Allahabad High Court
Vashisht Kumar Jaiswal vs State Of U.P. And Ors. on 21 October, 2003
Equivalent citations: AIR2004ALL105, 2005(2)AWC1779, 2004(1)CTLJ545(ALL), AIR 2004 ALLAHABAD 105, 2004 ALL. L. J. 951, 2004 A I H C 1832, 2005 (2) ALL WC 1779, 2004 (1) CTLJ 545, 2004 (97) REVDEC 677
Author: M. Katju
Bench: M. Katju, K.S. Rakhra
JUDGMENT M. Katju, J.
1. Heard learned counsel for the parties.
2. This writ petition has been filed against the impugned order dated 3-7-2003 (Annexure 1 to the petition) and lease deed dated 25-7-2003 in favour of respondents No. 5 and 6 during the pendency of the writ petition.
3. The respondents No. 5 and 6 were granted mining lease for three years which started from 28th April, 2000 and hence it came to an end on 27-4-2003. We are not going into the various points urged before us because we are of the opinion that this petition deserves to be allowed on the short point that once the period of the lease in favour of respondents No. 5 and 6 expired on 27-4-2003 there is no question of extension of the lease, and instead there should have been a fresh public auction/public tender after advertising the same in well known newspapers having wide circulation. This procedure is essential, as otherwise Article 14 of the Constitution will be violated. Transparency in public administration also requires that such a procedure should be followed whenever any public contract is granted. It may be mentioned that the owner of the land is the State Government and a Bhumidhar under the U.P.Z.A. and L.R. Act is not the owner of the land, but he is only tenant, the owner is the State as the land is vested in it under Section 4 of the U.P.Z.A. and L.R. Act. Hence it is not correct to say that the land belongs to the Bhumidhar.
4. Learned counsel for the respondents relied on a decision of the Supreme Court in Beg Raj Singh v. State of U.P., 2003 (1) CRC 362 : (AIR 2003 SC 833). In our opinion this decision is wholly distinguishable as Article 14 of the Constitution has not been considered therein at all.
5. In Ziauddin v. Commissioner, Moradabad, 2003 All LJ 1802 a Division Bench of this Court has held that all contract of public property must ordinarily be granted by advertising in well known newspapers having wide circulation, and thereafter holding public auction/public tender so as to comply with Article 14 of the Constitution.
6. This view has been taken in A.S. Advertising Company v. Nagar Nigam, Meerut, 2001 (1) UPLBEC 125 : 2001 All LJ 274 as well as in Karan Singh v. State of U.P., 2001 (1) UPLBEC 128 : 2001 All LJ 276. In these decisions we have referred to some earlier decisions of the Supreme Court and of this Court.
7. In Ram and Shyam Company v. State of Haryana, AIR 1985 SC 1147 and Shri Harminder Singh v. Union of India, AIR 1986 SC 1527 the Supreme Court held that ordinarily a theka should be granted after advertising it in well known newspapers having wide circulation. In Haji T.M. Hassan Rawther v. Kerala Financial Corporation, AIR 1988 SC 157 and Pashu Shav Chhedan Audyogic Utpadan Sahkari Samiti v. Nagar Palika, 1990 (1) UPLBEC 687 : 1990 All LJ 300; Swatantra Bihar Sahkari Avas Samiti v. State of U.P., (1992) 1 All LR 32 : 1992 All LJ 634 : (AIR 1992 All 196) it was held that ordinarily a public auction is the fair way to grant public contracts.
8. In Ram and Shyam's case (supra) the Supreme Court held that ordinarily public contracts should not be given by public negotiations. The principles of granting such contracts was laid down by the Supreme Court in Air India Ltd. v. Cochin International Airport Ltd., (2000) 10 JT (SC) 481 : AIR 2000 SC 801 and ordinarily these principles should be followed. It has also been held that advertisement in an unknown or little known newspaper would also not be valid vide A.S. Advertising Co. v. Nagar Nigam, (2001) 1 All WC 28 : 2000 All LJ 274. In the present case no good reason has been given for not advertising the theka for grant of Tehbazari, after the contract expired on 27-4-2003.
