(1.) Some operative facts, which have either been admitted or at any rate not disputed by the respondents in their affidavit-in-opposition, deserve to be noted, who has been associated with the respondent State, as Organising Agent of Assam State Lotteries ever since 1993 entered into an agreement with the Respondent State on 12.6.95 Annexure-I appointing the petitioner further as distributors of the State Lotteries. The respondents admit this agreement and its terms and conditions, furnishing of Bank guarantees to the tune of Rs. 7,50,000/- by the petitioner covering the period pf first drawal of lotteries.

(2.) The rest are peripheral facts such as the huge country wide net work of selling lottery tickets, which the petitioner was required to set up after showing equally hu|ge amount, appointing stockists and agents, incurring contractual obligations the filing an earlier petition challenging the order dated 30.12.95 Annexure-V, are either matters of record, or have been denied in a laconic manner by the respondents, following want of knowledge of arrangements and investments made by the petitioner, the circumstances compelling withdrawal of the earlier petition, the real controversy veers around the plea taken by the respondent State government its power to terminate or [reopen the contract, either under the terms of agreement, Annexure-I or even independent of it, as the power of the State, to act the larger interest of the people of Assam.

(3.) The dispute as; raised by the respondent, is with regard to the interpretation, of the terms of agreement, Annexure-I, its legal impact, binding effect on the State Government thus allowing the distributor (petitioner) an opportunity of being heard before passing final order is/was on the discretion of the Government 'the power of the State Government to revoke or terminate any contract, the agreement itself was terminable' if the Government considered that the State Lottery brought disrepute to the Government. The Government had power and authority to take a decision to discontinue the State lotteries which was opposed to public policy and public interest and the State Govt. had to take the impugned decision to discontinue the State Lottery as 'the effect of the State Lotteries on the people in the State of Assam, proved to be ruinous both financially and morally and state wide agitations were launced against the continuation of the Assam State Lotteries which had brought serious disrepute to the Govt. of Assam. Hence the impugned action of discontinuance of lottery culminating in the notification dated 12.2.96 as published in the Official Gazette of the Government of Assam, withdrawing the Assam State Lottery Rules 1994, and declaring the same to be inoperative with immediate effect. It is this notification marked as Annexure-IX A, (though erroneously mentioned as Annexure-X A in paragraph 27(A) of the petition) which is the subject matter of challenge along with the order/letter dtd. 30.12.95 (Annexure-5) intimating the petitioner the decision of the State Government to discontinue the State Lottery Draws with effect from 1.2.96. Yet another fact, which needs special mention, as it has a vital contextual bearing, is that the agreement Annexure-I was entered into, by the parties in the wake of the Supreme Court's order in State of Haryana Vs. Suman Enterprises, 1994 (4) SCC 217 wherein the Apex Court dealing with State Lotteries held that a State can not prohibit sale of lottery tickets 'organised' by other States, but can prohibit such sale of lotteries 'authorised' by other States. Mr. Goswami learned counsel appearing for the petitioner, as a first approximation to his systematic chain of arguments attaching the State action, has focussed and concentrated attention, on this contextual aspect, to highlight the importance of the agreement Annexure-I, resulting from the direct motivation provided by the aforesaid judgement. Exploding the unrealistic approach of the State Government to socio-ethical and moral well being of the people of Assam, and its pleaded concern therefore, learned counsel pointed out the stark reality and rightly so, that tickets organised by other States are on sale in the State of Assam, and roaming sale, for that, and its own lottery tickets are not to be sold in the State of Assam, they are to be sold in other States, the concern shown by the State Government holds no water. It does not help maintaining socio-ethical equilibrium of the community, when other disturbing factors, in the shape of a concrete system of sale of lottery tickets organised by other States is not only present on the soil of Assam but also rampant, which does not conform to the professed object and ideal of. the State Government, who is not only helpless but also powerless in the present set of circumstances in banning or prohibiting the sale of lottery tickets within the State of Assam organised by other States.

(4.) Taking up the clue from the socio-ethical moral well-being of the people, as shown by the State, learned counsel for the petitioner mounting a scathing attack on the State action in abusing its power in revoking the contract argued, supported by host of authorities, that ethics and power are not two circles which cross one another. The power of the State in the realm of public contract, as manifested in its administrative action, is also to be judged by certain well established standards. The justness, fairness and reasonableness of State action are the ethical tests to judge the exercise of power by the State. The ethics and power are to be coordinated and not to be subordinated.

