Right To Carry On Trade Under Article 19 Does Not Confer Any Right On Individual To Compel Govt To Enter Into A Contract: Delhi High Court

The Delhi High Court has observed that neither Article 19 nor any other provision of the Constitution of India recognizes a right inhering in an individual to compel the Government to enter into a contract.

Justice Yashwant Varma added that it is only when the State choses to enter into a contract by inviting bids and offers that it must follow a fair and transparent process of selection and ensure that all eligible parties are placed on an even pedestal.

The Court thus dismissed a plea challenging a 2018 Circular issued by the Department of Revenue in the Ministry of Finance with reference to earlier circulars issued by the Central Board of Indirect Taxes and Customs.

The impugned Circular laid in place a procedure for disposal of unclaimed and uncleared cargo in terms of the provisions made in sec. 48 of the Customs Act, 1962. It adopted a revised procedure for disposal of such cargo.

The petitioner, an Auctioneer or Auction Agent was aggrieved by the stipulation contained in the Circular prescribing that unclaimed or uncleared cargo shall be disposed of by way of an e-auction to be conducted by the Metal Scrap Trade Corporation Limited. The grievance was with respect to the exclusion of other auction agencies under the revised procedure.

While the petitioner was registered with the Delhi Government as an empanelled auctioneer, it also claimed to have provided services to the Central Government on earlier occasions acting as an auction agent.

The respondents authorities referred to the circumstance of the auction of goods being conducted by different agencies at various ports leading to inordinate delays and a breakdown of a cohesive system leading to substantial revenue losses being caused to the Government.

According to the respondents, these factors compelled them to reconsider the procedure to be adopted and to identify a competent single agency, which may be entrusted with the task of auction of unclaimed and uncleared cargo.

Thus, the question before the Court was whether the petitioner could claim an indefeasible or a constitutional right to be empanelled by the Centre for the purposes of auctioning of unclaimed and uncleared goods?

"The Court notes that while it is true that the State when it seeks to enter into the contractual field must comply with the mandate of Article 14 of the Constitution, neither Article 19 nor any other provision of our Constitution recognizes a right inhering in an individual to compel the Government to enter into a contract," the Court observed.

Referring to relevant judgments on the subject, the Court observed that the petitioner could not claim a fundamental right which may compel the Centre to necessarily enlist it for the purposes of auctioning of uncleared or unclaimed goods.

"All that Articles 14 and 19 of the Constitution mandate is to place the respondents under an obligation to ensure that as and when they do decide to invite tenders or bids or invite persons to enter into a contract with an organ of the State, it adopts a fair and non-arbitrary criterion for award of contract," the Court added.

Accordingly, the plea was dismissed as being misconceived.

Case Title: ACCURATE AUCTIONEERS v. UNION OF INDIA & ANR

Citation: 2022 LiveLaw (Del) 876

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