IN THE HIGH COURT OF ANDHRA PRADESH: AT AMARAVATI

*****

WRIT PETITION Nos: 31871, 32835 of 2022, 30041 of 2023 & 1690 of 2024

WRIT PETITION NO: 31871 of 2022

Between:

V.Rabbani Basha ` .. Petitioner

And

The State of Andhra Pradesh,

Rep. by its Principle Secretary,

Department of Panchayat Raj

And Rural Development and 5 others. .. Respondents

WRIT PETITION NO: 32835 of 2022

Between:

V.Rabbani Basha ` .. Petitioner

And

The State of Andhra Pradesh,

Rep. by its Principle Secretary,

Department of Panchayat Raj

And Rural Development and 5 others. .. Respondents

WRIT PETITION NO: 30041 of 2023

Between:

V.Rabbani Basha ` .. Petitioner

And

The State of Andhra Pradesh,

Rep. by its Principle Secretary,

Muncipal Administration & Urban Development

Department and 3 others. .. Respondents

2

WRIT PETITION NO: 1690 of 2024

Between:

V.Rabbani Basha ` .. Petitioner

And

The Vice Chairman cum Managing

Director (APSRTC), Amaravathi and 3 others. .. Respondents

DATE OF ORDER PRONOUNCED: 05.01.2026

HON’BLE Mr. JUSTICE GANNAMANENI RAMAKRISHNA PRASAD

1. Whether Reporters of Local : Yes/No

Newspapers may be allowed to see

the Judgments?

2. Whether the copies of judgment : Yes/No

may be marked to Law Reports/Journals?

3. Whether Their Ladyship/Lordship : Yes/No

wish to see the fair copy of the Judgment?

________________________________________

GANNAMANENI RAMAKRISHNA PRASAD, J

3

*HON’BLE Mr. JUSTICE GANNAMANENI RAMAKRISHNA PRASAD

+ WRIT PETITION Nos: 31871, 32835 of 2022, 30041 of 2023 &

1690 of 2024

% DATE: 05.01.2026

WRIT PETITION NO: 31871 of 2022

Between:

V.Rabbani Basha ` .. Petitioner

And

The State of Andhra Pradesh,

Rep. by its Principle Secretary,

Department of Panchayat Raj

And Rural Development and 5 others. .. Respondents

WRIT PETITION NO: 32835 of 2022

Between:

V.Rabbani Basha ` .. Petitioner

And

The State of Andhra Pradesh,

Rep. by its Principle Secretary,

Department of Panchayat Raj

And Rural Development and 5 others. .. Respondents

WRIT PETITION NO: 30041 of 2023

Between:

V.Rabbani Basha ` .. Petitioner

And

The State of Andhra Pradesh,

Rep. by its Principle Secretary,

Muncipal Administration & Urban Development

Department and 3 others. .. Respondents

4

WRIT PETITION NO: 1690 of 2024

Between:

V.Rabbani Basha ` .. Petitioner

And

The Vice Chairman cum Managing

Director (APSRTC), Amaravathi and 3 others. .. Respondents

! Counsel for the petitioners :

Heard Sri Venkateswarlu Kolla, learned Counsel for the Writ Petitioners

in W.P.No.1690 of 2024, 30041 of 2023, Smt. G. Urmila, learned Counsel

appearing on behalf of Smt. P. Vijaya Kumari, learned Counsel for the Writ

Petitioner in W.P.No.32835 of 2022.

^Counsel for respondents :

Sri Aravala Rama Rao, learned Standing Counsel for APSRTC.

< Gist:

 Head Note:

?CASES REFERRED:

1. (1973) 3 SCC 489

2. (1980) 4 SCC 1

3. (2004) 3 SCC 214

4. (2011) 6 SCC 508

5. (2012) 10 SCC 1

6. (2018) 6 SCC 1

7. (2024) 15 SCC 461

8. 2024 SCC OnLine 3432

9. 2025 SCC OnLine 2368

5

Judgment reserved on 16.12.2025

Judgment pronounced on 05.01.2026

Judgment uploaded on 08.01.2026

APHC010520862022

IN THE HIGH COURT OF ANDHRA PRADESH

AT AMARAVATI

(Special Original Jurisdiction)

[3328]

MONDAY,THE FIFTH DAY OF JANUARY

TWO THOUSAND AND TWENTY SIX

PRESENT

THE HONOURABLE SRI JUSTICE GANNAMANENI RAMAKRISHNA

PRASAD

WRIT PETITION NOs: 31871, 32835 OF 2022, 30041 OF 2023 &

1690 OF 2024

Between:

1. V.RABBANI BASHA, S/O V.AMEER BASHA, AGED ABOUT 36

YEARS, OCC- CONTRACTOR, RESIDENT OF KALASAPADU

VILLAGE AND MANDAL, YSR KADAPA DISTRICT

...PETITIONER

AND

1. THE STATE OF ANDHRA PRADESH, REP. BY ITS PRINCIPLE

SECRETARY, DEPARTMENT OF PANCHAYAT RAJ AND RURAL

DEVELOPMENT, SECRETARIAT, VELAGAPUDI, AMARAVATHI.

2. THE DISTRICT COLLECTOR, YSR KADAPA DISTRICT AT KADAPA.

3. THE DISTRICT PANC HAYAT OFFICER, KADAPA, YSR KADAPA

DISTRICT.

4. THE KALASAPADU GRAMPANCHYAT, REP. BY ITS PANCHAYAT

SECRETARY, KALASAPADU MANDAL, YSR KADAPA DISTRICT.

5. THE TAHSILDAR, KALASAPADU MANDAL, YSR KADAPA DISTRICT.

6. SMT Y SIVA LEELA, W/O Y.SRIDHAR, AGED ABOUT 32 YEARS,

6

OCC- SARPANCH, KALASAPADU GRAMPANCHAYAT AND

MANDAL, YSR KADAPA DISTRICT.

