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CASE NO.:

Appeal (civil) 5673 of 2006

PETITIONER:

Nagar Nigam, Meerut .. Appellant

RESPONDENT:

Al Faheem Meat Exports Pvt. Ltd & Ors. .. Respondents

DATE OF JUDGMENT: 07/12/2006

BENCH:

S. B. Sinha & Markandey Katju

JUDGMENT:

J U D G M E N T

(Arising out of SLP(Civil) No. 10174 of 2006)

S.B. SINHA, J.

Leave granted.

Nagar Nigam Meerut is before us questioning the legality of a

judgment and order dated 29th March, 2006 passed by a Division Bench of

the Allahabad High Court in Civil Misc. Writ Petition No. 53782 of 2004.

Appellant-Corporation is a local authority constituted under Uttar Pradesh

Municipal Corporations Adhiniyam, 1959 (the Act). As a local authority,

indisputably it has a large number of public duties and functions to perform;

maintenance of slaughter house being one of them. Chapter XVI of the Act

inter alia provides for regulation of slaughter houses. Sections 422 and 423

of the said Act, which are relevant for the purpose of this case are set out

herein below:

"422. Municipal Commissioner's powers in

respect of Corporation markets and

slaughterhouse etc. - Subject to the provision of

this Act and the rule and bye-laws framed

thereunder the Municipal Commissioner shall have

the power \026 (a) upon being authorized by the

Corporation in that behalf, to construct, purchase,

take on lease or otherwise acquire any building or

land for the purpose of establishing a Corporation

market or a Corporation slaughter-house or

stockyard within, and with the prior sanction of the

State Government, without the limits of the

Corporation and of extending or improving any

existing Corporation market or slaughter-house;

(b) from time to time, to build and maintain such

Corporation markets, slaughter-house and

stockyards and such stalls, shops, sheds, pens and

other buildings or conveniences as may be deemed

necessary for the use of the persons carrying on

trade or business in, or frequenting, such

Corporation markets, slaughter-houses or

stockyards;

(c) to provide for maintaining on any such

Corporation markets such building, places,

machines, weights, scales and measures for

weighing and measuring goods, sold therein as he

shall think fit;

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(d) upon being authorized by the Corporation on

that behalf, to close any Corporation market or

slaughter-house or stockyard or any portion thereof

and to dispose of as the property of the

Corporation the premises occupied for any market

or slaughter-house or stockyard or any portion

thereof so closes;

(e) with the previous sanction of the Corporation,

to prohibit by public notice from time to time

within a distance of fifty yards of any Corporation

market the sale or exposure for sale of the

commodities or of any of the commodities

specified in the notice ordinarily sold in the said

Corporation market and with like sanction to

cancel or modify any such notice at any time;

(f) to charge for the occupation or use of any stall,

shop, standing shed, or pen or other building in a

Corporation market, slaughter-house or stockyard,

and for the right to expose goods for sale in a

Corporation market, and for weighing and

measuring goods sold in any such market and for

the right to slaughter animals in any Corporation

slaughter-house, such stallages, rents and fees as

shall, from time to time be fixed by him, with the

approval of the Executive Committee, in that

behalf;

(g) with the approval of the Committee, from the

stallages, rents and fees leviable as aforesaid or

any portion thereof, for any period not exceeding

one year at a time; or

(h) to put up to public auction, or with the

approval of the Executive Committee, dispose of,

by private sale, for privilege of occupying or using

any stall, shop, standing shed or pen or other

building in a Corporation market, slaughter-house

or stockyard for such term and on such conditions

as he shall think fit.

423. Opening of private markets and of private

slaughter-houses:-

(1) The Corporation shall from time to time

determine whether the establishment of new

private markets or the establishment or

maintenance of private slaughter-house shall be

permitted in the City or in any specified portion of

the City.