(5.) Discussing all the authorities cited by the learned counsel as noted below, would be nothing but an idle parade of familiar learning.

(1) Baburam Prakash Chandra Maheswari Vs. Antarim Zila Parishad, AIR 1969 SC 556; (2) Khudiram Das Vs. State of West Bengal and Ors. AIR 1975 SC 550 (3) Ramana Dayaram Shetty Vs. Airport Authority of India and Ors., AIR 1979 SC 1628; (4) Pournami Oil Mills Vs. State of Kerala and Ors, AIR 1987 SC 590; (5) Union of India and Ors. Vs. Godfrey Philips India Ltd. and Ors., AIR 1988 SC 806; (6) Vencil Pushpraj Vs. State of Rajasthan, AIR 1991 SC 536; (7) Pine Chemicals Ltd. Vs. Assessing Authority and Ors., 1992 (2) SCC: 683; (8) Sri Bakul Oil Industries Vs. State of Gujrat, 1987 (1) SCC 752; (9) Mahavir Auto Stores and Ors. Vs. Indian Oil Corpn. and Ors., 1990 (3) SCC 752; (10) Food Corpn of India Vs. M/s. Kamendu Cattle Feed Industries, 1993(1) SCC 71; (11) Jugal K.P. Sharma Vs. Vijayendra P. Sharma, 1993 (1) SCC 115; (12) Tata Cellular Vs. Union of India, 1994 (6) SCC 651; (13) State of Orissa and Ors. Vs. Radheshyam Meher and Ors., 1995 (1) SCC 652 (14) Union of India and Ors. Vs. B.C.Chaturvedi, 1995 (6) SCC 750.

Suffice it to note, as has been held by the Supreme Court in Express Newspapers Pvt. Ltd. Vs. Union of India, AIR 1986 SC 872 :

"The dictum of Bhagwati, J. in International Airport Authority case that 'arbitrariness was the antithesis of Art. 14' is no more open to be condemned on ground that it would mean that all governmental actions which are not supportable by law were per se be violative of Art. 14. It is rather late in the day to question the correctness of the landmark decision in Maneka Gandhi case and the innovative construction placed by Bhagwati, J. on Art. 14 in the three cases of Royappa, Maneka Gandhi and International Airport Authority which have evolved new dimensions in judicial process."

(6.) The impugned action has been assailed as violative of the principles of natural justice, sufffering from the vice of unreasonableness and in breach of the principles of promissory estoppel and denounced as arbitrary, unreasonable and illegal.

(7.) Learned Additional Advocate General, Mr. Borah, referring to Annexure-B, as filed by the respondents along with their affidavit-in- opposition, submitted that although not necessary yet, a fair reasonable opportunity of being heard was in fact granted to the petitioner before passing the impugned order. He also maintained that State action being in the larger interests of the people of Assam was well within the power of the State, the impugned notification Annexure-IX(a), as issued by the State Govt. is beyond the pale of promissory estoppel as, the individual interests, when it clashes with the larger interest of the people, must yield to it. The doctrine of promissory estoppel is not attracted to the present case.

(8.) Now coming to the question of affording an opportunity of hearing, the respondents pleaded case is :

"That with regard to the statements made in para 10 of the writ petition, the deponent begs to state that the State Govt. decided to discontinue the Assam State Lotteries draw with effect from 1.2.96 and the said decision was communicated to the petitioner vide letter No. FTX-146/93/100 dated 30.12.95 issued by the Secretary to the Govt. of Assam, Finance Department. In reply to the aforesaid notice dated 30.12.95 the petitioner filed an application on 31.1.96 before the Secretary, Finance, Govt. of Assam, requesting for holding of the draws of the Assam State Lottery upto 10.2.96. On receipt of the application the petitioner was heard on the matter regarding discontinuance of holding the State Lottery draw as well as on the prayer for extension of time till 10.2.96."

