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Ganesh Ram Sharma An... v. Secretary To The Gov...
Structured Summary of the Provided Opinion
Factual and Procedural Background
These are three applications under Article 226 of the Constitution of India challenging orders of the Secretary to the Government of Assam in the Supply Department directing sale of various stocks of Government paddy to certain proposed vendees (the opposite party vendees). A notification issued by the Secretary (circa 20-10-1955) invited sealed tenders on printed forms, with conditions including deposit of earnest money (Rs. 1 per maund) by Treasury chalan. The petitioners (including the proprietor of The National Rice Mill, Jorhat) submitted tenders accompanied by earnest money deposits. The Department accepted, in preference, tenders from other bidders who had not deposited earnest money at the time of submission (and in some instances had used typed copies rather than the printed tender forms). The petitioners contend the Secretary violated the advertised terms and conditions and sought to set aside the sale orders by writ under Article 226.
Legal Issues Presented
- Whether the administrative acceptance of tenders that did not strictly comply with the Department's advertised terms (e.g., absence of earnest money or use of typed forms) amounted to violation of statutory rules or legal obligations such that the High Court could enforce those conditions by a writ under Article 226 of the Constitution.
- Whether the Secretary to the Government (and the State acting under directions of the Government of India) abused administrative discretion or acted unlawfully in preferring higher-priced tenders that were not accompanied by the prescribed earnest-money chalans, thereby entitling the petitioners to relief in writ proceedings.
Arguments of the Parties
Petitioners' Arguments
- The tenders accepted by the State were not in accordance with the terms and conditions laid down in the notification and printed tender forms (e.g., lack of required earnest-money chalans; submission on typed copies rather than printed forms).
- Because the accepted tenders failed to conform to the prescribed conditions, the Secretary was not justified in preferring those tenders over the petitioners' compliant tenders; the sale orders should therefore be set aside.
- There was no justification for showing favour to the opposite party vendees whose tenders were not in order; the petitioners argued they should have been preferred.
- In respect of a certain quantity the petitioner in Civil Rule No. 158 of 1955 claims his tender was accepted and he deposited the full consideration but did not obtain delivery; he urges relief or at least protection of that accepted allotment.
Respondent / State (Secretary to the Government of Assam) Arguments
- The Government did not guarantee any definite quantity or quality of paddy to buyers and reserved the right to accept or reject any tender without assigning reasons.
- The State had discretion to reject all tenders and resell as it wished; acceptance of the highest offers (subject to deposit of earnest money before formal communication of acceptance) was in line with instructions after consulting the Government of India.
- Although petitioners' tenders were accompanied by earnest-money deposits, the accepted tenders offered higher prices; the absence of chalans with those accepted tenders did not divest the State of its discretion to prefer higher offers.
- No statutory rule or provision of law was violated; petitioners' fundamental or valuable rights were not shown to be infringed by these discretionary administrative orders.
Table of Precedents Cited
No precedents were cited in the provided opinion.
Court's Reasoning and Analysis
The Chief Justice (Sarjoo Prosad, C.J.) and Justice H. Deka considered whether the Department's actions amounted to a legal wrong enforceable by writ. The Court's analysis proceeded along these lines:
- Nature of the orders: The challenged orders were administrative in nature (sales of government stocks) and not the product of statutory rule-making or exercise of statutory powers that created enforceable legal obligations on the State to accept only strictly conforming tenders.
- Content of the tender conditions: Although the printed tender conditions required Treasury chalans showing deposit of earnest money and use of printed tender forms, those conditions were not statutory enactments. The advertised forms themselves expressly reserved the Government's right to accept or refuse any tender, including the right to reject all tenders without assigning reasons.
- Discretion of the State: The State, acting under directions of the Government of India and after consultation with the Food Ministry, considered tenders and decided to accept the highest-priced offers on condition that earnest money be deposited before formal communication of acceptance. Telegrams were sent to require deposit, and the successful bidders then deposited earnest money.
- Standard for judicial intervention: The Court reiterated its limited jurisdiction under Article 226 in matters of administrative discretion — intervention is appropriate where there is illegality apparent on the face of the record, direct violation of statutory rules, or infringement of fundamental or valuable rights. Mere unfairness, discrimination, or departure from non-statutory departmental conditions does not necessarily attract writ jurisdiction.
