Case: Purxomoma Ramanata Quenin Vs. Makan Kalyan Tandel &amp; Others

certain statutory provisions. This circumstance, in our opinion, would not detract from the binding effect of the general principle enunciated in those cases.13. We may now deal with the contention of Mr. Iyengar that the lease of distilleries is governed by para 2 of Article 9 of Legislative Diploma No. 1761. In this connection we find that the judgment of the learned Judicial Commissioner does not show that any such ground was urged before him. Mr. Parekh on behalf of the appellant submits that the said Legislative Diploma was no longer in force at the time the distillery was leased in favour of the appellant. It is, in our opinion, not necessary to go into this aspect because it does not appear that tenders were invited in connection with the lease of the distillery in pursuance of the provisions of Article 9 of the Legislative Diploma. According to para 2 of Article 9 upon which reliance has been place by Mr. Iyengar, the lease can be put to auction in the stipulated conditions when it is found not convenient to renewed the previous one. The aforesaid paragraph, it would thus appear, relates to auction and not to calling of sealed tenders. An auction, as stated in Halsburys Laws of England, Third Edition, Vol. 2, page 69, is a manner of selling or letting property by bids, and usually to the highest bidder by public competition. An invitation to tender is a mere attempt to ascertain whether an offer can be obtained within such margin as the building owner or employer is willing to adopt, or, in other words, is an offer to negotiate, an offer to receive offers, an offer to chaffer (see Halsburys Laws of England, Third Edition, page 422). There is, in our opinion difference between auction and invitation for tenders. As there was no auction but only invitation for tenders in the present case, it cannot be said that the lease of the distillery was governed by Article 9 of the Legislative Diploma.14. It has been argued by Mr. Iyengar that there must have been some negotiation between the Government and the appellant as a result of which the appellant raised his offer so that it might exceed that of respondent No. 1. This may have been so but it was apparently with a view to ensure that the pecuniary interest of the Government did not suffer as a result of the rejection of the tender of respondent N. 1. The appellant was consequently made to pay Rs. 1,000 more than what had been offered by respondent No. 1.15. Mr. Iyengar has referred to some of the decisions of this Court, but none of them, in our opinion, is of any material assistance to respondent No. 1. In Century Spg. and Mfg. Co. Ltd. v. The Ulhasnagar Municipal Council, (1970) 3 SCR 854 = AIR 1971 SC 1021 ) this Court observed that a public body is not exempt from the liability to carry out its obligations arising out of representation made by it when a citizen who relies upon that representation alters his position to his prejudice. No such question arises in the present case because it is not shown that respondent No. 1 has altered his position to his prejudice by relying upon any representation made by the authorities.16. In Rashbihari Panda v. State of Orissa, (1969), 3 SCR 374 = (AIR 1969 SC 1081 ) this Court dealt with a Government scheme for sale and disposal of Kendu leaves. It was found that the right to make tenders for the purchase of Kendu leaves was restricted to those persons who had obtained contracts in the previous year. The scheme was held to be violative of Articles 14 and 19 (1) (g) because it gave rise to monopoly in Kendu leaves to certain traders. The dictum laid down in the above case cannot be of much assistance because there was no such restriction in the present case with regard to the making of the tenders.17. Dwarka Prasad Laxmi Narain v. The State of Uttar Pradesh, 1954 SCR 803 = (AIR 1954 SC 224 ) related to the validity of clause 4 (3) of the Uttar Pradesh Coal Control Order, 1953 according to which the licensing authority was given absolute power in the matter of grant, revocation, cancellation or modification of the licences issued under that Order. No such question arises in the present case.18. The last case referred to on behalf of respondent No. 1 is Guruswamy v. State of Mysore, AIR 1954 SC 592 . In that case a liquor contract was knocked down in an auction by the Deputy Commissioner in favour of one. A who was the highest bidder, B who was present at the auction but did not bid, saw the Excise Commissioner and offered Rs. 5,000/- in excess of As bid. Bs offer was accepted and As bid was cancelled. It was held that the cancellation of As bid though irregular was proper as A had obtained no right to the licence by the mere fact that the contract had been knocked down in his favour. The action of the Deputy Commissioner in giving contract to B was held to be wrong as it was found to be contrary to the rules framed under the Mysore Act. No such contravention of a statutory rule has been shown in the present case because of the lease of the distillery in question to the appellant.19. It may be stated that no allegations were made in the writ petition by the respondent No. 1 that the act of the authorities in the grant of lease of the distillery in question to the appellant was mala fide. There arises consequently no occasion for us to into that aspect. Nor has the above act been shown to be vitiated by any such arbitrariness as should call for interference by the Court. Indeed, as mentioned earlier, the matter is concluded by the decisions of this Court.

