Allowed

Smti. Raju Bala Das and 4 Ors. v. the State of Assam and 2 Ors.

Gauhati HC2 Dec 2021WP(C)/2833/2016

Case brief

AI extract

What is this about?

Public ferry lessees sought remission because lease assessments used revised toll rates while collections were restricted to old rates. The court held denial arbitrary despite collections exceeding settlement amounts, allowed the petitions, and directed proportionate remission to be calculated within four months, with any resulting entitlement disbursed.

What did the court decide?

Proportionate remission to be calculated within four months of receipt of a certified copy, accounting for deposits; any resulting amount due to be disbursed forthwith.

Smti. Raju Bala Das and 4 Ors. Vs the State… — Public Procurement and Tenders | Gauhati HC (2021)

¶1

GAHC010015302016

¶2

Page 1 of 17

¶3

THE GAUHATI HIGH COURT

¶4

(THE HIGH COURT OF ASSAM, NAGALAND, MIZORAM & ARUNACHAL PRADESH)

¶5

WP(C) 2833/2016

¶6

Smti. Raju Bala Das, W/o. Rajani Kr. Das, Vill. Daukuchi, P.O. Nagarbera, Dist. Kamrup [Rural], Assam.

¶7

Sri Madhab Das, S/o. Lt. Dhiren Ch. Das, Vill. Majgaon, P.O. North Guwahati, Dist. Kamrup [R], Assam.

¶8

Md. Abdul Waheb, S/o. Lt. Asmat Ali, R/o. Chandriya Patha, P.O. Baladmari, Dist. Goalpara, Assam.

¶9

Md. Abul Kalam Azad, S/o. Lt. Amzad Ali, Vill. Larkuchi, P.O. Larkuchi, Dist. Balbari, Assam.

¶10

Rajesh Bhakat, S/o. Trinesh Ch. Bhakat, Vill. Kaimari Part-III, Dist. Dhubri, Assam. .….……….Petitioners

¶11

Versus -

¶12

The State of Assam, represented by the Addl. Chief Secretary to the Govt. of Assam, Transport Deptt., Dispur, Ghy.-781006, Dist. Kamrup [M], Assam.

¶13

The Director, Inland Water Transport, Assam, Ulubari, Ghy.-781007, Dist. Kamrup [M], Assam.

¶14

The Executive Engineer, Inland Water Transport Divn., Ghy., Ulubari, Ghy.-781007, Dist. Kamrup [M], Assam.

……………….Respondents

Page 2 of 17

WP(C) 7402/2016

Hanif Ali, S/o Mangal Ali, Vill- Kaltali, P.O. Baharihat, P.S. Tarabari, Dist. Barpeta, Assam. 2. Md. Israfi Ali, S/o Lt. Kazimuddin, Vill- Adalaveti, P.O. Buragaon, P.S. Buragoan, Dist. Morigaon, Assam. 3. Md. Azizul Haque, S/o Hazi Kalu Sheikh, Vill- Kurihamari Silamari, P.O. Bhangnamari, P.S. Sialmari, Dist. Nalbari, Assam. 4. Md. Abdus Samad, S/o Lt. Afzal Hussain, Vill- Abhayapuri Ward No. 2, P.O. and P.S. Abhayapuri, Dist. Bongaigaon, Assam. 5. Md. Nurul Amin, S/o Asar Ali, Vill- Haibargaon, P.O. Baralimari, P.S. Bhuragaon, Dist. Morigaon, Assam. 6. Md. Azar Ali, S/o Sayad Ali, Vill- Haiborgaon, P.O. Baralimari, P.S. Bhuragaon, Dist. Morigaon, Assam. 7. Md. Imran Hussain, S/o Lt. Ramjan Ali, Vill- Tapari, P.O. Taptola, P.S. Bhuragaon, Dist. Morigaon, Assam. 8. Sri Hemanta Thakuria, S/o Lt. Bharat Ch. Thakuria, Vill- Uparhali, Dist. Kamrup, Assam. 9. Md. Nazim Hikmot Ali, S/o Lt. Sanaullai, Vill and P.O. Nagarbera, Dist. Kamrup, Assam. .….……….Petitioners - Versus - 1. State of Assam, Rep. by the Commissioner and Secretary to the Govt of Assam, Transport Department,

¶19

Page 3 of 17

¶20

Dispur, Guwahati-6, Kamrup [M], Assam.

