JUDGMENT <NAME>, J.

1. This and the other applications in the connected suits are on the name and on behalf of the Secretary of <ORG> for India in <ORG> for the purpose of his being added as a party to the suit presumably as party defendant.

2. The main object of such of the suits is to obtain, declaration that the Madras Hindu Religious Endoments Act 1 of 1925 is invalid and ultra vires, and on the basis of such declaration the plaintiff has asked for a relief by way of injunction which is merely a relief consequent on the declaration, of

3. The plaintiff in each of the cases is the head of a mutt or religious endowment and the only defendant to each of the actions is <ORG> for <ORG>, a body, it may be observed in passing, created and constituted by the said Act.

4. The question for determination, therefore, is whether on the application I should direct the Secretary of <ORG> being added as party defendant in these suits. The question is of Considerable importance and of great difficulty though I did not realize the full extent of either till I was more than half way through the hearing. It has been argued with much learning and light and also some little warmth on both sides, and I took time to consider my judgment not only having regard to the importance of the question to the parties, but also to the general principle on which alone it seemed to me that a satisfactory solution can be arrived at. If it had been an ordinary case I should probably have had very little difficulty in presuading the parties to agree to the tarddition of the party on conditions which may be regarded as equitable in the circum-stances.

5. It was with this view that almost at the very commencement of the discussion I asked the learned Advocate-General who appeared for the applicant whether he had any instructions to agree as to any conditions as to coats. He said ho had none Some days thereafter he again appeared before me and intimated that, so far as the applicant was concerned, he had definite instructions not to consent to any conditions. He, however, at the same time intimated that he had received a communication from the President of <ORG> to the effect that in the action the plaintiff should fail, <ORG> would consent to only one set of casts being allowed to the defendants and that they would be willing to allow the Secretary of <ORG> to take such one set. It is obvious that the two things are not and cannot be the same and that in these cases a set of costs to <ORG> must mean something very different to a set of costs to the Secretary of <ORG> at any rate as at present represented in the action. Further I felt that such Order 3 should, if at all, be passed only by consent of all parties. The plaintiff, however, refused to agree to any such arrangement and has asked me to decide the question raised ; and having regard to the great importance of the matter and the likelihood of its being taken up elsewhere, sooner or later, I have deemed it fit to deal with the application directly and dispose of it on its merits.

6. The first observation that falls to be made with regard to the present application is that it is one for joinder of a third party as party defendant and made by the third party himself and not by the plaintiff or the defendant in the action, I have felt it necessary to state this because it seems to me that, different considerations should apply to applications for joinder of additional parties when the party sought to be added is party plaintiff or party defendant and also when the application for such joinder is made by the party sought to be added or by either of the parties already on the record and if so, which of them. I will not pause to refer to all such considerations. In such a ease as the present one, however, it is obvious that if a third party's application to be added as party defendant were opposed by both parties, I should have had very little hesitation in rejecting the application unless I were satisfied that the party sought to be added was not only a proper party, but a necessary party Having regard, however, in this ease to the learned and strenuous , argument in support of the application by Mr. <NAME> on behalf of <ORG> I have felt bound to regard it virtually as an application by both. The question thus resolves itself into this : Should the plaintiff in this case be compelled to litigate against not only the defendant of his choice against whom he has prayed for the reliefs consequent on the declaration, but also, against the Secretary of <ORG> ?

7. I did not understand either the learned Advocate-General 'who argued the application on behalf of the applicant the Secretary of <ORG> or even Mr. <NAME> for <ORG> to argue that the applicant was a necessary party to the suit in the sense in which that expression is understood in the law relating to parties to actions, that is to say in other words, as a party without whom there can be no properly constituted suit, having regard to the cause of action alleged and the relief claimed. If it is to be only a question of a permissible party, then on principle it follows that such cannot generally be ordered when it is opposed by the person to fight whom he is so brought on the record. Thus, when A institutes a Suit on title to recover certain property from B, G should not be made additional plaintiff if B should object to it, except perhaps in the case of one possible exception of the title to the property between A and C being alternative in its proper sense. The principle is even stronger in the case of a plaintiff as against whom another defendant is sought to be added. It is the plaintiff that comes to <ORG> alleging a cause of action as against a particular defendant and asking for reliefs against him. The very basic principle of judgment inter partes is that the judgments are not judgments in rem, but declaratory and operative only as between them. The plaintiff being generally dominus litus, I fail to see on what principle of justice he can be compelled to fight against some other litigant not of his own choice unless such a pro cess is required by a positive rule of law.

8. The question thus further resolves itself into this whether in such an action the Secretary of <ORG> is a proper party having regard to the rules relating to the joinder of defendants. It was on this basis that the question was really argued by all the parties. It is Order 1 of the First Schedule to the Civil P.C. that lays down the rules regulating the joinder of parties. Rule 9 no doubt relates to joinder of defendants, but both in form and substance it is merely permissive and relates only to what the plaintiff may do if he were so minded. It is Clause (2) of Rule 10 that applies to the present case. It provides that the <ORG> may, at any stage of the proceedings either upon or without the application of either party and on such terms as may appear to the <ORG> to be just, order that the name of any person who ought to have been joined as defendant or whose presence before the <ORG> may be necessary in order to enable the <ORG> effectually and completely to adjudicate upon and settle all the questions involved in the suit, be added.

9. It has not been suggested in this case that the applicant, the Secretary of <ORG>, is a person who ought to have been added as party defendant in the suit. The contention was that the presence before the <ORG> of the Secretary of <ORG> in this case would be necessary in order to enable the <ORG> effectually and completely to ad-indicate upon and settle all the questions involved in the suit. If the expression in this clause had not been the word "necessary" but merely "desirable" a great deal might have been said for the argument adduced in support of the application. But at no stage of the discussion was I able to understand the learned gentleman that argued in support of the application to make out that the presence before the <ORG> of the Secretary of <ORG> was necessary. The necessity referred to in the clause is for the purpose of enabling the <ORG> effectually and completely to adjudicate upon and settle all the questions involved in a suit. It is obvious that this clause cannot be read as requiring that all persons who have or claim to have or are likely to have any sort of right, title or interest in respect of any portion of the subject-matter of a suit should all be made parties. If it be borne in mind that the suit is by a plaintiff for certain reliefs against certain persons as defendants and that the judgments of civil <ORG>s are not judgments in rem, then it follows that the questions involved in the suit are only questions with regard to the right set up and the relief claimed on the one side and denied or withheld on the other. The expression therefore " all the questions involved in the suit " can only be questions as between the parties to the litigation. The phrase "to enable the <ORG> effectually and completely to adjudicate upon and settle" would seem really to indicate that the addition of the party should be ordered, only if in the opinion of the <ORG> in the; absence of the party it cannot effectually and completely adjudicate and settle all the question.

10. In these cases there is no question of the <ORG> not being able effectually and adjudicate and settle any question. So far as I was able to see, the entire argument in support of the application was based on the position that in the absence of the Secretary of <ORG>, the <ORG> could not completely adjudicate upon and settle all the Questions involved in the suit. In other words, the contention was that the Secretary of <ORG> was a proper party to every suit in which any question was raised with regard in the legality of any statute and that in the absence of the Secretary of <ORG> , as a party in any such suit there can be no completeness of adjudication within the meaning of the rule. I confess that at first I was a little impressed, with this argument. But, as against this there are found heaps of cases in the reports both in this country and elsewhere in which the question of whether a particular legislative enactment was intra or ultra vires was decided merely as between the parties to the litigation without any representation in the suit either of the <ORG> or of the public. But it may, no doubt, be remarked that in none of these oases the question has been raised or decided. The only Case that has been cited before me in which there can be said to be any indication with regard to this matter is the case of Cunnigham v. Homey Homma [1903] A.C.151.

