STATE OF WEST BENGALversusM.R. MONDAL AND ANR.

                       STATE OF WEST BENGAL                                      A
                                 v.
                       M.R. MONDAL AND ANR.

                   •      SEPTEMBER 3, 2001

        [S. RAJENDRA BABU AND DORAISWAMY RAJU, JJ.]                              B


      National Highway Authorities of India Act, 1988;

        Highway-Collection of toll charges-For a portion of-Franchise for-
 Contractor, being highest bidder, allowed collection for a period of one year C
 only-But he committed defaults in depositing money-Contractor made
representations to Minister-in-Charge seeking deposit in instalments-However,
Joint Secretary issued Memorandum granting several concessions and also
 extended the contract for 30 years-Meanwhile, fresh bids invited for period
 subsequent to the one year duration of contract-Contractor filed a suit in D
 which injunction was granted-Subsequently, National Highway Authority of
 India entrusted with portion of the Highway in place of the State-Injunction
 order vacated-In appeal, High Court appointed Advocate-Receiver to
 supervise collection of toll charges-Ultimately, High Court not only stayed
 invitation of fresh bids but also ordered the continuance of the Receiver in
 respect of the possession of the expressway and collection of toll charges- E
 Correctness of-Held: Contract cannot be extended beyond the period of one
year without the prior approval ofCentral Government-A franchise or contract
for collection of toll charges is limited and circumscribed by Fee Collection
 Rules-Awarding and extending of contract cannot be the whim and fancy of
any authorities-High Court judgment set aside-National Highways (Fees p
for the use ofNational Highway Section and Permanent Bridge-Public Funded
Project) Rules, 1997-Rr. 6 to 9.

      The appellant-State called for tenders for collection of toll charges in
respect of a portion of the Highway,.Respondent No .I was the highest bidder
and a contract was entered into for a period of one year between respondent      G
No.I and the appellant But respondent No.I committed defaults right from
the very inception in depositing the advance bid money as well as the actual
bid money. However, respondent No. 1 made a representation to the Minister-
in-Charge seeking deposit in instalments.

                                     531                                         H
    532                     SUPREME COURT REPORTS [2001] SUPP. 2 S.C.R.

A         The Joint Secretary issued a Memorandum granting several concessions
    and also allowed respondent No. I to collect toll charges for a period of 30
    years. Meanwhile, fresh bids were invited for collection of toll charges of for
    the period subsequent to the one-year duration of the contract with respondent
    No.I.

B         Respondent No. 1 filed a suit in which temporary injunction was
    granted. However, the Central Government issued a notification under Section
    I I of the National Highways Authority of India Act, I988 entrusting the
    stretch of the Highway in question to the National Highway Authority oflndia
    in place of the appellant-State. In the meanwhile the interim injunction order
C   was vacated.

           In appeal, High Court appointed an Advocate-Receiver to supervise the
    collection of toll charges. The High Court had not only stayed the invitation
    of fresh bids but also ordered the continuance of the Receiver in respect of
    the possession of the expressway and collection of toll charges. Hence this
D   appeal.

          Allowing the appeal, the Court

          HELD: I. The Memorandum issued by the Joint Secretary can, by no
    stretch of imagination, be construed to bring into existence ipso facto an
E   extended period of contract beyond the onf! year period for which alone the
    contract had been given to respondent No. I in this case. An order passed
    but retained in file without being communicated to respondent No.I can have
    no force or authority whatsoever and the same has no valid existence in the
    eye of law or claim to have come into operation and effect. No reliance can
    be placed on the same to even assert a claim based on its contents. If its utility
F   depended upon a decision to be taken on the performance ofrespondent No.I
    by the Competent Authority, neither the authority could be compelled to take
    a decision nor any concrete rights could be said to have been acquired by
    respondent No.I, to warrant the grant of the type of directions given in this
    case. The discretionary power to grant injunction, be it of prohibitory or
G   mandatory nature, has been availed ofto bring into existence and force upon
    the State a new contract, which could never have been the intention of the
    State itself. 1541-E-GJ