...RESPONDENT(S):

Counsel for the Petitioner:

1. VUTUPALLI RAJANNA

Counsel for the Respondent(S):

1. GP FOR REVENUE

2. GP FOR PANCHAYAT RAJ RURAL DEV

3. Mattegunta.Sudhir,Standing Counsel For Z.P.Ps,M.P.Ps,Gram

Panchayats

WRIT PETITION NO: 32835 OF 2022

Between:

1. V.RABBANI BASHA, S/O V.AMEER BASHA, AGED ABOUT 36

YEARS, OCC- CONTRACTOR, RESIDENT OF KALASAPADU

VILLAGE AND MANDAL, YSR KADAPA DISTRICT

...PETITIONER

AND

1. THE STATE OF ANDHRA PRADESH, REP. BY ITS PRINCIPLE

SECRETARY, DEPARTMENT OF PANCHAYAT RAJ AND RURAL

DEVELOPMENT, SECRETARIAT, VELAGAPUDI, AMARAVATHI.

2. THE DISTRICT COLLECTOR, YSR KADAPA DISTRICT AT KADAPA.

3. THE DISTRICT PANCHAYAT OFFICER, KADAPA, YSR KADAPA

DISTRICT.

4. THE KALASAPADU GRAMPANCHYAT, REP. BY ITS PANCHAYAT

SECRETARY, KALASAPADU MANDAL, YSR KADAPA DISTRICT

5. THE TAHSILDAR, KALASAPADU MANDAL, YSR KADAPA DISTRICT.

6. SMT Y SIVA LEELA, W/O Y.SRIDHAR, AGED ABOUT 32 YEARS,

OCC- SARPANCH, KALASAPADU GRAMPANCHAYAT AND

7

MANDAL, YSR KADAPA DISTRICT.

...RESPONDENT(S):

Counsel for the Petitioner:

1. P VIJAYA KUMARI

Counsel for the Respondent(S):

1. GP FOR REVENUE

2. GP FOR PANCHAYAT RAJ RURAL DEV

3. Mattegunta.Sudhir,Standing Counsel For Z.P.Ps,M.P.Ps,Gram

Panchayats

WRIT PETITION NO: 30041 OF 2023

Between:

1. V.RABBANI BASHA, , S/O.V.AMEER BASHA, AGED ABOUT 40

YEARS, R/O.D.NO.2/100, MAIN BAZAR, KOTHA BAVI STREET,

KALASAPADU, YSR KADAPA DISTRICT.

...PETITIONER

AND

1. THE STATE OF ANDHRA PRADESH, REPRESENTED BY ITS

PRINCIPAL SECRETARY, MUNICIPAL ADMINISTRATION AND

URBAN DEVELOPMENT DEPARTMENT, A.P. SECRETARIAT,

VELAGAPUDI, AMARAVATI, GUNTUR DISTRICT.

2. THE MUNICIPAL COMMISSIONER, YARRAGUNTLA MUNICIPALITY,

YARRAGUNTLA, YSR KADAPA DISTRICT

3. THE REGIONAL MANAGER, ANDHRA PRADESH STATE ROAD

TRANSPORT CORPORATION, YSR KADAPA DISTRICT.

4. THE DEPOT MANAGER, APSRTC, PRODDATUR DEPOT, YSR

KADAPA DISTRICT.

...RESPONDENT(S):

Counsel for the Petitioner:

8

1. VENKATESWARLU KOLLA

Counsel for the Respondent(S):

1. GP FOR MUNCIPAL ADMN URBAN DEV

2. N RANGA REDDY (SC MC RSEEMA SPSR NLR)

3. K VISWANATHAM (SC FOR APSRTC)

WRIT PETITION NO: 1690 OF 2024

Between:

1. V. RABBANI BASHA,, S/O V. AMEER BASHA, AGED 36 YEARS,

BUSINESS, R/O. 2/100, MAIN BAZAR, KALASAPADU (PANDM),

KADAPA, YSR DISTRICT.

...PETITIONER

AND

1. THE VICE CHAIRMAN CUM MANAGING DIRECTOR APSRTC,

AMARAVATI, GUNTUR DISTRICT.

2. THE REGIONAL MANAGER APSRTC, KADAPA REGION, YSR

DISTRICT.

3. THE DISTRICT PUBLIC TRANSPORT OFFICER APSRTC, KADAPA -

YSR DISTRICT.

4. THE DEPOT MANAGER APSRTC, PRODDUTUR, KADAPA - YSR

DISTRICT

...RESPONDENT(S):

Counsel for the Petitioner:

1. VENKATESWARLU KOLLA

Counsel for the Respondent(S):

1. ARAVALA RAMA RAO(SC FOR APSRTC KKAC)

9

The Court made the following COMMON ORDER:

Heard Sri Venkateswarlu Kolla, learned Counsel for the Writ Petitioners

in W.P.No.1690 of 2024, 30041 of 2023, Smt. G. Urmila, learned Counsel

appearing on behalf of Smt. P. Vijaya Kumari, learned Counsel for the Writ

Petitioner in W.P.No.32835 of 2022 and Sri Aravala Rama Rao, learned

Standing Counsel for APSRTC.

2. The Writ Petitioner is the same person in all the four Writ Petitions. As no

cause survives in W.P.Nos.31871, 32835 of 2022 & 30041 of 2023, these Writ

Petitions have become infructuous.

