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2012 DIGILAW 431 (HP)

Ramesh Chand Prasher v. State of Himachal Pradesh

2012-08-14

RAJIV SHARMA

body2012
JUDGMENT : RAJIV SHARMA, J. 1. Material facts necessary for the adjudication of this petition are that respondent-State invited "Expression of Interest" for private sector participation in Cafe's in Himachal Pradesh, including Aabshar at Solan on "outright sale" basis. Last date of submission of offers was 29.11.2008 upto 4.00 P.M. Petitioner submitted bid on 27.11.2008. Bids were opened on 27.12.2008. Respondent No. 3 has been issued letter of intent on 2.3.2010 and the sale deed was executed between respondent-State and respondent No. 3 on 31.3.2010. Mr. Bimal Gupta has strenuously argued that respondent No. 3 was not at all eligible as per the mandatory conditions prescribed vide Annexure P-1. According to him, respondent No. 3 had not submitted annual turnover and net worth for the last three years which was required to be duly audited and income tax return of last three financial years supporting the information. He then argued that respondent No. 3 belongs to B.P.L. family. He also contended that one of the brothers from whom respondent No. 3 alleged to have raised loan also belongs to B.P.L. family. He lastly contended that the reserve price, on the recommendations made by the expert committee, was Rs. 30,78,000/- and respondents No. 1 and 2 have sold the property to respondent No. 3 for Rs. 27,15,000/-. 2. The Court had directed the Director, Tourism and Civil Aviation to be present in the Court vide order dated 6.7.2012. Mr. Arun Sharma, Director, Tourism and Civil Aviation was present in the Court 20.7.2012. He fairly submitted before the Court that there was violation of mandatory conditions of "Expression of Interest" notified, vide Annexure P-1. The Court appreciates the fair attitude of the Director, Tourism and Civil Aviation. We need more officers like Mr. Arun Sharma in order to maintain rule of law. 3. Mr. B.S. Chauhan has vehemently argued that respondent No. 3 was fully eligible to participate in the process. He then argued that petitioner has no locus standi to file the present petition. He further argued that petitioner has given the bid of only Rs. 17 lakhs and his client has given the bid of Rs. 27,15,000/-. He also argued that his client has raised loan from S/Sh. Shanti Swarup Sharma, Nitya Nand and Prem Sagar. 4. I have heard the learned Counsel for the parties and have perused the pleadings carefully. 5. He further argued that petitioner has given the bid of only Rs. 17 lakhs and his client has given the bid of Rs. 27,15,000/-. He also argued that his client has raised loan from S/Sh. Shanti Swarup Sharma, Nitya Nand and Prem Sagar. 4. I have heard the learned Counsel for the parties and have perused the pleadings carefully. 5. According to the "expression of interest", the parties were required to submit annual turnover and net worth in the last 3 years and duly audited financial statements and income tax return of last three financial years. Respondent-State in its reply has categorically admitted that respondent No. 3 has not submitted the audited annual turnover/net worth, financial statement and income tax returns for the last three years. Rather, as noticed above, Mr. Arun Sharma, Director, Tourism and Civil Aviation has apprised the Court that there was violation of mandatory conditions laid down vide Annexure P-1 while selling off Aabshar Cafe to respondent No. 3. Though the matter could be closed at this stage, but the Court has decided to hear the parties and adjudicate the matter in its entirety. 6. The financial bids in the case in hand were opened on 27.12.2008. According to the comparative statement in respect of Aabshar Cafe, petitioner has given the bid of Rs. 17 lakhs and respondent No. 3 has given the bid of Rs. 27,15,000/-. In one of the columns, it is stated that respondent No. 3 was an agriculturist and has not submitted audited financial statement files and income tax return. He has given his annual turn over from agriculture, i.e. Rs. 8 lakhs, i.e. by producing tomato, Shimla mirch, ginger, beans etc. The comparative statement was placed before the meeting held on 3.1.2009 for evaluating the "expression of interest" of the parties in respect of 3 cafes. 