          2.1. When the National Highways (Fees for the use of National Highway
    Section and Permanent Bridge-Public Funded Project) Rules, I 997 provided
H   for collection through franchisee and the selection of the contractor only
                      STATE v. M.R. MONDAL [RAJU, J.]                        533
through public auction under the instructions for specific periods as the            A
Central Government may issue, at competitive rates and in this case such
grant was made on behalf of the Central Government for one year initially,
there can be no extension granted in law by the Executing Agency without
the prior instructions or approval of the Central Government (542-8)

      2.2. Unlike contracts entered into in exercise of the executive power of       B
the State wherein terms can be stipulated and settled at the will and pleasure
of the State, a franchise or contract envisaged for the collection of toll charges
in question is limited and circumscribed by the provisions of the Fee Collection
Rules, 1997 and what could be only the subject-matter of an auction, selection
and grant on the basis of competitive rates of the bid cannot be the subject of      C
whim and fancy of any authority, particularly when public interest and public
exchequer of the Central Government is and will be at stake. Thus, without
the concurrence of the Central Government, which also has to be necessarily
in conformity with the statutory rules governiug the same, there cannot be
any extension granted in favour of respondent No. I and the High Court could
not have directed the doing of a thing not permissible in, or contrary to, the       D
rules. (542-E-Fl

        CIVIL APPELLATE JURISDICTION : Civil Appeal No. 6123 of
2001.

     From the Judgment and Order dated 20.11.2000 of the Calcutta High               E
Court in F.M.A.T. No. 3607 of 1999.
                                     WITH
        C.A. No. 6124 of 200 I.

      Harish N. Salve, Solicitor General and Mukul Rohatgi, Additional               F
Solicitor General, Bikash Ranjan Bhattacharjee, Avijit Bhattacharjee, Atanu
Saikia, V.B. Joshi, Ravi Kimi, Jananrdan, M.V. Kini and Ms. Leela Pujan for
the Appellants.

      P.K. Dass, U.B: Mookerjee, Abijeet Chatterjee, Parijat Sinha, Kishore
Dutta, Manas Dass Gupta and Sarla Chandra for the Respondents.                       G
        The Judgment of the Court was delivered by

        RAJU, J. Special leave granted.

      These appeals have been filed by the National Highways Authority of
India, who was not a party to the proceedings in the High Court, but with the        H
    534                    SUPREME COURT REPORTS [2001] SUPP. 2 S.C.K

A permission granted by this Court and the State of West Bengal against the
    judgment dated 20.11.2000 in FMAT No.3607of1999, whereunder a Division
    Bench of the Calcutta High Court has not only stayed the action initiated by
    the Superintending Engineer to re-bid the right to collect the toll in question
    but also ordered the continuance of the Receiver in respect of the possession
    of the expressway and collection of toll charges, meeting the expenses and
B   deposit with the State, etc., and a further direction to the State Government
    to take a decision in terms of Clause IS of the Memorandum No.15/1(3)/PR/
    N/DEW/IE-12/94(V) dt.11.3.1998.

          The disputes between the parties relate to the right of collection of toll
C   charges from the vehicles using part of Durgapur Expressway between 22
    km. to the end point Pals it - a stretch of 48 km. of road on National Highway
    No.2, known as Durgapur Expressway. That the said stretch forms part of a
    National Highway which vest with the Central Government and the Central
    Government, in exercise of its powers under Section 5 of the National
    Highways Act, 1956 [hereinafter referred to as "The Highways Act"], issued
D   a Notification to the extent that the functions in relation to the execution of
    works pertaining to this National Highway shall be exercisable also by the
    State Government of West Bengal, subject to the condition that the State
    Government concerned shall, in the exercise of such functions, be bound to
    comply with the rules for the time being in force made under the Act is
E   indisputable. The Parliament has enacted The National Highways Authority
    of India Act, 1988 [hereinafter referred to as "The Highways Authority Act"]
    in order to get over the difficulties experienced from time to time in
    maintaining effectively the National Highways through the "Agency System"
    pursuant to a delegation Notification under Section 5 of the Highways Act in
    favour of the State Governments concerned. Among other things, the Central
F   Government also framed rules called, The National Highways (Fees for the
    use ofNational Highway Section and Permanent Bridge-Public Funded Project)
    Rules, 1997 [hereinafter referred to as "The Fee Collection Rules"]. These
    Rules provide for fixation of rates of fee by the Central Government, the
    display of rates for fees, procedure for collection - either departmentally or
G   through Franchisee, the manner of its remittance from time to time, and
    submission of returns, etc.

