Kumar Karanwal Vs. The Commissioner & Anr  INSC 1382 (4 November 1996)
4TH DAY OF NOVEMBER, 1996 Present :
Mr. Justice K. Ramaswamy Hon'ble Mr. Justice G.B. Pattanaik K.S. Chauhan and Anil
Karnwal, Advs. for the Petitioner
O R D
following Order of the Court was delivered:
O R D
petitioner, admittedly, had made a bid in the auction for the year 1993-94,
conducted on February 25, 1993 for a sum of Rs.1,20,000/- 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 efflux of time. Consequently, for the years 1995-97, instead
of conducting fresh auction, on an application 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 thereof, the High Court in W.P.No. 31606 of 1995 by order dated
August 27, 1996 treating the grant of contract to the petitioner as an
extension of 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.
contended by Mr. K.S. Chauhan, learned counsel for the petitioner, that the
first respondent having granted the lease for the years 1995-97, had no power
to cancel the same under Rule 7 of the U.P. Toll Tax Regulations Levy &
Collection Rules, 1980 (for short, "the Rules") which gives absolute
power to the Commissioner under Rule 7 thereof.
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.
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 :
Procedure for grant of lease.- In accordance with the provision of Section 2-C
of the Act.
The Governor or his nominee may invite auction bids from the persons desirous
of taking lease for the collection of the tools levied on the bridge specified
in the notification issued by the Government.
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 a list of the
suitable candidate to whom the lease contract may be granted.
If it is considered necessary the Governor or his nominee may call any bidders
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 on respect of the right to collect tolls on
the specified road bridge.
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.
such occasion arises which makes the tenders/auction to be re- invited redone. a
similar notice of one month for the public auction may be issued.
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
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.
The Governor or his nominee shall require the lessee to furnish security equal
to three months installment of auction money ( including earnest money).
The lease/contract shall be executed on the standard form.
The cost of execution and registration of the lease be borne by the lessee.
Vesting to powers accepting auction bids- The powers 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.
Accepting of highest auction bid if an auction bid/negotiated offer is not the
highest one, the lower auction bid/negotiated offer can only be accepted after
getting the proper approval of the State Government.
Extension of the lease - No Extension of lease may be granted without the prior
sanction of the State Government".
4(i) give power to the Governor or his nominee to invite auction 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 whom the lease contact may be
granted. If it is considered necessary the Governor or his nominee may call any
bidder for negotiations under sub-rule (iii). Under sub-rule (iv) power has
been given to select nay 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.
(v) gives alternative mode of grant of lease by public action with which we are
not concerned in this case.
the grant of the lease, not exceeding five years as envisaged under sub-rule
(vii), the lessee shall furnish security equal to three months instalment of
shall execute the contract in the standard from under sub-rule (ix). After
execution thereof, the power of acceptance has been given to the Commissioner-Ist
respondent under Rule 7 of the Rules. If the auction bid after negotiation is
not the 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.
the mode conducting auction is a complete code by itself regulating the right
to collect the tolls on the specified road bridges by public notification. 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 right in directing 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.
special Leave Petition is accordingly dismissed.