Supreme Court of India
RAJ KUMAR KARANWALversusTHE COMMISSIONER AND ANR.
- Citation
- 1996 INSC 1275
- Decided
- 4 November 1996
- Disposal
- Dismissed
Holding
The Commissioner was devoid of jurisdiction to accept a bid for the expired period and to grant the lease; therefore the lease grant was a nullity and the cancellation was valid.
Summary
The petitioner had placed a bid in a 1993‑94 toll‑lease auction but could not take over the lease because the earlier contractor obtained a stay that later lapsed. For the years 1995‑97, instead of conducting a fresh auction, the Executive Engineer recommended that the petitioner be granted a lease for the same amount, which the Commissioner accepted on 2 September 1995. The Commissioner later cancelled this lease on 28 October 1995. The petitioner challenged the cancellation, arguing that under the Uttar Pradesh Toll Tax Regulations, 1980 the Commissioner could not cancel a lease once granted. The Supreme Court examined Rules 4, 7, 8 and 9 of the Regulations and held that the Commissioner had no authority to accept a bid for a period that had already expired except as prescribed, making the original lease grant ultra vires. Consequently, the cancellation was valid and the petition was dismissed.
Issues considered
- Whether the Commissioner of the Division has the power under the Uttar Pradesh Toll Tax Regulations, 1980 to grant or cancel a lease for a period that has expired without a fresh auction.
- Whether an extension or renewal of a toll‑lease without prior sanction of the State Government is permissible under Rule 9 of the Regulations.
Subjects
toll taxlease grantauctionextension of leasejurisdictioncancellationUttar Pradeshspecial leave petition
Judgment
A RAJ KUMAR KARANWAL
v.
THE COMMISSIONER AND ANR.
NOVEMBER 4, 1996
B [K. RAMASWAMY AND G.B. PATTANAIK, JJ.]
UP. Toll Tax Regulations, Levy and Collection Rules, 1980:
Rules 4, 7,8 and 9-Collection oftolls-Lease-Grant of-Subsequent
C cancellation-Validity of-Held: Commissioner devoid of any power to
accept any bid for previous years which expired by efflux of time, except in
the manner prescribed-Therefore the action of the Commissioner was one
withoutjurisdiction and hence a nullity-Government was right in directing
the Commissioner to have the order granting the lease cancelled-Hence
no interference called for.
D CIVIL APPELLATE JURISDICTION : Special Leave Petition (C)
No. 21020 of 1996.
From the Judgment and Order dated 27.8.96 of the Allahaoad High
Court in C.M.W.P. No. 31606of1995.
E
K.S. Chuahan and Anil Kamwal for the Petitioner.
The following Order of the Court was delivered :
F The petitioner, admittedly, had made a bid in the auction for the
year 1993-94, conducted on February 25, 1993 for a sum of Rs. I ,20,000
per annum. The said bid. could not be worked out for the reason that the
previous contractor had approached the High Court and had the operation
of the contract stayed which period expired by effiux of time. Consequently,
for the years 1995-97, instead of conducting fresh auction, on an application
G made by the petitioner, the Executive Engineer had recommended to grant
lease to the petitioner for the same amount of Rs. 1,20,000 for two years
as was done in the previous order which was accepted by the first respondent
on September 2, 1995. On subsequent instructions, the first respondent
had cancelled the grant of the lease to the petitioner by his proceedings
dated October 28, 1995. When the petitioner had challenged the legality
H thereof, the High Court in W.P. No.31606of1995 by order dated August
380
R.K. KARANWAL v. COMMNR. 381
27, 1996 treating the grant of contract to the petitioner as an extension of A
the previous grant, held that the first respondent was devoid of power to
extend the lease without obtaining prior permission of the State
Government. Thus, this special leave petition.
It is contended by Mr. K.S. Chauhan, learned counsel for the
petitioner, that the first respondent having granted the lease for the years B
1995-97, had no power to cancel the same under Rule 7 of the U.P. Toll
Tax Regulations Levy and Collection Rules, 1980 (for short, "the Rules")
which gives absolute power to the Commissioner under Rule 7 thereof.
Therefore, without any power to review his own order, the Commissioner
is devoid of power to cancel the same. We find no force in the contention.
c
Even assuming that the view taken by the High Court is not sound
in law, since it is a fresh grant, the ultimate decision can be rested
on the following circumstances. Rules 4,7,8 and 9 of the Rules reads as
under:
"4. Procedure for grantoflease---ln accordance with the provision D
of Section 2-C of the Act.