(2) No person shall establish a private market for

sale of, or for the purpose of exposing for sale,

animals intended for human food, or any article of

human food or livestock or articles of good for

livestock or shall establish or maintain a private

slaughter-house except with the sanction of and

after obtaining a licence from the Municipal

Commissioner who shall be guided in giving such

sanction and licence by the decisions of the

Corporation at the time in force under Sub-section

(1):

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Provided that the Municipal Commissioner

shall not refuse to give sanction lawfully

established on the appointed day if application for

such sanction and licence is made within two

months of the appointed day, except on the ground

that the place where the market or slaughter-house

is established falls to comply with any

requirements of this Act or of any rule of bye-law

thereunder.

(3) When the establishment of a private market or

a slaughter-house has been so sanctioned the

Municipal Commissioner shall cause a notice of

such sanction to be affixed in Hindi and such other

language or languages as the Corporation may

from time to time specify on some conspicuous

spot on or near the building or place where such

market is to be held.

Explanation: For the purpose of Sub-section (2)

the owner or occupier of a place in which a private

market or slaughter-house is established shall be

deemed to have established such market.

(4) The Municipal Commissioner shall not cancel

or suspend or refused to renew any licence for

keeping open a private market for any cause other

than the failure of the owner thereof to comply

with some provision of this Act, or with some

regulation or with some bye-law.

(5) The Municipal Commissioner may cancel or

suspend any licence for failure of the owner of a

private market to give in accordance with the

conditions of his licence a written receipt for any

stallage, rent, fee or other payment received by

him or his agent from any person for the

occupation or use of any stall, shop, standing,

shed, pen or other place therein.

(6) When the Municipal Commissioner has

refused, cancelled or suspended any licence to

keep open a private market, he shall cause a notice

of his having so done to be affixed in such

language or languages as the Corporation may

from time to time specify on some conspicuous

spot on or near the building or place where such

market has been held."

The first respondent herein was granted a licence for a period of one

year to run a slaughter house which is owned by the appellant-Corporation.

It gives this slaughter house on annual licence basis. Such a licence was

granted to the first respondent herein on 9.1.2004. The said licence expired

on 8.1.2005. The impugned advertisement dated 6.12.2004 was issued by

the appellant inviting applications for granting a fresh contract for running

the slaughter house. It is this advertisement whose validity was challenged

before the High Court.

It may be mentioned here that in the year 2003, the Mayor of the

Nagar Nigam issued an advertisement on 9.11.2003 for modernizing the

existing slaughter house, which was published in some local newspapers.

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The first respondent is said to have submitted a project report in response to

the same. However, as stated in paragraph 8 of the counter affidavit of the

Nagar Nigam before the High Court, the power to accept such a project

report is with the general body of the Nagar Nigam, which has not granted

any approval thereto.

It is alleged by the first respondent that he sent a representation to the

State Government seeking its permission to modernize the slaughter house.

Thereafter he filed a writ petition being Writ No. 37187/2004 before the

High Court, which disposed off the same on 15.9.2004 by directing the State

Government to consider the said representation. It is alleged that instead of

deciding the representation, the Nagar Nigam issued the impugned

advertisement inviting applications for tenders for running of the slaughter

house in question.

We may at this juncture also notice that the State intended to acquire

some land for a site for construction of an alternative slaughter house, in

respect of which proceeding under the Land Acquisition Act was initiated.

However, at the instance of one of the owners of the said land, the High

Court in Civil Misc. Writ Petition No. 11069 of 2006 (Asaf Ali vs. State of

U.P. & Ors.) stayed dispossession of the petitioner therein. That writ

petition is said to be still pending.

The High Court by means of the impugned judgment dated 29.3.2006

has allowed the writ petition directing that the writ petitioner (respondent

No. 1 herein) should be allowed to run the slaughter house for 10 years on

terms and conditions stipulated therein. We would reproduce the relevant

part of the impugned judgment of the High Court which is as under:

"Petitioner No. 1 and his counsel (Sh. S.D.