Decision (1 = appeal accepted, 0 = rejected): 1

Explanation:
1[ds]8. There is, in our opinion force in the contention advanced on behalf of the appellant that the Judicial Commissioner should not have without giving some cogent reason set aside the lease of the distillery in favour of the appellant. Pursual of the judgment shows that the main reason which weighed with the learned Judicial Commission in setting aside the lease in favour of the appellant was the submission made on behalf of the State that it was prepared without accepting the correctness of the contentions of respondent No.1 to set aside the lease if the court so desired.This circumstance in our opinion was hardly sufficient to warrant the setting aside of the lease in favour of the appellant. The person who was primarily affected by the setting aside of the lease was the appellant to whom the lease had been granted. In the absence of any concurrence of the appellant, the fact that the Government was prepared if the court so desired, to set aside the lease could hardly provide valid basis for the setting aside of the lease.We may now deal with the contention of Mr. Iyengar that the lease of distilleries is governed by para 2 of Article 9 of Legislative Diploma No. 1761. In this connection we find that the judgment of the learned Judicial Commissioner does not show that any such ground was urged before him. Mr. Parekh on behalf of the appellant submits that the said Legislative Diploma was no longer in force at the time the distillery was leased in favour of the appellant. It is, in our opinion, not necessary to go into this aspect because it does not appear that tenders were invited in connection with the lease of the distillery in pursuance of the provisions of Article 9 of the Legislative Diploma. According to para 2 of Article 9 upon which reliance has been place by Mr. Iyengar, the lease can be put to auction in the stipulated conditions when it is found not convenient to renewed the previous one. The aforesaid paragraph, it would thus appear, relates to auction and not to calling of sealed tenders. An auction, as stated in Halsburys Laws of England, Third Edition, Vol. 2, page 69, is a manner of selling or letting property by bids, and usually to the highest bidder by public competition. An invitation to tender is a mere attempt to ascertain whether an offer can be obtained within such margin as the building owner or employer is willing to adopt, or, in other words, is an offer to negotiate, an offer to receive offers, an offer to chaffer (see Halsburys Laws of England, Third Edition, page 422). There is, in our opinion difference between auction and invitation for tenders. As there was no auction but only invitation for tenders in the present case, it cannot be said that the lease of the distillery was governed by Article 9 of the Legislative Diploma.14. It has been argued by Mr. Iyengar that there must have been some negotiation between the Government and the appellant as a result of which the appellant raised his offer so that it might exceed that of respondent No. 1. This may have been so but it was apparently with a view to ensure that the pecuniary interest of the Government did not suffer as a result of the rejection of the tender of respondent N. 1. The appellant was consequently made to pay Rs. 1,000 more than what had been offered by respondent No. 1.It may be stated that no allegations were made in the writ petition by the respondent No. 1 that the act of the authorities in the grant of lease of the distillery in question to the appellant was mala fide. There arises consequently no occasion for us to into that aspect. Nor has the above act been shown to be vitiated by any such arbitrariness as should call for interference by the Court. Indeed, as mentioned earlier, the matter is concluded by the decisions of this Court.