           Rules 6 to 8 of the Fee Collection Rules provide for collection of fees
    departmentally, mode of collection and the manner of its remittance. Rule 9
    provides for the collection of fees through Franchisee to whom the Franchise
H   to collect has been awarded through auction for specific periods as the Central
                     STATE v. M.R. MONDAL [RAJU, J.]                    535
 Government may issue, as per tenns and conditions of the agreement executed A
 for such purposes and remittance of the auction money collected from the
 Franchisee by the Executing Agency to the Pay and Accounts Officer (National
 Highways), Ministry of Surface Transport, New Delhi. Rule 5 mandates that
all fees levied under the rules shall be collected by the Executing Agency
concerned departmentally or through Private Contractors "on the basis of
competitive bidding on behalfofthe Central Government". Executing Agency B
has been defined to mean, the National Highways Authority of India in the
case of those National Highways or part thereof entrusted to NHAI and State
Government or Union Territory, to which such functions are delegated under
Section 5 of the Highways Act. So far as the part of the Highway in question,
though there had been earlier Notification under Section 5, as noticed supra, C
subsequently, the Central Government has issued a Notification dated 4.2.1999,
in exercise of its powers under Section 11 of the Highways Authority Act,
entrusting the stretch of the Highway under consideration to the National
Highways Authority of India and indisputably the NHAI became, as a
consequence thereof, the Executing Agency in respect of the stretch of the
National Highway in the place of the State of West Bengal.                     D
       Tenders seem to have been called for in sealed covers, initially for the
 grant of franchise for collection of toll charges in respect of the portion of
 the Highway under dispute. Since, the highest bid offered in a sum of Rs.
 1,51,000 per day was not acceptable to the authorities concerned for a second _E
time bids were called for and though the highest bid in a sum of Rs. 1,99,909
 per day, was accepted, there has been violation of the terms and conditions
 of the grant, resulting in termination of the same and forfeiture of earnest
money. Once again sealed tenders were called for and the 1st respondent,
whose bid was for Rs. 2,20, 70 I per day, was accepted and entrusted with the
collection of toll charges in question. A written contract was entered into on F
 13.11.97 for the purpose for a period of one year commencing from 13.12.97
between the 1st respondent and the State of West Bengal, which at that point
of time happened to he the Executing Agency. It is interesting to note that
Clause I of the terms and conditions of the agreement stipulated that the
Agency for toll collection shall be for one year and in no case extension of ,.,
                                                                                v
the period would be allowed. However, the additional clauses agreed (Addi.
Clause I) provided that the Agency for toll collection, which is for one year,
"may be extended/fresh agreement may be made subject to fulfillment" of
clauses 8 and 9 of the terms and conditions of the bid. It also contained a
clause for tennination for non-payment of advance bid money (Clause 5) and
the power to terminate the agreement (Clause 9) without showing any cause H
    536                    SUPREME COURT REPORTS (2001] SUPP. 2 S.C.R.