7. It is evident from the noting portion placed on record by the petitioner vide Annexure P-8 at page 128-A of the paper book that State has decided to got ahead with the EOI on the basis of valuation carried out by Mr. Chitkara, Mr. Chitkara has given the minimum reserve price of Rs. 30.78 lakhs. Petitioner has also placed on record the copies of the "expression of interest" submitted by respondent No. 3. It is placed at page 129 of the paper book. Chitkara, Mr. Chitkara has given the minimum reserve price of Rs. 30.78 lakhs. Petitioner has also placed on record the copies of the "expression of interest" submitted by respondent No. 3. It is placed at page 129 of the paper book. Respondent No. 3 has stated in the "expression of interest" that he was an agriculturist and he could not furnish audited financial statement and he was not income tax payee and also could not furnish income tax returns. According to him, his annual turn over from agriculture was Rs. 8 lakhs per annum, i.e. by producing tomato, Shimla mirch, ginger, beans etc. 8. Petitioner has placed on record copy of the B.P.L. certificate issued in favour of respondent No. 3 on 2.4.2010, vide Annexure P-7. Annual income of respondent No. 3 from agriculture has been assessed at Rs. 1050/- per annum as per Annexure FA placed at page 152 of the paper book. The bid has been opened on 27.11.2008 and the certificate showing respondent No. 3 belonging to B.P.L. family is dated 2.4.2010. Respondent No. 3 in his reply has admitted that he belongs to B.P.L. family; however, his explanation is that it is based on survey conducted in the year 2002. Respondent No. 3 has also stated in the reply that there was no condition of reserve price at the time of finalization of the bid. It is evident from the record that the minimum reserve price was Rs. 30.78 lakhs on the basis of evaluation done by Mr. Chitkara. Respondent No. 3 has filed supplementary affidavit for placing additional documents on record whereby he has tried to establish that he has raised loan from Sh. Shanti Swarup Sharma amounting to Rs. 17.25 lakhs vide Annexures R-1 and R-2 and Rs. 5 lakhs each from S/Sh. Nitya Nand and Prem Sagar, vide Annexures R-3 and R-4. Surprisingly enough, one of the brothers of respondent No. 3 from whom he has raised loan, i.e. Sh. Nitya Nand also belongs to B.P.L. family. The copy of certificate, showing Nitya Nand belonging to B.P.L. family, has been placed on record by the petitioner vide Annexure PB. 9. The conditions imposed vide Annexure P-1 were mandatory and not directory. Surprisingly enough, one of the brothers of respondent No. 3 from whom he has raised loan, i.e. Sh. Nitya Nand also belongs to B.P.L. family. The copy of certificate, showing Nitya Nand belonging to B.P.L. family, has been placed on record by the petitioner vide Annexure PB. 9. The conditions imposed vide Annexure P-1 were mandatory and not directory. Respondent No. 3 ought to have supplied the annual turn over and net worth for the last 3 years duly supported by audited financial statement and income tax return of the last three years. Committee constituted by the respondent-State has over looked this condition and has committed grave illegality. However, the situation has been salvaged by the Director, Tourism and Civil Aviation by making a fair statement before this Court that there was violation of the conditions contained in the "expression of interest". There was no relaxation clause contained in Annexure P-1 and despite that the Committee had decided to go ahead with the bidding process, which led to issuance of "expression of interest" in favour of respondent No. 3 on 2.3.2010, which further led to execution of sale deed on 31.3.2010. Respondent No. 3 has not given his income as per "expression of interest" submitted by him, which is at page 130 of the paper book. He has given his annual turn over from agriculture Rs. 8 lakh per annum, i.e. by producing tomato, Shimla Mirch, ginger, beans etc. He has given false details. If he had the annual turn over of Rs. 8 lakh per annum, there was no occasion for him to raise loan from his relations. Rather, his agriculture income, as per Annexure PA at page 152, was Rs. 1050/- per annum duly certified by the Patwari concerned. It appears that petitioner's bid initially was for Rs. 17 lakhs. He has raised his offer to Rs. 30 lakhs as per Annexure P-4 dated 9.4.2009. This could not be taken into consideration by the respondent-State. 10. As far as the question of locus standi is concerned, petitioner has participated in the bid process and his bid was lower than the bid of respondent No. 3. However, fact of the matter is that respondent No. 3 was not eligible as per mandatory conditions contained in Annexure P-1. 