¶21

1. The Director, Inland Water Transport, Assam, Ulubari, Guwahati -7, Kamrup [M], Assam.

¶22

1. The Executive Engineer, Inland Water Transport Division Guwahati, Ulubari, Guwahati – 781007, Kamrup [M], Assam.

¶23

……………….Respondents

¶24

WP(C) 1046/2017

¶25

Arup Chetia, S/o Sri Numal Chetia, R/O Balijan Bam Sumoni Gaon, P.O. Borchapori, Dist- Tinsukia, Assam. .….……….Petitioner

¶26

- Versus - 1. The State of Assam, Rep. by the commissioner and Secy. to the Govt. of Assam, Transport Deptt., Dispur, Ghy-6, Kamrup [M], Assam.

¶27

1. The Director, Inland Water Transport, Assam, Ulubari, Ghy-7, Kamrup [M], Assam.

¶28

1. The Executive Engineer, Inland Water Transport Division, Dibrugarh-786001, Assam. ……………….Respondents

¶29

Advocates :

¶30

For the petitioners : Mr. S. Kataki, Advocate For the respondents : Ms. M.D. Bora, Standing Counsel, Transport Department Date of hearing & order : 02.12.2021

¶31

Page 4 of 17

¶32

BEFORE HON’BLE MR. JUSTICE MANISH CHOUDHURY JUDGMENT & ORDER

¶33

These 3 [three] writ petitions – W.P.(C) no. 2883/2016, W.P.(C) no. 7402/2016 and W.P.(C) no. 1046/2017 – filed under Article 226 of the Constitution of India have a common issue which has arisen out of settlements of a number of Government notified public ferries. A number of Government notified public ferries were settled by the respondent authorities in the Transport Department in favour of the petitioners pursuant to two tender processes of similar nature. The main question involves in this batch of writ petition is with regard to the claims of the petitioners for grant of remission on the ground that they were not permitted to collect tolls as per revised rates though the estimated amounts for the different Government notified public ferries in the tender notices were assessed and arrived at as per the revised toll rates and the refusal on the part of the respondent authorities to grant such remission.

¶34

In the writ petition, W.P.(C) no. 2833/2016, 5 [five] petitioners have joined together projecting that they have a common cause of action in preferring the writ petition. In the writ petition, W.P.(C) no. 7402/2016, a total of 9 [nine] petitioners have joined together similarly projecting a common cause of action. The writ petition, W.P.(C) no. 1046/2017 has been preferred by a single petitioner. As the subject-matter in these 3 [three] writ petitions and the reliefs sought therein are similar, all the 3 [three] writ petitions have been taken up together for adjudication at the stage of admission, as agreed to by the learned counsel for the parties and in view of the position that exchange of pleadings has been complete.

¶35

A tender notice vide Order no. 292 was published on 14.11.2014 by the respondent no. 3 in the two writ petitions – W.P.(C) no. 2833/2016 and W.P.(C) no. 7402/2016 i.e. the Executive Engineer, Inland Water Transport Division, Guwahati, whereby, sealed tenders were invited to lease out 46 [forty-six] nos. of Government notified public ferries under the Inland Water Transport Division of the respondent Transport Department for a period of 2 [two] consecutive years i.e. 2015-2016 and 2016-2017. Similarly, another tender notice dated 09.12.2014 was issued by the respondent no. 3 in the writ petition, W.P.(C) no. 1046/2017 i.e. the Executive

¶36

Page 5 of 17

¶37

Engineer, Inland Water Transport Division, Dibrugarh, whereby, sealed tenders were invited for a number of Government notified public ferries including Bogibeel-Karengbali Ferry Service in the district of Dibrugarh. The petitioners in the two writ petitions – W.P.(C) no. 2833/2016 and W.P.(C) no. 7402/2016 – participated in the said tender process, initiated by the tender notice dated 14.11.2014, by submitting their tenders. On the other hand, the petitioner in the writ petition, W.P.(C) no. 1046/2017, by responding to the tender notice dated 09.12.2014, submitted his tender in connection with Bogibeel-Karengbali Ferry Service.

