Rule 47(1) Of Assam Panchayat Rules Only Caps Highest Bid For Market Settlement, Doesn't Prescribe Lowest Viable Rate: Gauhati High Court

The Gauhati High Court has held that Rule 47(1) of the Assam Panchayat (Financial) Rules, 2002 only prescribes an upper limit for settlement of markets and does not contemplate or permit reading any minimum or “lowest viable” bid requirement into the statutory scheme.

The Court further held that administrative notices or assumptions drawn from tender-related figures cannot be used to import conditions into Rule 47(1) which the Rule itself does not provide for.

Justice Devashis Baruah, while examining the scope of Rule 47(1), held, “A perusal of the above quoted Rule would show that by virtue of the said Rule, the settlement of hats, ferries or fisheries by inviting sealed tender, affixing Court fee stamp has to be for such amount not exceeding 10% of the average settled value of the last three years for the respective hats, ferries, fisheries, ponds, etc. The said Rule only puts a cap on the upper limit of the value of bid, but does not mention anything on the lowest value of the bid.”

“It is also the opinion of this Court that the Tender Notice dated 07.06.2025, the Continuation Notice dated 16.06.2025 as well as Rule 47(1) of the Rules of 2002, do not mandate that the rate to be quoted should be between the average of the last three years settlement value and 10% of the last three years of the settlement value. The submission of the petitioners if allowed in the opinion of this Court would be incorporating a condition which neither is a part of the Tender conditions nor the Rules of 2002,” the Court further clarified.

As per Rule 47(1) of the Rules of 2002,

“47.(1) Such markets or ferries or fisheries or pounds as are vested in or placed under the control and administration of the Panchayat under Sections 105, 106, 107, 108 and 109 of the Act shall be settled by inviting sealed tenders affixing court fee stamp for such amount as has been prevailing otherwise and earnest money not below two percent of the minimum bid-value for sale and settlement of the right to collect the authorised fees in respect of the markets or ferries or the fisheries and the pounds for a period coinciding with one Panchayats financial year. Earnest money so received shall be entered in a Register in FORM No. 12 to the Schedule to these rules.”

The above ruling was delivered in a writ petition whereby the petitioners challenged the settlement of the Balisatra Half Weekly Market in favour of one of the respondents. Notably, the settlement was made pursuant to a tender process initiated by the Chief Executive Officer, Nagaon Zilla Parishad.

As per the factual matrix of the case, a Tender Notice was issued for settlement of various markets for the year 2025-2026, including the Balisatra Half Weekly Market. Thereafter, a Continuation Notice was issued, wherein the settlement values of the previous three years, the average thereof, and the figure arrived at by adding ten per cent to the said average were mentioned.

It is the case of the petitioners, as noted by the Court, that relying upon the figures mentioned in the continuation notice, they were under the impression that the settlement would be made in accordance with those figures. The petitioners did not participate in the tender process. Subsequently, they came to know that the market had been settled in favour of the respondent for an annual value of Rs. 66,23,866/-, after proportionate calculation.

Aggrieved by the said settlement, the petitioners approached the Court contending that the settlement was contrary to the tender-related notices and the applicable rules, which led to the filing of the present writ petition.

After examining Rule 47(1), the Court held that the Rule does not mention anything on the lowest value of the bid and only restricts settlement beyond the prescribed upper limit.

The Court opined, “the basis on which the present writ petition has been structured appears to be misconceived, inasmuch as, though highest viable rate to be quoted had been fixed, but the lowest viable rate has not been fixed. It also does not mandate that the bid value should be between the average of the last three years settlement rate i.e. Rs.1,48,00,350/- and 10% increase of the average of the last three years settlement rate i.e. Rs.1,62,80,385/.”

The Court also took note of the fact that the petitioners had not participated in the tender process.

The Court observed, “Nothing is brought to the notice of this Court that the petitioners have the capacity to participate in such tender process. The petitioners have also not sought for clarification in respect to Clause 12 of the Tender Notice and the Continuation Notice. Infact, only on 03.10.2025, the petitioners submitted a representation. The status of the petitioners are nothing, but that of interlopers and as such, it is also the opinion of this Court that the petitioners herein lack locus to challenge the bid settlement in favour of the respondent No.5.”

Accordingly, the Court dismissed the petition and upheld the settlement made in favour of the respondent.

Case No.: WP(C) No. 6324 of 2025

Case Title: Hementa Kumar Nath and Another v. State of Assam and Others

Click Here To Read Judgement