10. As far as the question of locus standi is concerned, petitioner has participated in the bid process and his bid was lower than the bid of respondent No. 3. However, fact of the matter is that respondent No. 3 was not eligible as per mandatory conditions contained in Annexure P-1. Petitioner has brought to the notice of the Court glaring illegality committed by the respondent-State while selling property to respondent No. 3 in violation of expressed condition contained in Annexure P-1. State largesse cannot be distributed against the norms prescribed. There has to be absolute fairness, reasonableness, transparency while dealing with the public property. This petition has been entertained by this Court in order to maintain rule of law. In case the petitioner had not approached this Court, the illegality committed by respondent-State could not be brought to the surface. The rigours of the locus standi have now been diluted by the Hon'ble Supreme Court. In this case, though the bid of the petitioner was lower than respondent No. 3, but he had the locus standi to raise the issue pertaining to illegality committed by respondent-State to sell the property in violation of the mandatory conditions and below the reserve price fixed, i.e. Rs. 30.78 lakhs. 11. Their Lordships of the Hon'ble Supreme Court in B.S.N. Joshi and Sons Ltd. Vs. Nair Coal Services Ltd. and Others, AIR 2007 SC 437 have held that the requirement in a tender can be classified into two categories: those which lay down the essential conditions of eligibility and the others which are merely ancillary or subsidiary to the main object to be achieved by the condition and if there are essential tender conditions, the same must be adhered to. If a party fails and/or neglects to comply with the requisite conditions which were essential for consideration of its case by the employer, it cannot supply the details at a later stage or quote a lower rate upon ascertaining the rate quoted by others. Their Lordships have further held that if there is no power of general relaxation of tender conditions, ordinarily the same shall not be exercised and the principle of strict compliance would be applied where it is possible for all the parties to comply with all such conditions fully. Their Lordships have held as under: 61. Their Lordships have further held that if there is no power of general relaxation of tender conditions, ordinarily the same shall not be exercised and the principle of strict compliance would be applied where it is possible for all the parties to comply with all such conditions fully. Their Lordships have held as under: 61. Law on the similar term has been laid down in M/s. Poddar Steel Corporation Vs. M/s. Ganesh Engineering Works and others, AIR 1991 SC 1579 , in the following terms : 6. It is true that in submitting its tender accompanied by a cheque of the Union Bank of India and not of the State Bank clause 6 of the tender notice was not obeyed literally, but the question is as to whether the said noncompliance deprived the Diesel Locomotive Works of the authority to accept the bid. As a matter of general proposition it cannot be held that an authority inviting tenders is bound to give effect to every term mentioned in the notice in meticulous detail, and is not entitled to waive even a technical irregularity of little or no significance. The requirements in a tender notice can be classified into two categories\027 those which lay down the essential conditions of eligibility and the others which are merely ancillary or subsidiary with the main object to be achieved by the condition. In the first case the authority issuing the tender may be required to enforce them rigidly. In the other cases it must be open to the authority to deviate from and not to insist upon the strict literal compliance of the condition in appropriate cases. 66. In the first case the authority issuing the tender may be required to enforce them rigidly. In the other cases it must be open to the authority to deviate from and not to insist upon the strict literal compliance of the condition in appropriate cases. 66. We are also not shutting our eyes towards the new principles of judicial review which are being developed; but the law as it stands now having regard to the principles laid down in the aforementioned decisions may be summarized as under: (i) If there are essential conditions, the same must be adhered to; (ii) If there is no power of general relaxation, ordinarily the same shall not be exercised and the principle of strict compliance would be applied where it is possible for all the parties to comply with all such conditions fully; (iii) If, however, a deviation is made in relation to all the parties in regard to any of such conditions, ordinarily again a power of relaxation may be held to be existing; (iv) The parties who have taken the benefit of such relaxation should not ordinarily be allowed to take a different stand in relation to compliance of another part of tender contract, particularly when he was also not in a position to comply with all the conditions of tender fully, unless the Court otherwise finds relaxation of a condition which being essential in nature could not be relaxed and thus the same was wholly illegal and without jurisdiction. 