3. The Writ Petition bearing W.P.No.1690 of 2024 is filed seeking the following

relief :

“…….to issue Writ, Order or Orders more particularly in the

nature of Writ of Mandamus declaring the action of District

Public Transport Officer (Respondent 3) in issuing

termination orders of my licence dated 08-12-2023 for open

space No. 03, 04 , 06 ,07, 10 and also open space No. 05 &

08 dated 15-11-2023 and also inviting fresh tenders dated 4-

1-2024 for open spaces in Erraguntla Bus Station of Kadapa,

YSR District as illegal, arbitrary, capricious and against

principles of natural justice offending articles 14, 19, 21 and

article 300 of the Constitution of India and consequently

quash or set aside the termination orders dated 8-12-2023

for open space No. 03, 04 , 06 ,07, 10 and 15-11-2023 for

open space No. 05 & 08 and also the tender notification

dated 4-1-2024 issued by the District Public Transport Officer

Kadapa, YSR District and pass such other Order or Orders

as may deem fit and necessary in the circumstances of the

case”

FACTS AS PER WRIT PETITIONER:

4. The above prayer would indicate that the Writ Petitioner is aggrieved of

the Termination Orders of his licences in respect of Open Space Nos.3,4,5,6,

7,8,10. The Writ Petitioner is also aggrieved of the issuance of the latest

Tender Notification dated 04.01.2024 for the above mentioned Open Spaces

(Ex.P.1). The above prayer would indicate that the Termination Orders were

passed in the months of November and December, 2023, and thereafter, the

10

Respondents have issued Tender Notification dated 04.01.2024. Previously,

the Respondent APSRTC Kadapa Region has called for bidding of Open

Spaces and issued Tender Notification dated 05.01.2022 for grant of licences

for doing different kind of businesses at Yerraguntla Bus Station by fixing a

monthly licence fee. The Writ Petitioner had participated in the Tender

process and secured allotment letters for Open Spaces dated 31.03.2022 for

Open Stall Nos.5 to 10 for the purpose of running different businesses for a

period of five years. Licence fee for each of the Open Spaces was payable on

monthly basis. The Writ Petitioner entered into an Agreement for running the

said Open Spaces on 16.06.2022. The Writ Petitioner has also entered into

an Agreement on 25.04.2023. It is submitted by the learned Counsel for the

Writ Petitioner that the Respondents have issued Show Cause Notices dated

10.10.2023, 2011.2023 & 24.11.2023 in respect of payment of monthly licence

fee for the months of November, 2023.

5. The Writ Petitioner has filed W.P.No.28876 of 2023 challenging the said

Show Cause Notices dated 10.10.2023, 2011.2023 & 24.11.2023. Vide Order

dated 03.11.2023, this Court has disposed of the W.P.No.28876 of 2023

directing the Writ Petitioner to submit the explanation to the Show Cause

Notices that were issued to him. Thereafter, the Writ Petitioner has received

the Orders of Termination dated 15.11.2023 & 08.12.2023 immediately.

Thereafter, the Respondent Corporation herein has called for Tenders on

04.01.2025 for grant of licences for the stalls/Open Spaces which were meant

for different kind of businesses in the Open Stall Nos.2,5,6,7,8,9,10 at

Yerraguntla Bus Station. Licence Fee was payable monthly. Aggrieved by

the Tender Notification dated 04.01.2024, the Writ Petitioner has filed the

W.P.No.1690 of 2024 (the present Writ Petition). Vide Order dated

23.01.2024, this Court has directed the Respondents not to finalize the

Tenders under Notification dated 04.01.2024.

11

VERSION OF APSRTC:

6. The Respondent Corporation has filed the Counter-Affidavit through its

Law Officer on 19.02.2024 along with material documents. It is submitted that

vide Proceeding dated 28.05.2022, the Respondent Corporation has handed

over the Open Space Nos.5,7,8,9,10 of 150 square feet each to the Writ

Petitioner. This document is filed along with the Counter-Affidavit. The

cardinal contention of the Respondent – APSRTC is that the Writ Petitioner

had grossly violated the conditions of licence by sub-letting the Open Spaces

secured by him to the third parties. The Respondent Corporation has placed

on record the Letters given by the sub-tenants confirming the position that the

Writ Petitioner has sub-let the Open Spaces. One such Letter is given by Sri

N. Reddappa dated 18.01.2024 stating that he has taken the Open Space as

sub-tenant from the Writ Petitioner and he has been paying the rents

regularly. Similar letter was also given by one Sri T. Venkata Subbaiah dated

14.11.2023. One more Letter of similar nature is given by Sri N. Reddappa in

respect to another shop (Open Space) on 14.11.2023. Similar Letter is

submitted by one Sri Bala Subramanyam that he has taken Open Space as

sub-tenant from the Writ Petitioner and he has been paying monthly rent of

Rs.8,500/-. The Respondent Corporation has also filed the transaction details

in respect of the said amounts paid by the sub-tenant as evidence against the

Writ Petitioner.

7. There is no rebuttal from the side of Writ Petitioner in respect of the

allegations made by the Respondent Corporation that the Writ Petitioner has

violated the terms of the licence by sub-letting the Open Spaces to the third

parties. Strangely, the Writ Petitioner took the plea that third parties have

illegally occupied the Open Spaces despite the fact that there is overwhelming

evidence to the contrary to the effect that the Writ Petitioner had sub-let the

Open Spaces to third parties. The Official Respondents have placed on

record the written confirmation by such third parties/sub-tenants that they are

regularly paying the rents to the Writ Petitioner.

12

ANALYSIS:

8. Having considered the facts as presented by both the parties, this Court

has noticed that the Respondent Corporation has given several Open Spaces

to one single person by imposing conditions that each of the Open Space is

earmarked for a particular kind of business and that licencee is required to

undertake only that business without any deviation.

