  special order direct’ and the direction contemplated  is one to subordinate officials and not to itself. [795 D-F]

JUDGMENT: CIVIL  APPELLATE JURISDICTION: Civil Appeals Nos.  2024  and 2025 of 1972. 786 C. K. Daphtary, R. C. Misra, Advocate-General for the  State of Orissa, Santosh Chatterjee and G. S. Chatterjee, for  the appellants (in both the appeals). M.  C. Setalvad and Vinoo Bhagat, for respondent No.  1  (in C.A. No. 2024 of 1971). Vinoo  Bhagat,  for respondent No. 1 (in C.A.  No.  2025  of 1971). The Judgment of the, Court was delivered by Hegde,   J.  These  appeals  by  certificate  raise   common questions of law for decision.  The questions of law arising for  decision  can be more conveniently brought out  if  the material  facts are first set out.  It is sufficient, if  we refer to the facts in Civil Appeal No. 2024 of 1971. The  1st  respondent  in Civil Appeal No. 2024  of  1971  is carrying  on  the business of selling country  liquor.   ’In pursuance  of  the order made by the State  of  Orissa,  the Excise  Commissioner  notified on January 8, 1971  that  the exclusive privilege of selling by retail the country  liquor in the eight specified shops in the Cuttack District for the period from April 1, 1971 to March 31, 1972 will be sold  by public  auction  on February 15, 1971 and on  the  following days.  The auction was accordingly held on the notified day. The  1st respondent was the highest bidder for  those  eight shops.    His  bids  were  provisionally  accepted  by   the Collector  subject to confirmation by the  Government.   The Government  rejected  those  bids being  of  the  view  that inadequate  price had been offered as a result of  collusion between the bidders.  It ordered the Excise Commissioner  to call  for  tenders  in respect of those  shops.   After  the tenders  were  duly received, the  Government  accepted  the tender  in  respect  of one shop and  rejected  the  other tenders  as  it  was again of the  opinion  that  the  price offered was inadequate.  Thereafter it sold the seven  shops by  negotiating  with  some of  the  tenderers.   The  price ultimately fetched was substantially more than that  offered

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either at the auction or as per tenders. Thereafter  the  1st  respondent moved the,  High  Court  of Orissa under Art. 226 of the Constitution for a direction to the  Government to confirm his bids and cause the  necessary licences  to be issued to him.  Various pleas were taken  in support  of  the relief asked for.  Such of them  that  were pressed before us will be referred to later.  The Government resisted  that  application.   The High Court  came  to  the conclusion  that  the Government had no power to  refuse  to confirm  the  bids  of the highest bidders  except  on  good grounds  and  the ground that had commended  itself  to  the Government for refusing to confirm the bids were irrelevant. It 787 also  opined  that  the  absolute  power  conferred  on  the Government to confirm or refuse to confirm the highest  bids without  giving  any  reason  was  an  unguided  power   and consequent  by violative of Arts. 14 and 19 (1) (g)  of  the Constitution.   The  High Court was further of  the  opinion that  monetary considerations were irrelevant for  ’deciding the question whether the highest bid should be confirmed  or not.   Aggrieved by that decision, the State of  Orissa  has come up in appeal. Before  proceeding to pronounce on the contentions  advanced at  the  hearing, it is convenient to set out  the  relevant provisions  of  law  as well as the  orders  passed  by  the Government  under S. 29 of the Bihar and Orissa Excise  Act, 1915  (as amended upto October 6, 1970) (to  be  hereinafter referred to as the Act).  The preamble to the Act reads               "Whereas it is expedient to amend and  reenact               the  law in the Province of Bihar  and  Orissa               relating  to  the import,  export,  transport,               manufacture,  possession, and sale of  certain               kinds of liquor and intoxicating drugs;               And  whereas  the  previous  sanction  of  the               Governor-General  has  been  obtained,,  under               section 5 of the Indian Councils Act, 1892, to               the passing of this Act;               It is hereby enacted as follows Section  22 deals with the grant of exclusive  privilege  of manufacture  and  sale  of country  liquor  or  intoxicating drugs.   To  the  extent  it is  material  for  our  present purpose, it reads :               "The State Government may grant to any person,               on  such conditions and for such period as  it               may think fit, the exclusive privilege-               (a).............................               (b).............................               (c).............................               (d).............................               (e)  of manufacturing and supplying  wholesale               and  selling  retail, any  country  liquor  or               intoxicating  drug within any specified  local               area :               Provided that public notice shall be given  of               the  intention  to grant  any  such  exclusive               privilege, and that any objections made by any               person residing within the area affected shall               be considered before an exclusive 788               privilege is granted."               Sub-s. (2) says : "No grantee of any privilege               under  sub-s.  (1)  shall  exercise  the  same               unless  or until he has received a license  in               that  behalf from the Collector or the  Excise

