ALAULI ANCHAL BOAT TRAFFIC COOPERATIVE SOCIETY LTD., PHULTORA AND ANR.versusSTATE OF BIHAR AND ORS.

                        (2016] 2 S.C.R. 83



ALAULI ANCHAL BOAT TRAFFIC COOPERATIVE SOCIETY                         A
            LTD., PHULTORA AND ANR.
                                v.
                  STATE OF BIHAR AND ORS.
                  (Civil Appeal No.1853 of2016)                        B
                       FEBRUARY 26, 2016
  [T. S. THAKUR, CJI, A. K. SIKRI AND R. BANUMATHI;
                           JJ.]
      Auction - Auction-purchase - Challenge to - Propriety of -       C
Auction· of a Ghat - Highest bid amount was Rs.16, 00, 0001- -
Though the appellant-society did not participate in the auction -
Its opinion was sought on the highest bid - The Society accepted
the bid for Rs. 16, 00, 0001- under protest - Contract of the Ghat
granted to the society - The society challenged the order inviting
the open bid by public auction for settlement of the Ghat and also     D
bid amount by filing writ petition - Single Judge of High Court
remitted the matter to the authorities cuncemed to reconsider the
matter - LPA of the State was allowed by the Division Bench of
High Court - On appeal, held: In the facts of the case, auction
process inviting bids in settlement of ghats cannot be said to be      E
arbitraq or in violtition ·of Government Circulars - Bid of
Rs:16,00,000!- had a rationale behind it being the highest bid -
The ghat in question was not the only ghat for which auction was
held - The Society had offered even higher bid amount in respect
of other ghats and was declared successfiil bidder - Thus, there· is
not justifiable reason to challenge either the auction or the bid      F
amount.
      Dismissing the appeal, the Court
      HELD: It emerges from the record that the reason for
auctioning the ghat in q-uestion was that the Circle Officer had
accepted the recommendation of the District Level Committee G
and acted as per the Government instruction vide letter No.2526
dated 12.09.1978 to go through open auction process which is
mandatory for the settlement of the ghats for every third year. As
per the recommendation of the District Level Committee, in order
to augment the State revenue, the authorities are expected to H
                                83
84             SUPREME COURT REPORTS                     [2016] 2 S.C.R.


A    invite bids through auction process and ensure transparency in
     acceptance of the bids. The auction process inviting the bids in
     the settlement of ghat cannot be said to be arbitrary or in violation
     of Government circulars. (Para 9) (88-B-C]
         2. In auction, the highest bid received was of Rs.16,00,000/
B -. Further, the appellant-society was not a bidder and did not
  participate in the auction. However, still it was offered to have
  the ghat settled in its favour on payment of Rs.16,00,000/- which
  was the highest bid received. It agreed to do so but accepted
  the bid under protest. There is no justifiable reason to ch,allenge
  either the auction or the aforesaid bid amount. The amount of
c Rs.16,00,000/- had a rationale behind it as it was the highest bid
  and, therefore, having agreed to take the settlement of ghat for
  Rs.16,00,000/- the appellant-society was not justified in
  challenging the auction of ghat by inviting bids. More so, Ghat in
  question was not the solitary ghat in which the auction has been
D held but other ghats were also auctioned and settled at much
  higher amounts. In fact, the appellant-society was successful in
  offering the highest bid amount for other ghats at Rs.20,00,000/
  -. Having participated and having emerged as the successful
  bidder for other ghats, the appellant-society is not justified iu
  challenging the auction iuvitiug open bids for the Ghat in question.
E
  The Division Bench rightly observed that every year the amount
   of bid has gone up and therefore, the Court has no jurisdiction to
   go into such disputed questions of fact with regard to bid amouut.
   (Paras 9 and 151 188-D-F; 90-E)
        3. Contention of the appellant society is that in view of
F various circulars of the Government, the upward revision of
  reserve Jama could only be fifteen percent of the reserve Jama/
  settlement amount for the previous years and the bid amount of
  Rs.16,00,000/- for the ghat in question is arbitrary and un-
  reasonable. When the decision was taken to go through the open
G auction  process which was even otherwise justifiable in order to
  augment the State revenue, the appellant-society cannot object
  to the same and claim the settlement of ghat in its favour on
  payment of 15% of the reserved Jama/settlement amount for the
  previous years. In fact, such a contention is not even available
  to the appellant-society inasmuch as the decision of the
H respondents to go through th.e auction process was never
 ALAULI ANCHAL BOAT TRAFFIC COOPERATIVE SOCIETY                                   85
         LTD., PHULTORA v. STATE OF BIHAR