Kautilya, advocate) have categorically stated

before us that the petitioner No. 1 shall construct

new building and install latest modern plants,

machines fixtures with latest advanced technology

on international standards so that one shall not be

able to identify it as "Slaughter House" from

outside and offered to invest Rs. 6 crores to

complete the project in one year besides

undertaking to deposit Rs. 60 lacs per annum at par

with the offer of petitioner No. 2 (As per affidavit

of Sri Prithvi SinghChauhan) provided he is

allowed to carry on the Slaughter House for ten

years.

Keeping in mind that the interest of the

common man at large is paramount which should

not be ignored and to ensure the welfare of the

local residents by saving them from facing untold

hardships and sufferings (as already recapitulated

earlier), we direct the Nigam and other concerned

authorities of Meerut, Administration to assist and

cooperate with petitioner No. 1 to modernize the

Slaughter House at its existing site on following

"terms and conditions":-

(1) Petitioner No. 1 represented by its Director

Mohd. Imran Khan (which includes legal

representative, successor, assignee, agent,

nominee, servant etc.) shall, on or before

30.4.2006, file an affidavit giving undertaking to

the Nigam to comply with the directions given

hereunder.

(2) (a) Petitioner No. 1 as per its offer and

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undertaking given to the court shall on or before

15th May 2006 deposit Rs. three crores with Nagar

Nigam, Meerut.

(b) Petitioner No. 1 shall also deposit Rs. two

crores on or before 30th September 2006 with

Nagar Nigam, Meerut.

(c) The Nigam give written notice to the Petitioner

No. 1 to deposit within three weeks of receipt of

said Notice or such extended time as the Nigam

may grant in writing such additional amount (not

exceeding Rs. 50 lacks at one instance) in case

additional amount, exceeding Rs. five crores

referred in above clause (a) and (b), is required to

complete the project, (as contemplated under this

judgment) subject, however, to the condition:

(i) demand of additional amount shall not in

total exceed Rs. one crore and the petitioner

No. 1, therefore, shall not be required to

deposit in total more than rupees six crores;

and

(ii) Further, in case of any amount being

found in excess and unutilized at the end of

completion of Project the said amount with

interest if any shall be repaid to Petitioner

No. 1 forthwith.

crores

(d) The above amount and time schedule shall

be subject to such further mutual

agreement/Settlement as the Nigam and Petitioner

No. 1 may settle under prior information to each

other as well as to the State Government but

notwithstanding the quality and the conditions of

Project of Slaughter House duly

approved/sanctioned by Centre for Integrated

Animal Husbandry & Dairy Development, Noida

(CIAHDD).

(e) All the aforesaid amounts deposited by

petitioner No.1 shall be kept by the Nigam in a

separate Nationalized Bank Account which shall

be exclusively appropriated/utilized for executing

modern slaughter house Project as duly approved

(as contemplated herein under) at the site of

existing Slaughter House.

(3) Petitioner No. 1 shall get the project-report

of the modern Slaughter House (with all details)

duly approved and cleared on or before 15th May

2006 by Centre for Integrated Animal Husbandry

and Dairy Development, Noida CIAHDD and

Agency/Organiszation approved by the Nigam.

The project reports shall include plan for Civil

electrical and mechanical designs/plans, adequate

provisions to check pollution of any kind including

"Treatment of Effluents and Pollutants" as per

norms prescribed by U.P. Pollution Control

Board. Health and Safety Devices, prevention of

Five and other relevant details as may be required

by the Nigam, or the State Government under

relevant concerned Act, Rules, Regulation,

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Government Orders etc. as well as bind itself to

discharge all obligation otherwise created for

operating modern slaughter house on international

standards.

(4) Petitioner No. 1 shall submit on or before

30th May 2006 a copy of the Project Report/Plan

duly approved by CIAHDD and other information,

if any, to the Nigam, M.D.A. or Pollution Control

Board, etc. dealing with the subject in question for

information who shall pass appropriate order

within ten days of receipt plan and intimate

Petitioner No. 1 accordingly.