12. Their Lordships of the Hon'ble Supreme Court in Nagar Nigam, Meerut Vs. Al Faheem Meat Exports Pvt. Ltd and Others, (2006) 13 SCC 382 have held that the State within the meaning of Article 12 of the Constitution of India cannot distribute its largesse at its own sweet will. The Court can ensure that the statutory functions are not carried out at the whims and caprices of the officers of the Government and local body in an arbitrary manner. Their Lordships have held as under: 12. In this case, however, we are concerned with a different question. It is now a well settled principle of law that having regard to the provisions of Article 14 of the Constitution of India, a State within the meaning of Article 12 thereof cannot distribute its largesse at its own sweet will, vide Ramana Dayaram Shetty Vs. In this case, however, we are concerned with a different question. It is now a well settled principle of law that having regard to the provisions of Article 14 of the Constitution of India, a State within the meaning of Article 12 thereof cannot distribute its largesse at its own sweet will, vide Ramana Dayaram Shetty Vs. International Airport Authority of India and Others, AIR 1979 SC 1628 . The Court can ensure that the statutory functions are not carried out at the whims and caprices of the officers of the government/local body in an arbitrary manner. But the Court cannot itself take over these functions. 13. This Court time and again has emphasized the need to maintain transparency in grant of public contracts. Ordinarily, maintenance of transparency as also compliance of Article 14 of the Constitution would inter alia be ensured by holding public auction upon issuance of advertisement in the well known newspapers. That has not been done in this case. Although the Nagar Nigam had advertised the contract, the High Court has directed that it should be given for 10 years to a particular party (respondent No. 1). This was clearly illegal. 14. It is well settled that ordinarily the State or its instrumentalities should not give contracts by private negotiation but by open public auction/tender after wide publicity. In this case the contract has not only been given by way of private negotiation, but the negotiation has been carried out by the High Court itself, which is impermissible. 17. In Shri Sachidanand Pandey and Another Vs. The State of West Bengal and Others, AIR 1987 SC 1109 O. Chinnappa Reddy, J. after considering almost all the decisions of the Court on the subject summarized the legal propositions in the following terms: On a consideration of the relevant cases cited at the bar the following propositions may be taken as well established: State owned or public owned property is not to be dealt with at the absolute discretion of the executive. Certain precepts and principles have to be observed. Public interest is the paramount consideration. One of the methods of securing the public interest when it is considered necessary to dispose of a property is to sell the property by public auction or by inviting tenders. Though that is the ordinary rule, it is not an invariable rule. Certain precepts and principles have to be observed. Public interest is the paramount consideration. One of the methods of securing the public interest when it is considered necessary to dispose of a property is to sell the property by public auction or by inviting tenders. Though that is the ordinary rule, it is not an invariable rule. There may be situations where there are compelling reasons necessitating departure from the rule but then the reasons for the departure must be rational and should not be suggestive of discrimination. Appearance of public justice is as important as doing justice. Nothing should be done which gives an appearance of bias, jobbery or nepotism. The public property owned by the State or by an instrumentality of the State should be generally sold by public auction or by inviting tenders. This Court has been insisting upon that rule, not only to get the highest price for the property but also to ensure fairness in the activities of the State and public authorities. They should undoubtedly act fairly. Their actions should be legitimate. Their dealings should be above board. Their transactions should be without aversion or affection. Nothing should be suggestive of discrimination. Nothing should be done by them which gives an impression of bias, favoritism or nepotism. Ordinarily, these factors would be absent if the matter is brought to public auction or sale by tenders. That is why the Court repeatedly stated and reiterated that the State owned properties are required to be disposed of publicly. But that is not the only rule. As O. Chinnappa Reddy, J. observed, "that though that is the ordinary rule, it is not an invariable rule". There may be situations necessitating departure from the rule, but then such instances must be justified by compulsions and not by compromise. It must be justified by compelling reasons and not by just convenience. 