11. The question in that case was whether a particular provision was ultra vires of <ORG> and the Attorney-General of the province was allowed to intervene at some stage. There is no decision in the case as to whether he was either a necessary or proper party and their Lordships of <ORG> do not even refer to it. I am unable, therefore, to regard it as a decision at all bearing on the point.

12. The case of Esquimalt and <ORG> v. <NAME> [1920] A.C. 358 was also cited for the applicant and relied upon. The property which was the subject-matter of that action had been the subject of a grant by the <ORG> and the question that arose was whether in such an action the Attorney-General of the province was a necessary party. At page, 364 Lord <NAME>, who delivered the judgment of their Lordships of <ORG>, observes as follows:

The learned Judges of <ORG> from whose judgment their Lordships feel complled to differ upon this point, do not refer to the rights of the <ORG> which may be affected but base their opinion solely on the ground that the <ORG> is not affected by the result and that consequently a mere declaratory order against the <ORG> would be of no value. But for the reservation of the rights already referred to, their Lordships would have agreed with this Conclusion.

13. At page 368 occurs the following sentence:

It is true that in these circumstances certain rights Which the <ORG> possesses, if the grant be good, will be interfered with.

and at page 369 their Lordships concluded by saying that they Therefore think that the <ORG> is affected in this matter, so that the presence of the Attorney General is proper and necessary for the determination of justice.

14. It is not contended in this case that by reason of any adjudication as between the original parties to the action, the rights of the Secretary of <ORG> would in any manner or mea-sure be affected. It is therefore not a case falling under the rule that the officer representing the <ORG> is a necessary party to every action as the result of which the rights of the <ORG> may be affected.

15. The question would, therefore, have to be determined merely on a consideration of, whether in the absence of the Secretary of <ORG> as a party to the action it is impossible to have a complete adjudication upon and settlement of all the questions involved in the suit. All the learned gentlemen that appeared at the <ORG> and argued the point on behalf of the various parties state that they were unable to find any decision bearing directly on the point.

16. I have therefore to arrive at a conclusion on first impression, and on what I conceive to be the general principles applicable. The conclusion I have thus arrived at is this : If the expression "all questions involved in the suit " should be regarded as absolute and not merely relative to the parties before the <ORG>, then the Secretary of <ORG> may in this case be regarded as a proper party and not otherwise. But it seems to me that there is neither principle for authority that can be discovered of regarding such an expression as "all the questions involved in a suit" appearing in a rule relatiag to joinder not parties as absolute and not relative.

17. The whole scheme of the Civil Procedure seems to me to point to a suit being refered as a suit for relief as against definite defendants, as a trial being one only as between the parties and an adjudication as one only binding them. IS a plaintiff should claim certain property and it should be regarded that the question involved in the suit is generally whether he is the owner of the property and not whether as against any other particular person he is entitled to certain rights over property very serious consequences are sure to ensue and procedure in our Courts of law is certain to become exceedingly complicated and much more disastrously prolonged than it is at present.

18. At this stage I may with advantage refer to two decisions that have been cited at the' Bar. Mr. <NAME> for the plaintiff, referred to the case of <NAME> v. <NAME> [1892] 1 Ch. 487. In that case the plaintiff, the patentee of a machine, brought the action against the defendant for using a machine which he alleged was an infringement of his patent? One <ORG>, the maker and patentee of the defendant's machine, applied to be added as defendant alleging that the judgment in the action would injure him and that the present defendant would not efficiently defend the action. The <ORG> of appeal consisting of Lord Justice <NAME> and Lord Justice <NAME> reversing the decision of the <ORG> below, held that <ORG> not being directly interested in the issues between the plaintiff and the defendant but only indirectly and commercially affected, the <ORG> had no jurisdiction to add him as a defendant. Lord Justice <NAME> at pages 489 and 490 observes as follows:

But reliance is placed on the following words of the rule, which provide for adding the names of parties 'whose presence before the <ORG> may be necessary in order to enable the <ORG> effectually and completely to adjudicate upon and, settle all questions involved in the cause or matter.' But what is the question involved in this action ? The question, and the only question, is whether what <ORG> is doing is an infringement of the plaintiffs patent.

19. And again later on that eminent Judge says:

Can it be said that the rule prevents the plaintiff from proceeding against a defendant Without having to litigate with everybody who may be in any way affected, however indirectly, by the action ? It appears to me that it does not. The counsel for the applicant grounded his argument on the allegation that <NAME>' interest would be affected by the decision in this action. It is true that his interest may be affected commercially by a judgment against the 'defendant, but can it be said that it would be legally affected ? Can we stretch the rule so far as to say that whenever a person would be incidentally affected by a judgment he may be added as a defendant ?

20. And Lord Justice <NAME> at pages 491 and 492 observes as follows:

No doubt the judgment in the present ease may indirectly affect <NAME>' patent; but the answer to that is, that whether it would affect it or not, this rule does not apply to such a case. <NAME> says that the defendant will not con-test the case properly, and will not conduct the defence so energetically as he would. But we cannot help that.

21. It seems to me that if ever a case can be conceived which would fall directly within the words of the rule already referred to this was such a case. There was a defendant, who when sued 'by the plaintiff for infringement of a patent right sought to justify his action on the patent right of a third party and if the terms of Clause (2) of Rule 10 should be taken absolutely as contended for, it would have seemed to be a clear case in which for the purpose of effectually and completely adjudicating upon and settling all questions involved with regard to the patent right of the plaintiff it was not only proper but necessary that this other patentee should have been added as a party defendant. But <ORG> said "No" and decided that he was not a proper party on the ground, I', take it, that the words of the rule should be construed not absolutely but relatively. It is a very strong case and I confess almost repugnant to common-sense. But the words of the statute that their Lordships of <ORG> were considering were identical with the words which I have to consider and it has not been shown that this decision of the learned Judges has ever been overruled or even questioned. It must also be observed that their Lordships' refused to make the other patentee a party to the action though they came to the conconlusion that by reason of the dicision the commercial interest of the other party would be seriously affected.Mr. <NAME> referred to Norris v. <NAME> [1877] 2 C.P.D. 80 It was an action on a bill of exchange against the acceptor originally and the defendant sought to add the name of a company which he alleged was the party really liable and which had also in the same matter a counter claim against the plaintiff. Chief Justice <NAME> makes in that case an observation which I may here reproduce. At page 83 that learned Judge observes:

Now, this, although it is not a case of making a parson a plaintiff in respect of a defendant as to whom he does not desire to be plaintiff without and against his will, is certainly the case of, making a person a plaintiff consent.

22. Again that learned Judge at page 84 lays down that:

the defendant to be added must be a defendant against whom the plaintiff has some cause of complaint which ought to be determined in the action and that it was never intended to apply where the person to be added as defendant is a person against whom the plaintiff has no claim, and does not desire to prosecute any.

23. He proceeds thus:

It seems to me that this application is answered, and that it was not intended that persons in the position of this company should1 be' added as defendants, merely for the convenience of another defendant...It seems to me that it is, the more important to construe this rule strictly because it is obvious the, in many cases, if the defendant's contention is right its provisions might be made use of in a manner, exceedingly harassing to plaintiffs, by forcing them to include in their actions persons against whom they do not seek to proceed, and to mix up their rights as against one person, with questions on a highly complicated nature arising between themselves and the others.

24. At page 85 Justice <NAME> says:

I am quite clear, however, that the <ORG> ought not to bring in nay person as defendant against whom the plaintiff does not desire to proceed unless a very strong case is made out, showing that in the particular case justice cannot be done without his being brought in.

