508 SUPREME COURT REPORTS (1962] SUPP.

STATE OF ASSAf

TULSI SINGH

(B.P. Sr:nIA, c .. J., K. SusBA RAO N. ltA.JAGOPALA

AYYANGAR, J. R. MuDHOLKAR and T. L.

VF.NKATAR~MA AIYAR, JJ.)

Fcrry-Seltlement nf by auction-!11t!es-01tl~ of officer canduc!1'.ng s1!e -Spe:iri! I.Ji'>~ 1nJ.in!ained by Assci1n aovernmcnt of -persons su, pccted or coafit1w:, d l'J b"- c:>nn '!c!ei 1oit-li sn1.11,7glin'} activilies-Nat?Lre of document-If could be "died on for sdtlinq f!ivil right-tJ-High Court if CtJ1t'd (lcirle m:11t-r, r entr1t., fed fo execulive authoritie•-lndian Evid-.nce .4cl, 1872 (I of 1872). •.35-Norlhern India Ferrie.• Act, 1878 (17 of 1878), as. 4,8,12, r. 19.

Under s. 4 of the Northern India Ferries Act, 1Ri8, the ferry at N was declared to be a puhlir ferry.

Rule I 9 framed under s. 12 of the Act provided that a s>le of frry w.lS generally to ho auctioned to the highest bidder, and the acceptance of a hid by the officer conducting the sale was subject to the approval of the Chief Enginet-r \vho had to see v.rhcthcr that officer had taken into consideration all the factors mentioned in r. 19.

Ferry at N \Vas put up tQ auction and sold to the second rcspo11dent whose bid \''as the lo.vcst, Though the first respondent's hid was the highest, the officer conducting the S<lle, \vithout funning an opinion about the suitability of the first respondent on his o\vn appreciation of matrrials as required under r. 19, rejected first respondent's hid straight -a\vay as his natne. appeared in the. "Speci; ll List"'.

This "Special List" was prepared and maintained by the Government of Assain of persons suspected or confirmed to be connrctcd v.•ith smuggling activities so that no permit or license may be o/anted to such pcrso ts. 'fiiis was in pursuance of thr. prohibition policy of the G )Vernricnt.

The first respondent applied to the Chief Enginrcr for accepting his bid and settling the ferry on him which was rejected, whereupon he moved the High Court of Assam under Art. 226.

The High Court set aside the settlement of the ferry in favour of the second respondent as bein~ violative of s. 8 of the Act and r. 19 and further dr.clarecl that tl1e first rcpon dent was entitled to the scttleinerit as the highest bidder.

Assam Government ca1ne up in appeal by special lea\'c to tlt<: Surreme C.ourt. ·

3 s.c.it.

SUPREME COURT REPORTS 509

The question is whether a bid of a person at the auction of ferry can straightaway te rejected by the officer conducting the sale merely for the reason _that his name appears in the special list and w bet her the H1h Court cc;>ld decide a , question was entrusted to the executive authorities under the Act and make setdement of the ferry.

Held, that the discretion conferred on the officer conduct ing the sale under s. 8 of the Northern Ferries Act read with r. 19 framed under the Act is wide but not unrestricted.

The discretion must be based on the material before him and rrlevant for his consideration and if, on a consideration thereof, he declines to exercise his discretion to accept the bid, his decision is not liable to be reversed by the courts,.

But where there is no material before him on basis of which he rejects a bid his action amounts to non-compliance with the provisions of r. 19 and cannot be upheld.

Held, further, that the "Special List" maintained by the Government of Assam of persons suspected or confirmed to be connected with smuggling activities is not a document falling withins. 35 of the Indian Evidence Act and while such list might serve a purpose in guiding Criminal Intelligence Department, it will be unsafe to re1y on it for deciding civil rights of a person.

Held, also, that even though the order of authorities is riot in accordance with Jaw, it was for the appropriate authorities. to deal with the matter and the High Court could not itself decide '\'hat is entrusted to the executive authorities.

Verappa Pillai v. Raman & Raman Ltd., [1952] S.C R. 583, followed.

CIVIL APPELLATE JURISDICTION : Civil Appeal No. 14 of 1962.

Appeal by special leave from the judgment and decree dated July ll, 1961, of the Assam High

Court in Civil Rule Nu. 64 of HJ6l.

Naunit Lal, for the appellantB.

The respondent did not appear.

State of.A.ssrm

•• Tulri Singh

Slate of .A.ss.im

Trdsi Sm1h

Ai1arJ.

io SUPI~EME COURT REPORTS [1962] SUPP.