9. In our opinion there must be transparency in these matters of grant of public contracts, otherwise Article 14 of the Constitution will be violated. It is only in rare and exceptional cases, and for good reasons, that a public contract should be granted without advertising it in well known newspapers and holding public auction/public tender.
10. A Division Bench decision of this Court in Karan Singh v. State of U.P., Writ Petition No. 51206 of 2000 decided on 1-12-2000 (reported in 2001 All LJ 276) has held that the period of a lease cannot be extended. A Division Bench of this Court in Ram Narain Pandey v. State of U.P., Writ Petition No. 31712 of 1993 decided on 30-9-1993 and in Jata Shankar v. State of U.P., Writ Petition No. 13638 of 1993 decided on 5-10-1993 also took this view. We are in agreement with these decisions and we are also of the opinion that once a public contract has been granted for a specific period then on the expiry of the period there is no question of renewal and there must be public auction/public tender after advertising in well known newspapers having wide circulation, otherwise Article 14 of the Constitution will be violated, and a monopoly may be created.
11. If it is held that even if the period of the contract has expired there can be extension of the contract then logically it would mean that a contract can go on for term after term and can be extended for 100 years or even more. This would create a monopoly in favour of a party, which would be illegal. It would also be against the interest of the State because in a public auction the State naturally can get higher amount of royalty for grant of the mining lease. In fact granting such extension creates an impression that there is some collusion between the grantee and the authorities.
12. It has been submitted by the learned counsel for the respondents that the grantee often invests a huge amount of money and hence he should be granted extension of the contract. We cannot accept this contention. When the contract is granted the party knows the period for which he has been granted the contract, and he also knows that his right exists only till the expiry of the contract. Hence whatever investment he wants to make should be from that point of view. He cannot claim extension just because he has invested a huge amount of money.
13. Learned counsel for the respondents has relied on Rules 6 and 8(i)(b) of the U.P. Minor Mineral (Concession) Rules 1963 in aid of his submission that the period of the mining lease can be extended. We are of the opinion that no rule can violate the Constitution of India. It may be mentioned that in every country there is a hierarchy of laws as explained by the eminent jurist Kelsen in his The Pure Theory of Law' (see Kelsen's The General Theory of the Law and State'). In our country the hierarchy is as follows:
(i) The Constitution of India;
(ii) Statutory law, which may be either Parliamentary law or law made by the State legislature;
(iii) Delegated legislation, which may be in the form of rules, regulations etc. made under the statute;
(iv) Administrative or executive instructions.
14. The general principle is that if there is a conflict between a higher law and a lower law, then the higher law must prevail. Article 14 is a part of the Constitution. Hence it is in the first layer of the hierarchy, whereas the rules in the U.P. Minor Mineral (Concession) Rules are pieces of delegated legislation and thus belong to the third layer of the hierarchy. Obviously if there is conflict between the first layer and the third layer then the norm in the first layer will prevail, and the norm in the lower layer of the hierarchy will become ultra vires. Hence in our opinion, no rule can be made which violates Article 14 of the Constitution.
15. It may be mentioned that against the Division Bench decision of this Court in Karan Singh v. State of U.P. (2001 All LJ 276) (supra) the State Government had filed an S.L.P. before the Supreme Court being S.L.P. (Civil) No. 4019 of 2001 which was dismissed on 11-7-2001. In fact the Supreme Court observed in that order:
"We see no reason as to why the State has filed the present S.L.P. The S.L.P. is dismissed."
16. For the reasons given above, we quash the lease granted in favour of respondents No. 5 and 6 and direct the State Government to advertise the contract for the lease In question in two well known newspapers having wide circulation and thereafter hold public auction/public tender in which all eligible persons can apply. If the petitioner or the respondents No. 5 and 6 are eligible they can also apply. Till the lease is granted in this manner the D.M., as an interim measure, can operate the lease.
17. The petition is allowed.