18. The law is, thus, clear that ordinarily all contracts by the Government or by an instrumentality of the State should be granted only by public auction or by inviting tenders, after advertising the same in well known newspapers having wide circulation, so that all eligible persons will have opportunity to bid in the bid, and there is total transparency. 18. The law is, thus, clear that ordinarily all contracts by the Government or by an instrumentality of the State should be granted only by public auction or by inviting tenders, after advertising the same in well known newspapers having wide circulation, so that all eligible persons will have opportunity to bid in the bid, and there is total transparency. In our opinion this is an essential requirement in a democracy, where the people are supreme, and all official acts must be actuated by the public interest, and should inspire public confidence. 13. Their Lordships of the Hon'ble Supreme Court in Siemens Public Communication Networks Private Limited and another v. Union of India and others, (2008) 16 SCC 215 have held that the decision making process of Government or its instrumentality should exclude remotest possibility of discrimination, arbitrariness and favouritism and it should be transparent, fair, bona fide and in public interest. 14. Their Lordships of the Hon'ble Supreme Court in Karnataka State Forest Industries Corporation Vs. Indian Rocks, AIR 2009 SC 684 have held that although a writ of mandamus can be issued only when there exists a legal right in the writ petition and a corresponding legal duty on the part of the State, but then if any action on the part of the State is wholly unfair or arbitrary, the superior Courts are not powerless. Their Lordships have held as under: 39. There cannot be any doubt whatsoever that a writ of mandamus can be issued only when there exists a legal right in the Writ Petition and a corresponding legal duty on the part of the State, but then if any action on the part of the State is wholly unfair or arbitrary, the superior Courts are not powerless. Reliance placed by G.J. Fernandez Vs. State of Mysore and Others, AIR 1967 SC 1753 is not apposite. In that case itself it was held:-- Thus under Article 162 the State Government can take executive action in all matters in which the legislature of the State can pass laws. But Article 162 itself does not confer any rule making power on the State Government in the behalf. G.J. Fernandez (supra) was considered in ABL International Ltd. (supra) 15. Their Lordships of the Hon'ble Supreme Court in Meerut Development Authority Vs. But Article 162 itself does not confer any rule making power on the State Government in the behalf. G.J. Fernandez (supra) was considered in ABL International Ltd. (supra) 15. Their Lordships of the Hon'ble Supreme Court in Meerut Development Authority Vs. Association of Management Studies and Another, AIR 2009 SC 2894 have held that disposal of the public property by the State or its instrumentalities partakes the character of a trust. The methods to be adopted for disposal of public property must be fair and transparent providing an opportunity to all the interested persons to participate in the process. Their Lordships have held as under: 28. It is so well-settled in law and needs no restatement at our hands that disposal of the public property by the State or its instrumentalities partakes the character of a trust. The methods to be adopted for disposal of public property must be fair and transparent providing an opportunity to all the interested persons to participate in the process. 16. Their Lordships of the Hon'ble Supreme Court in Akhil Bhartiya Upbhokta Congress Vs. State of Madhya Pradesh and Others, AIR 2011 SC 1834 have held that every action/decision of the State and/or its agencies/instrumentalities to give largesse or confer benefit must be founded on a sound, transparent, discernible and well defined policy, which shall be made known to the public by publication in the official gazette and other recognized modes of publicity and such policy must be implemented/executed by adopting a non-discriminatory and non-arbitrary method irrespective of the class or category of persons proposed to be benefited by the policy. Their Lordships have held as under: 65. What needs to be emphasized is that the State and/or its agencies/instrumentalities cannot give largesse to any person according to the sweet will and whims of the political entities and/or officers of the State. Every action/decision of the State and/or its agencies/instrumentalities to give largesse or confer benefit must be founded on a sound, transparent, discernible