25. The foregoing observations seem up me to lay down in very clear and unmistakable terms the principle applicable to' such a case as the present. On these principles I cannot possibly see my way to add the applicant as a party defendant to the action. I am further unable-to understand why the Secretary of <ORG> is sought be made a party to the action at all. The only suggestion on which such a joinder can be supported is that it is necessary that the declaration that the Act is ultra vires should be obtained in the presence of the Secretary of <ORG>. But the Secretary of <ORG> so far as the Civil Procedure Code is concerned represents merely the Government or the sovereign and can under the present system be regarded if at all only as part of the legislative machinery. There is no principle for even suggesting that any declaration as against him will be effectual and binding as against all other possible persons such as committees and other bodies and officers that may be constituted or created under the Act now in question.

26. There is no cause of action alleged against the applicant, and no relief whatever claimed against him. On a proper construction of the rule I feel constrained to hold that the applicant is not la proper party to the suit. The plaintiffs have complained of certain actions by <ORG> which would undoubtedly be unlawful but for the Endowments Act . They therefore ask for an injunction on the ground that the Act which is held up as a shield by the defence is really not available to them because it is illegal and ultra vires.

27. The declaration therefore a against the defendants must be regarded as merely ancillary to the relief claimed. On principle and authority I have therefore come to the conclusion that the Secretary of <ORG> is neither a necessary nor a proper party and that as the plaintiffs oppose his being joined as additional defendant I would not be justified in adding him as a party defendant even as a person brought in merely to look on and see fair play to use the words of Lord <NAME> in the case of Duke of Bedford v. <NAME> [1901] A.C. 1. Even as a Sort of harmless and permissible party I am satisfied he could not be added when such addition is opposed by the plaintiff and more so when on behalf of the applicant there has been an express refusal to submit to any condition as to costs.

28. Having regard to the number and variety' of legislative bodies and authorities in the country at the present day, paramount, imperial, local, delegated, subordinate, etc,, I feel that questions,, of ultra vires are certain to be raised in the <ORG> in increasingly large numbers of cases and I refuse to contemplate with equanimity the prospect of the Secretary of <ORG> for India being required by every defendant to be made a party in every one of them.

29. In the result the application must be dismissed with taxed costs for the plaintiffs in each of the cases and it is ordered accordingly.


PETITIONER: <ORG> Vs. RESPONDENT: STATE OF HARYANA AND ORS DATE OF JUDGMENT08/05/1985 BENCH: DESAI, D.A. BENCH: DESAI, D.A. ISLAM, BAHARUL (J) CITATION: 1985 AIR 1147 1985 SCR Supl. (1) 541 1985 SCC (3) 267 1985 SCALE (1)1237 CITATOR INFO : R 1987 SC1109 (30,38) RF 1988 SC 157 (8) R 1989 SC 157 (5) ACT: Constitution of India, 1950, Article 226- Jurisdiction of <ORG>-Petitioner to exhaust normal statutory remedies-Insistence on-When arises-Rule of exhaustion of alternative remedies-Whether a rule of law or a rule of convenience and discretion Haryana Minor Minerals (Vesting of Rights) Act, 1973 and Punjab Minor Mineral Concession Rules, 1964, Rule 130 (4) (2)-Auction of minor mineral quarry-Chief Minister declining to confirm highest bid-Awarding right to another person without giving opportunity to the highest bidder in the earlier auction, <ORG>, whether entitled to Interfere in a writ Administrative Law-Public Property-Norms for disposal of Principles of natural justice-Applicability of HEADNOTE: <ORG>-respondent No. 1 issued a notification for auctioning a minor mineral quarry situated in the <ORG>. The appellant offered the highest bid in the amount of Rs. 3.87 lakhs per annum as rent/royalty. The Presiding Officer accepted the bid of the appellant. <ORG> however under the belief that the highest bid did not represent the adequate lease rent, exercised powers under clause (4) of sub-rule 2 of Rule 130 or the Punjab Minor Mineral Concession Rules 1964 and declined to confirm the same. Respondent No. 4 wrote a letter to the Chief Minister casting serious aspersions on those who participated in the auction, and made an offer that if the contract for a period of 5 years is given he was willing to pay Rs. 4.5 lakhs per year. The Chief Minister accepted this offer. Being aggrieved, the appellant challenged the order of the Chief Minister, in a writ petition before the <ORG>, contending that respondent No. 4 had participated in the auction and made false allegations against the appellant, and without giving him any opportunity, the offer of respondent No. 4 was accepted which has denied equality of opportunity to the appellant in the matter of distribution of the <ORG> largesse. The <ORG> following the decision of this Court in <CITATION> ,  4 SCC 22, dismissed the writ petition on the ground that the appellant had an alternative remedy and that he must have exhausted the normal statutory remedies before invoking the extraordinary jurisdiction under Article 226. 542 Being aggrieved, the appellant filed an appeal to this Court and during is hearing filed an affidavit, that if the Court orders re-auction, and if the highest bid falls short of Rs. 4.5 lakhs then he would undertake to accept the contract at the value of Rs. 5.5 lakhs per annum. The Court held are auction and both the appellant and respondent No. 4 participated there in and the appellant offered the highest bid at the value of Rs. 25 lakhs. Allowing the Appeal, ^ HELD: 1. (i) The Court has imposed a restraint in its own wisdom on its exercise of jurisdiction under Article 226 where the party invoking the jurisdiction has an effective adequate alternative remedy. It has been expressly stated that the rule which requires the exhaustion of alternative remedies is a rule of convenience and discretion rather than a rule of law. It does not oust the jurisdiction of the Court It is made specifically clear where the order complained against is alleged to be illegal or invalid as being contrary to law, a petition at the instance of a person adversely affected would lie to the <ORG> under Article 226 and such a petition cannot be rejected on the ground that an appeal lies to the higher officer or <ORG>. An appeal in all cases cannot be said to provide in all situations an alternative effective remedy. [550 C-F] In the instant case, power was exercised by the authority set up under the rules to grant contract. The <ORG> did not pose to itself the question who would grant the relief when the impugned order is passed at the instance of a Chief Minister of the <ORG>. This is therefore a case in which the <ORG> was justified in throwing out the petition on the untenable ground that the appellant had an effective alternative remedy. [550 G-H] Assistant Collector of Central Excise v Jainson Hosiery Industries,  4 S.C.C. 22 and The <ORG> of Uttar Pradesh v Mohammad Nooh,  S.C.R. 595, referred to. (2) (i) There is a clear distinction between the use and disposal of private property and socialist property. Owner of private property may deal with it in any manner he likes without causing injury to any one else. But the socialist or if that word is jarring to some, the community or further the public property has to be dealt with for public purpose and in public interest. Tho marked difference lies in this that while the owner of private property may have a number of considerations which may permit him to dispose of his property for a song. On the other hand, dispose at of public property partakes the character of a trust in that in its disposal their should be nothing hanky panky and that it must be done at the best price so that large revenue coming into the offers of the <ORG> administration would serve public purpose viz. the welfare state may be able to expand its beneficient activities by the availability of larger funds. This is subject to one important limitation that socialist property may be disposed at a price lower than the market price or oven for a token price to achieve some defined constitutionally recognised Public purpose, one such being to achieve the goals set out in Part IV of the 543 Constitution. But where disposal is for augmentation of revenue and nothing else, the <ORG> is under an obligation to secure the best market price available in a market economy. [552 G-H; 553 A] (ii) The <ORG> is not free like an ordinary individual, in selecting recipient for its largesse and it cannot chose to deal with any person it please a in its absolute and unfettered discretion. The law is now well- settled that the <ORG> need not deal with anyone, but if it does so, it must do so fairly and without discretion and without unfair procedure. Even though the <ORG> is not bound to accept the highest bid, this proposition of law has to be read subject to the observation that it can be rejected on relevant and valid considerations, one such being that the concession is to be given to a weaker section of the society who could not outbid the highest bidder. In the absence of it, the approach must be as clearly laid down by the Constitution Bench of this Court in <CITATION> . [19551 SCR 305. Before giving up the auction process and accepting a private bid secretly offered, the authority must be satisfied that such an offer if given in open would not be outmatched by the highest bidder. In the absence of such satisfaction, acceptance of an offer secretly made and sought to be substantiated on the allegations without the verification of their truth, which was not undertaken would certainly amount to arbitrary action in the matter of distribution of <ORG> largesse which by the decisions of this Court is impermissible. 1554 G-H; 556 A-B; 555 G-H] <NAME> etc v. <ORG> of Orissa and Ors.  3 SCC 153, <CITATION> .  2 SCC 365 and <CITATION> .  3 SCR 784 held inapplicable. <NAME> v <ORG>.  3 SCR 1014 and <CITATION> .  3 SCR 1338 relied upon. 3. Rule 28 of Punjab Minor and Mineral Concession Rules, 1964 permits contract for winning mineral to be granted by the <ORG> by auction or tender. It is open to the <ORG> to dispose of the contract by tender. Even here the expression 'tender' does not mean a private secret deal between the Chief Minister and the offerer. Tender in the context in which the expression is used in rule 28, means 'tenders to be invited from intending contractors.' If it was intended by the use of the expression 'tender' in Rule 28 that contract can be disposed of by private negotiations with select individual, its validity will be open to serious question. The language ordinarily used in such rules is by public auction or private negotiations. The meaning of the expression 'private negotiations' must take its colour and prescribe its content by the words which precede them. And at any rate disposal of the <ORG> property in public interest must be by such method as would grant an opportunity to the public at large to participate in it, the <ORG> reserving to itself the right to dispose it of as best subserve the public weal. [559 F-H; 560 A-B 544 <CITATION> .  3 SCR 173 and Fertilizer Corporation Kamgar Union (Regd). <CITATION> .  1 SCC 568 relied upon. <CITATION> . etc.  Supp. SCC 85 referred to. 4. In the instant case, it is clear that respondent No. 4 was not selected for any special purpose or to satisfy any Directive Principles of <ORG> Policy. He surreptitiously ingratiated himself by a back-door entry giving a minor raise in the bid and in the process usurped the most undeserved benefit which was exposed to the hilt in the court. A unilateral offer, secretly made, not correlated to any reserved price made by the fourth respondent after making false statement in the letter was accepted without giving any opportunity to the appellant either to raise the bid or to point out the falsity of the allegations made by the fourth respondent in the letter as also the inadequacy of his bid. The appellant suffered an unfair treatment by the <ORG> in discharging its administrative functions thereby violating the fundamental principle of fair play in action. When he gave the highest bid, he could not have been expected to raise his own bid in the absence of a competitor. Any expectation to the contrary betrays a woeful lack of knowledge of auction process. And then some one surreptitiously by a secret offer scored a march over him. No opportunity was given to him either to raise the bid. Application of the minimum principles of natural justice in such a situation must be read in the Statute and held to be obligatory. When it is said that even in administrative action, the authority must act fairly, it ordinarily means in accordance with the principles of natural justice variously described as fair play in action. That having not been done, the grant in favour of the fourth respondent must be quashed. [554 H; 555 A-E; 560 D-E] JUDGMENT:

CIVIL, APPELLATE JURISDICTION: Civil Appeal No. 3751 of 1982.

From the Judgment and Order dated 15.9.1982 of <ORG> in L.P. A. No. 1232 of 1982.

<NAME> and <NAME>, for the Appellant.

<NAME>, <NAME>, <NAME> and <NAME> for the Respondent No. 4.

<NAME>, Attorney General and <NAME> for the Respondents.

The Judgment of the <ORG> was delivered by <ORG>, J. As the matter brooked no delay, when the arguments were concluded, the <ORG> pronounced the order which reads as under -

"The appeal is allowed and the decision of <ORG> at Chandigarh in L.P.A. No. 1232 of 1982 dated September 15, 1982 as well as the decision of the learned Single Judge in Civil Writ Petition No. 2321 of 1981 dated August 30, 1982.

The writ petition filed by the present appellant succeeds. The order of the Director of Industries dated May 25, 1981 granting a quarry lease to <ORG> (respondent No. 4) in respect of Serai Khawaja Plot No. II Quarry (except the area of Green Field colonies) for the period ending with 31st March, 1984 is quashed and set aside.

The first respondent the State of Haryana and the second respondent the Director of Industries are directed under and subject to the relevant provisions of the Haryana Minor Minerals (Vesting of Rights) Act, 1973 read with Punjab Minor and Mineral Concession Rules, 1964 as applicable to the State of Haryana to grant a right to the appellant in the form of contract usually entered into in similar cases to extract stones from Serai Khawaja Plot No. II on compensation howsoever described at the rate of Rs. 25 lacs per, year for a period of five years commencing from January I, 1983 and upto and inclusive and ending with December 31, 1987.

The appellant herein is directed to appear before the second respondent within a weak from today to execute the contract and/or necessary documents, instruments and to carry out all formalities including the making of deposits and/or payments, if any, required to be made under the relevant provisions of the Act and Rules. The fourth respondent is given time upto December 31, 1982 to clear out from the area and this time is given to him as and by way of locus penitentae to wind-up his affairs as far as the quarry involved in this appeal.

In the circumstances of the case, there will be no order as to costs.

Reasons will follow."

Here are the reasons.

It must be confessed that reasons in support of the decision are delayed but without offering an alibi for the tardiness, one aspect which inhibited giving of the reasons may be mentioned. My learned colleague suddenly left the <ORG> and the doubt nagged me for some time whether one Judge alone can give the reasons. It was an agreed order. Before pronouncing the order broad discussion took place which showed identity of views on all points involved in the matter. In this background to give reasons which appealed to us though drawn up by one of us would any day provide a better choice than not to give reasons because it would always annoy and distress the party who lost the legal battle whether there are legal or logical reasons in support of the order or it is merely an arbitrary exercise of power. However, what happened in the <ORG> in the presence of all parties and the learned counsel is res ipsa loquiter. What started before the <ORG> as a minor whisper, hardly audible, ended with the experience in a whispering gallery where the whisper multiplied at the other end of the gallery in volleying thunders. There would have been no qualms of conscience if the matter was disposed of sub-silentio as to reasons because of the outcome of the <ORG>'s exercise of jurisdiction under Art. 136. The reasons which dictated the choice and indicated the path did stand in need of justification because the end product justified interference. The very outcome would provide the raison d'etre for the exercise of power. Yet to bow to the tradition to convince the protagenis of reasoned orders, these are the reasons.