(5) Petitioner No.1 shall be duty bound to

remove defect, if any, communicated to it by the

Nigam, M.D.A. or U.P. Pollution Control Board,

within two weeks of receipt of objection and

obtain No Objection forthwith but in any case

before 15th June, 2006. The Board shall consider

the report and pass appropriate order/grant or

refuse "No Objection" within ten days of receipt of

submission of papers after removal of such defect.

(6) Petitioner No. 1 shall also obtain sanction No

Objection from the Nigam, Meerut Development

Authority(MDA), and U.P. Control Pollution

Board by submitting amendments in the plans, if

any, at appropriate time and then authorities shall

within ten days of the receipt of the same pass

appropriate order.

(7) Petitioner No. 1 shall inform Nigam in writing

before starting construction/execution of Project

work which must be undertaken on or before 15th

July, 2006.

(8) Petitioner No. 1 shall cooperate and assist the

Nigam (its authorities/officers) to make inspection

of the site during course of implementation of the

project to satisfy that the work is as per Project

Report approved by CIAHDD as well as other

directions issued by other authorities viz. the

Nigam, Meerrut Development Authority, U.P.

Pollution Control Board etc.

(9) Petitioner No. 1 shall be entitled to supervise

execution of the Project work and shall be entitled

to ensure that said work is performed/executed as

per Project Report, and all payments in that respect

shall be made promptly by the Nigam in

accordance with law from the amount so deposited

by Petitioner No. 1 under the above sub clauses of

Clause 2.

(10) Petitioner No. 1 shall be permitted to operate

and slaughter animals at the existing slaughter-

house subject to the condition that he shall deposit

with the Nigam on or before 15.05.2006 rupees

sixty lacs in lump sum for the period of 01-04-

2006 to 31-03-2007. Such amount can be

deposited, if so advised, in four equal instalments;

the first installment of Rs. 15 lacs to be paid to the

Nigam on or before 15th May, 2006. The second

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installment to be paid to be paid to the Nigam on

or before 15-08-2006, third installment to be paid

to the Nigam on or before 15-11-2006 and fourth

installment to be paid to the Nigam on or before

15-02-2007. In case of default in making the said

deposits within the time stipulated above, this

order shall stand automatically vacated in its

entirety. Petitioner No. 1 shall likewise continue

to deposit amount of Rs. 60 lacs per annum for ten

years i.e. for the period ending on 31-03-2016.

And thereafter slaughter house shall be allowed to

be used and operated on such basis and terms and

conditions as may be allowed and settled by the

Nigam under the law.

(11) Petitioner No. 1 shall be free to abandon his

claim to run modern slaughter house for a period

of "ten years" or for less period as he may be

desired but he shall not be, in lieu of it or in

connection with, entitled to damages/compensation

of any kind.

(12) Slaughter House shall be modernized within

a maximum period of one year from today out of

the funds referred to in Clause 1(a), (b), (c), (d)

and (e) above.

(13) Nagar Nigam Meerut, District Authorities

and other concerned authorities shall be duty

bound to ensure that all steps are taken to promote

expeditious execution of the Project Report

referred to above and further hereby directed to

extend desired support and full cooperation to the

petitioner in establishing "modern Slaughter

House". Laxity or negligence in any manner on

the part of either party shall be deemed and treated

deliberate act of interfering with the compliance of

this order of the Court.

(14) Petitioner No. 1 shall have no claim or

interest or subsisting right or charge on the assets,

whether movable or immovable in the assets of the

slaughter house in question created out of funds

referred to in sub-clause 2(a), (b), (c) (d), (e) and

(f) of Clause 2 after expiry of ten years or in case

of the petitioner No. 1 abandoning or relinquishing

his right to operate the Slaughter House at any

time before expiry of said ten years.