¶38

In the afore-mentioned two tender processes, the petitioners emerged as the successful bidders and they were settled with different Government notified public ferries [‘public ferries’, for short] at the settlement amounts indicated hereinbelow, with 2015-2017 as the period of settlement, vide separate orders of settlement passed by

¶39

the Government in the Transport Department and the same were as under :-

¶40

Sl.	Petitioner	Date of	Public Ferry Service	Period of	Settlement amount
W.P	.(C) no. 2833/20	Settlement 16		Settlement
1	Petitioner no. 1	28.05.2015	Dokuchi–Bhokuradia–Rangeswari– Pijupara Ferry Service	2015-2017	Rs. 3,85,255/-
2	Petitioner no. 2	05.05.2015	Guwahati–North Guwahati Ferry Service	2015-2017	Rs. 14,00,000/-
3	Petitioner no. 3	21.04.2015	Bagbor–Goalpara Ferry Service	2015-2017	Rs. 9,80,000/-
4	Petitioner no. 4	09.04.2015	Larkuchi–Majorchar–Kalachar Ferry Service	2015-2017	Rs. 16,10,000/-
5	Petitioner no. 5	03.07.2015	Gumaghat Ferry Service	2015-2017	Rs. 6,42,000/-
W.P	.(C) no. 7402/20	16
1	Petitioner no. 1	16.03.2015	Sontali–Bohari–Alikash Ferry Service	2015-2017	Rs. 33,51,000/-
2	Petitioner no. 2	14.05.2015	Bhuragaon–Badlichar–Via–Pavakati– Malahu–Magumari–Chitalmari and KarikhowaFerry Service	2015-2017	Rs. 7,20,000/-
3	Petitioner no. 3	02.06.2015	Adabari–Sialmari–Kurihamari Ferry Service	2015-2017	Rs. 6,51,000/-
			[1] Borghola–Kahibari–Borghola– Telphukhuri (Club) Ferry Service	2015-2017	Rs. 3,50,000/-
4	Petitioner no. 4	08.04.2015	[2] Nayerala – Gauranga Ferry Service	2015-2017	Rs. 1,00,000/-
5	Petitioner no. 5	02.07.2015	Baralimari–Gadhuwa–Via–Borbari– Kacharigaon–Nizsaharia Ferry Service	2015-2017	Rs. 5,05,000/-
6	Petitioner no. 6	10.04.2015	Gerimari– Kachasila–Via–Serang 4 No. Kaymari–Jaljali Ferry Service	2015-2017	Rs. 2,41,000/-
7	Petitioner no. 7	06.06.2015	Choulkhowa–Aparia–Gobordhan Ferry Service	2015-2017	Rs. 1,05,000/-
8	Petitioner no. 8	06.06.2015	Bamundi–Sialmari–Guimari Ferry Service	2015-2017	Rs. 3,06,000/-
9	Petitioner no. 9	02.04.2015	Dongra–Kholabandha Ferry Service	2015-2017	Rs. 2,30,000/-
W.P	.(C) no. 1046/20	17
1	Petitioner	04.03.2015	Bogibeel–Karengbali Ferry Service	2015-2017	Rs. 3,23,00,000/-

¶41

Page 6 of 17

¶42

Upon being settled with the afore-mentioned public ferries, the petitioners started to operate the public ferries after completing the requisite formalities in terms of the respective settlement orders but they were denied to collect the tolls at the revised rates which were notified by a notification dated 02.07.2014 published under the hand of the Secretary to the Government of Assam, Transport Department. When the respondent authorities insisted for deposit of the settlement amounts as per the installment schedule prepared in terms of the revised toll rates while denying the petitioners as lessees to collect the tolls at the revised toll rates in terms of the notification dated 02.07.2014, the petitioners being aggrieved thereby, have preferred these writ petitions seeking inter alia the reliefs, mentioned above.

¶43

Heard Mr. S. Kataki, learned counsel for the petitioners and Ms. M.D. Bora, learned Standing Counsel, Transport Department for all the respondents.

¶44

Mr. Kataki, learned counsel for the petitioners has submitted that by the notification dated 02.07.2014, the Government in the Transport Department had inter alia revised the toll rates for Government notified public ferries under the Directorate of Inland Water Transport, Assam as per Annexure-I and Annexure-II therein. As per the said notification, the revised toll rates came into force with immediate effect. The two tender notices in question herein, were published on 04.11.2014 and 19.12.2014 respectively, that is, they were issued after the revised toll rates had come into force. He has further submitted that the estimated amounts for different Government notified public ferries, sealed tenders for each of which were invited by either of the said two tender notices, were assessed and arrived at on the basis of the revised toll rates in terms of the notification dated 02.07.2014. The petitioners had prepared their bids with the knowledge that the estimated amounts for different Government notified public ferries were assessed and arrived at as per the revised toll rates. When the petitioners were not permitted to collect the revised toll rates during the settlement period, they approached the respondent authorities for remission of the settlement amounts as denial to collect the revised toll rates had caused both prejudice and loss in terms of money to them. But such remission had been denied to them unjustly and the said fact could be evident from the reasons assigned by the respondent no. 1 in the office order