(i) The Governor or his nominee may invite auction bids
from the persons desirous of taking lease for the collection
of the tolls levied on the bridge specified in the notification E
issued by the Government.
(ii) The Governor or his nominee shall scrutinize the
auction bids and verify the status any other particulars
submitted by the applicants and after examining the
documents or papers submitted by the applicants shall prepare F
a list of the suitable candidate to whom the lease contract
may be granted.
(iii) If it is considered necessary the Governor or his
nominee may call any bidders for negotiations. G
(iv) The Governor or his nominee presently the Divisional
Commissioner, will select any person out of the list of the
bidders and may order that the said person contractor shall
be granted lease in respect of the right to collect tolls on the
specified road bridge. H
382 SUPREME COURT REPORTS [1996] SUPP. 8 S.C.R.
A (v) The Governor, if it considers necessary, in public
interest may put to public auction the lease of the right to
collect tolls on any specified road bridge. Such public auction
shall be held after giving prior notice in important newspapers
by the authorised officer by giving a minimum notice of one
month in the first instance. If such occasion arises which
B makes the tenders/auction to be re-invited redone a similar
notice of one month of the public auction may be issued.
(vi) The Governor or his nominee presently the Division
Commissioner shall have the power to accept or reject any
bid/tender and his decision in that respect shall be final.
c
(vii) No lease/ contract of the right to collect the tolls under
the Act on any road bridge shall be made for a period
exceeding 5 (five) years at a time,
D (viii) The Governor or his nominee shall require the lessee
to furnish security equal to three months installment ofauction
money (including earnest money).
(ix) The lease/contract shall be executed on the standard
form.
E
(x) The cost of execution and registration of the lease be
borne by the lessee.
7. Vesting to powers accepting auction bids-The powers
F accepting auctions and entering into agreement on behalf of
the Governor of Uttar Pradesh shall be vested in the
Commissioner of the Division concerned or any officer
as may be authorised by the Governor to do so in this behalf.
G 8. Accepting of highest auction bid-If an auction bid/negotiated
offer is not the hig)lest one, the lower auctio11 bid/negotiated _
offer can only be accepted after getting-the prop~r approval
of the State Government.
9. Extension of the lease-No Extension oflease may be granted
H without the prior sanction of the State Government.".
R.K. KARANWAL v. COMMNR. 383
Rule 4(i) gives power to the Governor or his nominee to invite auction A
bids from the persons desirous of taking lease for the collection of the
tolls levied on the bridge specified in the notification issued by the
Government. Rule 4 (ii) envisages that the Governor or his nominee shall
scrutinize the auction bids and verify the status and other particulars
submitted by the applicants and after examining the documents or papers
submitted by the applicants, shall prepare a list of the suitable candidate to B
whom the lease contact may be granted. If it is considered necessary the
Governor or his n<lminee may call any bidder for negotiations under sub-
rule (iii) Under sub-rule (iv) power has been given to select any bidder
and thereafter the person nominated has power to grant contract of lease
in respect of the right to collect tolls on the specified road bridge. Sub-
rule (v) gives alternative mode of grant of lease by public action which we C
are not concerned in this case. After the grant of the lease, not exceeding
five years as envisaged under sub-rule (yii), the lessee shall furnish security
equal to three months installment of auction, money. He shall execute the
contract in the standard form under sub•rule (ix). After execution thereof,
the power of acceptance has been given to the Commissioner-I st respondent
under Rule 7 of the Rules. If the auction bid after' negotiation is not the D
highest one, the lower auction bid can only be accepted after getting the
approval of the State Government under Rule 8; extension of the lease is
regulated under Rule 9.
Thus the mode of conducting auction is a complete code by itself E
regulating the right to collect the tolls on'the specified road bridges by
public noiification. It is seen that the first respondent was devoid of any
power to accept any bid for the previous years which expired by efflux of
time except in the manner prescribed under Rule 4 and the following rules
thereafter. The action of the first respondent, therefore, is one without
jurisdiction and thereby it is a nullity. The Government, therefore, was F
right ·indirecting the first respondent to have the order granting lease by
him to the petitioner, cancelled. We do not find any illegality in the action
taken by the respondent warranting interference.
The Special Leave Petition is accordingly dismissed. G
G.N. Petition dismissed.
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