JUDGMENT M. Katju and R.S. Tripathi, JJ.
1. This writ petition has been filed against the impugned notice dated 9.3.2003 Annexure-6 to the writ petition fixing auction on 26.3.2003 at 11.00 a.m. in the Head Quarter of the respondent U. P. Forest Corporation, Lucknow. The petitioner has prayed for quashing of the condition Nos. 1, 7 and 8 in the terms and conditions of the Auction, copy of which is Annexure-4 to the writ petition.
2. Heard learned counsel for the parties.
3. The petitioner No. 1 is a society registered under the Societies Registration Act and the petitioner No. 2 is a trader who purchases tendu leaves and manufactures biri in the name and style of Shiva Biri Works. The petitioner No. 3 is a small trader and he deals in tendu leaves. He collects tendu leaves and exports it to the manufacturers of biri. Prior to enactment of U. P. Tendu Patta (Vyapar Viniyaman) Act, 1972, trade in tendu patta was uncontrolled and unregulated. For the first time, through the aforesaid enactment the State Government nationalised the trade in tendu leaves. Biri is manufactured from tendu leaves. Section 4 of the Act pertains to appointment of agents by the State Government for purchase and trade in tendu leaves on its behalf in respect of different units. It also enables the State Government to appoint one agent for more than one unit. Under Section 5 of the Act, no person shall sell tendu leaves to any person other than the State Government or an officer of the State Government authorised by it in that behalf or an agent in respect of the unit in which the leaves are grown. No person other than such Government officer or agent shall purchase tendu leaves from any person other than such Government officer or agent, or collect tendu leaves except under certain conditions mentioned in para 12 of the petition. Under Section 5 (2), the State Government or an officer of the State Government authorized by it in that behalf may impose certain terms and conditions, for the sale and transportation of tendu leaves. As stated in para 15 of the petition, the State Government has nominated the U. P. Forest Corporation as its agent. The State Government has also framed rules known as U. P. Tendu Patta (Vyapar Viniyaman) Niyamawali, 1972. Rule 3 of the Rules provides for appointment of agent. Rule 8 prescribes the manner for disposal of tendu leaves. According to it, tendu leaves procured by the State Government can be sold otherwise by tender on such terms and conditions are as specified in the tender notice issued by the State Government and the tender form. Rule 9 (2) directs that the tender notice shall be advertised in news papers and in such ether manner as the State Government may deem fit inviting sealed tenders from the persons registered under Sub-section (2). Under Rule 9 (4) which states that there shall be separate tender for each unit. Rule 9 (5) requires that every tender shall be accompanied by a treasury challan showing cash deposit under the head "Revenue Deposit" or a demand draft in favour of the Conservator of Forests/Divisional Forest Officer concerned of any branch of State Bank of India or nationalised Bank, equal to an amount specified in the tender notice to be deposited as earnest money. Rule 9 (6) further empowers the State Government to accept or reject all or any of the tenders so received without assigning any reason therefor. Rule 9 (7) provides that if the tenders received for a unit are not considered acceptable, the State Government may appoint as purchaser for such unit any person on such terms and conditions as may be mutually, agreed. Under Rule 9 (9) the successful tenderer or successful bidders, as the case may be, shall be appointed as purchaser for the particular unit and the entire quantity of tendu leaves collected or likely to be collected from such unit or such lesser quantity as may be offered to him by the State Government its officer or agent in such unit, shall be purchased by him.
4. It is alleged in para 25 of the petition that there is a clear distinction between earnest money and security deposit. The earnest money precedes the bid and security deposit is made after the bid. In para 26 of the petition it is stated that from a reading of the Act and the Rules the inescapable conclusion is that the tender/public auction has to be in relation to one unit. It cannot be for several units. It is alleged in para 27 that any other the construction of the Rules or the Act would render the Act unconstitutional. In paras 30 and 31 of the writ petition it is stated that prior to the year 2003 earnest money demanded was Rs. 5,000 alone but in the year 2003 there was a steep hike in the amount of such gate money. According to condition No. 1 of the conditions of the auction, a prospective bidder is required to deposit gate money at the rate of Rs. 25 per actual bag through bank draft. It is alleged that the said condition though seemingly innocuous, nonetheless causes great harm and prejudice. It is alleged in para 33 that the first lot at page No, 1 of the aforesaid brochure containing the terms and conditions of the auction as many as 65,479 bags are to be put up for sale through public auction. The amount of gate money which the prospective bidder is required to deposit shall be Rs. 16,36,975. It is alleged in para 34 that the authorities have again made a devious departure from the Rules. Such departure is not accidental. It is indeed deliberate and designed to drive the small traders out of trade. The conditions prescribed are allegedly arbitrary and capricious. The State Government has fallen prey in the hands of big traders to appropriate the entire stock of tendu leaves in the State and the small traders would not be able to purchase it. Such condition would tantamount to perpetuating monopoly, which is prohibited by Article 19(1)(g) of the Constitution. True copy of the Brochure containing the terms and conditions are Annexure-4. The petitioner also objected to condition No. 8 in the terms of the auction according to which if a successful bidder fails to deposit 15% of the bid amount by way of security, the gate money deposited by him would not only be forfeited but he would also be black listed and prosecuted in accordance with Section 185 of the Indian Penal Code. In para 44 it is stated that the respondent Corporation has issued an advertisement in the Hindi news paper Dainik Jagran dated 9.3.2003 fixing a date for public auction to be held at the Head Quarter of the Corporation at Lucknow. A copy of the notice is Annexure-6. The petitioners claim that they are small traders who manufacture biri and carry on their business in the local area, but in view of the arbitrary conditions imposed by the U. P. Forest Corporation particularly condition No. 1, their right to a trade has been destroyed.