¶45

Page 7 of 17

¶46

dated 03.02.2017 passed in respect of the representation submitted by the petitioner in the writ petition, W.P.(C) no. 1046/2017. Mr. Kataki has submitted that the other petitioners had also been denied the benefit of remission on the very same ground, as could be evident from the stand taken by the respondent authorities in their counter affidavits.

¶47

Ms. Bora, learned Standing Counsel for the Transport Department has submitted that though it is true that the revised toll rates were notified by the notification dated 02.07.2014 but it was decided not to enforce the revised toll rates due to public protest all over the State against collection of tolls at such revised rates. She has further submitted that despite collection of tolls at the old rates by the petitioners as lessees for the public ferries herein none of the petitioners had suffered losses in terms of money. The monthly statements maintained under Rule 12 of the Control and Management Ferries Rules, 1968 in respect of these petitioners go to indicate that during the settlement period, the amounts collected by these petitioners as lessees were over and above the settlement amounts at which the public ferries were settled in their favour. Contending as such, she has submitted that as no loss had been suffered by these petitioners as lessees the relief sought for by these petitioners regarding remission is not sustainable. The petitioners did not approach the respondent authorities seeking remission of the settlement amounts during the settlement period and their continuance with operation of the public ferries without demur goes to indicate that they had not suffered any loss.

¶48

I have considered the respective submissions of the learned counsel for the parties and also perused the materials brought on record by the pleadings of the parties. I have also gone through the provisions of the Northern India Ferries Act, 1878 and the Control and Management of Ferries Rules, 1968.

¶49

There is no dispute on the fact that the ferries settled with the petitioners are Government notified public ferries, declared as such under Section 4 of the Northern India Ferries Act, 1878, as amended [‘the Ferries Act, 1878’, for short]. The terms and conditions of such settlement are governed and regulated by the provisions of the Ferries Act, 1878 and the Control and Management of Ferries Rules, 1968, as

¶50

Page 8 of 17

¶51

amended, which have been framed by the State Government in exercise of the powers conferred under Rule 12 of the Ferries Act, 1878. Under Section 4, the power has been vested in the Government to declare a ferry, by notification in the Official Gazette, to be a public ferry. Section 15 of the Ferries Act, 1878 has provided for ‘toll’ and it states that toll, according to such rates as are from time to time fixed by the State Government, shall be levied on all persons, animals, vehicles and other things crossing any river by a public ferry and not employed or transmitted on the public service. It has been further provided that the State Government may, from time to time, declare that any persons, animals, vehicles or other things shall be exempt from payment of such tolls. As per sub-rule [1] of Rule 4 of the Control and Management of Ferries Rules, 1968, all public ferries which are let by public auction or by calling for tenders shall be managed by the lessees subject to the said Rules and the conditions entered in the lease granted for each ferry. Under Rule 15 thereof, it is the Director who decides the period for which the public ferry shall be leased, subject to the approval of the State Government in the Transport Department.

¶52

It was in exercise of the power conferred under Section 15 of the Ferries Act, 1878, the State Government issued the notification dated 02.07.2014 [supra] revising inter alia the toll rates for Inland Water Transport public ferries and rates of special trips under the Directorate of Inland Water Transport, Assam. Annexure-I and Annexure-II of the said notification had specified the different revised toll rates for different items like passengers, bicycles, goods, motorcycles/scooters, auto rickshaws, light motor vehicle, etc. The notification had clearly declared that the rate shall come into force with immediate effect. For examples, the base rate per km per passenger in modern vessel was increased from Rs. 2.40 to Rs. 5.00. Similarly, the rate for one motor cycle/scooter with rider in modern vessel was increased from Rs. 5.00 to Rs. 9.00.

¶53

It was subsequent to the publication of the said notification dated 02.07.2014, the tender notice dated 14.11.2014 and the tender notice dated 09.12.2014 were published, whereby, sealed tenders were invited for a number of Government notified public ferries, including the Government notified public ferries indicated in the Table above.