1962. March I. The Judgment of the Court waa delivered by

VENKATARAMA. AlYAJt, J.-The short question that arises for our decision in this appeal is whtether the settlement by the Executive Engineer, Golaghat in the State of Assam, of the ferry at N'opcrpatty

c>D the second respondent, Phuka Chandra. Gohain, on January 23, Hi61 was in accordance with the provisions of the orthern India Ferries Act, 1878, hereinafter roferred to as "the Act", and the rules framed thereunder.

The relevant provisions of the Act bearing on this question might now be referred to. Under s.4., the State Government may, from time to time, declare what ferries shall be deemed public ferries.

Section 8 of the Act is as follows :-

"8. The tolls of any public ferry may, from time to time, be let by public auction for a term not exceeding five yea.rs with the approval of the Commisioner, or by public au<'lion, or otherwise than by public auction, for any term with the previous sanction of the State Government.

The leSBee shall conform to the rules made under this Act for the management and coutwl of the ferry, and may be ea.lied upon by the officer in whom the immediate superintend<•nce of the ferry is vested, or, if the ferry is managed by a municipal nr other public body under section 7 or section 7 A, then by that body, to give Ruch security for his good conduct and for the punctual payment of the rent as the officer or body, as the tho case may be, thinks fit.

When the tolls are put up to public auction, the said officer or body, as the case may be, or the officer conducting the sale on his or its behalf, w "'v, for reasons recorded in

writing, refuse to accept the offer of his high est bidder, and may accept any other bid, or may withdraw the tolls from auction."

Rule 19 framed under s.12 of the Act is as follows:-

"The sale shall generally be by auction to . the highest bidder. The Officer conducting the sale for sufficient reason recorded in writing under his hand may refuse to accept the offer of the highest bidder or any bid. The Officer shall in accepting the bid consider the following factors among others :-

( i) Whether the bidder is a native or domicile or an outsider.

(ii) Whether the bidder bas experience of the ferry business.

(iii) Whether he has landed property in his own name within the district or State. can apeak the regional language, is finacially sound and of good conduct, etc." The ferry at N eparpatty has been declared to be a public ferry under s.4 of Act.

On January 23, 1961, the Executive Engineer, Colaghat, put up the lease of the ferry for the year 1961-62 for public auction under s.8 of the Act. At the auction, Tulsi Singh, the first respondent, gave a bid for Rs. 4,200/-,

one Indra Deo Singh for Rs. 4,050/- and Phukan Chandra Gobain, the second respondent for Rs. 3,000/-. The Executive Engineer then made the following Order :-

"Sold to Shri Phukan Chandra Gohain at Rs. 3,000/. (Rupees Three thousand) only es the two other highest bidders fall in special List."

Under Rule 19(a), the acceptance of the bid by the

St•te of .Assam

Tulsi Singh

iyarJ.

S1at1 of Assam

Tu/Ji SU1gh

A(1ar J,

conducting Offioer is subject to the approval of the Chief Engineer, and Rule W(b) provides tho.tho must, in doing so, "consider among others whother the Officer conducting the sale has taken into account and considered a.II the factors m!'ntioned in Rule 19 above." The Chief Engineer approved of the decision of tho executive Engineer dated January 23, 1961, and the sale totbe second respondent was confirmed. Thereupon, on February 6,1!161, t.he first respondent applied to the Chief Engineer for accepting his bid and Rettling the ferry on him.

By his Order dated April i, l!lfil, the Chief Engineer rejected this petition.

On .\fay 9, 1961, the first respondent filtd in the High Court of Assam a writ Petition uwler Ar-t. :!26 attacking the Order of the Executive Engineer datecl .January 2;1, 1961, settling the lease in favour of tho second respondent as contrary to the Act and the Rules, and praying that it might be Hett.led on him. The learned Judges accepted this l'oritention aml set aside the settlement in favour of the soeond respondent as violative of s.8 and Rule 19, and further declared that the first respondent was untitled to the settlement under R:ile 19 as the highest bidder. It is against this Judgment that this appeal by special leave is directed.

The power of tho Executive Enginncr to settle public ferries is derived from s.8 of the Act and the

H.ule~ framed thereundn, and it has theroforo to be exercised in accordance therewith. Under Rule! 9, the sale should genera.Hy be by auction to the highest bidder 9-ml under this provH<Jn the ferry should normally have boen settled wih the first respondent, who gave the bighPst. bid. Section 8, provides that the Officer eon ducting the sale may, for reasons recorded in writing, refuse to accept the offer of the highest bidder and accopt any other bid.

The discretion thus conferred on tho Officer, is wide hut not indefinite or unrestricted.

