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CASE NO.: Appeal (civil) 7366  of  2000 Special Leave Petition (crl.)   13664    of  2000

PETITIONER: STATE OF WEST BENGAL & ORS.

       Vs.

RESPONDENT: NIRANJAN SINGHA

DATE OF JUDGMENT:       14/12/2000

BENCH: S.R.Babu, K.G.Balakrishna

JUDGMENT:

L.....I.........T.......T.......T.......T.......T.......T..J

     RAJENDRA BABU, J.  :

     Leave granted.

     The respondent filed a writ petition in the High Court contending  that  under an agreement he was appointed as  an agent for collection of toll/taxes from vehicles plying over Matangini Setu on the Haldia River at Nargat in the district of  Midnapore  for one year from April 4, 1999 to  April  3, 2000.   The  agreement  between the parties provided  for  a clause as follows :-

     5.  After expiry of one year the term may be extended provided  that one month before expiry of such one year  the agent  shall  by  registered letter  request  the  Executive Engineer  concerned  for  such extension and  provided  that payment upto the date of such application have been received by  the Executive Engineer regularly and there have been  no default of any of the terms and conditions herein contained. The decision as to whether there has been any default or not on  the  part  of the agency shall rest with  the  Executive Engineer, and shall be binding on the agent.

     The   respondent  requested   the  Executive  Engineer concerned  for  extension  of  the agency for  a  period  of another  one  year  in terms of clause 5  of  the  agreement having  complied  with the conditions stated  therein.   The appellant  having invited fresh bids for appointment of  the agent  to  collect  toll or taxes instead of  extending  the period  of  agency  in  favour of  the  respondent,  a  writ petition  was  filed  by the respondent in  the  High  Court seeking  for quashing of the notification calling for  fresh bids  and  to consider the representation of the  respondent for  extension of the period of agency.  The learned  Single Judge  directed  for consideration of the representation  of

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the   respondent.   The  appellants   took  the  stand  that extension of period of agency is a matter of discretion with them  and  not  a matter of right with  the  respondent  and rejected  the representation.  Thereafter, the writ petition was  allowed  by upholding the claim of the  respondent  for renewal  of the agreement for another period of one year and directed  the concerned authorities to grant such renewal in his  favour  from April 4, 2000 to April 3, 2001 subject  to his compliance with the other terms and conditions and other formalities  required under the law.  The matter was carried in  appeal  to  the  Division  Bench  to  contend  that  the discretion  to grant a fresh lease in pursuance of clause  5 of  the agreement, to which we have adverted to earlier, was left  to  the Executive Engineer concerned and there  is  no right  available  to  the  respondent  and  further  it  was contended  that  the  learned Single Judge  could  not  have granted  the relief in favour of the respondent.  On  behalf of  the respondent the contention put forth before the court was  that clause 5 of the agreement entered into between the appellant  and  the  respondent,   involved  an  element  of legitimate  expectation and non-consideration of the  same would  amount  to  arbitrary  exercise  of  the  power  and, therefore, the learned single Judge was justified in issuing the writ.  The Division Bench took the view that clause 5 of the agreement provided for extension of the period of agency though  not renewal, and inasmuch as the conditions  imposed in  respect of such extension had been fulfilled, it was not a  case  involving grant of a fresh agency but extension  of the existing one and relied upon a decision of this Court in Food  Corporatiuon  of  India v.  M/s Kamdhenu  Cattle  Feed Industries,  1993  (1) SCC 71, and upheld the order made  by the learned Single Judge.  Hence this appeal.  We may notice that  the  distinction sought to be made by the  High  Court that  this  is not a case involving grant of a fresh  agency but  extension of the existing one does not make much sense. An  extension  of an agreement or renewal is granted on  the expiry  of the period of the existing agreement.  Either the extension or the renewal of the existing agreement may be on the  same  terms or on different terms.  If it is a case  of extension  of  the existing agreement on the same terms  and conditions  and such consideration gives rise to a  question of  legitimate  expectation  being a part of  the  concerned agreement,  economic consideration of getting higher bid for the  same period would be a relevant consideration.  If  the Governmental authorities had found that it would be feasible to  have the agency, as in the present case, on fresh  terms by  enhancing the amount payable to the Government, it would be  a  relevant factor and in such a case it cannot be  said that  the legitimate expectation of the respondent had  been affected  because  the public interest would  out-weigh  the extension  of the period of the agreement.  The doctrine  of legitimate  expectation is only an aspect of Article 14 of the  Constitution  in  dealing with the citizens in  a  non- arbitrary  manner and thus, by itself, does not give rise to an  enforceable right but in testing the action taken by the Government authority whether arbitrary or otherwise it would be  relevant.  The decision in Food Corporation of India  v. M/s  Kamdhenu  Cattle Feed Industries (supra) does  not  lay down  any principle which detracts from what we have  stated now.   In a case where the agency is granted for  collection of  toll or taxes, as in the present case, it can be  easily discerned  that the claim of the respondent for extension of the  period  of the agency would not come in the way of  the Government  if it is economically more beneficial to have  a fresh  agreement  by enhancing the consideration payable  to

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the  Government.   In such an event, it cannot be said  that the  action  of  the  Government   inviting  fresh  bids  is arbitrary.  Moreover, the respondent can also participate in the tender process and get his bid considered.  Hence, we do not  think  that  the view taken by the High  Court  can  be justified.   We  set  aside the order made by  the  Division Bench affirming the order of the learned single Judge in the writ proceedings and dismiss the writ petition.  However, it is  made  clear that until fresh arrangements are  made  the terms  upon  which the agency has been granted in favour  of the  respondent may continue.  The appeal is allowed in  the aforesaid terms.