¶54

Page 9 of 17

¶55

Rule 16 of the Control and Management of Ferries Rules, 1968 has laid down the procedure how the tender process has to be initiated and completed. As per Rule 19 of the Control and Management of Ferries Rules, 1968, the tender shall generally be settled to the highest bidder. As has been noted above, the petitioners in these 3 [three] writ petitions had participated in the said competitive tender processes initiated by the above two tender notices by submitting their tenders and had emerged successful in the said processes. On having emerged as the successful bidders, the afore-mentioned public ferries were settled in favour of the petitioners by different settlement orders in their favour by the State Government in the Transport Department specifying the amounts at which the public ferries were settled with them, as indicated in the Table above. As all the settlement orders were with similar terms and conditions, a reference to the settlement order dated 04.03.2015 issued in favour of the petitioner in the writ petition, W.P.(C) no. 1046/2017 would suffice for the purpose of adjudication of the issue involved herein.

¶56

It is reflected from the order dated 04.03.2015 itself that the settlement order in respect of Bogibeel-Karengbali Ferry Service was passed by the State Government after reaching a satisfaction regarding fulfillment of the provisions laid down in Rule 16 and Rule 19 of the Control and Management of Ferries Rules, 1968 and accordingly, the said public ferry i.e. Bogibeel-Karengbali Ferry Service was settled with the petitioner for a period of 2 [two] years w.e.f. 01.04.2015 to 31.03.2017 at a settlement amount of Rs. 3,23,00,000/- under the provisions of Section 4 [1] of Control and Management of Ferries Rules, 1968. It was further mentioned that the settlement was subject to the condition that if any subsequent hike in rates/tolls etc. was made by the Government, there would be proportionate increase in the lease amount [based on the proportionate increase in the estimated amount] and the lessee would have to accept it on usual terms and conditions.

¶57

When the said petitioner submitted a representation before the respondent no. 2 i.e. the Director of Inland Water Transport, Assam seeking remission of the settlement amount due to non-implementation of the revised toll rates, the matter was considered, at first, at the end of the respondent no. 3 therein i.e. the

¶58

Page 10 of 17

¶59

Executive Engineer, Inland Water Transport Division, Dibrugarh. By a communication dated 29.12.2015, the said respondent no. 3 had informed the respondent no. 2 i.e. the Director of Inland Water Transport, Assam that the said petitioner as lessee was made to collect the toll @ Rs. 18/- only per passenger as per the old toll rate, instead of the revised toll rate @ Rs. 24/- per passenger, notified vide the notification dated 02.07.2014 during the year 2015-2016. From the said communication, it is evident that the revised toll rates were not implemented by the respondent authorities during the year 2015-2016. The fact that the estimated amount in the concerned tender notice for the Bogibeel-Karengbali Ferry Service was assessed as per the revised toll rate is evident from a communication bearing no. DWT-224/2012-13/342 made by the Director of Inland Water Transport, Assam on 30.01.2016 to the Government in the Transport Department. In the said communication, the Director of Inland Water Transport, Assam had admitted that the assessment value as well as the tender bid value was considered as per the revised toll rates which was 33.33% above the old rates, but the revised toll rates were not implemented by the Department due to non-receipt of instruction from the Government. By indicating so, the Director of Inland Water Transport, Assam requested the Government in the Transport Department to consider remission of the tendered bid value. When the matter of remission was not considered by the Government, the petitioner in the writ petition, W.P.(C) no. 1046/2017 preferred a writ petition, W.P.(C) no. 2369/2016. The said writ petition, W.P.(C) no. 2369/2016 was disposed of by an order dated 20.09.2016 with a direction to the respondent no. 1 to consider and dispose of the representation submitted by the said petitioner taking note of the communication dated 29.12.2015 of the Inland Water Transport [IWT] Division, Dibrugarh.