and well defined policy, which shall be made known to the public by publication in the Official Gazette and other recognized modes of publicity and such policy must be implemented/executed by adopting a nondiscriminatory and non-arbitrary method irrespective of the class or category of persons proposed to be benefited by the policy. The distribution of largesse like allotment of land, grant of quota, permit licence etc. The distribution of largesse like allotment of land, grant of quota, permit licence etc. by the State and its agencies/instrumentalities should always be done in a fair and equitable manner and the element of favoritism or nepotism shall not influence the exercise of discretion, if any, conferred upon the particular functionary or officer of the State. 17. Their Lordships of the Hon'ble Supreme Court in Humanity and Another Vs. State of West Bengal and Others, AIR 2011 SC 2308 have held that bona fide ends cannot be achieved by questionable means specially when State is involved. Their Lordships have held as under: 43. This Court is unable to accept the aforesaid contention. It is axiomatic that in order to achieve a bona fide end, the means must also justify the end. This Court is of the opinion that bona fide ends cannot be achieved by questionable means, specially when the State is involved. This Court has not been able to get any answer from the State why on a request by the allottee to the Hon'ble Minister for Urban Development, the Government granted the allotment with remarkable speed and without considering all aspects of the matter. This Court does not find any legitimacy in the action of the Government, which has to act within the discipline of the constitutional law, explained by this Court in a catena of cases. We are sorry to hold that in making the impugned allotment in favour of the allottee, in the facts and circumstances of the case, the State has failed to discharge its constitutional role. 18. Their Lordships of the Hon'ble Supreme Court in Noida Entrepreneurs Association Vs. NOIDA and Others, AIR 2011 SC 2112 have held that the State or the public authority which holds the property for the public or which has been assigned the duty of grant of largesse etc, acts as a trustee and, therefore, has to act fairly and reasonably. Their Lordships have held as under: 38. The State or the public authority which holds the property for the public or which has been assigned the duty of grant of largesse etc., acts as a trustee and, therefore, has to act fairly and reasonably. Every holder of a public office by virtue of which he acts on behalf of the State or public body is ultimately accountable to the people in whom the sovereignty vests. Every holder of a public office by virtue of which he acts on behalf of the State or public body is ultimately accountable to the people in whom the sovereignty vests. As such, all powers so vested in him are meant to be exercised for public good and promoting the public interest. Every holder of a public office is a trustee. 39. State actions required to be non-arbitrary and justified on the touchstone of Article 14 of the Constitution. Action of the State or its instrumentality must be in conformity with some principle which meets the test of reason and relevance. Functioning of a "democratic form of Government demands equality and absence of arbitrariness and discrimination". The rule of law prohibits arbitrary action and commands the authority concerned to act in accordance with law. Every action of the State or its instrumentalities should neither be suggestive of discrimination, nor even apparently give an impression of bias, favouritism and nepotism. If a decision is taken without any principle or without any rule, it is unpredictable and such a decision is antithesis to the decision taken in accordance with the rule of law. 40. The Public Trust Doctrine is a part of the law of the land. The doctrine has grown from Article 21 of the Constitution. In essence, the action/order of the State or State instrumentality would stand vitiated if it lacks bona fides, as it would only be a case of colourable exercise of power. The Rule of Law is the foundation of a democratic society. (Vide: Erusian Equipment and Chemicals Ltd. Vs. State of West Bengal and Another, AIR 1975 SC 266 , Ramana Dayaram Shetty Vs. International Airport Authority of India and Others, AIR 1979 SC 1628 ; Haji T.M. Hassan Rawther Vs. Kerala Financial Corporation, AIR 1988 SC 157 ; Kumari Shrilekha Vidyarthi and Others Vs. State of U.P. and Others, AIR 1991 SC 537 and M.I. Builders Pvt. Ltd. Vs. Radhey Shyam Sahu and Others, AIR 1999 SC 2468 . 