The petitioner in his affidavit-in-reply filed on 21st August, 1996 has explained the circumstances in which the letter dated 31.1.96 was written, they are reproduced below:

"In view of the fact that the Government issued print orders for different lotteries for different dates upto 15th February, 1996, by the said letter, it was requested to ensure the holding of the draws of the Assam State Lotteries atleast upto 10.2.1996 to avoid further complication for the time being. It was not in reply to the letter of 30.12.1995 as it is categorically and specifically denied that on receipt of the aforesaid letter dated 31.1.1996, the petitioner was heard in the matter rqgarding discontinuance of holding State lottery draws as well as on the prayer for extension of time till 10.2.1996. It is asserted that no hearing of any kind was given at any stage to the petitioner. The impugned order dated 10.12.1995 was passed without giving any notice and/ or hearing to the petitioner."

Further it is averred by the petitioner :

"As regards letter dated 31.1.1996 the deponent begs to state that the petitioners experienced considerable difficulties as the respondents had been trying to frustrate the order of this Hon'ble Court passed in earlier Civil Rule on 10.1.1996. Prior to issuance of the impugned order, the Directorate of State Lotteries having been issuing the printing and release orders to the press for 30 days at a time and that also well ahead of the dates of draws. This practice had been going for the last 2 years. Such procedure ensures orderly holding of different lotteries at different places. After the interim order of this Hon'ble Court was passed in the earlier Civil Rule, the respondents started issuing printing and release orders for 20 days or even less only and that too without any uniformity. Even after issuance of print order on 6th, 8th, 13th and 15th January, 1996, the respondents by communication dated 30.1.96, informed the concerned presses that the said orders were cancelled on the ground that further scrutiny of the scheme is necessary. The concerned printers brought this order of cancellation to the notice of petitioners and the petiaioners are faced with a great crisis by such abrupt cancellation. Under these circumstances, the petitioners had no option but to write to respondents on 31.1.1996, with a request that as print orders upto 15.2.1996 have already been issued, the State may allow holding of all the draws atleast upto 10.2.1996 to avoid complications as a temporary measure. Such a letter was written with the hope that since the earlier Civil Rule was to come for consideration of this Hon'ble Count before 10.2.1996 that request would solve the major crisis. The petitioners had to write the said letter under coercing conditions deliberately created by the respondents even after knowing the interim order of this Hon'ble Court dated 10.1.1996."

The above quotation in extenso has become necessary to decide the contention as advanced by the respondents that the petitioner was in fact given an opportunity of being heard before taking the impugned decision and action.

(9.) Referring to the faulty nature of the affidavit, as sworn by the respondents, learned counsel was critical about it. But keeping aside his criticism for a while, and going by the affixiavit-in-opposition filed by the respondent Nos 1, 2 and 3 in the earlier petition Civil Rule No. 116/96, there remains no doubt whatsoever that no such opportunity of hearing, as now being claimed by the respondents, was given to the petitioner as is evident from paragraph 11 as quoted below :

"That with regard to the statements made in paragraphs 12 and 13, the deponent states that the State Government have not initiated any action for termination of the contract/ agreement with the petitioner. And as such the question of giving notice for termination of the contract with an opportunity to the petitioner of being heard has not arisen in the present case. There is no violation of the principles of natural justice."

It is one thing to contend that there was no need, no legal necessity or requirement to give notice or afford an opportunity of hearing before termination of the contract and altogether a different thing to say that an opportunity was given. This assertion on Jhe part of the respondent State stands contradicted and belied by its own stand taken in the earlier petition.

(10.) This opportunity of hearing, in the circumstances of the case was the bare minimum that was expected of the respondents. The contradicting questions cannot be viewed in isolation of the concerning circumstances and the contextual background as already noted above. It is not an ordinary contract which could be revoked any moment, it is in the realm of public contract where the State held out certain promises to the petitioner but in pursuance to those promises has acted to his detriment, in such circumstances the agreement, Annexrure-I, if it was to be revoked or terminated, would not exclude the rules of natural justice and which could also not be excluded in the circumstances of the present case. The need for affording an opportunity has been propounded even in cases where there is no such provision of hearing. The ensuring consequences of the State action, can well be gauged and envisaged. The aim and object of the principle of natural justice is to prevent miscarriage of justice, to secure justice. If everything was with fair ideal and perfect, so as to exclude an opportunity before taking the impugned action, it could as well have been left to the robots and the enforcement of laws made automatons. Audi alteram partem is a sound rule and their importance lies, as has been held by Bose, J. in Sangram Singh Vs. Election Tribunal, AIR 1955 SC 425 :

"Next, there must be ever present to the mind the fact that our laws of procedure are grounded on a principle of natural justice which requires that men should not be condemned unheard, that decision should not be reached behind their backs, that proceedings that affect their lives and property should not continue in their absence and that they should not be precluded from participating in them."