(15) The Nagar Nigam, Meerut and all the

concerned authorities shall have right to make

periodical inspections to ensure that the

slaughterhouse is properly maintained and run in

accordance with the relevant statutory provisions,

viz., the Act, Rules/Regulations and Government

Orders, etc, if any for ten years period

contemplated above.

(16) *** *** ***

(17) This order shall not, in any manner be read or

interpreted to encroach upon or undermine the

power conferred in lieu upon any

Officer/Authority of the Corporation etc.

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(18) In case of difficulty or doubt the parties are at

liberty to approach this Court for

appropriate/requisite order by way of clarification.

U.P. Government., Nagar Vikas Anubhag

Order dated 07-01-2005 (No. 03 Writ/9-8-2005-

11P/03), Annexure CA-3 to short counter affidavit

of respondent No. 1/State of U.P., is hereby set

aside.

The Writ petition is allowed by moulding

the reliefs subject to the conditions and to the

extent indicated above"

The directions issued by the High Court, in our considered opinion,

were totally unwarranted. The High Court undoubtedly exercises a wide

jurisdiction under Article 226 of the Constitution of India. The jurisdiction

of the High Court to entertain an application in the nature of a public interest

litigation is well-known but it is also trite that the court should exercise its

jurisdiction only when it is essential to do so. It is also trite that ordinarily

the High Court would not interfere in an administrative action of the State

unless it is inter alia found to be contrary to a legislative policy or arbitrary

attracting the wrath of Article 14 of the Constitution of India. The

jurisdiction of the High Court is limited in this regard. [See State of U.P.

vs. Section Officer Brotherhood and Anr. 2004 (8) SCC 286]

Apart from the above, Mr. Jayant Bhushan, learned senior counsel

appearing on behalf of the appellant submitted before us that the High Court

could not have issued the impugned directions which are not only violative

of Sections 422 and 423 of the Act, for the reasons that the statutory

functions of the Corporation have been taken away by the High Court's

order, but in addition the constitutional scheme adumbrated under Article 14

of the Constitution also stands violated. The learned senior counsel

contended that if with a view to achieve transparency the Corporation

intended to advertise a tender, it was not for the High Court to direct grant of

contract in favour of the first respondent herein on the terms and conditions

laid down in the impugned judgment.

Mr. Dinesh Dwivedi, learned senior counsel appearing for respondent

No.1, on the other hand, submitted that the High Court was faced with an

exceptional situation namely, the pressing need for modernization and

proper maintenance of the slaughter house keeping in view the health

hazards of the public at large. It was pointed out that the new proposed

slaughter house cannot be constructed at an early date, as the High Court in

another writ petition has stayed acquisition of the alternative site, as a result

whereof a stalemate had occurred and continued for 2-1/2 years. The

appellant-Corporation, it was urged, in view of the stand taken by the State

of U.P. could not grant lease for more than one year and it had no funds to

construct a new modernized slaughter house. It was submitted that having

regard to the aforementioned difficulties, the High Court passed the

impugned judgment and, thus, no fault can be found therewith. The learned

senior counsel would contend that Article 14 does not prohibit negotiation

with a private person for the purpose of distribution of largesse by the State

in some exceptional circumstances. Reliance in this connection has been

placed on the judgments of this Court reported in Sachidanand Pandey &

Ors. vs. State of West Bengal & Ors (1987) 2 SCC 295, Brij Bhushan &

Ors. vs. State of J & K & Ors. (1986) 2 SCC 354 and M.P. Oil Extraction

vs. State of M.P. (1997) 7 SCC 592.

Indisputably Appellant-Corporation is a State within the meaning of

Article 12 of the Constitution of India. It was constituted under the said Act

which was enacted with a view to ensure better municipal governmence of

the cities in the State of Uttar Pradesh. The statutory obligation on the part

of the Municipal Corporation to build and/or maintain a hygienic slaughter

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house is not open to question. We have noticed hereinbefore that in terms of

Sections 422 and 423 of the Act, the Corporation has various options. Such

options, however, must be exercised by the Nagar Nigam itself having

regard to the statutory scheme with a view to maintain public hygiene, but

the same must be done in the light of the doctrine of life and liberty of a

citizen as adumbrated under Article 21 of the Constitution. Such options

cannot be exercised by the High Court, as that is no part of its functions.

