IN THE HIGH COURT OF JUDICATURE OF ANDHRA PRADESH
* THE HON'BLE MR JUSTICE C.V.NAGARJUNA REDDY
+ Writ Petition No.24049 of 2010
% DT.23.12.2010
# Smt.Padma Pawar
…Petitioner
Vs.
$ Government of Andhra Pradesh, rep.by its Secretary, Department of Rural Development, Secretariat Buildings, Hyderabad and others
… Respondents
^ Counsel for the Petitioner: Sri T.P.Sekhar
! Counsel for respondent Nos.1 & 2: AGP for Panchayat Raj
? Cases referred:
1) (1987) 2 SCC 295
2) 1995 Supp (2) SCC 512.
Between:
Smt.Padma Pawar
… Petitioner
And
Government of Andhra Pradesh, rep.by its Secretary, Department of Rural Development, Secretariat Buildings, Hyderabad and others
… Respondents
Counsel for the Petitioner: Sri T.P.Sekhar
Counsel for respondent Nos.1 & 2: AGP for Panchayat Raj
The Court made the following:
ORDER:
I have heard Sri T.P.Sekhar, learned counsel for the petitioner, and the learned Assistant Government Pleader for Panchayat Raj, representing respondent Nos.1 and 2.
Respondent No.3 has not entered appearance and the notice sent to him has been returned with postal endorsement ‘unclaimed’.
In this writ petition, the petitioner has assailed the action of respondent No.2 in granting leasehold rights to run a canteen in premises forming part of old LIC Building, Nizamabad Town in favour of respondent No.3 without calling for tenders. The petitioner averred that failure of respondent No.2 to follow the well established method in awarding lease to respondent No.3 vitiated the decision making process and consequently, the very decision itself.
A counter affidavit has been filed by respondent No.2, wherein it is inter alia averred that the State Government has allotted land admeasuring 1983.33 sq.yards near old LIC Building, Nizamabad for the purpose of construction of DWCRA Bazar and that accordingly, 15 shops were constructed, of which, the premises for canteen is one. It is further averred that tenders were invited for allotment of canteen through tender notification, dated 15.10.2005, but only one tender was received from a person, by name, G.Venkat Narsaiah S/o Gangaram, and the canteen was allotted to him a for a period of one year with a provision for extension of term, under agreement, dated 03.11.2005. That the lessee vide his application, dated 22.02.2007, made a request to renew the agreement in favour of one V.Raja Goud and that accepting the said request, said V.Raja Goud was permitted to run the canteen with 10% enhancement of rent on existing rent of Rs.6,500/- from 07.11.2006.
It is further averred that as the agreement period with V.Raja Goud, including the extended period, expired, respondent No.3 has approached respondent No.2 with an application for grant of lease by offering a sum of Rs.12,000/- per month towards rent and Rs.60,000/- towards security deposit. Accordingly, the said request was accepted and a lease deed was entered into with respondent No.3 on 17.09.2010. The petitioner’s claim in the writ petition has been challenged on the ground that she never applied for allotment of canteen in her favour.
It is trite that the properties belonging to the State and its instrumentalities shall be duly protected and a responsibility is cast on the executive functionaries at the helm of affairs to ensure that they fetch maximum revenue. Respondent No.2 being the head of the District administration is the trustee of the properties situated in the District and belonging to the State. It is therefore his constitutional obligation to see that they fetch maximum possible revenue for the State. It is indubitable that granting of leasehold rights over the State’s properties constitutes distribution of largesse. It is well settled that the State-owned or public-owned property is not to be dealt with at the absolute discretion of the executive; that certain precepts and principles have to be observed, public interest being the paramount consideration; and that one of the methods of securing the public interest, when it is considered necessary to dispose of the property, is to sell the property by public auction or by inviting tenders, though such a rule is not an invariable rule. As and when a departure is made from the general rule, it must be shown that such an action is rational and not suggestive of discrimination.(See: Sachidanand Pandey Vs. State of W.B.[1] and G.D.Zalani Vs. Union of India[2]).
Applying these settled principles of law to the present case, the action of respondent No.2 in granting lease to respondent No.3 cannot be justified. Even if there was not much response to the tender notification issued in the year 2005, that hardly constitutes any justification for respondent No.2 to give away the leasehold rights just for the asking by respondent No.3. As long as five years have passed since the previous notification was issued. A person holding the position of respondent No.2 cannot be expected to think that the situation prevailed in the year 2005 would have continued even after five years, as it is common knowledge that rapid changes due to intense urbanization are taking place and Nizamabad being the District Headquarters, it is reasonable to expect that the demand for running canteen would have increased.
The plea that the petitioner has not applied for canteen is wholly without merit because unless proper notification is issued, a person is not expected to approach the respondents with applications for grant of lease.
In my opinion, respondent No.2 has not acted in a transparent manner and has deviated from the settled norms of calling for tenders. His action thus smacks of patent arbitrariness.
For the above-mentioned reasons, this Court holds that award of lease in favour of respondent No.3 is arbitrary and illegal and consequently, the lease granted in favour of respondent No.3 is set aside. Respondent No.2 is directed to call for tenders for granting leasehold rights for running the canteen within a period of one month from the date of receipt of a copy of this order.
The writ petition is accordingly allowed with costs of Rs.10,000/- (Rupees ten thousand only).
As a sequel to disposal of the writ petition, W.P.M.P.No.30784 of 2010 filed by the petitioner for interim relief is disposed of as infructuous.
(C.V.NAGARJUNA REDDY, J)
Date: 23.12.2010
VGB/AM
Note:
LR copies to be marked.
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