¶60

Pursuant thereto, the respondent no. 1 considered the said representation and disposed of the same by an office order dated 03.02.2017. While considering the representation of the petitioner [Sri Arup Chetia], notice was taken of the fact that the concerned public ferry was settled in favour of the petitioner at a tendered bid value at Rs. 3,23,00,000/- for the period from 2015 to 2017, that is, Rs. 1,61,50,000/- per year and a report submitted by the respondent no. 3 i.e. the Executive Engineer, Inland Water Transport Division, Dibrugarh amongst others. Notice was also taken of the fact that for Bogibeel-Karengbali Ferry Service, the assessment value for the year 2015-

¶61

Page 11 of 17

¶62

2016 was assessed at Rs. 95,92,000/- on calculation done on the basis of the revised toll rates, in comparison to the assessment value of Rs. 28,60,032/- during the year 2014-2015 based on old toll rates. It was recorded therein that during the first year of settlement of the said public ferry i.e. 2015-2016, the petitioner [Sri Arup Chetia] as the lessee was able to collect an amount of Rs. 4,32,93,071/- whereas he had to deposit an amount of Rs. 1,61,50,000/- only to the State Exchequer. As the lessee had earned more than the amount he was required to deposit to the State Exchequer even after collecting tolls at the old rates, the prayer for remission was negated on the ground that the lessee did not incur any loss. By holding so, it was held that there was no justification for remission. The same stand has been taken by the respondent authorities in all the counter affidavits filed in these 3 [three] writ petitions where the common relief that has been sought for is remission in respect of the respective settlement amounts.

¶63

In the back drop of afore-mentioned factual scenario, it is to be considered as to whether the relief of remission that has been sought for by the petitioners in these writ petitions had been unjustly denied and if yes, as to whether the relief that has been sought for in these writ petitions preferred under Article 226 of the Constitution of India can be granted to them or not.

¶64

The communication dated 29.12.2015 reflects that during the period from 2015 to 2016, the lessee of afore-mentioned public ferry was not allowed by the respondent authorities to collect the tolls at the revised rates notified by the notification dated 02.07.2014 and the lessee was made to collect the tolls at the old rates. The letter dated 30.01.2016 of the Director of Inland Water Transport, Assam has demonstrated that the estimated amounts indicated in the tender notices were arrived at by taking into consideration the revised toll rates notified by the notification dated 02.07.2014 which was above 33.33% above the old toll rates. The office order dated 03.02.2017 has further fortified the fact that the estimated amounts of different public ferries in order to settle the same for the period from 2015 to 2017 were arrived at on the basis of calculation made as per the revised toll rates notified by the notification dated 02.07.2014. From the office order dated 03.02.2017, it has further emerged that the State Government did not implement the revised toll rates, notified vide the

¶65

Page 12 of 17

¶66

notification dated 02.07.2014, due to protests from general public in various parts of the State. Such fact of non-implementation of the revised toll rates has been further reiterated in all the counter affidavits filed in the 3 [three] writ petitions.

¶67

It has been observed in Noble Resources Limited vs. State of Orissa and another, reported in [2006] 10 SCC 236, that it is trite that if an action on the part of the State is violative of the equality clause contained in Article 14 of the Constitution of India, a writ petition would be maintainable even in the contractual field. A distinction indisputably must be made between a matter which is at the threshold of a contract and a breach of contract; whereas in the former the court’s scrutiny would be more intrusive, in the latter the court may not ordinarily exercise its discretionary jurisdiction of judicial review, unless it is found to be violative of Article 14 of the Constitution of India. While exercising contractual powers also, the government bodies may be subjected to judicial review in order to prevent arbitrariness or favouritism on their part. Though inherent limitations exist, but it would not be correct to opine that under no circumstances a writ will lie only because it involves a contractual matter. It is, at the same time, observed that where serious disputed questions of fact are raised requiring appreciation of evidence, and thus, for determination thereof, examination of witnesses would be necessary; it may not be convenient to decide the dispute in a proceeding under Article 226 of the Constitution of India.

¶68

In Mahabir Auto Stores vs. Indian Oil Corporation, reported in [1990] 3 SCC 752, it has been held that even when the State or its instrumentality is engaged in commercial transactions, its action must be reasonable, fair and just. Therein, the respondent Indian Oil Corporation, an instrumentality of the State, who had monopoly business in lubricants, etc. suddenly discontinued the supply to the appellant, who was being supplied lubricant for a long period from 1965 to 1983. In such backdrop, the Hon’ble Supreme Court observed that even though the rights of the citizens are in the nature of contractual rights, even in such a case, rule of reason and rule against arbitrariness and discrimination, rules of fair play and natural justice are part of the rule of law applicable in situation or action by State instrumentality in dealing with citizens like in that case.