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             Commissioner." Section  29  deals  with  payment  for  grant  of  exclusive privilege.  It reads :               "(1)  Instead of or in addition to,  any  duty               leviable under this Act, the State  Government               may accept payment of a sum in  consideration               of the grant. of any exclusive privilege under               section 22.               (2) The sum payable under sub-s. (1) shall  be               determined as follows :               (a)  by  calling  tenders  or  by  auction  or               otherwise  as  the State  Government  may,  by               general or special order direct;- and               (b)  by  such authority and  subject  to  such               control as may be specified in such order."               Excise revenue is defined in s. 2(9) :                "  "Excise-revenue" means revenue derived  or               derivable  from  any duty, fee,  tax,  payment               other than a fine imposed by a Criminal  Court               or confiscation imposed or ordered under  this               Act  or  any other law for the time  being  in               force relating to liquor or intoxicating drugs               and  includes  any payment to be made  to  the               State Government under s. 29." In exercise of the powers conferred by s. 29(2) of the  Act, the  State  Government issued an order on  January  6,  1971 directing  that any sum payable under the aforesaid  section for  grant of the exclusive privilege of  manufacturing  and selling by retail of country liquor shall, unless  otherwise directed by the State Government, in any particular case  or cases  for any reason, ’be determined by auction to be  held in accordance with the procedure specified below:               "(i)  the  dates and centers for  the  auction               shall  be  fixed and notified  by  the  Excise               Commissioner   with  the  prior  approval   of               Government and the Collector shall then  issue               notice for auction and give wide publicity  to               the  same  in  such manner  as’  he  considers               necessary,  15 days before the date fixed  for               commencement of the auction;               (ii)  the auction shall determine the amount               of  monthly  consideration  money  and   shall               ordinarily 789               be  conducted  by  the Collector  and  in  his               absence by the Additional District Magistrate;               Provided  that  the State  Government  in   by               depute  an officer from head-quarters  to  aid               and advise the officer conducting such sales;               (iii)  the officer conducting the auction  may               satisfy  himself  as to the  solvency  of  any               bidder and may not allow a person of  doubtful               solvency  or  a  person to  whom  grant  of  a               licence  for retail sale of any intoxicant  is               prohibited under Orissa Excise Rules, 1965  to               offer bids in the auction;               (iv) the officer conducting the auction  shall               be  at liberty to close the auction if  he  is               satisfied that, there has not been sufficient               or  fair  competition  in which  case  he  may               publicly  adjourn the auction, to a  specified               hour  on the following day or on’  some  other               convenient  day to be notified by him  in  the               auction hall;               (v)  the  highest  bid  in  an  auction  shall

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             ordinarily  be, accepted provisionally by  the               Collector subject to confirmation by the State               Government  and  in case  where  the  officer               conducting the auction, refuses to accept the               highest  bid as offered, he shall  record  the               reasons  for  such  non-acceptance  and  shall               report  forthwith  the  same  to  the   Excise               Commissioner for further action after  receipt               of advances from the highest bidder;               (vi)  when  any  bid  in  an  auction  for  an               exclusive    privilege   or   privileges    is               provisionally  accepted by the Collector,  the               bidder shall deposit two months’ consideration               money  as  an advance deposit  which  will  be               refunded in case the provisional acceptance is               not  confirmed  by the State  Government.   