- Application to facts: The Court found no shown violation of statutory rules or legal rights by the petitioners. While the Secretary's preference for higher-priced offers (even where those tenders initially lacked earnest-money chalans or used typed forms) may appear unfair or discriminatory, that fact alone did not establish a legal wrong for which Article 226 relief was available. The petitioners had not demonstrated an infringement of rights enforceable by writ.
- Alternate remedy: The Chief Justice noted that if a petitioner had in fact paid consideration and been wrongfully denied delivery, that might give rise to a claim for damages in ordinary civil proceedings; however, such a claim would not render these matters amenable to writ relief under Article 226.
- Concurring judge's view (H. Deka, J.): Justice Deka agreed with the outcome but expressly observed dissatisfaction with the Government's fairness in particular instances (pointing out the Department's departure from its own advertised terms and discriminatory treatment). Despite this view, he acknowledged the constitutional and jurisdictional limits: because the rules were not statutory and the State enjoyed discretion, the Court could not, under Article 226, compel the State to sell to particular persons or enforce the non-statutory tender conditions.
Holding and Implications
CORE HOLDING: The applications under Article 226 are rejected and the petitions are dismissed.
Immediate consequences for the parties:
- No writ relief was granted; the administrative sale orders in favour of the opposite party vendees were not set aside by the Court.
- The Court found no violation of statutory rules or any legal right of the petitioners that would permit intervention under Article 226.
- The Chief Justice indicated that if any petitioner has a separate cause of action (for example, payment of consideration without delivery), a civil claim for damages may lie, but such a remedy is distinct from writ jurisdiction and was not entertained in these proceedings.
- The Court ordered that, in the circumstances disclosed, no costs would be awarded to the respondents.
Broader implications: The opinion emphasizes the limited scope of writ jurisdiction under Article 226 in matters of administrative discretion where departmental tender conditions are not statutory. The decision does not establish a new statutory interpretation or precedent beyond applying this jurisdictional principle to the facts of these cases.
Sarjoo Prosad, C.J:— These are three applications under Article 226 of the Constitution of India, in which the petitioners have prayed for setting aside orders of the Secretary to the Government of Assam in the Supply Department, directing sale of certain stocks of paddy belonging to Government to the proposed vendees who are party-respondents to these applications.
2. The orders in question are attacked mainly on the ground that the tenders submitted by the proposed vendees were not in accordance with the terms and conditions laid down by the Department for the submission of tenders, and, as such, the Secretary was not justified in accepting the tenders of those vendees in preference to the tenders of the present petitioners. The petitioner in Civil Rule No. 158 of 1955 is a businessman of Jorhat where he owns a rice-mill known as The National Rice Mill, which is situated at Madhabpur, P.O Titabar. The Secretary to the Government of Assam in the Supply Department issued a notification on or about 20-10-55, inviting sealed tenders godownwise for sale of various stocks of Government paddy lying in different godowns specified in the notification.
3. According to that notification, the tenders were to reach him by 5-11-55 on printed forms containing the terms and conditions of sale, which were available in certain Government offices on payment of a cash amount. One of the conditions mentioned in the form was that the tenders should be accompanied by chalans showing deposit of earnest money at the rate of rupee one per maund on the declared quantity in any Government Treasury in Assam under the head “Revenue Deposit.”
4. The earnest money was liable to be forfeited in the event of the tenderer resiling from his offer or in the case of his failure, after acceptance of the tender, either to deposit the entire amount or to remove the stocks sold within the time specified. The Page: 159earnest money was, however, refundable to the tenderer in case the tender was not accepted by the Government.
5. The petitioner alleges that, in pursuance of the above notification, he submitted his tender on 5-11-55 for purchase of ten thousand maunds of paddy lying at the Reserve Godown at Jorhat at the rate of Rs. 8/8/- per maund, and he filed a chalan along with it showing the deposit of earnest money to the tune of Rs. 10,000/- (ten thousand only) in the State Bank of India, Shillong branch.
6. He, however, received information from the Additional Secretary to the Government of Assam, Supply Department, that his tender had been accepted in respect of 1561 maunds of paddy only at the rate proposed by him.
7. Accordingly, on 25-11-55, the petitioner deposited at Jorhat Treasury the balance of the amount payable by him in respect of the sale of the quantify of paddy for which his tender had been accepted. He later on learnt that the Department had accepted the tender of respondent No. 3, Harakchand Radhakishen, for the sale of 9639 maunds of paddy lying at the said Reserve Godown, at the rate of Rs. 9/- per maund.