¶69

Page 13 of 17

¶70

In ABL International Limited and another vs. Export Credit Guarantee Corporation of India Limited and others, reported in [2004] 3 SCC 553, the Hon’ble Supreme Court after considering a number of previous decisions on the aspect, has held as under :-

¶71

“27. From the above discussion of ours, the following legal principles emerge as to the maintainability of a writ petition :

¶72

(a) In an appropriate case, a writ petition as against a State or an instrumentality of a State arising out of a contractual obligation is maintainable.

¶73

(b) Merely because some disputed questions of fact arise for consideration, same cannot be a ground to refuse to entertain a writ petition in all cases as a matter of rule.

¶74

¶75

However, while entertaining an objection as to the maintainability of a writ petition under Article 226 of the Constitution of India, the court should bear in mind the fact that the power to issue prerogative writs under Article 226 of the Constitution is plenary in nature and is not limited by any other provisions of the Constitution. The High Court having regard to the facts of the case, has a direction to entertain or not to entertain a writ petition. The Court has imposed upon itself certain restrictions in the exercise of this power. [See : Whirlpool Corporation vs. Registrar of Trade Marks , [1998] 8 SCC 1 ] And this plenary right of the High Court to issue a prerogative writ will not normally be exercised by the Court to the exclusion of other available remedies unless such action of the State or its instrumentality is arbitrary and unreasonable so as to violate the constitutional mandate of Article 14 or for other valid and legitimate reasons, for which the Court thinks it necessary to exercise the said jurisdiction.”

¶76

In Maharashtra Chess Association vs. Union of India and others, reported in [2020] 13 SCC 285, the Hon’ble Supreme Court has observed that in exercising its discretion to entertain a particular case under Article 226, a High Court may take into consideration various factors including the nature of the injustice that is alleged by the petitioner, whether or not an alternate remedy exists, or whether the facts raise a question of constitutional interpretation.

¶77

Page 14 of 17

¶78

Having regard to the facts and circumstances of the case in hand, it is found that there is no disputed fact involved as the State respondents have themselves admitted that though revised toll rates were notified by the notification dated 02.07.2014, the same were not implemented during the settlement period from 2015 to 2017 and as a result, these petitioners as lessees were not allowed to collect the toll rates at the revised rates. Meaning thereby, the petitioners were compelled to collect the tolls at the old rates, despite the revised toll rates coming into effect by way of a statutory notification. While granting the settlements, the State respondents had made it a condition for the lessees that the settlement would be the subject to the condition that if any subsequent hike in rates/tolls, etc. was made by the Government, there would be proportionate increase in the lease amount [based on the proportionate increase in the estimated amount] and the lessee would have to accept it on usual terms and conditions. In the same analogy, the position should have been reversed in that if during the settlement period, there was subsequent decrease in rates/trolls, etc. by any decision on the part of the Government, there would be proportionate decrease in the lease amount [based on the proportionate decrease in the estimated amount] and lessees would be allowed to deposit the installment amounts based on such proportionate decrease. The decision of not to implement the revised toll rates was of the Government taken unilaterally but the incidence of such decision had also fallen on the lessees like the petitioners, of public ferries. It should not always operate in one single way, notwithstanding any change in the situation in the opposite way from the situation which was envisaged at the inception.

¶79

In the instant case, by the aforesaid two tender notices [supra], the bidders were invited to submit their tenders on the basis of the estimated amounts assessed and arrived at on the basis of the revised toll rates. Such transactions are commercial transactions for the bidders participating in the tender process initiated for settlement of public ferries, which fall in the category of distribution of State largesses. The bidders are prudent businessmen who prepare their tenders by taking into consideration a host of factors including the terms and conditions incorporated in the tender document, the estimated amounts and the quantums of profit they are likely to earn and accordingly, they arrive at their tendered bid values. One prepares his tender,

¶80

Page 15 of 17

¶81

to the best of his estimation, by quoting his tendered bid value at a definite amount on the premise that at such amount, he would be able to perform the obligations under the contract if the tender is settled in his favour and at the same time, would also be able to earn a particular amount of profit. A number of bidders participate in a tender process and the bidders tender different bid values but only one of them emerges successful. Thus, the preparation of the tendered bid value is at the peril of the rejection of one’s tender if the same does not emerge as the highest valid one and a tender process is always competitive. The petitioners in these cases submitted their tenders by preparing them only after taking into consideration that they would be able to collect the tolls at the new revised rates and accordingly, the tendered bid values were quoted. The representation of the State respondents was clear in that the estimated values were assessed and arrived at by taking into account the revised toll rates, notified vide the notification dated 02.07.2014. Acting on such representation, the petitioners had changed their positions.