A and call for a fresh bid, by giving forty five days' notice with similar option
    to the collecting agent also to put an end by giving similar notice, if he is
    unwilling to continue or unable to offer revised bid due to revision of rates,
    if any - and in such eventualities, to handover vacant and peaceful possession
    of site, structures and toll gates etc., forthwith on receipt of the notice of
    termination.
B
         Formal inauguration of toll collection was said to have been made on
  12.12.97 and from 13.12.97, the 1st respondent-contractor commenced regular
  collections. Though, he was obliged to deposit seven days bid money in
  advance, he committed defaults from inception and started making several
C pleas to avoid compliance. Regular and repeated defaults in the deposit of
  advance bid money as well as actual bid money are attributed to him, driving
  the authorities to issue show-cause notices for taking appropriate action. Instead
  of dealing with the officials, the I st respondent seems to have approached the
  Minister-in-Charge, for instaiment deposits and on the same date (5.1.98)
  approached the Minister with offer to pay Rs. 2,90,000 per day when another
D stretch of 17 kms of the Durgapur Expressway upto Dankuni is open for
  traffic and handed over to him and for extension of the contract period to 40
  years after the expiry of original period of one year, in addition to making
  several other claims in utter disregard and against the terms of the very
  written contract. On 15.1.98, the Secretary PW and PW (Roads), Govt. of
E West Bengal, appears to have directed the concerned Engineer not to take
  penal action against the contractor till his representations to the Minister are
  decided. As on 15.1.98, the arrears of tolls due from him are stated to be Rs.
  22,07,010. Surprisingly, on 11.3.98 the Joint Secretary PW and PW (Roads)
  seems to have issued a Memorandum to the Chief Engineer, Durgapur
  Expressway, directing him to allow the contractor to deposit at the rate of
F Rs.I.JO lakh per day (an amount far less than the bid which was not initially
  accepted as being low) for six months with effect from 16.12.97 subject to
  the condition that he would pay at the original contracted rate after six months
  and dues will be paid in I 0 equal instalments. The very Joint Secretary issued
  another Memorandum dated 11.3.98, permitting him to deposit bid money
G with effect from 16.12.97 and further ordering that the Toll Collector will be
   liable to continue to deposit bid money at the rate of Rs. 2,90,000 per day,
   if Dankuni and 17 kms of Durgapur Expressway i:; opened during currency
   of the present contract period, provided the toll charges are increased
   proportionately. After referring to the payment schedule permjtted under the
   other Memo dated 11.3.98, several other concessions like dispensing with the
H requirement of deposit of bid money in advance and modifications of the
                       STATE v. M.R. MONDAL [RAJU, J.)                       537
earlier agreed terms seem to have been also indiscriminately made, of which         A
strong reliance has been placed for the !st respondent on para 15, which read
as follows:

        "15. Subject to satisfactory performance of the toll collector during
        the contract period of one year, to be decided by PW (Roads)
        Department, the Toll Collector will continue to collect toll charges on     B
        Durgapur Expressway for 30 (thirty) years to start with, beyond the
        initial contract period of one year, on a lease basis, (since the agency
        has been referred to as lessee in condition 22 of the Annexure A)
        subject to renewal of the lease at the end of every three years to the
        satisfaction of PW (Roads) Department."                                     C
      Such reckless favouritism seems to have been shown, despite the fact
that as on 10.3.98, the arrears of toll due from !st respondent was stated to
be Rs. l,41,24,864, unmindful of the interests of the Central Government, the
beneficiary on whose behalf alone the State Government was acting.

      The Superintending Engineer concerned seems to have invited on
                                                                                    D
21.10.98 sealed bids for the selection of fresh franchise for collection of toll
for the period commencing from 13.12.98 (for the period subsequent to the
one year duration of the contract with the !st respondent).

      The !st respondent appears to have filed on 6.11.98 T.S. No. 273 of           E
 1998, before the Court of Civil Judge, Senior Division, Burdwan, against the
Authorities of the State Government not only challenging the notice inviting
tenders but also for a declaration that there is a subsisting valid contract by
and between the plaintiff and defendant for 30 years with effect from 16.12.98
by virtue of the Memorandum dated 11.3.98; for a mandatory injunction to
direct the Authorities to hand over 17 kms stretch of Calcutta-Durgapur             F
Expressway from Dankuni to Singur as and when ready; and for per11:ianent
injunction restraining the defendant from taking any steps pursuant to the
notice dated 21.10.98 inviting tenders. Relief in the nature of ad-interim,
prohibitory order of injunction also seems to have been sought. Denying
even reasonable time, as it is claimed, to file objections, interim order appears   G
to have been granted on 12.11.98, permitting, at the same time, the !st
respondent to carry on toll collection in terms of the agreement dated 19.11.97,
as modified by the Govt. Memos dated 11.3.98 and further directing the
Authorities to hand over the 17 km stretch of the Highway from Dankuni to
Singur, on its completion, for collection of toll on the road from Palsit to
Dankuni. These orders were to be in force till the disposal of the injunction       H
    538                     SUPREME COURT REPORTS [2001] SUPP. 2 S.C.R.