No               sale  shall  be  deemed  to  be  final  unless               confirmed by the State Government who shall be               at liberty to accept or reject any bid without assig ning any reason therefore;               (vii)  no licence for any exclusive  privilege               shall  be granted until acceptance of the  bid               is confirmed by the State Government;               (viii)  when  any bid in an  auction  for  any               exclusive privilege is provisionally  accepted               but  the advance deposit is  not  paid,  the               exclusive privilege shall  790               be put to reauction as soon as possible at the               risk and loss of the defaulter;               (ix)  all bids in an Auction shall be  offered               by  the  bidder  in person  or  by  his  agent               legally authorised for the purpose." As  mentioned earlier in pursuance of the above  order,  the Collector held an auction in respect of the shops  mentioned earlier.    The  highest  bidder  had  made  the   necessary deposits.  But. the Government did not accept his bids. On March 7, 1971, the Government issued the following order               "Whereas for determining the sums payable  for               the   grant   of   exclusive   privilege    of               manufacturing and selling by retail of country               liquor  auction had been held in the  district               of  Cuttack in accordance with  the  procedure               laid  down in the order of the  Government  of               Orissa  in  the Excise Department  No.  S.R.O.               12/71, dated the 6th January 1971;               Whereas  due  to  collusive  bids  among   the               bidders  at  the  said auction  it  is   not               possible  to  determine the said sums  in  the               aforesaid manner;               Now,  therefore,  in exercise  of  the  powers               conferred by sub-section (2) of Section 29  of               the  Bihar and Orissa Excise Act, 1915  (Bihar               and Orissa Act 2 of 1915) read with the  Order               No. S.R.O. 12/71, dated the 6th January, 1971,               the-  State Government do hereby  direct  that               the  procedure for determining the aforesaid               sum  in  respect  of the  grant  of  exclusive               privilege  of  manufacturing  and  selling  by               retail  of country liquor in the  local  areas               specified  in  the Schedules I  for  the  year               1971-72  shall be as laid down in Schedule  II               hereof-                          SCHEDULE I                 .    .     .    .    .   .  .

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                        SCHEDULE II               1.    The sum payable under sub-section (1) of               Section  29  of  the said  Act  for  grant  of               exclusive privilege  of  manufacturing   and               selling  by  retail of country liquor  in  the               aforesaid  local areas shall be determined  by               the Excise Commissioner by  calling  tenders               which may be  791 for  individual local area or for lots of such area as  the Excise Commissioner may consider proper;  2.  Tender  notice  shall  be issued  by  the  Excise  Com- missioner  and published in the Notice Board of  his  office the C uttack Collectorate and the offices of Sub  Divisional Officers in that district and shall also be widely published in   such  manner  as  the  Excise  Commissioner   considers necessary. 3.  The  tender notice shall, among other  things,,  mention that  it is open to the State Government not to  accept  any tender  or to order for calling fresh tenders  or  otherwise for such reason as they deem proper in the public interest; 4 to 8................................... 9.   The Excise Commissioner shall prepare a list of all the tenders   received   and   submit   the   list   with    his recommendations  of  any particular tender  with  sufficient reasons alongwith the tender papers to the State  Government for  approval.   The  tenderers  whose  tenders  have   been recommended   for  acceptance  shall  deposit  two   month’s consideration  money  as an advance deposit  which  will  be refunded   in  case  their  tenders  are  not  approved   by Government. 10......................................." As mentioned earlier, the Government accepted the tender  in respect of only one shop and sold the exclusive privilege to sell country liquor in other shops by negotiation. Before  us  the  writ  petitioners  did  not  challenge  the validity  of any of the provisions in the Act;  possibly  in their own interest.  They are not interested in raising  any contention  which  might  vitiate the  auctions  held.   The contentions urged on behalf of the writ petitioners have  to be  examined, in the background that the provisions  of  the Act are not contended to be invalid. One  of  the  contentions  taken  on  behalf  of  the   writ petitioners  was that the power retained by  the  Government "to accept or to reject any bid without assigning any reason therefore" in cl. (6) of the order made by the Government on January 6, 1971 in exercise of its powers under s. 29(2)  of the Act was an arbitrary power and therefore it is violative of  Arts.  14  and 1 9 ( 1 (g).  This  contention  has  been upheld  by  the High Court.  It was urged on behalf  of  the writ petitioners that they have a fundamental right to carry on trade or business in country liquor. That right can 792 be regulated only by imposing reasonable restrictions in the interest of the general public.  Restrictions imposed by the order  in  question  cannot  be  considered  as   reasonable restrictions in the interest of the general public.  It  was further  urged that the power retained by the Government  to accept  or to reject the highest bid without  assigning  any reason  is  an unguided power and hence it is  violative  of Art. 14.  These contentions were accepted by the High Court. To us, none of these contentions appear to be well  founded. As  seen  earlier  s. 22 of the Act  confers  power  on  the Government to grant to any person on such conditions and for such  period as it may think fit the exclusive privilege  of

