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Abhilash Singh v. State of U.P. & Ors. - WRIT - A No. 47018 of 2003 [2003] RD-AH 386 (20 October 2003)


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Abhilash Singh ------ Petitioner


State of U.P. & ors. ------                          Respondents


Hon'ble Dr. B.S.Chauhan, J

Hon'ble D.P.Gupta, J.

(By Hon'ble Dr. B.S.Chauhan, J.)

This writ petition has been filed for issuing a writ of certiorari quashing the order dated 12.9.2003 (Annex. 7), by which the bid of the petitioner, though the highest, has not been accepted, and also for quashing the order dated 16.9.2003 (Annex. 8), by which the fresh auction is going to be made.

The facts and circumstances giving rise to this case are that petitioner has been the highest bidder for a sum of Rs.3,90,000/- when the auction was held on 22.8.2003 under the provisions of U.P.Minor Minerals (Concession) Rules, 1963 (hereinafter called the Rules 1963), and he deposited a sum of Rs.1,95,000/- as was a condition of the notice. The District Magistrate vide order dated 16.9.2003 did not approve the bid and asked for a fresh auction of 11 Moram Ghats, including the Karari Moram Ghat, auctioned earlier. Hence this petition.

The learned counsel for the petitioner has submitted that once the petitioner has been the highest bidder and that too on the 4th occasion of the auction as in the earlier three auctions no person came forward to give the  bid, and petitioner has deposited Rs.1,95,000/-, the question of holding the fresh auction does not arise. Hence, the orders impugned are liable to be quashed.

Learned Standing Counsel has submitted that as under the provisions of Rule 27(e) (i) of the Rules 1963 every bid given in such circumstances requires to be accepted finally by the State Government or the District Magistrate, as the case may be, and the contract does not stand concluded inasmuch as the bid is accepted by the State/District Collector and in the instant case, as the Collector did not accept the bid, no right has ever accrued in favour of the petitioner. Hence, the petition is liable to be dismissed.

We have heard the learned counsel for the parties and perused the record.

Undoubtedly, the provisions of Rule 27(e) (i) of the Rules 1963 provide that bid shall not be treated as accepted unless the State Government or the District Collector, as the case may be, accepts it.

It means that unless the bid is approved by the State Government or the District Collector as required under the aforesaid Rule the contract shall not stand concluded.

There can be no quarrel to the settled legal proposition that if statute provides for approval of the higher Authority, the order cannot be given effect to unless it is approved and the same remains inconsequential and unenforceable.

A Full Bench of this Court in Shakir Husain Vs. Chandoo Lal & ors., AIR 1931 All 567 has held that any order is good unless disapproved. But where approval is required, the order does not become effective until it is so approved.

A similar view has been reiterated in Shanta Prasad Vs. Collector, Naini Tal & ors., 1978 ALJ 126.

A Division Bench of this Court in Mohammad Ali Vs. The State of Uttar Pradesh & ors., AIR 1958 All 681 considered a case under the provisions of U.P. Municipalities Act, 1916, providing for appointment subject to approval of the Government and considered the distinction between the appointment with permission of the Government and with approval of the Government. The Court observed as under:-

"When a person is employed under a power which is to be exercised subject to the approval of a higher authority or the Government, the appointment holds good so long as the higher authority or the Government has not disapproved of it. There is a distinction between an appointment with the permission of a higher authority or the Government, and an appointment subject to the approval of the higher authority or the Government. An appointment which is to be made with the permission of a higher authority or the Government cannot be made unless the permission is first obtained, but an appointment which can be made subject to the approval of a higher authority or the Government may be made and will be rendered invalid only when it is disapproved by the higher authority."

A Constitution Bench of the Hon'ble Supreme Court in Union of India & ors. Vs. M/s Bhimsen Walaiti Ram, AIR 1971 SC 2295 considered the similar provision requiring approval by the authority concerned and the Court held as under: -

"It is, therefore, clear that the contract of sale was not complete till the bid was confirmed by the Chief Commissioner and till such confirmation, the person, whose bid has been provisionally accepted, is entitled to withdraw his bid. When the bid is so withdrawn and before the confirmation of the Chief Commissioner the bidder will not be liable for damages on account of any breach of contract or for the short-fall of the re-sale. An acceptance of an offer may be either absolute or conditional. If the acceptance is conditional, the offer can be withdrawn at any moment until absolute acceptance has taken place.

While deciding the said case, the Hon'ble Supreme Court placed reliance upon the judgment of the Court of Appeal in Hussey Vs. Hornepayne, (1878) 8 Ch.D. 670 where offer was accepted (subject to the title being approved by the solicitor."

In that case, it was held that the contract became conclusive only on being approved by the solicitor and prior to that it was merely a conditional acceptance and contract did not stand concluded.

In State of Orissa Vs. Harinarayan Jaiswal, AIR 1972 SC 1816, the Hon'ble Supreme Court held that where the statutory provision provides for approval or acceptance by an authority the State reserves for itself the right to accept or reject even the highest bid and in such an eventuality the auction bidder cannot enforce the contract prior to approval as required under the provisions. In that case, the Hon'ble Apex Court examined a case where an auction for country-liquor contract was to be accepted by the Collector subject to the confirmation of the State Government.

In State of U.P. Vs. Vijay Bahadur Singh, AIR 1982 SC 1234, the Hon'ble Apex Court held that the State is entitled to change or revise the policy even subsequent to the acceptance of the provisional bid. The bid becomes final once being approved by the competent authority if approval is required by law. However, if State changes its policy prior to confirmation/approval of the bid, the person, i.e., the highest bidder, cannot raise any grievance whatsoever.

In  Laxmikant & ors. Vs. Satyawan & ors., AIR 1996 SC 2052, a public auction stands completed on approval by the competent authority and prior to that, no right is accrued in favour of the highest bidder. However, once the letter of confirmation is issued, it cannot be changed. In that case, the condition letter clearly provided that the auction conceived contemplated that acceptance of the highest bidder would be required acceptance by the Board of Trustees. While deciding the said case, the Court placed reliance upon its judgement in Trilochan Mishra etc. Vs. State of Orissa, AIR 1971 SC 733.

While dealing with the approval of the award under the Land Acquisition Act, the Hon'ble Supreme Court in Vijayadevi Navalkishore Bhartia & anr. Vs. Land Acquisition Officer & anr., (2003) 5 SCC 83, held that the authority granting approval does  not act as an Appellate Authority. The Court observed as under:-

"In the context of an administrative act, the word ''approval' does not mean anything more than either confirming, rectifying, assenting, sanctioning or consenting. This is only an administrative power which limits the jurisdiction of the authority to apply its mind to see whether the proposed award is acceptable to the Government or not."

The settled legal proposition, referred to above, makes it clear that  where any statutory provision  provides for approval by the authority, acceptance of the bid remains conditional and contract is concluded only after accord of the approval. The acceptance of the bid by the authority remains provisional as he has no competence to accept it finally, and therefore, in such a case Court is required to examine the issue of jurisdiction/competence of the authority to accept a contract as per the statutory provisions dealing with the particular case..  

Thus, in view of the above, as in the instant case the bid has not been accepted by the District Collector/State, we are of the considered opinion that no contract stood concluded between the parties, and the petitioner has no cause of action to approach this Court.

Petition is, therefore, dismissed.




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