questioned or challenged by the appellant-society in any judicial                 A
proceedings. On the contrary, it jumped to the offer of the
respondents and accepted the bid but, at the same time, put the
uncalled for condition that it was accepting the same under protest.
Therefore, it cannot now turn around and make out a case that
the bid amount should have been 15% of the reserved Jama/
                                                                                  B
settlement for the previous years. [Paras 10-11) [88-G; 89-A-C)
       4•. In the present case, the settlement was already done for
three years and thereafter the appellant-society was bound to
settle the ghat on the basis of open bid as per the direction of the
Government with a view to re-assess the valuation of the
settlement and the process of open bid was rightly adopted by                     C
the appellant-society which was also necessary to enhance the
revenue of the Government. [Para 12) [89-F)
     CIVIL APPELLATE JURISDICTION : Civil Appeal No. 1853
of2016
                                                                                  D
     From the Judgment and Order dated 15.12.2011 in Letters Patent
AppealNo. 1457 of2009 passed by Patna High Court
        Subhro Sanyal, Ram Nibas Pd., Advs. for the Appellants.
       Shivam Singh, Gopal Singh, Advs. for the Respondents.
                                                                                  E
       R. BANUMATHI, J. I. Leave granted.
         2. This appeal assails an order dated 15.12.2011 passed by the
  Division Bench of the High Court of Judicature at Patna allowing Letters
  Patent Appeal No.1457 of 2009 setting aside the order of the learned
  Single Judge and declining to interfere with the order of the Collector
                                                                                  F
. dated 16. l 0.2008, auctioning Ghurandera Kilagarai Ghat and direction
  to the appellant-society to deposit the balance bid amount of Rs. I 0,80,000/
  - for the year 2008-2009 for settlement of the said ghat.
        3. A public notice dated 16. I 0.2008 was issued by the Zonal Officer,
 Alauli for auction ofGhurandera Kilagarai Ghat for the year 2008-2009
 in which Reserve Jama was fixed at Rs.33,350/-. Three bidders had                G
 taken part in the auction, the highe~t bidder at Rs.16,00, I 00/- by Sushi I
 Kumar and that one Lalan Kumar and Shri Ram Bi lash Yadav who also
 participated in the bid at Rs.5,00,000/- and Rs. I 0,00,000/- respectively.
 At the time of Oak, the appellant-society which was present there
 accepted the settlement under protest and deposited one third of the             H
86              SUPREME COURT REPORTS                         [2016] 2 S.C.R.


A    total bid amount. The appellant-society then prayed for recalling the
     open bid for the year 2008-2009 on the ground that the bid amount was
     very much higher and also to fix the amount only with fifteen percent
     increase of the previous years and for direction upon the respondent to
     adjust the amount deposited by it in the future instalment. Request of the
     appellant-society was declined; however, liberty was granted to the
B
     appellant-society that it can avail next two settlements for consecutive
     years at the same settlement amount without any further Jama or open
     bid.
            4. The appellant-society then filed Writ Petition No.3646 of2009
     praying for quashing the order dated 16. I 0.2008 inviting open bid for
c    settlement of Ghurandera Kilagarai Ghat for the period 2008-2009 through
     public auction. ihe appellant alleged that the bid amount was very much
     higher than the amount on which ghats were being settled for the previous
     years. Learned Single Judge disposed of the writ petition and remanded
     the matter back to the Collector, Khagaria observing that the persons
D    who bid the amount were not really interested in taking the settlement
     and that the appellant-society had taken the ghat under protest. The
     learned Single Judge directed the authorities to re-consider the matter in
     the light of various circulars of the State Government. Being aggrieved,
     respondent-State of Bihar preferred appeal in LPA No.1457 of 2009
     which was allowed by the Division Bench holding that the record revealed
E    that every year the amount of bid has gone up and as such the court has
     no jurisdiction to go into the disputed questions of fact with regard to the
     bid amount and that it was for the appellant-society to work out its
     remedies before the appropriate forum.
            5. Learned counsel for the appellant-society Mr. Subhro Sanyal
F    submitted that bid amount of Rs.16,00,000/- for which the ghat was
     settled is arbitrary and is very much on the higher side than the
     standardized revision by fifteen percent of the amount over and above
     the amount fixed in previous years and hence the respondents are obligated
     to re-fix the amount. It was contended that the appellant-society had
G    accepted the bid only under protest and the Division Bench failed to
     c.onsider the fact that the appellant-society had reserved its right to
     challenge the public auction Ghurandera Kilagarai Ghat by Circle Officer,
     Alauli and deposit ofone third amount under protest does not amount to
     acquiescence and waiver of appellant's legal right.
           6. Per contra, learned counsel for the respondents Mr. Shivam
H    Singh contended that the Circle Officer, Alauli not only accepted the
 ALAULI ANCHAL BOAT TRAFFIC COOPERATIVE SOCIETY                                87
 LTD., PHULTORA v. STATE OF BIHAR [R. BANUMATHI, J.]

