Page 202 - ELT_15th July 2020_Vol 373_Part 2

184 EXCISE LAW TIMES [ Vol. 373

icy inasmuch as it involves an element of pure chance or accident.
In matters involving award of contracts or grant of licence or per-
mission to use public property, the invocation of first-come-first-
served policy has inherently dangerous implications. Any person
who has access to the power corridor at the highest or the lowest
level may be able to obtain information from the Government files
or the files of the agency/instrumentality of the State that a particu-
lar public property or asset is likely to be disposed of or a contract is
likely to be awarded or a licence or permission is likely to be given,
he would immediately make an application and would become en-
titled to stand first in the queue at the cost of all others who may
have a better claim.
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 at-
tempt should be made to scuttle the claim of worthy applicants.
When it comes to alienation of scarce natural resources like spec-
trum etc., it is the burden of the State to ensure that a non-
discriminatory method is adopted for distribution and alienation,
which would necessarily result in protection of national/public in-
terest.
96. In our view, a duly publicised auction conducted fairly and
impartially is perhaps the best method for discharging this burden
and the methods like first-come-first-served when used for aliena-
tion of natural resources/public property are likely to be misused
by unscrupulous people who are only interested in garnering max-
imum financial benefit and have no respect for the constitutional
ethos and values. In other words, while transferring or alienating
the natural resources, the State is duty bound to adopt the method
of auction by giving wide publicity so that all eligible persons can
participate in the process.”
28. The issue of grant of state privileges by the process of auction alone
came up for answer in the Presidential Reference, since reported as Natural
Resources Allocation, In re, Special Reference No. 1 of 2012, (2012) 10
SCC 1. The Constitution Bench held that action of the State, whether it re-
lates to distribution of largesse, grant of contracts or allotment of land, is to
be tested on the touchstone of Article 14 of the Constitution. The action has
to be fair, reasonable, non-discriminatory, transparent, non-capricious, un-
biased, without favouritism or nepotism, in pursuit of promotion of healthy
competition and equitable treatment. It should conform to the norms which
are rational, informed with reasons and guided by public interest, etc. The
Court held :-
“107. From a scrutiny of the trend of decisions it is clearly per-
ceivable that the action of the State, whether it relates to distribution
of largesse, grant of contracts or allotment of land, is to be tested on
the touchstone of Article 14 of the Constitution. A law may not be
struck down for being arbitrary without the pointing out of a con-
stitutional infirmity as State of A.P. v. McDowell & Co., (1996) 3 SCC
709, has said. Therefore, a State action has to be tested for constitu-
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