8. It is stated that in submitting the tender, this respondent (No. 3) had not deposited the earnest money, as required by the conditions of the tender form, and yet the Secretary to the Government of Assam in the Supply Department sent him a telegram on 19-11-55 asking him to deposit the earnest money long after the date of submission of the tender.
9. In the other two cases, the allegation of the petitioners is that the proposed vendees not only failed to deposit the earnest money and submit the required chalans along with the tender forms, but that they had submitted their tenders not on the printed forms but on typed copies thereof; and thus the tenders submitted by them were not at all in conformity with the terms and conditions either of the notification or of the form of tender.
10. It is argued on behalf of the petitioners that the proposal of the Secretary, Supply Department, to sell these quantities of paddy to the opposite party vendees was clearly in violation of the terms and conditions laid down by the Department itself for the sale of Government stocks of paddy, and, as such, the orders should be set aside.
11. It is further argued that there was absolutely no justification for the Department to show any favour to the opposite party vendees when their tenders were not in order, and no good reason has been assigned for not accepting the tenders of the petitioners, which otherwise should have been accepted.
12. On behalf of the Secretary to the Government of Assam in the Supply Department, a counter-affidavit has been filed, wherein it is stated that, on the terms and conditions for the sale of the paddy, the Government did not guarantee to make any definite quantity or quality of paddy available to the buyer, and further that the Government reserved the right to accept, without assigning any reason, any tender offered by an intending buyer.
13. It is submitted that it was open to Government to reject all the tenders without assigning any reason therefor, and that Government had complete discretion in the matter. In the present case, it is submitted that the stocks of paddy were procured by the State Government in different godowns, but after decontrol it was decided to dispose of the stocks according to the directions of the Government of India. Tenders were accordingly invited from intending purchasers in the printed form, a copy of which is annexed to the petitions.
14. On the conditions mentioned in the printed form, it was notified that the tenders should be accompanied by Treasury Chalans showing deposit of earnest money at the rate of rupee one per maund on the declared quantity, and it is not disputed that the tenders of the petitioners were accompanied with such deposits; but it is said that these tenders offered lower prices than what were offered by the opposite party vendees in these cases, and that although the tenders offered by the latter were not accompanied by Treasury chalans showing deposit of earnest money, yet they were preferred in view of the maximum price which had been offered by them.
15. The tenders were opened and considered in the presence of the representatives of the Government of India, and after consulting the Food Ministry to the Government of India, the tenders of those whose rates were the highest were accepted on condition that they deposited the earnest money before the acceptance order was formally communicated to them. Telegrams were, therefore, sent in pursuance of this decision and then the opposite party vendees deposited the earnest money and were allotted the quantities of paddy proposed to be sold to them.
16. It is claimed, therefore, on behalf of the State that it was not binding on the Secretary, Supply Department, to accept the tenders of the petitioners, and that the absence of the earnest money along with the submission of the tenders did not take away the discretion of the State Government or, for the matter of that, that of the Government of India, to accept the highest offer which was made for the purchase of the paddy in question.
17. It is also contended that there was no violation of any statutory rule in these cases, nor have the petitioners shown that any of their valuable rights or fundamental rights has been infringed by the orders in question, which were entirely discretionary orders, which the Secretary, Supply Department, could pass in the circumstances.
18. The question which arises is — whether, in these cases, there has been any violation of any statutory rules and obligations, of which this Court could direct enforcement. The orders in question are entirely administrative orders, and although the tenders submitted by the opposite party vendees may not have been quite in form, as prescribed by the terms and conditions of sale, those conditions were not statutory conditions, and it is not shown how we could, by a Writ under Article 226 of the Constitution, enforce those conditions. The conditions do show that Government reserved the right to accept or not to accept any tender offered by any party interested.
19. Indeed, that position is not disputed by Mr. Ghose appearing on behalf of the petitioners. He even concedes that it was open to the Department to reject all the tenders and then to sell the quantities of paddy afresh to any person they liked. If this is so, then it cannot be contended that these are appropriate cases in which we can exercise our extraordinary powers of issuing writs under Article 226 of the Constitution.
20. In these cases, there may have been some justification for the Secretary, Supply Department, not to accept the tenders given by the petitioners, because it is undoubted that the Secretary, under the directions of the Government of India, accepted the tenders which offered the highest prices for the paddy to be sold. It is true that the rules and conditions once laid down by the Department for such sales, should be respected as far as practicable, and there should be no impression given to the members of the public, with whom the Department deals, that there was something sinister or something undesirable in not conforming strictly to the rules.