A   petition and the same was adjourned to 4.1.99 for hearing with permission to
    file objections, if any, in the meantime.

             By this time, the Central Government, which came to know of this
    litigation, seems to have on 15.2.99 issued instructions to the State Government
    to challenge the injunction order passed by the Court, expeditiously. On
B    1.7.99, a request seems to have been also made to the State Government to
    initiate action to transfer toll collection arrangement as well the stretch of the
    National Highway in question to the NHAI in view of the Notification dated
    4.2.99 entrusting the Highway in question to NHAI. On the willingness
    expressed by the State on 16.8.99, NHAI also has been directed by the
C   Central Government to take necessary follow up action, indicating further
    that the arrears due from the 1st respondent were said to be Rs. 4,19,75,250
    for 13.12.97 to 12.12.98; and Rs. 35,31,210 for 13.12.98 to 18.1.99. The
    State of West Bengal appears to have filed Miscellaneous Appeal FMAT No.
    2360 of 1999 before the Calcutta High Court, challenging the order dated
     12.11.98. A separate suit for recovery of the outstanding arrears from the !st
D   respondent for the period upto 31.5.99 appears to have been also filed. By a
    Memorandum dated 24.8.99, the very Joint Secretary, PW (Roads) Department,
    with reference to the issues raised by the Chief Engineer, Durgapur
     Expressway, clarified the real position regarding the nature of action
     culminating in the issue of memo dated 11.3.98 by stating as hereunder:

E           "His memo nos. 314-R/DEW dated 21.10.1998 and 317-R/DEW dated
            21. I 0.1998 may be referred to. His Suggestion contained there
            regarding memo under reference has been carefully examined. M.R.
            Mondal who having been selected the toll collector Durgapur
            Expressway between Palsit end and intersection with B.T.C. Road at
            Singur through process of agreement submitted certain representations
F
            in his letter No. MRM/RD/97-98/36 dated 05.01.1998 in terms of
            certain long term and short-term concessions and benefit in the
            operation of toll collection. After careful consideration the Govt. in
            its memo no. 15/PR/N/DEW/IE-12/94 (V) dated 11.03.1998 placed
            certain proposals on the issue for further discussion subject to approval
G           by the competent authority, Ministry of Surface Transport, Govt. of
            India. But M.R. Monda! did not respond to the said memo and no
            amended agreement has also executed. Thus, memo no. 15/PR/N/
            DEW/IE-12/94 (V) dated 11.03.1998 of P.W. (Roads) Deptt. has no
            application in the matter of collection of toll charges from Durgapur
H           Expressway by M.R. Monda!. This is without any prejudice to legal
                      STATE v. M.R. MONDAL [RAJU, J.)                        539
        cases pending before different courts of law in the matter of collection    A
        of toll charges.

        Concerned parties are informed accordingly"

       On 3.9.99, FMAT No. 2360 of 1999 came to be disposed of with a
direction to the Trial Court to dispose of the injunction application, at an        B
early date. By an Order dated 5.10.99, the Trial Judge vacated the interim
injunction and dismissed the injunction petition both on merits and also for
the reason that the interim orders were obtained by misleading the Court. On
11.10.99, the Authorities of the State took over possession of the Highway
in question and it is stated that as on 10.10.99 the arrears due from the !st
respondent is said to be Rs. 8,39,08,440. Yet, at the intervention of the           C
Minister-in-Charge, the I st respondent managed to get directions in his favour
and sought for restoration of the collection work to him. The matter was
pursued before the High Court in FMAT No. 3607199 and by an order dated
27.10.99, Shri Tarun Kumar Banerjee, Advocate, Ex-Chief Judge of City
Civil Court, Calcutta, was appointed as Receiver to supervise the collection        D
of toll charges, until further orders. Prior to this on I I.I 0. 99, an order for
maintaining the status quo also appears to have been made. The Special
Leave Petition filed by the State against the order dated 27. I 0.99 in SLP (C)
No.17123/99 came to be dismissed on 17.12.99 on the following terms:

        "Both the parties agree that the receiver after collecting the amount       E
        of toll shall pay the entire amount to the State. In that view of the
        matter, no orders are sought by the learned counsel for the petitioner.
        The Special Leave Petitions are disposed of accordingly.

        lfthere is any objection regarding the expenses incurred by the receiver
        or any other amount spent by him, it shall be open to the petitioner        p
        to approach the High Court."

       The grievance of the State Government seems to be that the Receiver
is not able to cope up with the work and there had been default in not cmly
filing the returns properly but also in the remittance of the amounts. The
public exchequer continued to be the loser and with the Court Receiver on           G
the job, the State was unable to properly assess the quantum of collection and
the ultimate loss of revenue to the public exchequer. The Department appears
to have taken a census on the Durgapur Expressway from 8 a.m. on 12.6.2000
to 8 a.m. on 15.6.2000 and it was found that at Azapur near Palsit, average
toll collection should have been Rs. 4,95,575 per day. Similar census at
Dankuni also, the other point of the Highway in question, revealed that the         H
    540                    SUPREME COURT REPORTS [2001) SUPP. 2 S.C.R.

A   collection should have been Rs. 4,49,565 per day. The deposits made by the
    Receiver seem to have been, apart from the same being irregular and not
    systematic, were only in the range of Rs. 70,000 to Rs. 2,25,000 per day.

          The Division Bench of the Calcutta High Court, as indicated above,
    disposed of the appeal on 20.11.2000, by giving certain directions, both
B   learned Judges rendering separate but concurring opinions. Hence, the above
    appeals.

           Heard the learned Senior Counsel for the appellants as well as the
    respondents. On an overall consideration of the indisputable facts on record
    and the submissions made on either side, we are unable to persuade ourselves
C   to appreciate or approve. the manner of approach adopted, the method of
    consideration undertaken and statements on some abstract principles of Jaw,
    unmindful of the stage of the proceedings and the serious as well as
    irretrievable public detriment that is bound to result from the conclusions
    arrived at and directions issued on a perfunctory understanding of the rights
D   of parties, the statutory provisions of the Act, Rules and Regulations governing
    the issue.

         The observations of the learned Judges of the Division Bench on the
  question of existence of 'prima facie case' to justify or warrant the grant of
  the prohibitory as well as mandat-0ry directions of the nature issued in the
E case, in our view, suffer from serious self-contradictions, apart from
  impermissibility of several assumptions made in this regard on the basis of
  perfunctory and inchoate materials which could not provide any basis in law
  for such claims. All relevant materials also do not seem to have been adverted
  to in their proper and legal perspective and the conclusions arrived at appears
  to have arrived at throwing to winds the elementary and basic principles of
F law pertaining to the creation of contractual relationship between the parties.
  The judgment under challenge also seems to be oblivious to the obvious facts
  emanating from records that those materials relied upon for the plaintiff-
   contractor do not, in law, constitute any or sufficient basis of evidence, which
  could establish even if not rebutted by evidence adduced on the other side,
G the plaintiffs case for an extended term in law. The fact that substantial
   mischief or injury is likely to be necessarily caused by the grant of the order,
   under challenge, unlike in the case of refusal of the relief, and that the grant
   would lead to irreparable loss and damage to the interest of the State as well
   as public interest, seems to have been completely lost sight of notwithstanding
   the serious violations of the conditions and terms of the contract between
H parties.
                       STATEv. M.R. MONDAL (RAJU, J.]                          541

