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Mandar Madhusudan Bahudhandhi Swablambi Sahkari Sammittee Ltd v/s State of Bihar

    C.W.J.C. 112 Of 2007

    Decided On, 11 January 2007

    At, High Court of Bihar

    By, THE HONOURABLE MR. JUSTICE NAVANITI PD. SINGH

    For the Appearing Parties: Rajendra Narayan, Rajiv Kumar Singh, A.C. Nirankar, Advocates.



Judgment Text

(1.) Heard.

(2.) The present application has been filed by the petitioners for quashing the order of the Commissioner, Bhagalpur Division as endorsed on the application of intervener dated 20-12-2006 (Annexure-9) and consequential communication thereof from the office of the Commissioner to the Collector and Additional Collector, Banka being communication dated 21-12-2006, as contained in Annexure-9/a. By the aforesaid impugned orders, the settlement of the right to collect rent of Bounsi Mela on behalf of the State which was settled with the petitioners has been ordered to be cancelled and the steps are ordered to be taken for fresh settlement. When the matter was taken up for admission, an intervention was sought to be made on behalf of Nikhil Bahadur Singh and Amar Kumar Singh who professed that it was on their initiative and on their application that the Commissioner had rightly set aside the settlement. They, as such, sought leave to intervene in the matter and file a counter-affidavi

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t justifying the necessity of setting aside the settlement made in favour of the petitioners. This was permitted and that is how this case is being taken up now with the consent of all the parties.

(3.) In the district of Banka, a fair (Mela) is held known as Bounsi Mela. The right to collect rent therein vests in the State Government. Settlement is made for a period of one year though primarily the Mela is held for one full month. It starts from Makar Sankranti that is 14th of January for a period of one month. The State Government having taken decision to appoint collecting agents of rent and tolls therein on their behalf make settlement in this regard by calling for an open auction.

(4.) For the present year, it is not in dispute, that public notice was duly given. It is not in dispute that in newspaper, due advertisement was issued in regard to the said proposed settlement fixing 14-12-2006, 18-12-2006 and 22-12-2006 as the three alternative dates on which public auction would be done amongst the participants. If on 14th settlement was made then the other two dates became infructuous. If for any reason on 14th, no settlement could be made then it would be so done on 18th. If on 18th it was finalised then 22nd was an infructuous date. These three dates are usually given as there may not be necessity to readvertise each time for any reason there is failure.

(5.) In the present case on 14-12-2006, it is not in dispute, that there was a strike in the Collectorate and, as such, the auction could not take place. The next date being 18th, the petitioners and others were present but no one offered above the reserve Jama. It were petitioners alone who offered the highest amount equivalent to the reserve Jama which is the reserve price and, as such, the Additional Collector accepted his bid and directed him to deposit the entire amount of Rs. 2,04,988/- with 10% security totalling to Rs. 2,25,486/- which the petitioners deposited in cash on the same date as is evidenced by receipt appended as Annexure-8. Thus, the petitioners had completed his part and became a settlee of the Mela in question, right to collect rent and tolls. It now appears that an application was filed before the Commissioner, Bhagalpur Division under whose supervision, the settlements have to be made on 20-12-2006 by Vayvasasyee Kalyan Samiti, Banka. In the said application all that was said was even though there was paper advertisement fixing the dates and. accordingly, settlement was made in favour of the petitioners for the said amount as indicated above, they were now ready to offer more than the amount at which settlement had been made 22nd was the last date indicated in the advertisement and, as such, to enable them to participate, the Commissioner may set aside the settlement and direct fresh auction on 22nd. On this application being filed on it itself, the Commissioner endorsed that that auction should be reheld and this was then followed by a formal communication dated 21-12-2006 (Annexure 9/a) wherein under orders of the Commissioner, it was directed that the settlement made with the petitioners be cancelled and the settlement be readvertised by public auction. It is these two communications that are under challenge.