Factually matrix first. The <ORG> of Haryana in exercise of the power conferred upon it by Haryana Mioner Minerals (Vesting of Rights) Act, 1973 ('1973 Act' for short) grants lease for winning minor mineral vestige in it. The grant of the lease is regulated by Punjab Minor Mineral Concession Rules, 1964 ('Rules' for short) in their application to the <ORG> of Haryana. A notification was issued on December 26, 1980 specifying that minor mineral quarries at various places in Faridabad District would be auctioned on February 20, 1981. At the auction held on that day, appellant-<ORG> gave the highest bid for Sarai Khawaja Plot No. II in the amount of Rs 1,52,000 p.a. The presiding Officer conducting the auction accepted the bid but the <ORG> Government did not confirm the same. A fresh auction was notified to be held on May 4, 1981. The appellant participated and gave the bid for the same plot, his highest bid rising to Rs 3,87,000 for a period of three years. The same routine followed. The Presiding Officer accepted the bid and the <ORG> Government declined to confirm the same. Then there happened something which cannot have any parallel or precedent in a constitutional democracy like ours but one could have profitably drawn parallel from the administration of old princely <ORG>s. Respondent No. 4 wrote a letter dated May 9, 1981 (Anx. R-1 in <ORG>) addressed to the Chief Minister, Haryana <ORG> setting out therein the history of various auctions, and casting serious aspersions on those who participated in the auction inter alia saying that the bidders at the auctions have formed a syndicate and want to monopolise the business by not outbidding each other so that the <ORG> gets uneconomical rent/royalty. It was further alleged that 'the goondas and anti-social elements are assisting those monopolists/bidders and successfully pushed out a party like respondent No. 4. The letter further proceeds to make an offer/that if the contract for a period of five years is given to respondent No. 4 in respect of Sarai Khawaja Plot No. 2, it is willing to pay Rs 4,50,000 per year. There is also an offer for Sarai Khawaja Plot No. 1 with which we are not concerned. Promptly this offer was accepted by the Chief Minister. The appellant challenged the action of the Chief Minister in Writ Petition No. 2321/81 in the Punjab and Haryana High Court inter alia contending that those who formed the firm styled as <ORG> respondent No. 4, had participated in the auction and Then made false allegations against the appellant whose bid was the highest and without giving him any opportunity, the offer of respondent No. 4 was accepted which has denied equality of opportunity to the appellant in the matter of distribution of <ORG> largesse.

A learned Single Judge issued a notice to the respondents calling upon them to show cause why rule nisi may not be issued. In response to the notice, respondent No. 4 appeared and contended that the petitioner had an alternative remedy and on this short ground, the learned Single Judge rejected the writ petition. <ORG> of <ORG> in the Letters Patent Appeal filed by the appellant concurred with the learned Single Judge and dismissed the appeal. Hence this appeal by special leave.

At this stage it would be advantageous to refer in some details what transpired at the hearing of this appeal in this <ORG>. Let us at once recapitulate what happened in the court because that by itself provides a tell-tale piece of evidence compelling the court to interfere and set aside the impugned order. Mr. <NAME>, learned Attorney General raised a sort of a preliminary objection that this <ORG> should not assist the syndicalists to join hands to deprive the <ORG> of its legitimate revenue. Then he made a pertinent observation a interposing an objection when Mr. <NAME>, learned counsel for the petitioner was making his submissions. The question posed was: if the <ORG> interferes and quashes the grant in favour of the fourth respondent, the only option open to the court would be to direct a fresh auction. He posed the further question that if at the time of re-auction, the highest bid does not reach upto Rs 4,50,000 p.a. for which the lease is granted to the fourth respondent, would the <ORG> make good the loss ? Apart from the rhetoric of the question, the issue raised was of primary importance. We, therefore, asked Mr. <NAME> whether his client is willing to make an affidavit incorporating therein that if the highest bid at a reauction, if the court so directs, falls short of Rs 4,50,000 the appellant would agree and undertake to accept the contract at the value of Rs 5,50,000 p.a. Such an affidavit was immediately filed. In order to give the fourth respondent to whom contract under the impugned order was given, an opportunity whether he would like to raise his offer. Mr. <NAME> voiced his apprehension about his contentions. We assured him that without prejudice to his contentions, it would be open to his client to raise his offer. What transpired may be tabulated in a chart: Appellant's offer Respondent's offer

1. 5.50 lacs 2. 6 lacs

3. 6.50 lacs 4. 7 lacs

5. 7.53 lacs 6. 8 lacs

7. 8.50 lacs 8. 9 lacs

9. 10 lacs 10. 10.50 lacs Court intervened at this stage and said that the raise must be minimum at the rate of Rs 1 lac.

11. 12 lacs 12. 14 lacs

13. 15 lacs 14. 16 lacs

15. 17 lacs 16. 18 lacs

17. 19 lacs 18. 20 lacs

19. 21 lacs 20. 22 lacs

21. 25 lacs.

Shock and surprise was visible on the face of each one in the court. Shock was induced by the fact that public property was squandered away for a song by persons in power who holds the position of trust. Surprise was how judicial intervention can serve larger public interest. One would require multi-layered blind-fold to reject the appeal of the appellant or any tenuous ground so that the respondent may enjoy and aggrandize his unjust enrichment. On this point we say no more.

Before we deal with the contentions, let us have a look at the relevant provisions of the Act and the Rules.

Rule 28(1) of the Rules provides that contracts for extraction of minor mineral may be granted by the <ORG> by auctioning or tendering for a maximum period of five years after which no extension shall be granted' Sub-rule (2) provides that 'the amount to be paid annually by the contractor to the <ORG> shall be determined in auction or by tender to be submitted for acceptance, by the authority competent to grant the contract.' Rule 29 confers power on the Presiding Officer to reject or accept any bid or tender without assigning any reason to the bidders or tenderers. However, where the highest bid or tender is rejected, the reason shall however, be reported to the <ORG>. Rule 30 provides for notifying of the proposed auction on the notice board of the Director, Mining Officers and at least in one newspaper having wide circulation in the locality nearest to the area in question in the regional language as also in the <ORG> Gazette. Sub-cl. (4) of sub-r. (2) of Rule 30 provided that 'no bid shall be regarded as accepted unless confirmed by <ORG>.' Rule 58 confers power on the <ORG> to relax any of the provisions of the Rules in the interest of mineral development or better working of the mine.

Before we deal with the larger issue, let me put out of the way the contention that found favour with <ORG> in rejecting the writ petition. The learned Single Judge as well as the <ORG> recalling the observations of this <ORG> in <CITATION> rejected the writ petition observing that 'the petitioner who invokes the extraordinary jurisdiction of the court under Art. 226 of the Constitution must have exhausted the normal statutory remedies available to him'. We remain unimpressed. Ordinarily it is true that the court has imposed a restraint in its own wisdom on its exercise of jurisdiction under Art. 226 where the party invoking the jurisdiction has an effective, adequate alternative remedy. More often, it has been expressly stated that the rule which requires the exhaustion of alternative remedies is a rule of convenience and discretion rather than rule of law. At any rate it does not oust the jurisdiction of the <ORG>. In fact in the very decision relied upon by <ORG> in <CITATION> it is observed that there is no rule, with regard to certiorari as there is with mandamus, that it will lie only where there is no other equally effective remedy. It should be made specifically clear that where the order complained against is alleged to be illegal or invalid as being contrary to law, a petition at the in stance of person adversely affected by it, would lie to <ORG> under Art. 226 and such a petition cannot be rejected on the ground that an appeal lies to the higher officer or <ORG>. An appeal in all cases cannot be said to provide in all situations an alternative effective remedy keeping aside the nice distinction between jurisdiction and merits. Look at the fact situation in this case. Power was exercised formally by the authority set up under the Rules to grant contract but effectively and for all practical purposes by the Chief Minister of the State. To whom do you appeal in a State administration against the decision of the Chief Minister ? The clutch of appeal from <NAME> to <NAME> wife can only be bettered by appeal from one's own order to oneself. Therefore this is a case in which <ORG> was not at all justified in throwing out the petition on the untenable ground that the appellant had an effective alternative remedy. The High <ORG> did not pose to itself the question, who would grant relief when the impugned order is passed at the instance of the Chief Minister of the State. To whom did <ORG> want the appeal to be filed over the decision of the Chief Minister. There was no answer aud that by itself without anything more would be sufficient to set aside the judgment of <ORG>.

Turning to the merits of the case, the arguments covered a much larger canvass than was anticipated when the hearing opened. It was submitted that India being a Sovereign Socialist Secular Democratic Republic, the property of the <ORG> or of the <ORG> is socialist property which would imply that it is community property and every citizen of this country has vital interest in its effective use and legitimate disposal.