9. It is the case of the Respondents that the Writ Petitioner has secured

licences in favour of several Open Spaces (as already indicated supra). The

Writ Petitioner has not only committed default of licence fee/rent but also

violated the conditions of the licence by sub-letting the Open Spaces to the

third parties. The Respondent Corporation has filed the Letters collected from

the sub-tenants clearly evidencing that the Writ Petitioner has indulged in sub-

letting the premises and that the sub-tenants were not carrying on the

businesses which are indicated and earmarked by the Respondent

Corporation for each of the Open Spaces and therefore, this is the third

violation of the conditions of licence. Since these facts have not been

rebutted by the Writ Petitioner, this Court has no other option but to accept the

contentions of the Respondent Corporation that the Writ Petitioner has

violated the conditions of the licence, inasmuch as the Writ Petitioner has sub-

let the Open Spaces to the third parties in violation of the licence conditions.

The Writ Petitioner has also violated the terms of the licence inasmuch as the

businesses earmarked for the Open Spaces have not been followed by the

Writ Petitioner beside the default of non-payment of licence fee/monthly rents.

On the contrary, the Writ Petitioner had approached this Court with unclean

hands inasmuch as Writ Petitioner had complained of illegal encroachment by

third parties which he had illegally sub-let the Open Spaces to the third parties

or sub-tenants in violation of the conditions of the licence.

10. In this view of the matter, this Court is of the opinion that the present

Writ Petition is devoid of any merit. Accordingly, this Writ Petition is dismissed.

No Order as to Costs.

13

11. As indicated above, the other Writ Petitions bearing W.P.Nos.31871,

32835 of 2022 & 30041 of 2023 have become infructuous and accordingly

disposed of as such.

12. Before parting with this case, this Court is rather duty bound to opine

and hold that the very practice adopted by the APSRTC by granting several

licences in favour of one single person i.e., the Writ Petitioner is a pernicious

practice, thereby giving scope to the Writ Petitioner to sub-let the Open

Spaces to the third parties unauthorisedly, thereby violating the conditions of

the licences. This apart, granting of several licences to a single person has

also created a vested interest inasmuch as State largesse ought not to have

been granted to a single person, thereby creating monopoly. It is the

incumbent duty on the part of the Respondent Authorities to ensure that each

Open Space is allocated to a different person, since such State largesse is

created with an avowed object of ensuring that the material resources of the

community are so distributed as best to sub-serve the common good (Article

39 (b)); and that the State shall in particular, strive to minimize the inequalities

in income (Article 38 (2)) on one hand and to prevent development of vested

interest or monopoly on the other hand.

13. Articles 38 and 39 of the Constitution of India are usefully extracted

hereunder:

“38. State to secure a social order for the

promotion of welfare of the people.—

(1) The State shall strive to promote the welfare of the

people by securing and protecting as effectively as it may

a social order in which justice, social, economic and

political, shall inform all the institutions of the national life.

(2) The State shall, in particular, strive to minimise

the inequalities in income, and endeavour to eliminate

inequalities in status, facilities and opportunities, not

only amongst individuals but also amongst groups of

people residing in different areas or engaged in

different vocations.

(Emphasis Supplied)

14

39. Certain principles of policy to be followed by

the State.—The State shall, in particular, direct its policy

towards securing—

(a) that the citizens, men and women equally, have

the right to an adequate means to livelihood;

(b) that the ownership and control of the material

resources of the community are so distributed as

best to subserve the common good;

(c) that the operation of the economic system does

not result in the concentration of wealth and means

of production to the common detriment;

(d) that there is equal pay for equal work for both men

and women;

(e) that the health and strength of workers, men and

women, and the tender age of children are not

abused and that citizens are not forced by economic

necessity to enter avocations unsuited to their age or

strength;

(f) that children are given opportunities and facilities to

develop in a healthy manner and in conditions of

freedom and dignity and that childhood and youth are

protected against exploitation and against moral and

material abandonment.”

(Emphasis Supplied)

14. The above view as expressed by this Court is fortified by various

decisions of the Hon’ble Supreme Court. In Ramana Dayaram Shetty V.

International Airport Authority of India and Others: (1979) 3 SCC 489 in

Para-11 and 12 the Hon’ble Apex Court has held as under:

“11. Today the Government in a welfare State, is

the regulator and dispenser of special services and

provider of a large number of benefits, including jobs,

contracts, licences, quotas, mineral rights, etc. The

Government pours forth wealth, money, benefits,

services, contracts, quotas and licences. The

valuables dispensed by Government take many forms,

but they all share one characteristic. They are steadily

taking the place of traditional forms of wealth. These

15

valuables which derive from relationships to Government

are of many kinds. They comprise social security benefits,

cash grants for political sufferers and the whole scheme of

State and local welfare. Then again, thousands of people

are employed in the State and the Central Governments

and local authorities. Licences are required before one

can engage in many kinds of businesses or work. The

power of giving licences means power to withhold

them and this gives control to the Government or to

the agents of Government on the lives of many

people. Many individuals and many more businesses

enjoy largessee in the form of Government contracts.

These contracts often resemble subsidies. It is virtually

impossible to lose money on them and many enterprises

are set up primarily to do business with Government.

Government owns and controls hundreds of acres of

public land valuable for mining and other purposes. These

resources are available for utilisation by private

corporations and individuals by way of lease or

licence. All these mean growth in the Government

largessee and with the increasing magnitude and

range of governmental functions as we move closer to

a welfare State, more and more of our wealth consists

of these new forms. Some of these forms of wealth may

be in the nature of legal rights but the large majority of

them are in the nature of privileges. But on that account,

can it be said that they do not enjoy any legal protection?

Can they be regarded as gratuity furnished by the State so

that the State may withhold, grant or revoke it at its

pleasure? Is the position of the Government in this respect

the same as that of a private giver? We do not think so.