21. But, in the present case, the justification claimed by the State Government for not strictly adhering to the rules of tender is that they were getting higher prices for the sale of the paddy. Apart from the fact that there had been no violation of any statutory rules or provisions of law in these cases, we are not satisfied that the petitioners have been able to establish the violation of any legal right at all so as to induce our interference. The applications, therefore, cannot be entertained and have to be rejected.
22. It has been urged by Mr. Ghose that, at any rate, his tender in respect of a certain quantity of paddy has been accepted, and he has deposited the entire consideration for the sale of that paddy, and yet he has not obtained any delivery of the same, and that the opposite parties are now trying to put him off by proferring certain excuses in favour of the vendee respondent in Civil Rule No. 158 of 1955.
23. If this is so, this may constitute a cause of action in favour of the petitioner in a claim for damages, if any, but it does not attract our jurisdiction under Article 226 of the Constitution. These petitions, therefore, fail and are rejected. In the circumstances disclosed in these cases, we do not think that we would give any costs to the respondents.
H. Deka, J.:— I agree with the order proposed by my Lord the Chief Justice that the Rules should be discharged.
24. Since the facts have been elaborately stated in the judgment of my Lord, I need not recount them over again. Looking, however, at the facts as they are, I am not satisfied that the Government dealt fairly towards the petitioners in the matter of passing orders for sale in favour of the opposite party No. 3, Harakchand Radhakishen, in Civil Rule No. 158 of 1955 and opposite party No. 3, Nethuram Jaidayal, in the other two cases.
25. The terms on which the applications or tenders were invited, were not respected in the matter of passing the order that has been impugned. The express terms in the notice were that the tenders should be submitted in forms available from the Supply Offices in the District and Sub-Divisional headquarters, and the set of rules that were supplied with these forms made it a condition precedent that the tenders should be accompanied by chalans showing deposit of earnest money at the rate of rupee one per maund on the declared quantity, in any Government Treasury.
26. In all these three cases, the parties who have been favoured with the order, did not deposit any earnest money whatsoever. The only excuse shown by the Government is that they quoted higher rates for the purchase of the paddy than the petitioners did. It is quite obvious that these tenders might have been quite speculative, as those tenderers had not to face any risk as to the forfeiture of the earnest money in case they did not accept the order of sale in their favour, whereas the persons who put in the earnest money had to face that penalty in case they did not accept the Government order.
27. The order of sale in favour of such persons who did not deposit the earnest money, therefore, amounted to an action unwarranted under the rules which the Government proposed to abide by. That the Government had obviously shown some discrimination in favour of these persons, is clear from another fact, namely, that in the application of Haribux Kanwatia in Civil Rule No. 160 of 1955, we find that he was personally present at the time when the tenders were opened, and when he found that the tenders, without earnest money, were being considered, he verbally represented to the respondents, namely, the Secretary to the Government of Assam, Supply Department, and others, that he was prepared to purchase fifty thousand maunds of paddy at the rate of Rs. 9/- per maund, which was the highest rate that was being accepted, but the Department refused to take that into consideration on the ground that it was not put down in his tender form.
28. If the conditions of tender were meant to be strictly enforced in his case, there is no reason for relaxing the same in case of some other persons. Similar discrimination was shown in the matter of refusing to sell the quantity of paddy to Ganesh Ram Sharma, petitioner in Civil Rule No. 158 of 1955, for which his tender had been accepted.
29. Actions like these may not be strictly illegal, but surely unfair. A private businessman may do away with scruples for the sake of gain or profit, but the action of the Government or a State employee should be of a higher level. Our difficulty is that we cannot step in all cases where we find that there has been unfairness or discrimination in an administrative action.
30. The jurisdiction of the Court is limited, to a, great extent, in exercising its powers under Article 226 of the Constitution, to some illegalities apparent on the face of the record or direct or indirect violation of some statutory rules or provisions. Taking the Government as an ordinary party, we cannot force their hands to sell their paddy to any body in particular, because they have unfettered discretion in the matter, nor can we issue a writ directing them to sell the paddy in terms of the notification issued by them.
31. Neither the notifications nor the rules they advertised are framed under any statutory provisions or provisions coming under any Act, therefore, they enjoyed certain liberties in the matter, which we are unable to check under Article 226. The prestige of the Government should be its own care. In this view, of things, I agree that no relief can be given under these petitions.
32. Petitions dismissed.
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