41. Power vested by the State in a Public Authority should be viewed as a trust coupled with duty to be exercised in larger public and social interest. Power is to be exercised strictly adhering to the statutory provisions and fact-situation of a case. "Public Authorities cannot play fast and loose with the powers vested in them". 41. Power vested by the State in a Public Authority should be viewed as a trust coupled with duty to be exercised in larger public and social interest. Power is to be exercised strictly adhering to the statutory provisions and fact-situation of a case. "Public Authorities cannot play fast and loose with the powers vested in them". A decision taken in arbitrary manner contradicts the principle of legitimate expectation. An Authority is under a legal obligation to exercise the power reasonably and in good faith to effectuate the purpose for which power stood conferred. In this context, "in good faith" means "for legitimate reasons". It must be exercised bona fide for the purpose and for none other. (Vide: Commissioner of Police, Bombay Vs. Gordhandas Bhanji, AIR 1952 SC 16 , Sirsi Municipality by its President Sirsi Vs. Cecelia Kom Francis Tellis, AIR 1973 SC 855 . The State of Punjab and Another Vs. Gurdial Singh and Others, AIR 1980 SC 319 The Collector (District Magistrate) Allahabad and Another Vs. Raja Ram Jaiswal, AIR 1985 SC 1622 ; Delhi Administration (Now N.C.T. of Delhi) Vs. Manohar Lal, AIR 2002 SC 3088 and N.D. Jayal and another v. Union of India and others, AIR 2004 SC 867 ). 19. Their Lordships of the Hon'ble Supreme Court in Centre for Public Interest Litigation and Others Vs. Union of India (UOI) and Others, AIR 2013 SC 3725 have held that the distribution process must be fair and transparent affording equal opportunity to all interested parties and wherever a contract is to be awarded or a licence is to be given, the public authority must adopt a transparent and fair method for making selections so that all eligible persons get a fair opportunity of competition. The State and its agencies/instrumentalities must always adopt a rational method for disposal of public property and no attempt should be made to scuttle the claim of the applicants. Their Lordships have held as under: 74. At the outset, we consider it proper to observe that even though there is no universally accepted definition of natural resources, they are generally understood as elements having intrinsic utility to mankind. They may be renewable or non renewable. They are thought of as the individual elements of the natural environment that provide economic and social services to human society and are considered valuable in their relatively unmodified, natural, form. They may be renewable or non renewable. They are thought of as the individual elements of the natural environment that provide economic and social services to human society and are considered valuable in their relatively unmodified, natural, form. A natural resource's value rests in the amount of the material available and the demand for it. The latter is determined by its usefulness to production. Natural resources belong to the people but the State legally owns them on behalf of its people and from that point of view natural resources are considered as national assets, more so because the State benefits immensely from their value. 75. The State is empowered to distribute natural resources. However, as they constitute public property/national asset, while distributing natural resources, the State is bound to act in consonance with the principles of equality and public trust and ensure that no action is taken which may be detrimental to public interest. Like any other State action, constitutionalism must be reflected at every stage of the distribution of natural resources. In Article 39(b) of the Constitution it has been provided that the ownership and control of the material resources of the community should be so distributed so as to best sub-serve the common good, but no comprehensive legislation has been enacted to generally define natural resources and a framework for their protection. Of course, environment laws enacted by Parliament and State legislatures deal with specific natural resources, i.e., Forest, Air, Water, Costal Zones, etc. 76. The ownership regime relating to natural resources can also be ascertained from international conventions and customary international law, common law and national constitutions. In international law, it rests upon the concept of sovereignty and seeks to respect the principle of permanent sovereignty (of peoples and nations) over (their) natural resources as asserted in the 17th Session of the United Nations General Assembly and then affirmed as a customary international norm by the International Court of Justice in the case of Democratic Republic of Congo v. Uganda. Common Law recognizes States as having the authority to protect natural resources insofar as the resources are within the