ORDER M. Katju and Prakash Krishna, JJ.
1. Heard learned counsel for the petitioner. Sri Prem Chand has appeared for the respondent.
2. Admittedly, the petitioner had been granted a contract for five years from 12.2.1998 to 11.2.2003. This five years period has admittedly expired.
3. Learned counsel for the petitioner has invited our attention to Clause 4 of the agreement dated 12.2.1998 which states as follows :
"That this contract shall be valid for five years period. But it shall further be renewed, at the option of both the parties on the prevailing advertisement tax rates."
4. In our opinion, this clause only applies where both the parties are agreeable that the contract should be renewed. In the present case, the respondents were not agreeable to renew the contract. Moreover, in our opinion, this clause for renewal of the contract is violative of Articles 14 and 19(1)(g) of the Constitution. In a case where the contract was granted for a fixed period, then it is known to the parties that it is for that period that the contract will subsist. Further extension or renewal of the contract will result in creating a monopoly in favour of a party, and would be an incentive for corruption, especially when it is a case of granting of a public contract. This would be violative of Articles 14 and 19(1)(g) of the Constitution as held in Ramanna v. International Airport Authority of India, AIR 1979 SC 1628, In our opinion, whenever a public contract is given for a fixed period, then on the expiry of that period, there has to be a fresh public auction/ public tender after advertising it in well-known newspapers having wide circulation and then fixing a date for bidding in the auction/tender so that all eligible persons can apply. We have taken this view repeatedly in several decisions and we reiterate the same view again.
5. Since the period of contract has already expired on 11.2.2003, the petitioner cannot continue to operate the theka. With these observation, the petition is dismissed. The interim order, if any, is vacated.