recommendation of the District Level Committee rather he has acted as          A
per the direction of the Government letter to go through open evaluation
process in ord,er to augment the revenue of the State. The respondents
further contended that the appellant-society took the settlement of the
ghat on the amount assessed through open bid and as such appellant-
society is estopped from assailing the auction of the ghat by inviting bids.
                                                                               B
      7. We have carefully considered the rival contentions and perused
the impugned order and materials on record.
       8. Pursuant to the auction notice dated 16.10.2008, auction of
Ghurandera Kilagarai Ghat was held on 27. I 0.2008 in which three persons
participated and the highest bid was at Rs.16,00,100/- by one Sushi!           c
Kumar. By perusal of record of proceedings of auction ofGhurandera
Kilagarai Ghat (Annexure P/I 0), it is seen that at the time of Oak,
appellant-society was present there and its opinion on the highest Oak
was obtained and the appellant-society had then taken the settlement of
the said ghat under protest. Relevant portion of record of auction
proceedings of Ghurandera Kilagarai Ghat dated 27.10.2008, reads as            D
under:
       "The highest bid had done by the Dakvakta No. 3 Shri Sushi!
       Kumar S/o Shri Satya Narayan Pra.Yadav, Rio Govindpur Natoliya
       Sahebpur Kamal, Baigusarai. At the time of Oak, the Alauli Zonal
       Bodh Traffic.Society Ltd., Phoolwada, Khagdiya was present              E
       there. Get his opinion on this highest Oak.
                                             Ready to take with objection
                                                                    Sd/-"
Even though the appellant-society had neither participated in the auction
nor submitted the bid, appellant-society's opinion was obtained on the F
higher Oak and the appellant-society accepted the bid under protest for
Rs.16,00,000/-. Though, no plausible explanation is shown to us as to
why the appellant-society was given the contract when it had not
participated in the auction or submitted its bid, learned counsel for the·
appellant had submitted that Sushi! Kumar, who was the highest bidder G
and had given the bid ofRs.16,00, I 00/-, did not come forward and it is in
these circumstances the appellant was offered the contract of the said
ghat at the aforesaid rate. Be that as it may, Sushi I Kumar, who was
the highest bidder, did not question the settlement of ghat in favour of the
appellant-society and, therefore, such a question is not to be gone into in
these proceedings. Since the contract was awarded to the appellant- H
88              SUPREME COURT REPORTS                         (2016] 2 S.C.R.


A    society and insofar as the said award is concerned, nobody has challenged
     the validity thereof, we are only called upon to decide as to whether the
     appellant-society could question the settlement bid of Rs.16,00,000/- at
     which the settlement of ghat was given to the appellant-society.
            9. It emerges from the record that the reason for auctioning the
B    said ghat was that the Circle Officer, Alauli had accepted the
     recommendation of the District Level Committee and acted as per the
     Government instruction vide letter No.2526 dated 12.09.1978 to go
     through open auction process which is mandatory for the settlement of
     the ghats for every third year. As per the recommendation of the District
     Level Committee, in order to augment the State revenue, the authorities
c    are expected to invite bids through auction process and ensure
     transparency in acceptance of the bids. The auction process inviting the
     bids in the settlement of ghat cannot be said to be arbitrary or in violation
     of government circulars. In auction, the highest bid received is of
     Rs.16,00,000/- as mentioned above. Further, as pointed out above, the
D    appellant-society was not a bidder and did not participate in the auction.
     However, still it was offered to have the ghat settled in its favour on
     payment ofRs.16,00,000/- which was the highest bid received. It agreed
     to do so but accepted the bid under protest. We do not find any ju~tifiable
     reason to challenge either the auction or the aforesaid bid amount. Had
     the appellant-society refused, the only other course of action was to
E
     invite the bids again. The amount ofRs.16,00,000/- had a rationale behind
     it as it was the highest bid and, therefore, having agreed to take the
     settlement of ghat for Rs.16,00,000/- the appellant-society was not
     justified in challenging the auction of ghat by inviting bids. More so,
     when Ghurandera Kilagarai Ghat was not the solitary ghat in which the
F    auction has been held but other ghats were also auctioned and settled at
     much higher amounts.
            10. Contention of the appellant-society is that in view of various
     circulars of the Government, the upward revision ofreserve Jama could
     only be fifteen percent of the reserve Jama/settlement amount for the
G    previous years and the bid amount of Rs.16,00,000/- for the ghat in
     question is arbitrary and un-reasonable.According to the appellant-society,
     Reserve Jama Committee fixed the reserve Jama for settlement of
     Ghurandera Kilagarai Ghat for the years 2005-2006, 2006-2007, 2007-
     2008 at Rs.28, 750/- Rs.29,000/- and Rs.33,500/- respectively.