Rule I 9 provides that in accepting the bid, he has to take into

account certain factors; and under Rule 19(b), the Chief Engineer has to satisfy himself that these factors have been taken into consideration by the conducting Officer when he accepted the bid. It is contended for the appellant that, if there are materials before a conducting officer on which he could refuse to accept the highest bid and he on a consideration, thereof declines, in the exercise of his riiscretion, to accept it, his dicision is not one which is liable to be reviewed by the Court. That is undoubtedly so but when there are no materials before him on which he could act under Rule 19, then that il a case not of exercise of discretion but of want of authority to settle under the Act. Now the only ground given in .the Order dated January 23, 1961, for rejecting the bid of the first respondent which was the highest, is that his name is in the "special list". It appears from the affidavit of the Chief Engineer that in pursuance of the policy of prohibition followed in the State of Assam, the Government or Officers .of the Government have prepared ''lists of persons suspected or confirmed to be connected with smuggling activities", and that it was "the policy of the Governm<'nt not to grant taxi permit, stage carrier permit, fisheries, ferries etc. to persons who are listed to be suspected or confirmed opium smugglers". It is this list that is referred to as the "special list" in the order of the Executive Engineer. It is argned for the appellant that if a person is a. smuggler, then he is not a person of good conduct, and the rejection of his bid would be justified under Rule 19(iii). The contention is perfectly sound, and the authorities would be exercising their discretion properly in refusing to accept the bid of a smuggler, because, to put such a person in charge of ferries must help to evade the prohibition laws, and that would be a relev1tnt factor under Rule 19(iii). But the difficulty of the appellant is that there are no materials nu which the first respondent could be held to ' .. . ' ' ,- . .

State of Assam

Tulsi Singh

A'._yarJ.

Stalt n(. !.~1m11

•• I'ul1i Si., :h

.4 '_'fd' .! •

be a smuggler. It appears that he was!proseouted

under s. 4 of tho Assam Ganja and Bhang Prohibit.ion Act but that ended in his discharge. It is argued thllt though the materials llvailable might have been insufficient to sustain a conviction under the Ad, the~· might be sufficient for the authorities to take action under Rule 19. That is possible hut th:tt i~ not the position in this casc. The Executive Engineer did not form any opinion about the first respondent on his own appreciation of the materials. He found his name in the "special list'' and straightaway rejected his bid.

Now the question is whether on this mawi-ial an Orcler rejecting the highest hid could be made under Rule 19. It is not ancl cannot he argued that the 'special list" is a document falling within s. 35 of the Evidence Act. It is said to be a confidential document. It does not appear on what information it is prepared or from what sources the information is received. Nor is anyhing disclosed 88 to the procedure adopted by tho Government Officers in preparing the list.

While such lists might servn a purpose in guiding Criminal Int-Olligence Department, it will be unsafe to rely solely on thorn for deciding civil rights of persons. If the "special list" is thus ruled out as not material on which an opinion could be formed, then thnre was nothing else on which the conducting Officer could have rejected the offer of the highest bidder under Rule 19. We are accordingly of opinion that the decision of the learned , Judges or the High Court that the rejection of the offer of the highest bidder is not in a.coordance with s. 8 or Rule 19 is corrent.

The result of this conclusion is that the authorities under the Aet would have to be directed to consider the matt{lr a.fresh and give a decision in accordance with law, but the learned Judges have proceeded further and observed that under Rule

~ 9, the offer of "the tir1t resrondent, being te

...

3 S.C.lt.

SUPREME COURT REPORTS 515

highest, ahould be accepted. The appellant con tends that even on the view that the Order of the Executive Engineer dated January 23, 1961, is not in accordance with law, it was for the appropriate authorities to deal with the matter and make a fresh settlement and that the Court could not itself decide what is entrusted to the executive authorities undfT the Act. This, in our opinion, is correct.

In Verappa Pillai v. Raman & Raman Ltd.(') the quest!on arose with reference to the grant of permits under the Motor Vehicles Act. The au thorities constituted under the Act had made an Order granting permits to one Verappa Pillai, and its validity was disputed by a rival applicant M/s Raman and Raman Ltd., in an application under Art. 226.

The High Court of Madras had held that the title of the applicant would prevail over that of Verappa Pillai and accordingly set aside the order of the authorities and direct grant of the permits to the applicants.

On appeal to this Court, it was held that such a direction was elearly i11 excess of the powers and jurisdiction of the High Court. We must accordingly hold that the order of the High Court, in so far as it declared the rights of the highest bidder, is erront'- ous.

But, in view of the fact, that the lease was only for the period 1961-62 and that would shortty be expiring, there is no need to direct a fresh consideration of the matter by the authorities. In the result, the appeal is dismissed.

Appeal dismissed.

(I) [l9i2J S.C.R, 583,

Stati of Assan1

Tulsi Singh