NEW BIHAR BIRI LEAVES CO. & ORS. versus STATE OF BIHAR & ORS.

NEW BIHAR BIRI LEAVES CO. & ORS. versus STATE OF BIHAR & ORS.

Clause 4(bb) in Tender Notices and statutory agreements is inconsistent with and repugnant to Section 9(1), proviso of the Act (which contains a built-in-warranty of merchantable quality), and is invalid. Condition 13 of the Tender Notice and Agreement is reasonable, does not violate Articles 14 or 19, and is valid; it assures minimum public revenue from sale of Kendu leaves and balances risks and profits evenly between State and purchasers. Petitioners cannot approbate advantageous terms and reprobate disadvantageous ones after accepting and working out the contract.

Parties
Petitioner: New Bihar Biri Leaves Co. & Ors.; Petitioner: Y.S. Chitale, K.K. Sinha, S.K. Sinha; Respondent: State of Bihar & Ors.; Respondent: Miss A. Subhashini
Jurisdiction
India
Judgment Date
06 January 1981
Procedural Posture
Original Jurisdiction (writ Petitions and Criminal Appeal) / Judgment (final Disposition)
Outcome
Petitions and appeal dismissed (except clause 4(bb) declared invalid).
Legal Topics
State Monopoly, Restrictions on Trade, Fundamental Rights, Reasonableness, Bid Acceptance, Contractual Obligations
Constitutional Law Contract Law Administrative Law State Monopoly Restrictions on Trade Fundamental Rights Reasonableness Bid Acceptance +1 more

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Parties

New Bihar Biri Leaves Co. & Ors.

Petitioner

Y.S. Chitale, K.K. Sinha, S.K. Sinha

Petitioner

State of Bihar & Ors.

Respondent

Miss A. Subhashini

Respondent

Procedural Posture

Original Jurisdiction (writ Petitions and Criminal Appeal) / Judgment (final Disposition)

Legal Issues

  1. 1 Whether clause 13 and clause 4(bb) of the Bihar Kendu Leaves (Control of Trade) Act/Rules/Agreement violate Articles 14 and 19 of the Constitution.
  2. 2 Whether contractual conditions imposed by the State can restrict the fundamental right under Article 19(1)(g).
  3. 3 Whether clause 4(bb) is repugnant to Section 9(1), proviso of the Act.

Ratio Decidendi

Clause 4(bb) in Tender Notices and statutory agreements is inconsistent with and repugnant to Section 9(1), proviso of the Act (which contains a built-in-warranty of merchantable quality), and is invalid. Condition 13 of the Tender Notice and Agreement is reasonable, does not violate Articles 14 or 19, and is valid; it assures minimum public revenue from sale of Kendu leaves and balances risks and profits evenly between State and purchasers. Petitioners cannot approbate advantageous terms and reprobate disadvantageous ones after accepting and working out the contract.

Court Disposition

Petitions and appeal dismissed (except clause 4(bb) declared invalid).

Orders

  • Clause 4(bb) in Tender Notices and statutory Agreement declared invalid for inconsistency with Section 9(1) proviso of the Act.
  • All writ petitions and criminal appeal dismissed, except for above.