interests of the general public. The State is deemed to have a proprietary interest in natural resources and must act as guardian and trustee in relation to the same. Constitutions across the world focus on establishing natural resources as owned by, and for the benefit of, the country. The State is deemed to have a proprietary interest in natural resources and must act as guardian and trustee in relation to the same. Constitutions across the world focus on establishing natural resources as owned by, and for the benefit of, the country. In most instances where constitutions specifically address ownership of natural resources, the Sovereign State, or, as it is more commonly expressed, 'the people', is designated as the owner of the natural resource. 85. As natural resources are public goods, the doctrine of equality, which emerges from the concepts of justice and fairness, must guide the State in determining the actual mechanism for distribution of natural resources. In this regard, the doctrine of equality has two aspects: first, it regulates the rights and obligations of the State vis-a-vis its people and demands that the people be granted equitable access to natural resources and/or its products and that they are adequately compensated for the transfer of the resource to the private domain; and second, it regulates the rights and obligations of the State vis--vis private parties seeking to acquire/use the resource and demands that the procedure adopted for distribution is just, non-arbitrary and transparent and that it does not discriminate between similarly placed private parties. 89. In conclusion, we hold that the State is the legal owner of the natural resources as a trustee of the people and although it is empowered to distribute the same, the process of distribution must be guided by the constitutional principles including the doctrine of equality and larger public good. 95. This Court has repeatedly held that wherever a contract is to be awarded or a licence is to be given, the public authority must adopt a transparent and fair method for making selections so that all eligible persons get a fair opportunity of competition. To put it differently, the State and its agencies/instrumentalities must always adopt a rational method for disposal of public property and no attempt should be made to scuttle the claim of worthy applicants. When it comes to alienation of scarce natural resources like spectrum etc., it is the burden of the State to ensure that a nondiscriminatory method is adopted for distribution and alienation, which would necessarily result in protection of national/public interest. 20. The disposal of public property without safeguarding the interest of the State amounts to colourable exercise of power. When it comes to alienation of scarce natural resources like spectrum etc., it is the burden of the State to ensure that a nondiscriminatory method is adopted for distribution and alienation, which would necessarily result in protection of national/public interest. 20. The disposal of public property without safeguarding the interest of the State amounts to colourable exercise of power. Their Lordships of the Hon'ble Supreme Court in Siddhu Matriculation Hr. Secondary School Vs. K. Shyam Sunder and Others, (2011) 8 SCC 737 have held that when power is exercised in bad faith to attain ends beyond the sanctioned purposes of power by simulation or pretension of gaining a legitimate goal, it is called colourable exercise of power. Their Lordships have held as under: 21. In The State of Punjab and Another Vs. Gurdial Singh and Others, AIR 1980 SC 319 , this Court held that when power is exercised in bad faith to attain ends beyond the sanctioned purposes of power by simulation or pretension of gaining a legitimate goal, it is called colourable exercise of power. The action becomes bad where the true object is to reach an end different from the one for which the power is entrusted, guided by an extraneous consideration, whether good or bad but irrelevant to the entrustment. When the custodian of power is influenced in exercise of its power by considerations outside those for promotion of which the power is vested, the action becomes bad for the reason that power has not been exercised bonafide for the end design. Accordingly, in view of the observations and discussions made hereinabove, the writ petition is allowed. The letter of intent dated 2.3.2010 and sale deed dated 31.3.2010 are quashed and set aside respondents No. 1 and 2 are directed to re-do the entire process for selling Aabshar Cafe, Dedgharat, District Solan within a period of three months from today strictly in accordance with law. Pending application(s), if any, including, CMP No. 8514 of 2012, also stands disposed of. There shall, however, be no order as to costs.