¶82

In Unitech Limited and others vs. Telengana State Industrial Infrastructure Corporation [TSSIC] and others, reported in [2020] 13 SCC 285, the Hon’ble Supreme Court of India has observed that having invited private entrepreneurs to submit bids on stipulated terms and conditions, it must be held down to make good its representations. The State and its instrumentalities are duty bound to act fairly under Article 14 of the Constitution. They cannot, even in the domain of contract, claim an exemption from the public law duty to act fairly. The State and its instrumentalities do not shed either their character or their obligation to act fairly in their dealings with private parties in the realm of contract. Investors who respond to the representations held out by the State while investing in public projects are legitimately entitled to assert that the representations must be fulfilled and to enforce compliance with duties which have been contractually assumed.

¶83

The State respondents had denied the grant of remission solely on the ground that while operating the public ferries, none of the petitioners as lessees had suffered losses and all of them had collected beyond the settlement amounts during the two years of settlement period. The deviation on their part from the terms and conditions of the tender process in that the lessees was not allowed to collect tolls at

¶84

Page 16 of 17

¶85

the revised rates was completely ignored. As has been noted above, a bidder submits his tender with an objection to collect a certain amount of profit in the event he emerges successful in the competitive tender process and earning of profit at a lesser amount than was expected by him at the unjust intervention of the State authorities cannot be held to be any justification, much less proper justification, on the part of the State and its authorities. The earning of lesser profit by the successful bidder as the lessee than he was expecting to earn on the basis of the clear representation of the State that he would be allowed to collect the tolls at the revised rates by virtue of the revised toll rates notified by a statutory notification is also a loss in relative term. The requirement of Article 14 of the Constitution of India is to act fairly, justly and reasonably without any element of arbitrariness by the State by virtue of its dominant position. The action of the State respondents in the case in hand is found to be contrary to the principle of non-arbitrariness embodied in Article 14 of the Constitution of India. It is settled that the jurisdiction of this Court under Article 226 of the Constitution of India is discretionary as well as equitable. The fact situation obtaining in the case in hand is not such that after one is put in an adverse and vulnerable position the situation cannot be rectified.

¶86

In the light of the above discussion, this Court is of the unhesitant view that the petitioners herein are treated in an unfair, unjust and arbitrary manner by the State respondents who were in dominant bargaining positions, and such action of denying the benefit of remission to the petitioners is found to be in violation of the principle embodied in Article 14 of the Constitution of India. Consequently, the petitioners are found entitled to the grant of remission in an appropriate manner, which has to be worked out in the same analogy as incorporated in the settlement orders itself, albeit in a reverse manner, in that if there is any subsequent decrease in rates/tolls, etc. there would be a proportionate decrease in the lease amount [based on the proportionate decrease in the estimated amount]. The entire exercise shall be completed by the respondent authorities as expeditiously as possible, but not beyond an outer limit of 4 [four] months from the date of receipt of a certified copy of this order. While undertaking such exercise, the deposits made by the petitioners against their respective settlement amounts qua the settlement amounts shall have to be taken

¶87

Page 17 of 17

¶88

into account. If any amount is found entitled to these petitioners, after such exercise, it shall be disbursed to them forthwith thereafter.

¶89

Resultantly, the 3 [three] writ petitions are allowed to the extent indicated above. There shall, however, be no order as to cost.

¶90

JUDGE

¶91

Comparing Assistant

Smti. Raju Bala Das and 4 Ors. v. the State of Assam and 2 Ors.

Case brief

What is this about?

What did the court decide?

Smti. Raju Bala Das and 4 Ors. v. the State of Assam and 2 Ors.

Case brief

What is this about?

What did the court decide?

What the court decided

A compact analysis

Issues for consideration

Cases cited

Statutes considered

Parties & counsel

Coram

Case details

Similar cases

Papul Hazarika Vs the State of Assam

Rowmari Phukan Fodia Self Help Group Vs the State of Assam and 12 Ors.

Rowmari Phukan Fodia Self Help Group Vs the State of Assam and 12 Ors.

Arup Chetia Vs the State of Assam and 2 Ors.

Sri Pabitra Boro, Vs the State of Assam and Ors.

Hanif Ali and 8 Ors. Vs State of Assam and Ors.