5. It appears that during the pendency of the writ petition the auction was held and certain persons were granted the contract in question. Hence an amendment application has been filed praying for impleadment of such persons as respondents and we have allowed this amendment application. In the affidavit filed in support of the amendment application it is alleged in para 36 (4) that the petitioners were not permitted to enter the Hall, where auction proceedings were going on, and hence the auction was a farcical exercise and the officers were in collusion with the bidder.
6. A counter-affidavit has been filed by the Regional Manager, U. P. Forest Corporation, Allahabad. It is alleged that the petition should be dismissed because the petitioners have concealed material facts. It is alleged in para 10 that tendu leaves are naturally grown vegetation in the forest of Uttar Pradesh which are found only in the districts of Sonbhadra, Chandauli, Mirzapur, Allahabad, Chitrakoot, Banda, Lalitpur, Mahoba, Hamirpur and Jhansi. Only those leaves which spring-up on a tendu plant in the month of May are fit and used for manufacturing of Biri and only those leaves are plucked and collected for the aforesaid purpose. In this process, the tendu leaves are plucked in the month of May through the labourers, kept in bundles of 50 leaves each and then left open on the field for drying. When the leaves are dried, they are put in bags and then transported to the godown. This process of plucking, collecting and storage in the godown is done within a very short period of 4-6 weeks depending upon the set in of the rains. In this process, huge money is invested by the Corporation towards the payment of wages to the labourers for plucking and storage. The godowns are taken on rent from private persons for a year on the basis of the capacity of the godown. In para 12 of the counter-affidavit it is stated that the tendu leaves are perishable in nature and the disposal of the same is to be done before the arrival of the fresh crop. If it remains indisposed, there is hardly any buyer for the same as its quality deteriorates and it is not considered to be absolutely fit for manufacturing of Biri. Such tendu leaves, which remain indisposed, are termed as left out material in the commercial parlance and no good price is received or offered in terms of price after a fresh crop is available in the market. In para 14 of the counter-affidavit it is stated that in the current year, i.e., 2002-2003, the Corporation was faced with a very peculiar and unusual situation when about 25% of the total stock of 2002 could not be disposed of by February, 2003 despite best efforts made by the Corporation in order to dispose of the tendu leaves of 2002 within the time schedule, i.e., by February, 2003, the Corporation invited tenders on 28.6.2002 and 27.8.2002 and thereafter fixed 9th, 10th and 11th October, 2002, as the dates of holding the auction. The petitioners and other purchasers formed a cartel and boycotted the auction. The Corporation having failed to dispose of the entire quantity in the aforementioned tenders and auction, again invited tenders on 10.12.2002. However, in this tender also the entire tendu leaves could not be disposed of. In para 15 of the counter-affidavit, it is stated that this undisposed stock which was an unusual feature for the year 2003 was very seriously engaging the attention of the authorities of the Corporation, who could not dispose off the same despite their best efforts as referred to above. Hence they brought it to the notice of the State Government. The State Government then vide order dated 24.2.2003 constituted a Committee of Dr. R.L. Singh. Principal Chief Conservator of Forest/Managing Director, as Chairman, Dr. A.K. Verma, Special Secretary, Forest Department, U. P., Shri Shanker Lal Pandey, Special Secretary, Forest Department, U.P. and Sri D.M. Singh Regional Manager, U. P. Forest Corporation (Southern Region) as members. The said committee was entrusted with the authority to disposing the tendu leaves by public auction or private negotiations. True copy of the G.O. dated 20/24.2.2003 in this connection is Annexure-C.A. 3. The Committee held its meeting on 4.3.2003 at Lucknow which was also attended by three senior officers of the Corporation as special invitees. The Committee in its meeting finalised the modality of disposal. True copy of the Minutes of the Meeting dated 4.3.2003 is Annexure-C.A. 4. On the basis of the decision of the Committee, the auction notice was published in news papers fixing 26.3.2003 as the date of auction. In para 19 it is stated that the auction proceedings commenced at 9.00 a.m. on 26.3.2003. 30 persons deposited the gate money and obtained receipts of their deposits, which was a token for entry in the auction hall. 60 persons were present in the auction hall apart from the Auction Committee. A photostat copy of extract of the attendance sheet dated 26.3.2003 is Annexure-C.A. 5. The auction started at 11.30 a.m. on 26.3.2003 and the details are mentioned in paras 21 to 28 of the counter-affidavit. The highest bid was accepted. It is alleged in para 28 that the bid sheets filed would reveal that there has been a close contest among the bidders as is evident from the bid sheets, copies of which are Annexures-6 to 13 to the counter-affidavit. The auction was conducted by an impartial Committee constituted by the State Government. The members were present at the time of the auction and put their signatures in the bid sheet. The first and second highest bidders have also duly signed the bid sheet in presence of the members of the Auction Committee. In para 29 of the counter-affidavit, it is stated that the Corporation had to sell and dispose of the lying stocks of tendu leaves and if the lying stock is not sold before the arrival of the fresh stock of 2003 in the market it would be impossible for the Corporation to dispose of the existing stock subsequently. Apart from the above, the period for which the godowns were taken on rent is also going to expire in the month of April. In case the godown are not vacated, the owners would blackmail, and pressurize the Corporation for exorbitant rent and the Corporation would be saddled with extra burden on account of rent for no useful gains.