It was never disputed nor could it have been disputed that minerals vest in the state. The minor minerals vast in the State where the land from which they are to be extracted is situated and minerals other than minor minerals vast in the Union. 'Minor minerals' have been defined in The Mines and Minerals (Regulation and Development). Act, 1957 to mean, 'building stores, gravel, ordinary clay, ordinary sand other than sand used for prescribed purposes, and any other mineral which <ORG> may, by notification in <ORG>, declare to be a minor mineral.' Minor minerals vest in the state in which the land is situated. The first respondent State of Haryana notified that an auction would be held for mineral quarries of Faridabad District. The appellant gave his bid at the auction so notified. It is an admitted position that his was the highest bid. Anyone conversant with auction would not be naive enough to believe that one can go on raising his own bid. His was the highest bid in the amount of Rs. 3,87,000 p.a. Though the Presiding Officer accepted the bid of the appellant, being the highest bid at the auction, yet <ORG> in the exercise of the power conferred by cl. (4) of sub-r. (2) of Rule 30 declined to confirm the same presumably under the belief that the highest bid did not represent the adequate lease rent which <ORG> was entitled to get. The right of <ORG> not to confirm the bid as also its action of not confirming the highest bid of the appellant is not questioned. Therefore, various decisions laying down that the Government is not bound to accept the highest bid to which our attention was drawn by Mr. <NAME>, learned counsel for the fourth respondent are of no relevance in this case. This <ORG> in <ORG> v. <CITATION> . and <CITATION> . held that the Government is under no obligation to accept the highest bid and that no rights accrue to the bidder merely because his bid happened to be the highest. The <ORG> also observed that the Government had the right, for good and sufficient reason, not to accept the highest bid but even to prefer a tenderer other than the highest bidder. In <NAME> case the <ORG> further observed that the power conferred on the Government by the act to refuse to accept the higher bid, cannot be confined to inadequacy of bid only. There may be variety of other good and sufficient reasons to reject the same. The appellant has no grievance that even though his was the highest bid, the same was not accepted nor Mr. <NAME> on his behalf contends that the highest bid of the appellant was rejected on grounds which are either irrelevant or extraneous. This aspect therefore need not detain us any more.

Let us put into focus the clearly demarcated approach that distinguishes the use and disposal of private property and socialist property. Owner of private property may deal with it in any manner he likes without causing injury to any one else. But the socialist or if that word is jarring to some, the community or further the public property has to be dealt with for public purpose and in public interest. The marked difference lies in this that while the owner of private property may have a number of considerations which may permit him to dispose of his property for a song. On the other hand, disposal of public property partakes the character of a trust in that in its disposal there should be nothing hanky panky and that it must be done at the best price so that larger revenue coming into the coffers of the <ORG> administration would serve public purpose viz. the welfare <ORG> may be able to expand its beneficient activities by the availability of larger funds. This is subject to one important limitation that socialist property may be disposed at a price lower than the market price or even for a token price to achieve some defined constitutionally recognised public purpose, one such being to achieve the goals set out in Part IV of the Constitution. But where disposal is for augmentation of revenue and nothing else, the <ORG> is under an obligation to secure the best market price available in a market economy An owner of private property need not auction it nor is he bound to dispose it of at a current market price. Factors such as personal attachment, or affinity kinship, empathy, religious sentiment or limiting the choice to whom he may be willing to sell, may permit him to sell the property at a song and without demur. A welfare <ORG> as the owner of the public property has no such freedom while disposing of the public property. A welfare <ORG> exists for the largest good of the largest number more so when it proclaims to be a socialist <ORG> dedicated to eradication of poverty. All its attempt must be to obtain the best available price while disposing of its property because the greater the revenue, the welfare activities will get a fillip and shot in the arm. Financial constraint may weaken the tempo of activities. Such an approach serves the larger public purpose of expanding welfare activities primarily for which the Constitution envisages The setting up of a welfare <ORG>. In this connection we may profitably refer to <CITATION> in which <NAME>, J. speaking for the <ORG> observed:

"It must, therefore. be taken to be the law that where the <ORG> is dealing with the public, whether by E way of giving jobs or entering into contracts or issuing quotas or licences or granting other forms of largesse, the <ORG> 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 which is not arbitrary, irrational or irrelevant. The power or discretion of the <ORG> in the matter of grant of largesse including award to jobs, contracts, quotas, licences etc., must be confined and structured by rational, relevant and non-discriminatory standard or norm and if the <ORG> departs from such standard or norm in any particular case or cases, the action of the <ORG> would be liable to be struck down, unless it can be shown by the <ORG> that the departure was not arbitrary, but was based on some valid principle which in itself was not irrational, unreasonable or discriminatory.

At another place it was observed that the Government must act in public interest, it cannot act arbitrarily or without reason and if it does so, its action would be liable to be invalidated. It was further observed that the object of holding the auction is generally to raise the highest revenue. The Government is entitled to reject the highest bid if it thought that the price offered was inadequate. But after rejecting the offer, it is obligatory upon the Government to act fairly and at any rate it cannot act arbitrarily. Following this line of thought, in <CITATION> . while upholding the order of <ORG> dated April 27, 1979 allotting to the second respondent 10 to 12 lacs blazes annually for extraction of resin from the inaccessible chir forests in Poonch, Reasi and Ramban Divisions of the State for a period of 10 years on the terms and conditions set out in the order, observed as under:

"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 <ORG> cannot act in a manner which would benefit a private party at the cost of the <ORG>; such an action would be both unreasonable and contrary to public interest. The <ORG>, 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.

" (emphasis supplied) At one stage, it was observed that the Government is not free like an ordinary individual, in selecting recipient for its largesse and it cannot choose to deal with any person it pleases in its absolute and unfettered discretion. The law is now well-settled that the Government need not/deal with anyone, but if it does so, it must do so fairly and without discretion and without unfair procedure. Let it be made distinctly clear that respondent No. 4 was not selected for any special purpose or to satisfy ally Directive Principles of State Policy. He surreptitiously ingratiated himself by a back-door entry giving a minor raise in the bid and in the process usurped the most undeserved benefit which was exposed to the hilt in the court. Only a blind can refuse to perceive it.

Approaching the matter from this angle, can there be any doubt that the appellant whose highest bid was rejected by the Government should have no opportunity to improve upon his bid more so when his bid was rejected on the ground that it did not represent adequate market consideration for the concession to extract minor mineral. A unilateral offer, secretly made, not correlated to any reserved price made by the fourth respondent after making false statement in the letter was accepted Without giving any opportunity to the appellant either to raise the bid or to point out the falsity of the allegations made by the fourth respondent in the letter as also the inadequacy of his bid. The appellant suffered an unfair treatment by the <ORG> in discharging its administrative functions thereby violating the fundamental principle of fair play in action. When he gave the highest bid, he could not have been expected to raise his own bid in the absence of a competitor. Any expectation to the contrary betrays a woeful lack of knowledge of auction process. And then some one surreptitiously by a secret offer scored a march over him. No opportunity was given to him either to raise the bid or to controvert and correct the erroneous statement.