(11.) Leaving aside actual participation, the petitioner was not even afforded any opportunity of being heard. The documents relied upon by the learned counsel for the respondents in support of his argument even if taken on their face value us correct, and construed in the most liberal manner, yet do nut meet the bare minimal requirement of elementary rules of affording an opportunity, let alone a reasonable opportunity of being heard. The doctrine of promissory estoppel as invoked in the instant case goes hand in hand with legitimate expectation. Learned counsel for the petitioner has cited several judgments in support of his argument, and urged that the petitioner is entitled to relief based on legitimate expectation that the agreement entered into by the State would be carried out and continued for its full term.

(12.) The Doctrine of Legitimate Expectation has been explained in 'Halsbury's Laws of England', Fourth Edition Volume 1(1) page 151 paragraph 81 to the effect that:

"A person may have a legitimate expectation of being treated in a certain way by an administrative authority even though he has no legal right in private law to receive such treatment The expectation may arise either from a representation or promise made by the authority, including an implied representation or from consistent past practice."

(13.) Explaining the doctrine of promissory estoppel in the context of withdrawal of a time-bound exemption notification before expiry of period of its operation by another notification issued under the same statutory provision in public interest, the Supreme Court in one of its recent judgment in Kasinka Trading Vs. Union of India, AIR 1995 SC 874:1995(1) SCC 274 has, even while dismissing the appeal, held :

"The doctrine of promissory estoppel or equitable estoppel is well established in the administrative law of the country. The doctrine represents a principle evolved by equity to avoid injustice. The basis of the doctrine is that where any party has by his word or conduct made to the other party an unequivocal promise or representation by word or conduct, which is intended to create legal relations or effect a legal relationship to arise in the future, knowing as well as intending that the representation, assurance or the promise would be acted upon by the other party to whom it has been made and has in fact been so acted upon by the other party, the promise, assurance or representation should be binding on the party making it and that party should not be permitted to go back upon it, if it would be inequitable to allow him to do so, having regard to the dealings, which have taken place or are intended to take place between the parties. The doctrine of promissory estoppel is applicable against the Government also particularly where it is necessary to prevent fraud or manifest injustice. The doctrine, however, cannot be pressed into aid to compel the Government or the public authority 'to carry out a representation or promise which is contrary to law or which was outside the authority or power of the officer of the Government or of the public authority to make". To invoke the doctrine of promissory estoppel clear, sound and positive foundation must be laid in the petition itself by the party invoking the doctrine. Bald expressions, without any supporting material, to the effect that the doctrine is attracted because the party invoking the doctrine has altered its position relying on the assurance of the Government would not be sufficient to press into aid the doctrine. The doctrine of promissory estoppel cannot be invoked in the abstract and the Courts are bound to consider all aspects including the results sought to be achieved and the public good at large, because while considering the applicability of the doctrine, the Courts have to do equity and the fundamental principles of equity must for ever be present in the mind of the Court, while considering the applicability of the doctrine. The doctrine must yield when the equity so demands if it can be shown having regard to the facts and circumstances of the case that it would be inequitable to hold the Government or the public authority to its promise, assurance or representation."

The only exception to the doctrine of promissory estoppel is the legislative action and may possibly be the larger public interests. The impugned notification is not the result of any legislative action, it is essentially an executive act in resiling the contract and discontinuing or withdrawing the Assam State Lottery Rules, 1994. This action is not immune from promissory estoppel and as already discussed above, the so called larger public interest, as pleaded by the respondents, is merely illusory.

(14.) In the light of the foregoing discussion, was it really too much for a common man to Expect of the mighy State, to follow the rules of natural justice even while resiling from its held out promises? The answer is to be an emphatic, 'No'.

(15.) In view of the foregoing discussion, this petition deserves to be allowed, it is accordingliy allowed. The notification dated 12.2.96, Annexure IX(A) and so also the letter dated 30th December, 1995, Annexure-V to the petition are quashed. The respondents are directed to give effect to the agreement dated 12th June, 1995, Annexure-I. The petition is disposed of. The parties are left to bear their own costs.