        The learned Judges of the Division Bench of the High Court ought to            A
 have seen that there can be no legal impediment for the Department to make
preparations ahead of the period of expiry of the one year contract given in
 favour of the plaintiff to facilitate the entrustment of the task of collecting the
toll in question for the period subsequent thereto, to a newly selected contractor
 at competitive rates. The Division Bench further overlooked the vital legal           B
 proposition that the Memorandum dated I I .3.1998 of the Joint Secretary
cannot, per se, have the legal consequence of bringing into existence an
extended period of contract and that too for 30 years though said to be
renewable periodically every three years. On a proper consideration of the
Memorandum dated 11.3.1998, which was also stated to have been never
 communicated to the plaintiff, and the subsequent Memorandum dated                    C
24.8.1999 of the very Joint Secretary, who issued the earlier Memo, that
Memorandum dated 11.3.1998 contained only certain proposals and not any
 final orders of extension or renewal of the contract as assumed in the judgment
under challenge. Paragraph I 5 of the Memorandum dated 11.3.1998, which
has been relied upon as the basis for claiming an extended period of contact,
 itself has been misconstrued out of context though by itself, it cannot have          D
the effect of bringing into existence such an extended term of contract to
warrant or justify the grant of the directions of the nature in the present case.
 Even assuming for consideration without accepting that paragraph 15 of the
Memorandum dated 11.3.1998 had any effect, it can by no stretch of
imagination be construed to bring into existence ipso facto an extended period         E
of contract beyond the one year period for which alone the contract had been
given to the plaintiff in this case. An order passed but retained in file without
being communicated to the plaintiff can have no force or authority whatsoever
and the same has no valid existence in the eye of law or claim to have come
into operation and effect. No reliance can be placed on the same to even
assert a claim based on its contents. If its utility depended upon a decision          F
to be taken on the performance of the plaintiff by the Competent Authority,
neither the authority could be compelled to iake a decision nor any concrete
rights could be said to have been acquired by the plaintiff, to warrant the
grant of the type of directions given in this case. It is really surprising that
the discretionary power to grant injunction, be it of prohibitory or mandatory         G
nature, has been availed of to bring into existence and force upon the State
a new contract, which could never have been the intention of the State itself.

      The relevant and vital facts apparent on record and the stark realities
of the case go to show that the plaintiff has been entrusted with the contract
for collecting the toll in question only for a period of one year from !3.12.1997      H
    542                    SUPREME COURT REPORTS [2001) SUPP. 2 S.C.R.