What happened in this case must open the eyes both of the Government as well as the people at large. How an uncontrolled exercise of executive power to deal with socialist property in which entire community's interest was sacrificed so as to cause huge loss to the public exchequer would have gone unnoticed but for the vigilance of the appellant who no doubt is not altruistic in its approach but its business interests goaded it to expose the unsavoury deal. Conceding that on weighty and valid considerations, the highest bid can to rejected by the <ORG> one such which can be foreseen is that the highest bid does not represent the adequate market price of the concession, yet before giving up the auction process and accepting a private bid secretly offered, the authority must be satisfied that such an offer if given in open would not be outmatched by the highest bidder. In the absence of such satisfaction, acceptance of an offer secretly made and sought to be substantiated on the allegations without the verification of their the truth, which was not undertaken, would certainly amount to arbitrary action in the matter of distribution of <ORG> largesse which by the decisions of this Court is impermissible. Even though repeatedly, this Court has said that the <ORG> is not bound to accept the highest bid, this proposition of law has to be read subject to the observation that it can be rejected on relevant and valid considerations, one such being that the concession is to be given to a weaker section of the society who could not outbid the highest bidder. In the absence of it, the approach must be as clearly laid down by <ORG> of this Court in <CITATION> that case, the appellant and the fourth respondent were rival liquor contractors for the sale of the liquor contract for the year 1953-54 in the <ORG> of Mysore. The contract was auctioned by the Deputy Commissioner under the authority conferred upon him by the Mysore Excise Act, 1901. The appellant's bid was the highest and the contract was knocked down in his favour subject to formal confirmation by the Deputy Commissioner. The fourth respondent was present at the auction but did not bid. Instead of that he went direct to the Excise Commissioner and made a higher offer. The Excise Commissioner cancelled the sale of favour of the appellant and directed the Deputy Commissioner to take action under the relevant rule. The latter accepted the tender of the respondent. The appellant moved <ORG> for a writ of mandamus which was dismissed. In appeal by the certificate, it was urged on behalf of the <ORG> that the Deputy Commissioner acted within the ambit of his powers under the relevant rule which gave him an absolute discretion either to re-auction or to act otherwise and no fetters are placed upon the 'otherwise' method. The court negatived this contention observing that arbitrary improvisation of an ad hoc procedure to meet the exigencies of a particular case is ruled out. Therefore, the grant of the contract to the fourth respondent was wrong. Repelling the contention that a writ petition at the instance of the appellant would not be maintainable, <ORG> observed as under:

"The next question is whether the appellant can complain of this by way of a writ. In our opinion, he could have done so in an ordinary case. The appellant is interested in these contracts and has a right under the laws of the State to receive the same treatment and be given the same chance as anybody else. Here we have <NAME> who was present at the auction and who did not bid-not that it would make any difference if he had, for the fact remains that he made no attempt to outbid the appellant. If he had done so it is evident that the appellant would have raised his own bid. The procedure of tender was not open here because there was no notification and the furtive method adopted of setting a matter of this moment behind the backs of those interested and anxious to compete is unjustified. Apart from all else, that in itself would in this case have resulted in a loss to the State because, as we have said, the mere fact that the appellant has pursued this with such vigour shows that he would have bid higher. But deeper considerations are also at stake, namely, the elimination of favouritism and nepotism and corruption: not that we suggest that occurred here, but to permit what has occurred in this case would leave the door wide open to the very evils which the <ORG> in its wisdom has endeavored to avoid. All that is part and parcel of the policy of the <ORG>. None of it can be ignored. We would there- fore in the ordinary course have given the appellant the writ he seeks. But, owing to the time which this matter has taken to reach us (a consequence for which the appellant is in no way to blame, for he has done all he could to have an early hearing), there is barely a fort night of the contract left to go. We were told that the excise year for this contract (1953-54) expires early in June. A writ would therefore be ineffective and as it is not our practice to issue meaningless writs we must dismiss this appeal and leave the appellant content with an enunciation of the law."

Fact of no two cases are alike, but if one attempts to compare the situation, the conclusion is inescapable. Appellant's bid was the highest bid. It was in the amount of Rs. 3,87,000 p.a. Respondent No. 4 approached the Chief Minister with a slightly higher bid of Rs. 4,50,000 per year. This was granted without any reference to the appellant to raise his bid. Such a thing, if allowed to pass once is bound to be repeated because this method is open to the abuse of favouritism and nepotism and the loss of revenue in this case to the State is enormous. What happened in tho court staggered everyone. Learned Attorney General <NAME>, who questioned the competence of the court to deal with the matter when he witnessed the rising crescendo of the auction in the court and the bid reached Rs. 12 lacs per year, he quietly left the court frankly stating that he does not wish any contention to be raised on behalf of the State of Haryana. Apprehension voiced by <ORG> has literally come true in this case. This view of <ORG> was reaffirmed in <CITATION> ., the only distinguishing feature of the case being that the highest bid of the appellant was rejected and the contract was given to <ORG>, a cooperative Society of the workmen. Though the court did not so specifically state, it upheld the rejection of the highest bid of the appellant on the ground that the benefit of the concession was given to a cooperative society formed by the weaker section of the society and thereby it serves the public purpose as set out in Art. 41 of the Directive Principles of the State Policy. In <ORG> (<ORG>), Sindri and <ORG>. v. Union of India & <ORG>., <NAME>, <NAME> speaking for himself and <NAME>, <NAME> Observe as under:

"A pragmatic approach to social justice compel us to interpret constitutional provisions, including those like Articles 32 and 226, with a view to see that effective policing of the corridors of power is carried out by the court until other ombudsman arrangements-a problem with which <ORG> has been wrestling for too long- emerges. I have dwelt at a little length on this policy aspect and the court process because the learned Attorney General challenged the petitioner's locus standi either qua worker or qua citizen to question in court the wrong doings of the public sector although he maintained that what had been done by the <ORG> was both bona fide and correct. We certainly agree that judicial interference with the administration cannot be meticulous in our Montesquien System of separation of powers. The court cannot usurp or abdicate, and the parameters of judicial review must be clearly defined and never exceeded. If <ORG> company has acted fairly, even if it has faltered in its wisdom, the court cannot, as a super-auditor, take <ORG> to I l task. The function is limited to testing whether the administrative action has been fair and free from the taint of unreasonableness and has substantially complied with the norms of procedure set for it by rules of public administration."

In a concurring opinion, <NAME>, CJ. Observed that sales of public property, when the intention is to get the best price, ought to take place publicly.

<CITATION> . etc., this court observed that public auction with open participation and a reserved price guarantees public interest being fully subserved.

Even though later on, learned Attorney General did not invite us to examine any specific contention on behalf of the State of Harayana, it may in passing be stated that with regard to transactions with the State, the principle enunciated in Sec. 55(5) (a) of the Transfer of Property Act would apply with greater vigour. Proceeding along it was submitted that if that is accepted and if it appears to the court that the State of Haryana did not appear to have full appreciation of the value of the property and the other party i.e. respondent No. 4 by reason of its profession was aware of the same and the resulting transaction is materially unfair, then such a case falls outside the principle enunciated by the decision of this court, on which reliance was placed on behalf of the respondent No. 4. We consider it unnecessary in the facts of this case to examine this aspect.

The position that emerge is this. Undoubtedly rule 28 permits contracts for winning mineral to be granted by the <ORG> by auction or tender. It is true that auction was held. It is equally true that according to the <ORG> <ORG>, the highest bid did not represent the market price of the concession. It is open to the <ORG> to dispose of the contract by tender. Even here the expression 'tender' does not mean private secret deal between the Chief Minister and the offerer. Tender in the context in which the expression is used in rule 28, meant tenders to be invited from intending contractors.' If it was intended by the use of the expression 'tender' in rule 28 that contract can be disposed of by private negotiations with select individual, its validity will be open to serious question. The languages ordinarily used in such rules is by public auction or private negotiations. The meaning of the expression 'private negotiations' must take its colour and prescribe its content by the words which precede them. And at any rate disposal of the state property in public interest must be by such method as would grant an opportunity to the public at large to participate in it, the <ORG> reserving to itself the right to dispose it of as best subserve the public weal. Viewed from this angle, the disposal of the contract pursuant to the letter by the fourth respondent to the Chief Minister is objectionable for more than one reason. The writer has indulged into allegations, the truth of which was not verified or asserted. The highest bidder whose bid was rejected on the ground that the bid did not represent the market price, was not given an opportunity to raise his own bid when privately a higher offer was received. If the allegations made in the letter influenced the decision of the Chief Minister, fair-plan in action demands that the appellant should have been given an opportunity to counter and correct the same. Application of the minimum principles of natural justice in such a situation must be reading the statute and held to be obligatory. When it is said that even in administrative action, the authority must act fairly, it ordinarily means in accordance with the principles of natural justice variously described as fair play in action That having not been done, the grant in favour of the fourth respondent must be quashed.