The law has not been slow to recognise the importance of

this new kind of wealth and the need to protect individual

interest in it and with that end in view, it has developed

new forms of protection. Some interests in Government

largessee, formerly regarded as privileges, have been

recognised as rights while others have been given legal

protection not only by forging procedural safeguards but

also by confining/structuring and checking Government

discretion in the matter of grant of such largessee. The

discretion of the Government has been held to be not

unlimited in that the Government cannot give or withhold

largessee in its arbitrary discretion or at its sweet will. It is

insisted, as pointed out by Prof. Reich in an especially

stimulating article on “The New Property” in 73 Yale

Law Journal 733, “that Government action be based

on standards that are not arbitrary or unauthorised”.

The Government cannot be permitted to say that it will

give jobs or enter into contracts or issue quotas or

licences only in favour of those having grey hair or

16

belonging to a particular political party or professing a

particular religious faith. The Government is still the

Government when it acts in the matter of granting

largessee and it cannot act arbitrarily. It does not

stand in the same position as a private individual.

12. We agree with the observations of Mathew, J., in V.

Punnan Thomas v. State of Kerala [AIR 1969 Ker 81] that:

“The Government, is not and should not

be as free as an individual in selecting the

recipients for its largessee. Whatever its

activity, the Government is still the

Government and will be subject to restraints,

inherent in its position in a democratic

society. A democratic Government cannot lay

down arbitrary and capricious standards for

the choice of persons with whom alone it will

deal.”

The same point was made by this Court in Erusian

Equipment and Chemicals Ltd. v. State of West

Bengal [(1975) 1 SCC 70 : (1975) 2 SCR 674] where the

question was whether blacklisting of a person without

giving him an opportunity to be heard was bad? Ray, C.J.,

speaking on behalf of himself and his colleagues on the

Bench pointed out that blacklisting of a person not only

affects his reputation which is, in Poundian terms, an

interest both of personality and substance, but also denies

him equality in the matter of entering into contract with the

Government and it cannot, therefore, be supported without

fair hearing. It was argued for the Government that no

person has a right to enter into contractual relationship

with the Government and the Government, like any other

private individual, has the absolute right to enter into

contract with any one it pleases. But the Court, speaking

through the learned Chief, Justice, responded that the

Government is not like a private individual who can pick

and choose the person with whom it will deal, but the

Government is still a Government when it enters into

contract or when it is administering largessee and it

cannot, without adequate reason, exclude any person

from dealing with it or take away largessee arbitrarily. The

learned Chief Justice said that when the government

is trading with the public, “the democratic form of

Government demands equality and absence of

arbitrariness and discrimination in such transactions.

. . The activities of the Government have a public

element and, therefore, there should be fairness and

equality. The State need not enter into any contract

17

with anyone, but if it does so, it must do so fairly

without discrimination and without unfair procedure”.

This proposition would hold good in all cases of

dealing by the Government with the public, where the

interest sought to be protected is a privilege. It must,

therefore, be taken to be the law that where the

Government is dealing with the public, whether by

way of giving jobs or entering into contracts or

issuing quotas or licences or granting other forms of

largessee, the Government cannot act arbitrarily at its

sweet will and, like a private individual, deal with any

person it pleases, but its action must be in conformity

with standard or norms w hich is not arbitrary,

irrational or irrelevant. The power or discretion of the

Government in the matter of grant of largessee

including award of jobs, contracts, quotas, licences,

etc. must be confined and structured by rational,

relevant and non-discriminatory standard or norm and

if the Government departs from such standard or

norm in any particular case or cases, the action of the

Government would be liable to be struck down, unless

it can be shown by the Government that the departure

was not arbitrary, but was based on some valid

principle which in itself was not irrational,

unreasonable or discriminatory.”

(Emphasis Supplied)

15. In Kasturi Lal Lakshmi Reddy v. State of J&K: (1980) 4 SCC 1, the

Hon’ble Apex Court held in Para Nos. 12 to 14 as under.

“12. Now what is the test of reasonableness which has

to be applied in order to determine the validity of

governmental action. It is undoubtedly true, as pointed out

by Patanjali Sastri, J., in State of Madras v. V.G.

Row [(1952) 1 SCC 410 : 1952 SCR 597 : AIR 1952 SC

126 : 1952 Cri LJ 966] that in forming his own conception

of what is reasonable, in all the circumstances of a given

case, it is inevitable that the social philosophy and the

scale of values of the judge participating in the decision,

would play an important part, but even so, the test of

reasonableness is not a wholly subjective test and its

contours are fairly indicated by the Constitution. The

concept of reasonableness in fact pervades the entire

constitutional scheme. The interaction of Articles 14, 19

and 21 analysed by this Court in Maneka Gandhi v. Union

of India [(1978) 1 SCC 248 : (1978) 2 SCR 621] clearly

demonstrates that the requirement of reasonableness runs

like a golden thread through the entire fabric of

18

fundamental rights and, as several decisions of this Court

show, this concept of reasonableness finds its positive

manifestation and expression in the lofty ideal of social

and economic justice which inspires and animates the

directive principles. It has been laid down by this Court

in E. P. Royappa v. State of Tamil Nadu [(1974) 4 SCC 3 :

(1974) 2 SCR 348] and Maneka Gandhi case [(1978) 1

SCC 248 : (1978) 2 SCR 621] that Article 14 strikes at

arbitrariness in State action and since the principle of

reasonableness and rationality, which is legally as well as

philosophically an essential element of equality or non-

arbitrariness, is projected by this Article, it must

characterise every governmental action, whether it be

under the authority of law or in exercise of executive

power without making of law. So also the concept of

reasonableness runs through the totality of Article 19

and requires that restrictions on the freedoms of the

citizen, in order to be permissible, must at the best be

reasonable. Similarly Article 21 in the full plenitude of

its activist magnitude as discovered by Maneka

Gandhi case [(1978) 1 SCC 248 : (1978) 2 SCR 621]

insists that no one shall be deprived of his life or

personal liberty except in accordance with procedure

established by law and such procedure must

be reasonable, fair and just. The directive principles

concretise and give shape to the concept of

reasonableness envisaged in Articles 14, 19 and 21

and other Articles enumerating the fundamental

rights. By defining the national aims and the

constitutional goals, they setforth the standards or

norms of reasonableness which must guide and

animate governmental action. Any action taken by the

Government with a view to giving effect to anyone or more

of the directive principles would ordinarily, subject to any

constitutional or legal inhibitions or other overriding

considerations, qualify for being regarded as reasonable,

while an action which is inconsistent with or runs counter

to a directive principle would prima facie incur the

reproach of being unreasonable.