7. In para 30 it is stated that the highest bidders in respect of each lot have already deposited security as mentioned in the conditions of the sale. In para 31 of the counter-affidavit, it is stated that the result of the auction which was held in a most impartial and transparent manner was binding upon the parties to the auction. When the tendu leaves are stored after collection, the sale is lot-wise and not unit-wise. A unit is comprised of certain area having plants of tendu leaves standing in the forest with green leaves. It is sated that before resorting to the clearance/ distress sale number of efforts were made to sell the tendu leaves in small lots, which failed and the Corporation was hence compelled to make a distress/clearance sale on 26.3.2003. The auction was held after wide publicity in which more than 30 persons participated and bids were offered in close contest. The contrary allegations are without any material and based on no reason. In para 46 it is stated that the earnest money was never a fixed amount of Rs. 5,000. The earnest money is on per bag basis. Earlier the gate money used to be demanded as Rs. 5,000, but the experience was very bitter. Since the amount of money involved in the lots was much higher, hence it was decided to raise the gate money proportionately so that fake bidders may not come and disturb the auction proceedings. In para 48, it is stated that the Corporation failed to dispose of the tendu leaves through small lots, and hence was compelled to make bigger lots so that only bona fide purchasers may participate in the auction, and deposit 15% of the auction money as security deposit at the conclusion of the auction. In this process, the illegitimate and fake bidders were excluded. While making lots, the financial status of the prospective purchases was taken into consideration so that bona fide prospective purchasers alone may participate.
8. A counter-affidavit to the amendment application and affidavit filed in support thereof has been filed. In para 9, it is stated that neither any of the petitioners came for depositing the draft as gate money, nor was there any occasion to permit or not to permit them to enter into the auction hall. It is stated that one of the petitioners, i.e., petitioner No. 3 met the Managing Director of the Corporation, who is also Chairman of the Auction Committee in the afternoon on 26.3.2003 and submitted a written representation raising a number of grievances pertaining to the tendu leaves. In this representation there is no mention of even a single word about any irregularity being committed in holding of the auction. This itself shows that the averments in the amendment application are wholly incorrect.
9. We have carefully considered the submissions, of learned counsels for the parties. The allegations in the counter-affidavit clearly shows that the auction in question was held in a transparent manner in the peculiar and special facts of the case, and it was held by a High Power Committee consisting of very senior officers of which the Chairman was the Principal Secretary/Managing Director of the Corporation itself. The allegations of the petitioner have been denied in the counter-affidavit. We cannot go into these factual controversies in writ jurisdiction. Under Section 114(e) of the Evidence Act there is a presumption that official acts have been regularly performed.
10. This Court cannot ordinarily interfere in administrative matters, since the administrative authorities are specialists in matters relating to the administration. The Court does not have the expertise in such matters, and ordinarily should leave such matters to the discretion of the administrative authorities. It is only in rare and exceptional cases, where the Wednesbury principle applies, that the Court should interfere vide Tata Cellular v. Union of India, (1994) 6 SCC 651 and Om Kumar v. Union of India, 2001 (2) SCC 386. In 17. P. Financial Corporation v. Naini Oxygen and Acctylence Gas Ltd., JT 1994 (7) SC 551 (vide para 21), the Supreme Court observed :
"21. However, we cannot lose sight of the fact that the Corporation is an independent autonomous statutory body having its own Constitution and Rules to abide by, and functions and obligations to discharge. As such, in the discharge of its function, it is free to act according to its own light. The views it forms and the decisions it takes are on the basis of the information in its possession and the advice it receives and according to its own perspective and calculations. Unless its action is mala fide, even a wrong decision taken by it is not open to challenge. It is not for the Courts or a third party to substitute its decision, however more prudent, commercial or business like it may be, for the decision of the Corporation. Hence, whatever the wisdom (or the lack of it) of the conduct of the Corporation, the same cannot be assailed for making the Corporation liable."
11. The action of the respondents was an administrative action and we do not see any illegality in the same. There were special reasons for resorting to a distress/clearance sale. Thus, there is no force in this petition. The writ petition is dismissed.