Apart from various considerations herein examiner, if any other view is taken in the facts and circumstances of this case, it may provide a classic example of ostrich burying its face in sand and declining to see the reality.

M.L.A. Appeal allowed,


JUDGMENT <NAME>, J.

1. This is a suit for partition and separate possession of the plaintiff's 1/12th share in the suit properties. Defendant 1 is the father of the plaintiff, defendants 2 to 5 are the brothers of the plaintiff and also the sons of defendant 1. Defendant 6 is the brother of defendant 1, and defendant 7 is the son of defendant 6. The claim was resisted by defendants 6 and 7 mostly on the ground that there was a division in the family 18 years before the suit, and that the properties in Schedule 2 and some other plaint mentioned properties belonged to defendant 6 solely as his self acquisition. Both the lower <ORG> concurrently found against the case of defendant 6. They came to the conclusion that the parties constituted a joint family on the date of the institution of the suit. It was also found that the properties comprised in Schedule 2 were also joint family properties. They mainly consisted of outstandings which were advanced either out of the income from family lands or out of the family trade which was carried on by defendant 6. It was further found that defendant 6 was living separately from defendant 1's branch. But the trade was carried on by defendant 6 assisted also sometimes by the elder son of defendant 1. Both the lower <ORG> accordingly decreed the claim of the plaintiff and directed division of the family properties and delivery of 1/l2th share to the plaintiff. In Second Appeal on behalf of defendant 6 the main question argued was in regard to the direction for accounts given by both the lower <ORG> in respect of the properties in Schedule 2 to the plaint. As aforesaid it mainly consisted of the outstandings of the business carried on by defendant 6 on behalf of the joint family. The contention of Mr. <NAME> is that the lower <ORG> have misdirected themselves in the application of the principles of Hindu law in the matter of accounting by the manager or members of the family who are in possession of the properties. In a suit for partition it is well settled that an account will have to be taken of the properties that are available for division as on the date of the suit or as on the date of any severance in status effected by a member of the family in accordance with law. The principle on which the liability of a member to account is based is thus enunciated by <ORG> in <CITATION> AIR 1922 PC 71 at p. 663:

In the absence of proof of direct misappropriation or fraudulent and improper conversion of the moneys to the personal use of the manager, he is liable to account for what he received and not for what he ought to or might have received if the moneys had been profitably dealt with.

2. The relationship between a manager and the members of the family is not that of mere agent and principal. His position is analogous to that of a trustee, but his obligations are not the same as those of a trustee. He is not bound to keep accounts. He has absolute control over the income and, therefore, he is not called upon to defend the propriety of his past dealings. But he is bound to account for all the family properties, moveable or immoveable which have been traced to his possession and the members are entitled to look into the accounts to discover what the properties consisted of or what they consist of. It is open to the other members to show that the manager had in his possession certain family properties and that he must account for their disappearance and that the items of expenditure said to have been incurred were not incurred or not incurred to the extent mentioned in the account or they were incurred for purposes other than the legitimate purpose of the family. These pleas are, therefore, available to the members when the manager is or ought to be directed to file an account of the properties existing on the date of the plaint or on the date of the severance. So far as the manager is concerned these principles are well settled. But the question is when owing to differences in the family or for convenience of management, members of the family lived apart without a severance in status but still as members of a joint family entitled to participate in all the income of the joint family properties, on what basis is the account to bo directed. Of course every member brings into the hotchpot all the properties in possession. In such a case, in my opinion, the principles applicable to a manager in regard to the liability for accounting will equally apply. <NAME>, J. in <NAME> v. <NAME>, (1880) 5 Bom 589, at p. 595, thus explained the footing on which an account should be taken:

The ordinary rule, no doubt, is that the members of an undivided Hindu family, when making a partition are entitled, not to an account of past transactions, but to a division of the family property actually existing at the date of partition . . . . . Where one member of the family has been entirely excluded from the enjoyment of the property, there might be good grounds for ordering an account; but in the ordinary case of joint enjoyment by the members of the whole property, or of enjoyment by different members of different portions of the property, the taking of an account would be most difficult and unsatisfactory, and we are not aware of any case in which the <ORG> have ever ordered it. There seems to us to be nothing in the circumstances of the present case which would induce us to depart from the ordinary rule.

3. In this case the fact is established as aforesaid that defendant 1's branch and defendant 6's branch have been in management of different portions of the joint family properties at any rate 15 years before the suit. Defendant 6 was carrying on a family trade or was in sole management of the properties in his possession with the knowledge and consent of defendant 1's branch. In so far as the corpus of the properties is traced to his possession he is bound to account and explain for its disappearance. Therefore in respect of the items of the properties in Schedule 2 he is bound to account.

4. Mr. <NAME> complains that the direction given by the lower <ORG> is wrong for two reasons. Schedule 2 consists of 19 items and out of them items 2, 3, 8, 10, 12, 14 to 17 and 19 were collected by defendant 6 after making certain remissions. The lower <ORG> disallowed the said remissions and also directed him to account for interest on the said sums from the date of the collections. The ground alleged by the learned District <NAME> is that defendant 6 had no right to make the remissions without the knowledge or consent or acquiescence of the other members of the family and that he is liable for interest on the amounts he has received from the date of collection. So far as the question of remission is concerned, in my opinion, the principle enunciated by the lower <ORG> is wrong. The managing member of a joint family is entitled to settle accounts with the debtors and in the course of the settlement he will have the right to make a reasonable reduction either towards interest or principal if the circumstances of the case should allow it. It is not necessary that he should obtain the consent of the other members of the family or to do so only with their knowledge. Therefore, defendant 6 though a junior member of the family was left in sole management of the trade along with defendant 1's branch. He will have the right and discretion to make the remissions and if they were done bona fide it ought not to be open to the other members to question them; but he will have to satisfy that the remissions were made by him in the interest of the family having regard to the particular circumstances of the case. Prima facie the burden will be upon him and if he has given a satisfactory explanation of the same it is open to the other members to show that the remissions were not in the interest of the family and without consideration and not in the bona fide exercise of the discretion. <NAME>, C.J. in <NAME> v. <NAME> (1893) 17 Bom 271 at p. 283 in dealing with a similar question observed:

As to the remissions of tenants and compromises of suits, although they show a loss to the family firm of a considerable sum between 1920 and 1942 (<ORG>), the defendants have failed to give any proof that they were improper or uncalled for. The circumstance that <ORG> was not made a party to the suits, may have afforded the defendants an opportunity of taking a technical objection, but cannot by itself and without any other evidence afford sufficient reason for concluding that they were compromised without adequate cause or contrary to the interests of the family. As to the remissions to debtors, the <ORG> below has considered they were satisfactorily explained by the plaintiff...

5. In the matter of interest defendant 6 can only be called upon to account for such interest as he received on the debts. He will also be accountable for interest if he has re-invested the amounts, but he cannot be made accountable for not investing the same and realizing the interest. Therefore, the direction that he should be accountable with interest from the date of the collection is not correct. I, therefore, direct an account be taken of the said items 2, 3, 8, 10, 12, 14 to 17 and 19 in the light of the above observations and remit the case back to <ORG>. In other respects the decrees of the lower Courts are confirmed. As the appellants have substantially failed I direct them to pay the costs of the respondents.