Maintenance and setting up of a slaughter house (abattoir) is a statutory

responsibility of the Corporation. We may notice that the three Judge bench

of this Court in Buffalo Traders Welfare Association vs. Union of India &

Ors. (2004) 11 SCC 333 had issued certain directions to the Municipal

Corporation of Delhi to construct both temporary and permanent slaughter

house (abattoir) keeping in mind the future need of the city. This Court in

the said case has been monitoring construction of a modern slaughter house

in Delhi. However, the question who should be given the contract for the

slaughter house and on what terms, is for the Municipal Corporation to

decide, and not for the Courts. All that the Courts can do is to ensure that

there is no arbitrariness on the part of the Municipal authorities.

In this case, however, we are concerned with a different question. It is

now a well settled principle of law that having regard to the provisions of

Article 14 of the Constitution of India, a State within the meaning of Article

12 thereof cannot distribute its largesse at its own sweet will, vide R.S.

Shetty vs. Union of India, AIR1979 SC 1628. The Court can ensure that

the statutory functions are not carried out at the whims and caprices of the

officers of the government/local body in an arbitrary manner. But the Court

cannot itself take over these functions.

This Court time and again has emphasized the need to maintain

transparency in grant of public contracts. Ordinarily, maintenance of

transparency as also compliance of Article 14 of the Constitution would inter

alia be ensured by holding public auction upon issuance of advertisement in

the well known newspapers. That has not been done in this case. Although

the Nagar Nigam had advertised the contract, the High Court has directed

that it should be given for 10 years to a particular party (respondent No. 1).

This was clearly illegal.

It is well settled that ordinarily the State or its instrumentalities should

not give contracts by private negotiation but by open public auction/tender

after wide publicity. In this case the contract has not only been given by

way of private negotiation, but the negotiation has been carried out by the

High Court itself, which is impermissible.

We have no doubt that in rare and exceptional cases, having regard to

the nature of the trade or largesse or for some other good reason, a contract

may have to be granted by private negotiation, but normally that should not

be done as it shakes the public confidence.

The law is well-settled that contracts by the State, its corporations,

instrumentalities and agencies must be normally granted through public

auction/public tender by inviting tenders from eligible persons and the

notification of the public-auction or inviting tenders should be advertised in

well known dailies having wide circulation in the locality with all relevant

details such as date, time and place of auction, subject-matter of auction,

technical specifications, estimated cost, earnest money Deposit, etc. The

award of Government contracts through public-auction/public tender is to

ensure transparency in the public procurement, to maximise economy and

efficiency in Government procurement, to promote healthy competition

among the tenderers, to provide for fair and equitable treatment of all

tenderers, and to eliminate irregularities, interference and corrupt practices

by the authorities concerned. This is required by Article 14 of the

Constitution. However, in rare and exceptional cases, for instance during

natural calamities and emergencies declared by the Government; where the

procurement is possible from a single source only; where the supplier or

contractor has exclusive rights in respect of the goods or services and no

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reasonable alternative or substitute exists; where the auction was held on

several dates but there were no bidders or the bids offered were too low, etc.,

this normal rule may be departed from and such contracts may be awarded

through 'private negotiations'. (See Ram and Shyam Company vs. State of

Haryana and Others, AIR 1985 SC 1147).

In Sachidanand Pandey v. State of West Bengal, AIR 1987 SC 1109

at 1133, O.Chinnappa Reddy, J. after considering almost all the decisions of

the Court on the subject summarized the legal propositions in the following

terms:

"On a consideration of the relevant cases cited

at the bar the following propositions may be

taken as well established: State owned or public

owned property is not to be dealt with at the

absolute discretion of the executive. Certain

precepts and principles have to be observed.

