State of Assam Vs. Tulsi Singh 
INSC 78 (1 March 1962)
Ferry--Settlement of by auction--Rules--Duty
of officer conducting sale--Special List maintained by Assam Government of
persons suspected or confirmed to be connected with smuggling
activities--Nature of document--If could be relied on for settling civil
rights--High Court if could decide matter entrusted to executive
authorities--Indian Evidence Act, 1872 (1 of 1872). s.35--Northern India
Ferries Act, 1878 (17 of 1878), ss. 4,8,12, r. 19.
Under s. 4 of the Northern India Ferries Act,
1878, the ferry at N was declared to be a public ferry. Rule 19 framed under s.
12 of the Act provided that a sale of ferry was generally to be auctioned to
the highest bidder, and the acceptance of a bid by the officer conducting the
sale was subject to the approval of the Chief Engineer who had to see whether
that officer had taken into consideration all the factors mentioned in r. 19.
Ferry at N was put up to auction and sold to the second respondent whose bid
was the lowest, Though the first respondent's bid was the highest, the officer
conducting the sale, without forming an opinion about the suitability of the
first respondent on his own appreciation of materials as required under r. 19,
rejected first respondent's bid straight away as his name appeared in the
"Special List". This "Special List" was prepared and
maintained by the Government of Assam of persons suspected or confirmed to be
connected with 'smuggling activities so that no permit or license may be
granted to such person is.
This was in pursuance of the prohibition
policy of the Government. The first respondent applied to the Chief Engineer
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 being
violative of s. 8 of the Act and r. 19 and further declared that the first
respondent was entitled to the settlement as the highest bidder. And Government
came up in appeal by special leave to the Supreme Court, 509 'The question is
whether a bid of a person at the auction of ferry can straightaway be rejected
by the officer conducting the sale merely for the reason that his name appears
in the special list and whether the High Court could decide a question was
entrusted to the executive authorities under the Act and make settlement of the
Held, that the discretion conferred on the
officer conducting 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 relevant 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
within s. 35 of the Indian Evidence Act and while such list might serve a
purpose in guiding Criminal Intelligence Department, it will be unsafe to rely
on it for deciding civil rights of a person.
Held, also, that even though the order of
authorities is not in accordance with law, it was for the appropriate authorities
to deal with the matter and the High Court could not' itself decide what is
entrusted to the executive authorities.
Verappa Pillai v. Raman & Raman Ltd.,
 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 11, 1961, of the Assam High Court in Civil Rule No. 64 of
Naunit Lal, for the appellants.
The respondent did not appear.
510 1962. March 1. The Judgment of the Court
was delivered by VENKATARAMA AIYAR, J.-The short question that arises for our
decision in this appeal is whether the settlement by the Executive Engineer,
Golaghat in the State of Assam. of the ferry at Neperpatty on the second
"respondent, Phuka Chandra Gohain, on January 23, 1961 was in accordance
with the provisions of the Northern India Ferries Act, 1878.
hereinafter referred to as "the
Act", and the rules framed there under.
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 years with
the approval of the Commissioner, or by public auction, or otherwise than by
public auction, for any term with the previous sanction of the State
The lessee shall conform to the rules made
under this Act for the management and control of the ferry, and may be called
upon by the officer in whom the immediate superintendence of the ferry is
vested, or, if the public body under section 7 or section 7A, then by that
body, to give such security for his good conduct and for the punctual payment
of the rent as the officer or body, as the the 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, may. for reasons recorded in 511 writing, refuse to
accept the offer of his highest 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 has experience of the
(iii) Whether he has landed property in his
own name within the district or State, can speak the regional language, is
financially sound and of good conduct, etc." The ferry at Neparpatty 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 as the two other
highest bidders fall in special List." Under Rule 19(a), the acceptance of
the bid by the 512 conducting Officer is subject to the approval of the Chief
Engineer, and Rule 19(b) provides that he must, in doing so, ",consider
among others whether the Officer conducting the sale has taken into account and
considered all the factors mentioned in Rule 19 above." The Chief Engineer
approved of the decision of the executive Engineer dated January 23, 1961, and
the sale to the second respondent was confirmed.
Thereupon, on February 6,1961, the first
respondent applied to the Chief Engineer for accepting his bid and settling the
ferry on him. By his Order dated April 7, 1961, the Chief Engineer rejected
this petition. On May 9, 1961, the first respondent filed in the High, Court of
Assam a writ Petition under Art. 226 attacking the Order of the Executive
Engineer dated January 23, 1961, settling the lease in favour of the second
respondent as contrary to the Act and the Rules, and praying that it might be
settled on him. The learned Judges accepted this contention and set aside the
settlement in favour of the second respondent as violative of s.8 and Rule 19,
and further declared that the first respondent was entitled to the settlement
under Rule 19 as the highest bidder. It is against this Judgment that this
appeal by special leave is directed.
The power of the Executive Engineer to settle
public ferries is derived from s.8 of the Act and the Rules framed thereunder,
and it has therefore to be exercised in accordance therewith. Under Rule 19,
the sale should generally be by auction to the highest bidder and under this
provision the ferry should normally have been settled with the first
respondent, who gave the highest bid. Section 8, provides that the Officer
conducting the sale may, for reasons recorded in writing, refuse to accept the
offer of the highest bidder and accept any other bid. The discretion thus
conferred on the Officer, is wide but not indefinite or unrestricted. Rule 19
provides that in accepting the bid, he has to take into 513 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
discretion, to accept it, his decision 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 is 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 Government 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 if; referred
to as the ,'special list" in the order of the Executive Engineer. It is
argued 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 relevant factor under Rule 19(iii).
But the difficulty of the appellant is that there are no materials on which the
first respondent' could be held to 514 be a smuggler. It appears that he was
prosecuted under s. 4 of the Assam Ganja and Bhang Prohibition Act but that
ended 'in his discharge. It is argued that though the materials available might
have been insufficient to sustain a conviction under the Act, they might be
sufficient for the authorities to take action under Rule 19. That is possible
but that is not the position in this case. 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 material
an Order rejecting the highest bid could be made under Rule 19. It is not and cannot
be 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 anything disclosed as to the procedure adopted by the
Government Officers in preparing the list. While such lists might serve a
purpose in guiding Criminal Intelligence Department, it will be unsafe to rely
solely on them 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 there 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 of the High Court that the
rejection of the offer of the highest bidder is not in accordance with s. 8 or
Rule 19 is correct.
The result of this conclusion is that the
authorities under the Act would have to be directed to consider the matter
afresh and give a decision in accordance with law, but the learned Judge, have
proceeded further and observed that under Rule 19, the offer of the first
respondent, being the 515 highest, should be accepted. The appellant contends
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 under the Act.
This, in our opinion, is correct. In Verappa Pillai v. Raman & Raman Ltd.
(1) the question srose with, reference to the grant of permits under the Motor
Vehicles Act. The authorities 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' hold 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 clearly in 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 erroneous. But, in view of the fact, that the lease was only for the
period 1961-62 and that would shortly be expiring, there is no need to direct a
fresh consideration of the matter by the authorities. In the result, the appeal