A   and that as per the provisions of law noticed supra, such collection by the
    Executing Agency departmentally or through franchisee as in this case, is to
    be for and on behalf of the Central Government and the amounts have to be
    remitted to the Central Government, which only is the beneficiary of such
    collection. When the statutory rules provided for collection through franchisee
B   and the selection of the contractor only through public auction under the
    instructions for specific periods as the Central Government may issue, at
    competitive rates and in this case such grant was made on behalf of the
    Central Government for one year initially, there can be no extension granted
    in law by the Executing Agency without the prior instructions or approval of
    the Central Government. It would be futile for anyone to claim or for Courts
C   to countenance any claim that without reference to the Central Government
    on whose behalf the State Government was acting as Executing Agency
    could under the pretext of a proposed extension proceed to extend the same
    for 30 years with a provision for periodical review of three years unmindful
    of the financial interest of the Central Government and the ultimate loss that
    may result to the public exchequer. The mere fact that if departmentally the
D   collection is made by the Executing Agency it can be in perpetuity in the
    sense that as long as the Executing Agency is continuing to be the Agency,
    a person like the plaintiff, who has been entrusted for the task only for one
    year, cannot seek umbrage under clause (11) of the Rule. Unlike contracts
    entered into in exercise of the executive power of the State wherein terms can
E   be stipulated and settled at the will and pleasure of the State, a franchise or
    contract envisaged for the collection of toll in question is limited and
    circumscribed by the provisions of the Fee Collection Rules, 1997 and what
    could be only the subject-matter of an auction, selection and grant on the
    basis of competitive rates of the bid cannot be the subject of whim and fancy
    of any authority, particularly when public interest and public exchequer of
F   the Central Government is and will be at stake. Thus, without the concurrence
    of the Central Government, which also has to be necessarily in conformity
     with the statutory rules governing the same, there cannot be any extension
    granted in favour of the plaintiff and the High Court could not have directed
     the doing of a thing not permissible in or contrary to the statutory rules.
G         It is now an indisputable fact on record that the Central Government
    has issued a statutory Notification dated 4.2.1999 published in the Government
    of India Gazette of even date, in exercise of its powers under Section 11 of
    NHAI Act entrusting the Highways including the stretches in question, to the
    National Highways Authority of India and that with the said Notification, the
H   status of the State Government as Executing Agency has come to an end,
                     STATEv. M.R. MONDAL (RAJU, J.]                       543
though the plaintiff, first respondent herein, seeks to place reliance upon A
Section 12(l)(a) of the National Highways Act. In our view, the said provision
will have no relevance or application to the case on hand. The transitional
provision in the form of transfer of assets and liabilities of the Central
Government to the authority, would take in only subsisting rights already
acquired or obligations and liabilities incurred as on the date of publication B
of the Notification and that too in accordance with law and not in derogation
of law. So far as the case on hand is concerned, the plaintiff could not
legitimately claim to have acquired any rights b)' virtue of the Memorandum
dated 11.3 .1998 which has no force or sanctity in law and the Central
Government or the NHAJ cannot be said to have incurred any obligation or
liability thereby, stepping into the shoes of the State Government which.acted C
as an Executing Agency for the period commencing from 4.2.1999. We are
unable to appreciate as to how the Division Bench, in the teeth of concrete
and clinching material that from the inception of the contract the first
respondent plaintiff had been playing foul and has been devising methods
and ways to avoid his responsibilities and has been shown to be guilty of
serious lapses in depositing regularly the amounts due, could have been D
given any protection by issuing directions of the nature under challenge in
these appeals. The obvious impracticalities involved in the appointment of an
Advocate-Receiver to supervise such a stupendous task of the nature in
question seems to have also been overlooked and escaped the attention of the
Court and no serious thought seems to have been also bestowed upon the E
materials brought to its notice even about the inability of the Advocate-
Receiver to effectively function to safeguard the financial interest of the
public exchequer.

      For the reasons stated above, we are of the view that the judgments
under challenge have not only the effect of conferring an undue, undeserved      F
and unjustified benefits and rights on the plaintiff, first respondent herein,
but also have the consequence of doing grave injustice to public interest and
great loss to public Revenue. We are also of the view that not only the order
of the Division Bench dated 20.11.2000 is liable to .be set aside, but
consequential direction should be issued to retrieve the situation before any    G
further irreparable damage is caused to the public exchequer. Consequently,
we order :-

      I. The. order dated 20.11.2000 of the Division Bench is hereby set aside
and that of the learned Trial Judge is restored.
                                                                                 H
    544                      SUPREME COURT REPORTS [2001] SUPP. 2 S.C.R.

A         2. The Advocate-Receiver appointed by the High Court shall stand
    discharged forthwith and he shall cease to function as such from the day the
    authorities of the NHAI directly assume supervision and control of the
    Highway and the collection of toll in question, under intimation to the Receiver.

             3. The authorities of the NHAI, who has jurisdiction and control over
B the stretch of the Highways pursuant to the notification, are hereby authorized
  and permitted to assume the right to collect and regulate/control the collection
  of toll by serving a letter to that extent on the Advocate-Receiver and on such
  service, the Advocate-Receiver shall stand discharged for all purposes, except
  for rendering accounts to the collections already made to the authorities of
C the NHAI. If there is any dispute in this regard, it shall be worked out by
  obtaining appropriate directions from the Calcutta High Court, which appointed
  the Receiver.

             Consequently, the appeals shall stand allowed on the above terms. No
    costs.
D
    v.s.s.                                                        Appeals allowed.