Public interest is the paramount consideration.

One of the methods of securing the public

interest when it is considered necessary to

dispose of a property is to sell the property by

public auction or by inviting tenders. Though

that is the ordinary rule, it is not an invariable

rule. There may be situations where there are

compelling reasons necessitating departure

from the rule but then the reasons for the

departure must be rational and should not be

suggestive of discrimination. Appearance of

public justice is as important as doing justice.

Nothing should be done which gives an

appearance of bias, jobbery or nepotism."

"The public property owned by the State

or by an instrumentality of the State should be

generally sold by public auction or by inviting

tenders. This Court has been insisting upon that

rule, not only to get the highest price for the

property but also to ensure fairness in the

activities of the State and public authorities.

They should undoubtedly act fairly. Their

actions should be legitimate. Their dealings

should be above board. Their transactions

should be without aversion or affection.

Nothing should be suggestive of

discrimination. Nothing should be done by

them which gives an impression of

bias, favoritism or nepotism. Ordinarily, these

factors would be absent if the

matter is brought to public auction or sale by

tenders. That is why the Court

repeatedly stated and reiterated that the State

owned properties are required to

be disposed of publicly. But that is not the only

rule. As O.Chinnappa Reddy, J. observed, "that

though that is the ordinary rule, it is not an

invariable rule". There may be situations

necessitating departure from the rule, but then

such instances must be justified by

compulsions and not by compromise. It must

be justified by compelling reasons and not by just

convenience".

The law is, thus, clear that ordinarily all contracts by the

Government or by an instrumentality of the State should be granted only by

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public auction or by inviting tenders, after advertising the same in well

known newspapers having wide circulation, so that all eligible persons will

have opportunity to bid in the bid, and there is total transparency. In our

opinion this is an essential requirement in a democracy, where the people are

supreme, and all official acts must be actuated by the public interest, and

should inspire public confidence.

In the present case, unfortunately, the High Court's attention was not

drawn to the aforementioned legal principles.

Furthermore, we see force in the submission of Mr. Jayant Bhushan,

learned senior counsel for the appellant, that it was not for the High Court to

fix the terms and conditions of the Contract. It is for the state authorities to

take a policy decision and fix the terms and conditions of the Contract. It is

one thing to say that the High Court in exercise of power of judicial review

may strike down the contract or a notice inviting the tender if it offends

Article 14 of the Constitution of India, but it is another thing to say that the

High Court in exercise of the power of judicial review would thrust a

contract upon a non-willing party particularly when the said exercise would

be violative of Article 14 of the Constitution. Yet again, save and except in

some very rare and exceptional case, the question of fixing any terms of the

Contract or laying down the terms and conditions is for the concerned

authority to decide, and it is not a matter within the domain of the Courts. In

this behalf, we may refer to a decision of this Court in Association of

Registration Plates vs. Union of India & Ors. reported in (2005) 1 SCC

679, wherein this Court opined:

"The fifteen years' contract period has also been

supported by the Union of India and State

authorities. We find great substance in the

submissions made on the data supplied as a

justification for awarding the contract for a long

period of 15 years. There would be a huge

investment required towards the infrastructure by

the selected manufacturer and the major return

would be expected in initial period of two years

although he would be bound down to render his

services for future vehicles periodically for along

period. Looking to the huge investment required

and the nature of the job which is most

sophisticated, requiring network and infrastructure,

a long-term contract, if though viable and feasible,

cannot be faulted by the court. If there are two

alternatives available of giving a short-term or a

long-term contract, it is not for the court to suggest

that the short-term contract should be given. On

the subject of business management, expertise is

available with the State authorities. The policy has

been chalked out and the tender conditions have

been formulated after joint deliberations between

authorities of the State and the intending

manufacturers. A contract providing for technical

expertise, financial capability and experience

qualifications with a long term of 15 years would

serve the dual purpose of attracting sound parties

to stake their money in understanding the job of

supply and safeguard the public interest by

ensuring that for a long period the work of

affixation of security plates would continue

uninterrupted in fulfillment of the object of the

scheme contained in Rule 50. Our considered

opinion, therefore, is that none of the impugned

clauses in the tender conditions can be held to be

arbitrary or discriminatory deserving their striking

down as prayed for on behalf of the petitioners."