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selling  in retail any country liquor.  Section 29  empowers the  Government to accept payment of a sum in  consideration for the grant of any exclusive privilege under s. 22  either by  calling tenders or by auction or otherwise as it may  by general  or special order direct.  The, powers conferred  on the State Government by s. 22 and s. 29 are absolute powers. As  seen earlier, the validity of those provisions  has  not been  challenged before us.  Under s. 29(2)  the  Government had  power  to dispose of any of  the  exclusive  privileges mentioned  in  s.  22 either by calling for  tenders  or  by auction  or otherwise as it may by general or special  order direct.   That  being  the amplitude of  the  power  of  the Government, we fail to see how the Government can be said to have conferred on itself arbitrary power under clause (6) of its order made on January 6, 1971, when it provided that :               "  No sale shall be deemed to be final  unless               confirmed by the State Government who shall be               at liberty to accept or reject any bid without               assigning any reason therefore."  The  power  that the government reserved for  itself  under that clause is nothing more than what was conferred on it by the legislature under s. 22 and s. 29 of the Act.  It is not possible to challenge the validity of the order made without challenging the validity of s. 29 itself. It is true that this Court has ruled that the right to trade in intoxicating drugs is also a right to carry on any  trade or  business  within  the meaning of Art. 19  (1)  (g) see Krishna Kumar Narula v. Jammu Kashmir State and ors(1).   At the  same  time, it was held by this Court in  Cooverjee  B. Bharucha   v.   The  Excise  Commissioner  and   the   Chief Commissioner,   Ajmer  and  ors.(2)  that  for   determining reasonable restrictions within the meaning of Art’ 19 (6) of the  Constitution  on the right given under cl. 19  (1)  (g) regard  must  be had to the nature of the business  and  the conditions prevailing in a particular trade; State has power to prohibit trades which are illegal or immoral or injurious to the health and (1) [1967] 3 S.C.R. 50. (2) [1954] S.C.R. 873. 793 welfare  of the public and there is no inherent right  in  a citizen  to  sell intoxicating liquors by retail.   In  that case  the  court  held that the  provisions  in  the  Excise Regulation 1 of 1915 purporting to regulate trade in  liquor in  all  its  different spheres are  not  invalid.   It  was further held in that case that the charge of licence fee  by public auction is more in the nature of a tax than a licence fee  though it is described as a licence fee.  One  of  the purposes of the Regulation is to raise revenue.  Revenue  is collected  by  the grant of contracts to carry on  trade  in liquor and these contracts are sold by auction.  The grantee is  given  a licence on payment of the auction  price.   The Regulation specially authorises this.  The decision in  Lala Harichand Sarda v. Mizo District Council and anr. (1) relied on  by the writ petitioner does not bear on the point  under consideration.  it  deals with power to grant or  refuse  to grant  licence  to trade in some  ordinary  commodity  under Lushai Hill Distt.  Regulation. Even apart from the power conferred on the Government  under ss. 22 and 29, we fail to see how the power retained by  the Government under cl. (6) of its order dated January 6,  1971 can  be  considered as unconstitutional.  As  held  by  this Court  in  Cooverjee  Bharucha’s case (supra),  one  of  the important  purpose  of selling the exclusive right  to  sell liquor  in wholesale or retail is to raise revenue.   Excise

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revenue  forms an important part of every  State’s  revenue. The Government is the guardian of the finances of the State. It  is  expected to protect the financial  interest  of  the State.  Hence quite naturally, the legislature has empowered the  Government  to  see that there is  no  leakage  in  its revenue.   It is for the.  Government to decide whether  the price  offered  in  an  auction  sale  is  adequate.   While accepting  or  rejecting a bid, it is merely  performing  an executive  function.  The correctness of its  conclusion  is not open to judicial review.  We fail to see how the plea of contravention of Art. 19(1)(g) or Art. 14 can arise in these cases.   The  Government’s  power  to  sell  the   exclusive privileges set out in s. 22 was not denied.  It was also not disputed  that  those  privileges could be  sold  by  public auction.   Public actions are held to get the best  possible price.  ’Once these aspects are recognised, there appears to be, no basis for contending that the owner of the privileges in  question who had offered to sell them cannot decline  to accept  the highest bid if he thinks that the price  offered is inadequate.