Mewalal Agarwal vs State of West Bengal and Others

M.H.S. Ansari, J.—The instant writ application is filed seeking a direction to the respondent Additional District Magistrate, Burdwan to allot the seized/Unclaimed coal to the petitioner on the basis of his representation dated June 29, 2001.

It is the case of the petitioner that he used to purchase the seized/ unclaimed coal from different police station at the'' Government rate, depositing the sale proceeds in the Treasury.

The coal, it is stated, is one seized by the police authorities under the Police Act. u/s 25 of the Police Act power has been conferred upon the police officers with regard to disposal of such property as they shall receive from the Magistrate of the District.

On behalf of the State respondents Mr. SanJIb Mishra, lr. Government Pleader placed before this Court a "NOTE" of the Additional District Magistrate, Assansol, prescribing the procedure with regard to disposal of unclaimed properties. The revised modalities have been stated in the Annexure to the Memo No. 54/Adm/GM dated August 10, 1998. The procedure prescribed is to first intimate the public for claiming the property within a period prescribed.

In the event, no such claims are received and the period prescribed therefore has expired, such unclaimed property Including coal is to be disposed of by auction and only after giving wide publicity. Paragraph ''4'' of the said revised procedure for disposal of unclaimed property for the sake of convenience is extracted hereunder;

"In the event as stated in Para-3 i.e. no claim within six months is received, such unclaimed materials including coal shall have to be disposed oil by auction and only after giving wide publicity."

It is well settled that where the State is awarding contracts, it should be done only after an advertisement, so that public at large gets an opportunity to participate and there is fair competition. In Fertilizer Corporation Kamgar Union v. Union of India AIR 1981 SC 344, at 350, a Constitution Bench observed as follows;

".....We want to make it clear that we do not doubt the bona fides of the authorities but as far as possible, sales of public property when the intention is to get the best price, ought to take place publicly. The vendors are not necessarily bound to accept the highest or any other offer, but the public at least gets the satisfaction that the Government has put all its cards on the table."

In State of Uttar Pradesh Vs. Shiv Charan Sharma and Others, , the dispute was with regard to grant of lease for excavating sand and minor minerals. It was observed that the State should sell the right by public auction and not on application of a party as public auction with open participation and a reserved price guarantees public interest being fully sub served.

In this connection, it must also be noticed as held by the Supreme Court in certain of its Judgments, reference to which will be made presently that the Government is entitled to make pragmatic adjustment and also decisions which may be necessary or called for under the prevalent peculiar circumstances.

In Shri Sachidanand Pandey and Another Vs. The State of West Bengal and Others, , it was held that as regards the question of propriety of private negotiation with an individual or corporation, it should be borne in mind that State owned or public owned property is not to be dealt with at the absolute discretion of the executive. Certain precepts and principles have to be observed, public Interest being the paramount consideration. One of the methods of securing the public Interest when it is considered necessary to dispose of the property is to sell the property by public auction or by inviting tenders. But such a rule is not an Invariable rule. There may be situations where there are compelling reasons necessitating departure from the rule. As and when a departure 1st made from the general rule, it must be shown, that such an action was rational and not suggestive of discrimination. In that case on facts the Court found that on the commercial and financial aspect, the lease granted in favour of a group of hoteliers, not arbitrary as the method of "net sales" was held to be fairly well known method adopted in similar situations. To the same effect is the Judgment in G.D. Zalani and another etc. Vs. Union of India and others, . In Kasturi Lal Lakshmi Reddy, Represented by its Partner Shri Kasturi Lal, Jammu and Others Vs. State of Jammu and Kashmir and Another, , Supreme Court, after referring to various judgments. Including the judgment in Ramana Dayaram Shetty Vs. International Airport Authority of India and Others, , held as under;

"It is imperative in a democracy governed by the rule of law that governmental action must be kept within the limits of law and if there is any transgression, the Court must be ready to condemn it. It is a matter of historical experience that there is a tendency in every Government to assume more and more powers and since it is not an uncommon phenomenon in some countries that the legislative check is getting diluted, it is left to the Court as the only other reviewing authority under the Constitution to be Increasingly vigilant to ensure observance with the rule of law and in this task, the Court must not flinch or falter. It may be pointed out that this ground of Invalidity, that the Governmental action is unreasonable or lacking in the quality of public interest, is different from that of mala fides though it may, tn a given case, furnish evidence of mala fides;"

In M.P. Oil Extraction and Another Vs. State of M.P. and Others, , Supreme Court held as under;

"Although to ensure fair play and transparency in State action, distribution of largesse by Inviting open tenders or by public auction is desirable, it cannot be held that in no case distribution of such largesse by negotiation is permissible. In the instant case, as a policy decision protective measure by entering into agreements with selected industrial units for assured supply of sal trees at concessional rate has been taken by the Government. The rate of royalty has also been fixed on some accepted principle of pricing formula as well be Indicated hereafter. Hence, distribution or allotment of sal seeds at the determined royalty to the respondents and other units covered by the agreements cannot be assailed. It is to be appreciated that in case, distribution by public auction or by open tender may not achieve the purpose of the policy of protective measure by way of supply of sal seeds at concessional rate of royalty to the Industrial units covered by the agreements on being selected on valid and objective considerations."

It was further held that principle of reasonableness and non-arbitrariness in governmental action is the core of our entire Constitutional scheme and structure. On the facts of that case, the action of the State Government in granting a contract by way of negotiation was held not arbitrary or irrational,

In such view of the matter, petitioner can have no right to claim, consideration of his representation for allotment of coal. The petitioner would have to await the notice with regard to disposal by auction and to participate in the said auction.

For the reasons aforestated, the writ application is dismissed. There shall, however, be no order as to costs.

Let urgent xerox certified copy of this Judgment and order be furnished to the appearing parties, if applied for, on priority basis.

Application dismissed