Introduction:
The Calcutta High Court has set aside an interim order restraining an e-auction for settlement of a ferry ghat, holding that the writ petitioner had approached the Court after participating unsuccessfully in the very auction process it subsequently challenged, without disclosing this material fact. The Division Bench of Justice Shampa Sarkar and Justice Arjun Ray Mukherjee observed that such non-disclosure was significant because the Single Judge had been asked to interfere with a concluded auction without being apprised that the writ petitioner itself had submitted a bid and failed to secure the contract.
The proceedings arose from an intra-court appeal in MAT 1503 of 2026, filed by Nowda Thana Ferry Service Co-operative Society Limited against the interim order dated July 31, 2026, passed in WPA 15822 of 2026. The dispute concerned the Bhandardaha (Humaipur) Ferry Ghat, situated over the Jalangi river, and the process undertaken by the competent authorities for granting its lease through e-auction.
The appellant, Nowda Thana Ferry Service Co-operative Society Limited, had emerged as the successful bidder after offering ₹4.90 lakh for a three-year lease of the ferry ghat. Following its successful bid, the appellant had also deposited ₹1,63,334 towards the lease rent for the first year. A letter of acceptance had been issued in its favour, indicating that the auction process had progressed beyond the stage of merely inviting bids.
The writ petitioner, Hariharpara Thana Ferry Service Co-operative Society Limited, had also participated in the same e-auction. However, it was unsuccessful and did not emerge as the highest or successful bidder. Despite having participated in the auction, the society subsequently approached the High Court and challenged the decision to conduct the e-auction.
Before the Single Judge, the petitioner contended that its representation seeking extension of the existing settlement of the ferry ghat had remained pending and that the authorities had acted illegally by issuing the e-auction notices while the representation was yet to be decided. On July 31, 2026, the Single Judge granted interim protection, thereby restraining further steps pursuant to the auction process.
The successful bidder challenged that interim order before the Division Bench. The appellate court found that the interim order had been passed without adequate consideration of the settled parameters governing the grant of interlocutory injunctions. In particular, the Bench held that the Single Judge had not sufficiently examined whether the writ petitioner had established a prima facie case, where the balance of convenience lay, and whether refusal of interim relief would cause irreparable injury.
The Division Bench also attached considerable importance to the fact that the auction had already concluded before the interim order was passed. A successful bidder had been identified, a letter of acceptance had been issued and the successful bidder had deposited a substantial amount towards the first year’s lease. In these circumstances, the Court held that the balance of convenience did not favour restraining the concluded auction process.
The case also required the Division Bench to examine the interaction between Rule 281(iii) of the West Bengal Land and Land Reforms Manual, 1991 and the statutory powers vested in Panchayat Samitis under the West Bengal Panchayat Act, 1973 and the Panchayat Samiti Administration Rules, 2008. The writ petitioner sought to rely upon the Manual’s provisions concerning preference to local boatmen’s cooperative societies and hereditary Patnis in appropriate ferry settlements.
The Bench, however, held that the provisions of the Land Manual could not override the statutory powers of the Panchayat Samiti where the ferry ghat had vested in the Panchayat authorities. The Court recognised the power of the competent Panchayat authority to manage such public resources and grant leases, including through a transparent auction mechanism.
The judgment also brings into focus the broader principle that public property cannot ordinarily be dealt with through opaque or preferential arrangements when an open and competitive auction is legally available. According to the Bench, e-auction promotes transparency, maximises public revenue and provides eligible participants with an equal opportunity to compete.
The Court further considered the public interest associated with the ferry service. The ferry ghat was not merely a commercial asset but an important means of transportation for villagers crossing the Jalangi river for business, livelihood, education and other essential activities. The Court therefore examined the dispute not merely as a contest between two cooperative societies but against the larger requirement that public resources and public services be administered in the public interest.
Against this background, the Division Bench ultimately set aside the July 31 interim order and permitted the authorities to proceed on the basis of the concluded auction. At the same time, it clarified that any steps taken pursuant to the auction would remain subject to the final outcome of the pending writ petition.
Arguments of the Parties:
The appellant, Nowda Thana Ferry Service Co-operative Society Limited, challenged the interim order principally on the ground that it had been granted without taking into account the material circumstances surrounding the auction. The appellant had participated successfully in the e-auction, emerged as the highest or successful bidder with a bid of ₹4.90 lakh for the three-year lease and had already complied with the financial requirement by depositing ₹1,63,334 towards the first year’s lease rent.