(6.) On behalf of petitioners, it is submitted that once the petitioners had participated in the settlement process, succeeded, deposited the entire bid amount the settlement was complete and could not be set aside except on the grounds known to law. It could not be set aside merely because subsequently someone turns up and offers to pay a higher amount. It is submitted that the auction process in law is complete the moment the bid is finally accepted. The law in this regard then operates. The law is not different when it comes to State action or State revenue. The law does not exempt State Government from the legal consequences of their actions. Secondly, it is submitted that even if for any reason, the settlement had to be cancelled, it could not have been cancelled without due notice to the petitioners and without hearing the petitioners.

(7.) The interveners, on the other hand, submit that they had intended to participate in the auction on 18-12-2006. They had accordingly made a representation, as contained in Annexure-1 to their intervention application. It is submitted on their behalf that the settlement made with petitioners is a sham settlement. They were precluded from participating in the auction process. This was sufficient to vitiate the settlement process. It was further stated that the Commissioner had full right in the interest of revenue to cancel the settlement made if there was likelihood to get a better revenue for the State Government.

(8.) These are the rival contentions which are required to be resolved in the present matter.

(9.) Firstly, coming to the submissions on behalf of interveners, suffice to say that there are no documents on record to show that the interveners or anyone else intended to participate in the settlement process held on 18-12-2006. This grievance is not apparent from any of the several representations brought on record by the interveners and the petitioners. The representations clearly state that they were now ready to offer highest bid and in none of the representations, there is any complaint or whisper thereof that anyone was precluded from participating in the process. On the other hand, Annexure- 1 to the intervention application is eloquent enough to show that what was sought for was a postponement of the settlement process and that too on the ground that they may on the postponed day be in a position to make a higher bid. To my mind, this is clear indication that even though people knew about the dates even though people participated but on the fateful day when settlement was made, they were not in a position to outbid the petitioners and, therefore, this indirect method was adopted to unsettle a settled settlement. The plea of the interveners have no legs to stand rather they are apparently false and cannot be taken note of by this Court.

(10.) Coming to the submission of the petitioners that once settlement has been made and money deposited, accordingly, a concluded contract comes in operation that may not be wholly correct. There is an acceptance by the State to the offer of the petitioners which is a quasi contract at this stage but it nevertheless binds the parties. The State cannot riggle out of the situation merely because at a later stage or at a later date someone thinks of making a better offer. The law is well settled that an arrangement legally entered into is binding on the parties. The same cannot be unsettled unilaterally by any party. The State cannot walk out of a binding arrangement merely because it is economic to do so. The law makes no exception in so far as State is concerned. One must keep in mind the serious consequences which may follow if this uncertainty is allowed to prevail. If this settlement is cancelled and in the next event this amount is not fetched then where is the State left. Who will make good the loss? The law, therefore, does not permit change without legal justification. Therefore, the contention of the petitioners has got to be accepted that a settlement duly made with the petitioners could not have been cancelled merely on the plea made by someone that they were ready to enhance the bid and, thus, the State would gain revenue. Such an action is not permissible in fact or in law. On this short issue, this writ application is liable to be allowed and the impugned orders, as contained in Annexures-9 and 9/a, are liable to be set aside.

(11.) However, as it has also been urged that the orders are also bad for violation of principles of natural justice, I deem it proper to decide that issue as well. Commissioner of the Division is fairly a senior responsible officer of the Government. He is supposed to be aware of the simple principles of natural justice. The only grievance that was made to him as apparent from Annexure-9 that a party is ready to offer a higher amount and, accordingly, prayed that a settlement made in favour of the petitioners be cancelled. The Commissioner should have been aware that a settlement having been made, civil rights had accrued to the petitioners which could not be taken away in this arbitrary manner and that too without noticing them and/or granting them opportunity of hearing. Further, the order communicated on the next day (Annexure-9/a) does not give any reason for setting aside the settlement. That is another reason that is why the order cannot be sustained. A settlement cannot be cancelled on the whim and caprice of officers of the State.

(12.) In that view of the matter, I have no option but to quash the order of the Commissioner as endorsed on Annexure-9 and as communicated by Annexure-9/a. Consequently, the settlement made in favour of the petitioners shall continue and bind the State. This writ application is therefore, allowed. Application allowed
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