13. So also the concept of public interest must as far

as possible receive its orientation from the directive

principles. What according to the founding fathers

constitutes the plainest requirement of public interest is set

out in the directive principles and they embody par

excellence the constitutional concept of public interest. If,

therefore, any governmental action is calculated to

implement or give effect to a directive principle, it would

ordinarily, subject to any other overriding considerations,

be informed with public interest.

19

14. Where any governmental action fails to satisfy

the test of reasonableness and public interest

discussed above and is found to be wanting in the

quality of reasonableness or lacking in the element of

public interest, it would be liable to be struck down as

invalid. It must follow as a necessary corollary from

this proposition that the Government cannot act in a

manner which would benefit a private party at the cost

of the State; such an action would be both

unreasonable and contrary to public interest. The

Government, therefore, cannot, for example, give a

contract or sell or lease out its property for a consideration

less than the highest that can be obtained for it, unless of

course there are other considerations which render it

reasonable and in public interest to do so. Such

considerations may be that some directive principle is

sought to be advanced or implemented or that the contract

or the property is given not with a view to earning revenue

but for the purpose of carrying out a welfare scheme for

the benefit of a particular group or section of people

deserving it or that the person who has offered a higher

consideration is not otherwise fit to be given the contract

or the property. We have referred to these considerations

only illustratively, for there may be an infinite variety of

considerations which may have to be taken into account

by the Government in formulating its policies and it is on a

total evaluation of various considerations which have

weighed with the Government in taking a particular action,

that the court would have to decide whether the action of

the Government is reasonable and in public interest. But

one basic principle which must guide the court in arriving

at its determination on this question is that there is always

a presumption that the governmental action is reasonable

and in public interest and it is for the party challenging its

validity to show that it is wanting in reasonableness or is

not informed with public interest. This burden is a heavy

one and it has to be discharged to the satisfaction of the

court by proper and adequate material. The court cannot

lightly assume that the action taken by the Government is

unreasonable or without public interest because, as we

said above, there are a large number of policy

considerations which must necessarily weigh with the

Government in taking action and therefore the court would

not strike down governmental action as invalid on this

ground, unless it is clearly satisfied that the action is

unreasonable or not in public interest. But where it is so

satisfied, it would be the plainest duty of the court under

the Constitution to invalidate the governmental action. This

is one of the most important functions of the court and also

20

one of the most essential for preservation of the rule of

law. It is imperative in a democracy governed by the rule

of law that governmental action must be kept within the

limits of the law and if there is any transgression, the court

must be ready to condemn it. It is a matter of historical

experience that there is a tendency in every

Government to assume more and more powers and

since it is not an uncommon phenomenon in some

countries that the legislative check is getting diluted,

it is left to the court as the only other reviewing

authority under the Constitution to be increasingly

vigilant to ensure observance with the rule of law and

in this task, the court must not flinch or falter. It may

be pointed out that this ground of invalidity, namely, that

the governmental action is unreasonable or lacking in the

quality of public interest, is different from that of mala fides

though it may, in a given case, furnish evidence of mala

fides.”

(Emphasis Supplied)

16. In Jamshed Hormusji Wadia v. Board of Trustees, Port of Mumbai

and another: (2004) 3 SCC 214, the Hon’ble Apex Court held in Para-18 as

under:

“18. In our opinion, in the field of contracts the

State and its instrumentalities ought to so design their

activities as would ensure fair competition and non-

discrimination. They can augment their resources but

the object should be to serve the public cause and to

do public good by resorting to fair and reasonable

methods. The State and its instrumentalities, as the

landlords, have the liberty of revising the rates of rent so

as to compensate themselves against loss caused by

inflationary tendencies. They can — and rather must —

also save themselves from negative balances caused by

the cost of maintenance, payment of taxes and costs of

administration. The State, as the landlord, need not

necessarily be a benevolent and good charitable

Samaritan. The felt need for expanding or stimulating its

own activities or other activities in the public interest

having once arisen, the State need not hold its hands from

seeking eviction of its lessees. However, the State cannot

be seen to be indulging in rack-renting, profiteering and

indulging in whimsical or unreasonable evictions or

bargains.”

(Emphasis Supplied)

21

17. In NOIDA Entrepreneurs Assn. v. NOIDA: (2011) 6 SCC 508, the

Hon’ble Supreme Court held in Paras 38 to 41 as under:

“38. The State or the public authority which holds the

property for the public or which has been assigned the

duty of grant of largessee, etc. acts as a trustee and,

therefore, has to act fairly and reasonably. Every holder of

a public office by virtue of which he acts on behalf of the

State or public body is ultimately accountable to the

people in whom the sovereignty vests. As such, all powers

so vested in him are meant to be exercised for public good

and promoting the public interest. Every holder of a public

office is a trustee.

39. State actions are required to be non-arbitrary and

justified on the touchstone of Article 14 of the Constitution.