The appellant’s grievance was that, despite these developments, the Single Judge had restrained the authorities from proceeding further pursuant to the auction at the instance of a society which had itself participated in the same process but had failed to secure the contract. According to the appellant, the writ petitioner could not challenge the auction as though it had been an outsider to the process when the record demonstrated that it had voluntarily submitted its own bid.
The appellant also relied upon the fact that the auction had already concluded before the interim order was issued. A letter of acceptance had been granted to the successful bidder, thereby creating a concrete legal and commercial interest in its favour. The appellant therefore contended that the interim order disrupted a completed process rather than preserving the status quo at an earlier stage.
The appellant further questioned the basis upon which the writ petitioner claimed a right to continuation or extension of the existing settlement. Its case, in substance, was that a pending representation seeking extension of an existing arrangement could not automatically confer a right to insist that the authorities refrain from initiating a fresh and transparent auction.
The appellant also supported the authority’s decision to resort to e-auction. It was submitted that where a public asset is capable of generating revenue and competing eligible parties are available, an open auction provides a transparent mechanism for determining the highest available offer. Interference with such a process merely because an unsuccessful participant subsequently challenged it would undermine the integrity of public auctions and discourage genuine competition.
The writ petitioner, Hariharpara Thana Ferry Service Co-operative Society Limited, on the other hand, had challenged the e-auction notices on the ground that its earlier representation seeking extension of the existing settlement had not been considered. Its case before the Single Judge was that the authorities had proceeded to issue the auction notices illegally while the representation remained pending.
The petitioner also sought to rely upon Rule 281(iii) of the West Bengal Land and Land Reforms Manual, 1991. The provision, as relied upon by the petitioner, contemplated preference in certain circumstances for local boatmen’s cooperative societies and hereditary Patnis in the settlement of ferries. The petitioner sought to use this framework to support its claim against the decision to proceed through the e-auction process.
The underlying submission was that the authorities were required to consider the existing rights, representations and preferences applicable to ferry settlements before proceeding to a fresh auction. The petitioner therefore sought judicial protection against the auction process pending determination of its grievance.
However, the Division Bench noted a crucial fact which had not, according to the appellate court, been adequately brought to the attention of the Single Judge: the writ petitioner had itself participated in the e-auction. This meant that the society had not merely objected to the auction in principle. It had entered the competitive process, submitted its own bid and, after failing to obtain the contract, approached the Court.
The respondents’ position, as reflected in the appellate proceedings, was consequently supported by the record of the auction. The authorities had proceeded through an e-auction and had accepted the successful bid after completion of the process. The successful bidder had already made the required deposit. Thus, the State and Panchayat authorities had a substantial basis for contending that the concluded auction ought not to be interrupted without compelling legal grounds.
The Division Bench also considered the institutional position of the Panchayat Samiti. The ferry ghat had vested in the Panchayat Samiti, and the relevant statutory framework empowered the Panchayat authorities to administer such properties and enter into lease arrangements. The writ petitioner’s reliance on the Land Manual, therefore, had to be considered alongside the statutory powers conferred by the West Bengal Panchayat Act and the applicable Rules.
The parties’ competing positions thus presented two distinct questions. The first was whether the writ petitioner had a legally enforceable basis to demand continuation or extension of the existing settlement instead of a fresh auction. The second was whether, once the auction had been concluded and a successful bidder had been selected, an interim order should nevertheless prevent the authorities from acting upon that result.
The Division Bench ultimately found that the second question was decisive at the interim stage. Even assuming that the writ petition raised an arguable question regarding the legality of the auction, the grant of interim relief required the Court to apply the established principles governing interlocutory injunctions. The fact that the petitioner had participated in the auction, coupled with the absence of disclosure of that fact, materially affected the equitable basis for granting such relief.
Court’s Judgment:
The Division Bench of Justice Shampa Sarkar and Justice Arjun Ray Mukherjee allowed the appeal and set aside the interim order dated July 31, 2026. The Court’s reasoning rested on several interconnected principles concerning candour before the court, the requirements for interim injunctions, the sanctity of concluded public auctions and the management of public property.
A significant part of the judgment concerned the conduct of the writ petitioner. The Bench observed that the Single Judge was “probably” not informed that the writ petitioner had itself participated in the e-auction. According to the Division Bench, this was not a peripheral fact. It went directly to the circumstances in which the writ petition was instituted and interim relief was sought.
The Bench observed that the writ petitioner had “took a chance” by submitting its bid in the auction and, after being unsuccessful, approached the Court and obtained interim protection. The Court regarded the failure to disclose participation in the auction as a material misrepresentation, particularly because the interim order was obtained without the successful bidder being before the court.