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(emphasis supplied)

In the present case, the respondent no.1 challenged the impugned

advertisement dated 6.12.2004 issued by the Nagar Nigam. We have

carefully perused the said advertisement and find no illegality in the same.

It has been held by this Court in several decisions that the Court should not

ordinarily interfere with the terms mentioned in such an advertisement.

Thus in Global Energy Ltd. and Anr. vs. Adani Exports Ltd. and Ors.

2005(4) SCC 435 this Court observed (vide para 10) :

"The principle is, therefore, well settled that

the terms of the invitation to tender are not open to

judicial scrutiny and the courts cannot whittle

down the terms of the tender as they are in the

realm of contract unless they are wholly arbitrary,

discriminatory or actuated by malice."\005\005\005

Similarly in Master Marine Services (P) Ltd. vs. Metcalfe &

Hodgkinson (P) Ltd. and Anr. 2005(6) SCC 138, this Court held that the

modern trend points to judicial restraint in reviewing the administrative

action. The court does not sit as a court of appeal over such a decision but

merely reviews the manner in which the decision was made. The court

ordinarily would not interfere with an administrative decision. The

Government must have freedom of contract. Some fair play in the joints is a

necessary concomitant for an administrative body functioning in an

administrative sphere.

We have carefully perused the impugned advertisement and we do not

find any arbitrariness, discrimination or malafides in the same. Hence the

High Court had no justification for interfering with the said advertisement.

For the reasons aforementioned, we have no other option but to hold

that the impugned judgment is unsustainable. It is set aside accordingly.

The question, however, arises what direction should be passed by us now,

considering the fact that the impugned advertisement was issued on

6.12.2004. We think that the interest of justice would be subserved if the

appellant Corporation is directed to issue an advertisement in well known

newspapers having wide circulation again calling for bids on such terms and

conditions which it may find to be reasonable within six weeks from the date

of communication of this order. The bids offered pursuant thereto must be

opened and a final decision must be taken within eight weeks thereafter.

Till such time it will be for the appellant-Corporation to decide as to

how the slaughter house should be allowed to function by making such

interim arrangement as it may find fit and proper.

Although the State of U.P. had rejected the proposal of the Municipal

Corporation, we direct the State to have a fresh look at the matter and to

consider the feasibility/desirability of grant of a licence to run the slaughter

house for a longer period than one year on the condition that the plant should

be modernized by the licencee. In our opinion, such a policy decision may

be required to be taken keeping in view the health and welfare of a large

number of inhabitants of the vicinity where such abattoirs are functioning, as

also vis-`-vis the health of the inhabitants of the locality, which is a

fundamental right under Article 21 of the Constitution of India. If a policy

decision is taken by the State, it goes without saying that the appellant-

Corporation in future may act in terms thereof, unless otherwise provided for

by the Statute.

Although the matter is not before us, however, keeping in view the

fact that now it is widely felt that a modern abattoir should be constructed, as

was noticed by this Court in Buffalo Traders Welfare Association (supra),

which ensures hygiene and sanitation, we would request the High Court to

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consider the desirability of disposing of Civil Misc. Writ Petition No.

11069/2006 (Asaf Ali vs. State of U.P. & Ors.) as expeditiously as possible.

Save and except the aforementioned directions, we are of the opinion that

the Corporation may work out the other modalities as it deems fit and in

accordance with law. If respondent No.1 has deposited any amount for the

modernization of the plant, which has not been carried out, the Corporation

may refund the amount subject to any outstanding dues.

The appeal is allowed accordingly. No costs.