H           11. For the reasons given above, we have no hesitation to reject
 ALAULI ANCHAL BOAT TRAFFIC COOPERATIVE SOCIETY                                 89
 LTD., PHULTORA v. STATE OF BIHAR [R. BANUMATHI, J.]

the aforesaid contention. It is re-emphasized that when the decision            A
was taken to go through the open auction process which was even
otherwise justifiable in order to augment the State revenue, the appellant-
society cannot object to the same and claim the settlement of ghat in its
favour on payment of 15% of the reserved Jama/settlement amount for
the previous years. In fact, such a contention is not even available to the
                                                                                B
appellant-society inasmuch as the decision of the respondents to go
through the auction process was never questioned or challenged by the
appellant-society in any judicial proceedings. On the contrary, it jumped
to the offer of the respondents and accepted the bid but, at the same
time, put the uncalled for condition that it was accepting the same under
protest. Therefore, it cannot now turn around and make out a case that          c
the bid amount should have been 15% of the reserved Jama/settlement
for the previous years.
       12. The appellant placed reliance upon the letter dated 12.04. I 982
of the Joint Secretary, Department of Revenue & Land Reforms,
Government of Bihar addressed to Collector, Gopalganj stating that D
minimum fifteen percent increase is to be made in the settlement of
Jalkar keeping in mind the development of Jalkar and rising prices of
fish. The said letter dated I 2.04.1982 deals with development of Jalkar
and Fisheries-cum-Makhana. Likewise, letter dated 09.03.2002 upon
which the High Court based its order stipulates that the settlement of
ghats ought to be made only for three years on the basis of reserve E
Jama. In the present case, the settlement was already done for three
years and thereafter the appellant-society was bound to settle the ghat
on the basis of open bid as per the direction of the Government with a
view to re-assess the valuation of the settlement and the process of
open bid was rightly adopted by the appellant-society which was also F
necessary to enhance the revenue of the Government.
        13. Likewise the circular dated 12.02.198 l which states that instead
of doing settlement of Jalkar through open bidding, it should be made to
the cooperative societies for every three years deals only with Sairats
pertaining to Fisheries-cum-Makhana. By perusal of the said circular, it        G
is seen that the District Fishery Officer and also Fishery Officer from
the level of Sub-Division are the members of the Committee thereby
indicating that the said circulRr is only with reference to Fisheries-cum-
Makhana. But so far as in the present case Ghurandera Kilagarai Ghat,
it is concerned with settlement of ghats for transportation of men and
material through water base. Contention of the respondents is that the          H
90              SUPREME COURT REPORTS                          (2016] 2 S.C.R.



A    appellant-society was well aware of the higher economic viability as
     through these ghats, maize transportation is being carried out for their
     export centres from Khagria Railway Station.
          14. As pointed out earlier, the appellant has not earlier challenged
   the auction notice d<lted 16.10.2008. On the day of auction dated
B 27.10.2008, the appellant-society was present and when its opinion was
  ·obtained on the highest Oak, the appellant-society accepted the settlement
   of ghat for Rs.16,00,000/-. While so, it was not open to the appellant-
   society to challenge the auction notice and to seek writ of mandamus to
   direct the respondents to act as per the decision of the District Level
   Reserve Jama Committee. As pointed out earlier, the Circle Officer
c accepted the recommendation of the District Level Committee and gone
   through the open evaluation process which is mandatory for settlement
   of ghats for every third year after the evaluation of open bid process.
            15. Be it noted, Ghurandera Kilagarai Ghat was not the only solitary
     ghat auctioned, but auction was held for other ghats also and the bid
D    amount had gone much higher than the amounts at which the ghats
     were being settled in the previous years. In fact, the appellant-society
     was successful in offering the highest bid amount for other ghats at Rs.
     20,00,0001-. Having participated and having emerged as the successful
     bidder for other ghats, the appellant-society is not justified in challenging
E    the auction inviting open bids for Ghurandera Kilagarai Ghat. The Division
     Bench rightly observed that every year the amount of bid has go1ie up
     and therefore, the Court has no jurisdiction to go into such disputed
     questions of fact with regard to bid amount. We do not find any reason
     warranting interference with the impugned order.

F           16. It is to be pointed out that the appellant-society has deposited
     only thirty per cent of the amount and even after serving three notices
     by the Circle Officer Alauli, the rest of the amount has not yet been
     paid. While granting stay of the impugned order, vide order dated
     23.03.2012, this Court directed the appellant-society to deposit a sum of
     Rs.2,00,000/-. The respondents are at liberty to proceed against the
G    appellant-society to recover the amount due from the appellant-society.
            17. In the result, the appeal is dismissed leaving the parties to bear
     their respective costs.
     Kalpana K. Tripathy                                         Appeal dismissed.

H

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