- There is no concluded contract till the  bid is accepted.  Before there was a concluded contract, it  was open  to  the bidders to withdraw their  bids-see  Union  of India and ors. v. M/s.  Bhimsen Walaiti Ram (2) . By  merely giving bids, the bidders had not acquired any vested rights. The fact that the Government was the seller (1) [1967] 1 S.C.R. 1012. (2) [1970] 2 S.C.R. 594. 794 does  not change legal position once its exclusive right  to deal  with those privileges is conceded.  If the  Government is the exclusive owner of those privileges, reliance on Art. 19(1)(g)  or  Art. 14 becomes irrelevant.   Citizens  cannot have any fundamental right to trade or carry on business  in the  properties or rights belonging to the  Government,  nor can there be any infringement of Art. 14, if the  Government tries  to  get  the best available price  for  its  valuable rights.   The High Court was wholly wrong in  thinking  that purpose  of  ss.  22 and 29 of the Act  was  not  to  raise revenue.  Raising revenue as held by this Court in Cooverjee Bharucha’s case (supra) was one of the important purposes of such  provisions.   The fact that the price fetched  by  the sale of country liquor is an excise revenue does not  change the nature of the right.  The sale in question is but a mode of raising revenue.  Assuming that the question of arbitrary or  unguided  power can arise in a case of this  nature,  it should  not be forgotten that the power to accept or  reject the  highest  bid is given to the highest authority  in  the State i.e. the Government which is expected to safeguard the finances  of the State.  Such a power cannot be  considered as  an arbitrary power.  If that power is exercised for  any collateral  purposes,  the  exercise of the  power  will  be struck  down.  It may also be remembered that herein we  are not  dealing  with  a  delegated  power  but  with  a  power conferred by the legislature. The  High Court erroneously thought that the Government  was bound to satisfy the Court that there was collusion  between the  bidders.   The  High Court was not  sitting  on  appeal against the order made by the Government.  The inference  of the Government that there was a collusion among the  bidders may  be right or wrong.  But that was not open  to  judicial review  so  long  as it is not proved that it  was  a  make- believe one.  The real opinion formed by the Government  was that the price fetched was not adequate.  That conclusion is taken   on  the  basis  of  Government  expectations.    The conclusion  reached by the.  Government does not affect  any

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one’s  rights.   Hence,  in  our  opinion  the  High   Court misapplied the ratio of the decision of this Court in Barium Chemicals Ltd. and anr. v. Company Law Board and ors.(1) and Rohtas Industries Ltd. v. S. T. Agarwal (2) . It  was next urged that having had recourse to  the  auction method  once,  the  Government  was  precluded  from  either calling  for  tenders or to sell by negotiation.   The  High Court has accepted that contention.  We are unable to  agree with  the  High  Court  in  its  conclusion.   Neither   the provisions of the Act nor the order issued by the Government lend any support to such a conclusion. (1) [1969] S.C.R. 311 (2) [1969] 1 S.C.C. 325. 795 Once the Government declines to accept the highest bid,  the auction held became useless.  Similar is the effect when the Government refused to accept the highest tender.  That  left the Government free to have recourse to other methods.   The power  given  to  the  Government by the  Act  to  sell  the exclusive privilege in such other manner as it thinks fit is a  very  wide  power.   That  power  is  unrestricted.    It undoubtedly  includes  the power to sell the  privileges  in question by private negotiation. It was urged that before adopting the method of selling  the privileges  by  private  negotiation.   The  Government   is required  by  S.  29  (2) (a) to make  an  order  that  the, privileges in question will be sold by private  negotiation. The Government has failed to make such an order.  Hence  the sales effected are invalid.  We, are, unable to accept these contentions.  In the cases of public auctions or in the case of calling for tenders, orders from the Government directing its subordinates to notify or hold the auctions or call  for tenders  is  understandable.   Public auctions  as  well  as calling  for  tenders  are done  by  subordinate  officials. Further  due  publicity  is  necessary  in  adopting   those methods.  TOP require the Government to make an order  that it  is  going  to  sell one or more  of  the  privileges  in question  by negotiating with some one is to make a  mockery of  the law.  If the Government can enter  into  negotiation with  any person, as we think it can, it makes no  sense  to require  it  to  first make an order that  it  is  going  to negotiate with that person.  We must understand a  provision of law reasonably.  Section 29 (2) (a) does not speak of any order.  It says that "the State Government may by general or special  order direct".  The direction contemplated by  that provision  is a direction to subordinate officials.   It  is meaningless to say that the Government should direct itself. In  the  result  these  appeals are  allowed  and  the  writ petitions dismissed.  No costs. V.P.S.                           Appeals allowed. 796