Action of the State or its instrumentality must be in

conformity with some principle which meets the test of

reason and relevance. Functioning of a “democratic form

of Government demands equality and absence of

arbitrariness and discrimination”. The rule of law prohibits

arbitrary action and commands the authority concerned to

act in accordance with law. Every action of the State or its

instrumentalities should neither be suggestive of

discrimination, nor even apparently give an impression of

bias, favouritism and nepotism. If a decision is taken

without any principle or without any rule, it is unpredictable

and such a decision is antithesis to the decision taken in

accordance with the rule of law.

40. The public trust doctrine is a part of the law of

the land. The doctrine has grown from Article 21 of the

Constitution. In essence, the action/order of the State

or State instrumentality would stand vitiated if it lacks

bona fides, as it would only be a case of colourable

exercise of power. The rule of law is the foundation of

a democratic society. [Vide Erusian Equipment &

Chemicals Ltd. v. State of W.B. [(1975) 1 SCC 70 : AIR

1975 SC 266] , Ramana Dayaram Shetty v. International

Airport Authority of India [(1979) 3 SCC 489 : AIR 1979

SC 1628] , Haji T.M. Hassan Rawther v. Kerala Financial

Corpn. [(1988) 1 SCC 166 : AIR 1988 SC 157] , Shrilekha

Vidyarthi v. State of U.P. [(1991) 1 SCC 212 : 1991 SCC

(L&S) 742 : AIR 1991 SC 537] and M.I. Builders (P)

Ltd. v. Radhey Shyam Sahu [(1999) 6 SCC 464 : AIR

1999 SC 2468] .]

41. Power vested by the State in a public authority

should be viewed as a trust coupled with duty to be

22

exercised in larger public and social interest. Power is to

be exercised strictly adhering to the statutory provisions

and fact situation of a case. “Public authorities cannot

play fast and loose with the powers vested in them.” A

decision taken in an arbitrary manner contradicts the

principle of legitimate expectation. An authority is under

a legal obligation to exercise the power reasonably

and in good faith to effectuate the purpose for which

power stood conferred. In this context, “in good faith”

means “for legitimate reasons”. It must be exercised

bona fide for the purpose and for none other.

[Vide Commr. of Police v. Gordhandas Bhanji [1951 SCC

1088 : AIR 1952 SC 16] , Sirsi Municipality v. Cecelia Kom

Francis Tellis [(1973) 1 SCC 409 : 1973 SCC (L&S) 207 :

AIR 1973 SC 855] , State of Punjab v. Gurdial

Singh [(1980) 2 SCC 471 : AIR 1980 SC 319] , Collector

(District Magistrate) v. Raja Ram Jaiswal [(1985) 3 SCC 1

: AIR 1985 SC 1622] , Delhi Admn. v. Manohar Lal [(2002)

7 SCC 222 : 2002 SCC (Cri) 1670] and N.D.

Jayal v. Union of India [(2004) 9 SCC 362 : AIR 2004 SC

867] .]”

(Emphasis Supplied)

18. In Natural Resources Allocation, In re, Special Reference No. 1 of

2012: (2012) 10 SCC 1, the Hon’ble Apex Court held in Para-107 as under:

“107. From a scrutiny of the trend of decisions it is

clearly perceivable that the action of the State,

whether it relates to distribution of largessee, grant of

contracts or allotment of land, is to be tested on the

touchstone of Article 14 of the Constitution. A law may

not be struck down for being arbitrary without the pointing

out of a constitutional infirmity as McDowell case [(1996) 3

SCC 709] has said. Therefore, a State action has to be

tested for constitutional infirmities qua Article 14 of the

Constitution. The action has to be fair, reasonable, non-

discriminatory, transparent, non-capricious, unbiased,

without favouritism or nepotism, in pursuit of

promotion of healthy competition and equitable

treatment. It should conform to the norms which are

rational, informed with reasons and guided by public

interest, etc. All these principles are inherent in the

fundamental conception of Article 14. This is the mandate

of Article 14 of the Constitution of India.”

(Emphasis Supplied)

23

19. The Hon’ble Supreme Court had highlighted the requirement of balancing

the fundamental rights harmoniously with the directive principles of State

policy in Lok Prahari through its General Secretary v. State of U.P., and

others: (2018) 6 SCC 1, the Hon’ble Apex Court held in Paras 23 and 24 as

under:

23. Similarly, in Akhil Bhartiya Upbhokta

Congress v. State of M.P. [Akhil Bhartiya Upbhokta

Congress v. State of M.P., (2011) 5 SCC 29 : (2011) 2

SCC (Civ) 531] this Court held that: (SCC pp. 50-51, para

48)

“48. Part IV contains “directive principles of

State policy” which are fundamental in the

governance of the country and it is the duty of

the State to apply these principles in making

laws. Article 39 specifies certain principles of

policy which are required to be followed by the

State. Clause (b) thereof provides that the

State shall, in particular, direct its policy

towards securing that the ownership and

control of the material resources of the

community are so distributed as best to

subserve the common good. Parliament and

legislatures of the States have enacted several

laws and the Governments have, from time to

time, framed policies so that the national wealth

and natural resources are equitably distributed

among all sections of people so that have-nots of

the society can aspire to compete with haves.”

