The Supreme Court has ruled that the government and its instrumentalities cannot grant or withhold its largess arbitrarily as it will be contrary to the citizens’ Constitutional right to equality under Article 14.
A bench of justices G S Singhvi and S J Mukhopadhaya said the state cannot be envisaged as simply a coercive machinery,wielding the “thunderbolt of authority” and must alienate its property only by way of auction or by inviting bids.
“In our constitutional schemes compliance of the doctrine of equality enshrined in Article 14 of the Constitution has to be read as a condition precedent for exercise of power by the state government and the corporation,more so,when it relates to alienation of public property or any right of interest therein.
“The state cannot be conceived of simply as a coercive machinery for wielding the thunderbolt of authority. Now the government is a regulator and dispenser of special services and provides to the large public benefits including jobs,contracts,licenses,quotas,mineral rights etc,” said Justice Singhvi,writing the judgement for the bench.
The apex court passed the verdict while upholding a Bombay High Court judgement,which had quashed a 30-year-lease,granted by the Municipal Corporation of Nagpur to a private firm Saroj Screens Pvt Ltd.
In this case,a plot of land had been leased to a private party by the corporation,contrary to the rules and without inviting proper bids.
The apex court said,”It is necessary to emphasise that the corporation holds the property as a trustee of the public and any alienation of such property or any right or interest therein otherwise than by way of auction or by inviting bids would amount to breach of that trust.”
The bench said the law has also recognised the changing character of the governmental functions and the need to protect individual as well as public interest.
“The government cannot give or withhold largess in its arbitrary discretion or according to its sweet-will.
“The Government cannot now say that it will transfer the property (land etc) or will give jobs or enter into contracts or issue permits or license only favour of certain individuals,” the bench said while dismissing the private firm’s appeal.