(Emphasis Supplied)

24. In Akhil Bhartiya [Akhil Bhartiya Upbhokta

Congress v. State of M.P., (2011) 5 SCC 29 : (2011) 2

SCC (Civ) 531] this Court examined the legality of the

action of the Madhya Pradesh Government to allot twenty

acres of land to an institution on the basis of application

made by the Trust. This Court held that the distribution of

State largessee allocation of land, grant of permit, licence,

etc. should always be in a fair and equitable manner. It

was held that the elements of favouritism or nepotism shall

not influence the exercise of discretion by the decision-

maker. Observing that every action of the public

authority should be guided by public interest, free

from arbitrariness, in para 65, it was held as under:

(SCC p. 60)

24

“65. What needs to be emphasised is that

the State and/or its agencies/instrumentalities

cannot give largessee to any person according

to the sweet will and whims of the political

entities and/or officers of the State. Every

action/decision of the State and/or its

agencies/instrumentalities to give largessee or

confer benefit must be founded on a sound,

transparent, discernible and well-defined

policy, which shall be made known to the

public by publication in the Official Gazette

and other recognised modes of publicity and

such policy must be implemented/executed by

adopting a non-discriminatory and non-

arbitrary method irrespective of the class or

category of persons proposed to be benefited

by the policy. The distribution of largessee like

allotment of land, grant of quota, permit licence,

etc. by the State and its agencies/instrumentalities

should always be done in a fair and equitable

manner and the element of favouritism or

nepotism shall not influence the exercise of

discretion, if any, conferred upon the particular

functionary or officer of the State.

(Emphasis Supplied)

19. In Subodh Kumar Singh Rathour v. Kolkata Metropolitan

Development Authority : (2024) 15 SCC 461, the Hon’ble Apex Court held in

Para 128 as under:

“128. The sanctity of public tenders lies in their role

in upholding the principles of equal opportunity and

fairness. Once a contract has come into existence

through a valid tendering process, its termination

must adhere strictly to the terms of the contract, with

the executive powers to be exercised only in

exceptional cases by the public authorities and that

too in loathe. The courts are duty bound to zealously

protect the sanctity of any tender that has been duly

conducted and concluded by ensuring that the larger

public interest of upholding bindingness of contracts are

not sidelined by a capricious or arbitrary exercise of power

by the State. It is the duty of the courts to interfere in

contractual matters that have fallen prey to an arbitrary

action of the authorities in the guise of technical faults,

policy change or public interest, etc.”

(Emphasis Supplied)

25

20. In State of Andhra Pradesh and Others v. Dr. Rao, V.B.J. Chelikani

and Others : 2024 SCC OnLine SC 3432, the Hon’ble Apex Court had held

in Para No.46 as under:

“46. Thus, time and again, this Court has held that

while the power to distribute and redistribute public

assets and resources lie within the State's discretion,

such discretion is not absolute. Article 14 and the logic

of equality impose fetters on the exercise of this

discretionary power. Therefore, it cannot be questioned or

contested that state policy and executive action must

satisfy the rigours of Article 14.”

(Emphasis Supplied)

21. In Shanti Construction Pvt. Ltd. V. State of Odisha and Others :

2025 SCC OnLine SC 2368, the Hon’ble Apex Court had held in Para No.10

as under:

“10. A public tender is not a private bargain. It is

instrument of governance, a mechanism through

which the State discharges its solemn duty as trustee

of public wealth. Its purpose is not merely procedural

compliance, but maximisation of public value through

a process i.e. fair, transparent and competitive. The

obligation of the Tendering Authority is therefore

twofold, namely, to interpret its own terms with

consistency and to ensure that such interpretation

advances, not defeats, the object of tender. The court

must intervene in a case of demonstrable

misconstruction of a tender condition or irrationality

which affects the public interest. When an interpretation

of a tender condition narrows competition and excludes

the highest bidder on a ground unsupported by law, the

decision making process is vitiated. The interpretation of

the terms of tender must, therefore, serve the object and

purpose of the tender mainly to maximise the revenue to

the State, when it deals with a natural resource.”

(Emphasis Supplied)

22. The conduct of the Respondent Corporation in allotting so many Open

Spaces in favour of one single person, namely the Writ Petitioner, is

deprecated by this Court. The present Tender Notification issued by the

26

Respondent Corporation dated 04.01.2024 (Ex.P.1) is the same as the earlier

Tender Notifications. This Court has perused the conditions in the Tender

Notification. This Tender Notification also does not prohibit a single person

from bidding for more than one Open Space. The Respondents have carried

on with this pernicious practice of allotting several Open Spaces to a single

person that leads to monopoly and development of vested interest as

indicated above on account of this unhealthy practice. This practice is

contrary to public interest. The State largesse is meant to be distributed in

favour of persons who are in real need and it ought not to create any vested

interest or monopoly in one person. The facts involved in the present case is

a classic example of the Writ Petitioner developing vested interest since he

had bidded for several shops, thereby giving scope to the Writ Petitioner to

sub-let the Open Spaces to several third parties. This indicates that a laxity on

the part of the Official Respondents had enabled the Writ Petitioner to create

his own eco-system that made him to blatantly abuse the tender conditions

and the conditions of licence.

23. In this view of the matter, this Court is inclined to quash the Tender

Notification issued by the Respondent Corporation dated 04.01.2024 (Ex.P.1).

Accordingly, the Tender Notification bearing Sl.No.E2/797(1)2024-EPTO/Y

(Ex.P.1) is quashed and set aside. There shall be a direction to the Official

Respondents to refund all the deposits submitted by the bidders including the

Writ Petitioner within a period of three weeks from today if not refunded

earlier. The Respondent Corporation is directed to prepare a fresh Tender

which ensures that a single person cannot bid for more than one licence (for

Open Space).

27

24. Interlocutory Applications, if any, stand closed in terms of this order.

______________________________________

GANNAMANENI RAMAKRISHNA PRASAD, J

Dt: 05.01.2026

Note: LR copy to be marked

B/o. JKS/MNR

28

10

HON'BLE SRI JUSTICE GANNAMANENI RAMAKRISHNA PRASAD

W.P.Nos. 31871, 32835 of 2022, 30041 of 2023 & 1690 of 2024

Dt: 05.01.2026

Note: LR copy to be marked

B/o. JKS/MNR