The principle underlying this aspect of the judgment is well established: a party seeking discretionary and equitable relief must approach the court with complete candour and disclose material facts. Interim injunctions are not ordinarily granted as a matter of right. A litigant seeking such relief must disclose circumstances that may affect the court’s assessment of the merits, balance of convenience and equities between the parties.
Here, knowledge that the petitioner itself had competed in the auction could materially affect the assessment of its challenge. The Court therefore considered the omission particularly significant.
The Division Bench further found that the Single Judge had not adequately applied the traditional three-fold test for interim injunctions. Before restraining an administrative or public authority from acting upon a concluded decision, the Court ordinarily examines whether the applicant has a prima facie case, whether the balance of convenience lies in its favour and whether refusal of interim protection would result in irreparable injury.
The first requirement, a prima facie case, does not mean that the petitioner must establish its entire case conclusively at the interim stage. It does, however, require the Court to be satisfied that there is a serious question requiring adjudication and that the applicant has a legally sustainable basis for seeking protection.
The second consideration, balance of convenience, requires the Court to compare the consequences of granting and refusing interim relief. The Court must consider which course would cause greater prejudice to the respective parties and to the public interest.
The third requirement concerns irreparable injury. Interim relief is ordinarily justified where the threatened harm cannot adequately be compensated or remedied at the conclusion of the proceedings.
Applying these principles, the Division Bench found that the balance of convenience favoured allowing the concluded auction to proceed. By the time the Single Judge passed the interim order, the auction had already been completed, the appellant had emerged as the successful bidder, a letter of acceptance had been issued and money had already been deposited towards the first year’s lease.
The Court therefore distinguished the present case from one where judicial intervention is sought before a tender or auction is completed. Once the process had culminated in a successful bid, intervention had the potential to unsettle a transaction already acted upon by the public authority and the successful bidder.
The Court’s reasoning was also influenced by the nature of the property involved. The ferry ghat was a public resource vested in the Panchayat Samiti. The authorities therefore had a responsibility to administer it in accordance with law and in a manner that served public interest.
In this context, the Bench endorsed the use of e-auction as a mechanism for maximising revenue. An open electronic auction permits eligible participants to compete transparently and reduces the possibility of arbitrary selection. Where public property is to be leased, the State or public authority is ordinarily expected to adopt a fair, transparent and competitive process unless there are legally recognised reasons for adopting another method.
The Court observed that public properties should not ordinarily be leased out except through an auction process where auction is the appropriate mechanism. Such a process must provide a level playing field to all eligible bidders. The emphasis on equal opportunity is particularly relevant in the present case because both cooperative societies had actually participated in the same e-auction.
The Division Bench also examined the writ petitioner’s reliance on Rule 281(iii) of the West Bengal Land and Land Reforms Manual, 1991. The petitioner sought to invoke the provision relating to preference for local boatmen’s cooperative societies and hereditary Patnis in certain ferry settlements.
The Court, however, held that the Land Manual could not override the statutory powers conferred upon Panchayat Samitis by the West Bengal Panchayat Act, 1973 and the Panchayat Samiti Administration Rules, 2008. Since the ferry ghats in question had vested in the Panchayat Samiti, the statutory authorities were entitled to exercise their powers of administration and settlement in accordance with the governing legislation.
This aspect of the judgment is important because administrative manuals and executive instructions cannot ordinarily displace powers or procedures created by statute. Where Parliament or the State Legislature has conferred a particular power upon a statutory authority, an administrative manual must operate consistently with that statutory framework rather than restricting or overriding it.
The Court therefore rejected the suggestion that Rule 281(iii) could, by itself, prevent the competent Panchayat authority from conducting an e-auction. The existence of a preference provision had to be considered within the larger statutory scheme governing the management of the ferry ghat.
The Bench also invoked Section 41(ha) of the Specific Relief Act, 1963. The provision reflects legislative policy against granting injunctions where such an injunction would impede or delay projects or works involving public interest. Although the present dispute concerned a ferry ghat rather than a conventional infrastructure project, the Court considered the public character of the ferry service and the consequences of interrupting arrangements made through a public auction.
The ferry service was being used by villagers for crossing the Jalangi river in connection with business, livelihood and education. The Court therefore considered that the functioning of the ferry had an important public dimension. The issue could not be approached exclusively as a private commercial dispute between two cooperative societies.
This consideration reinforced the Court’s conclusion that public interest lay in allowing the ferry service and the lawful administrative arrangement to continue rather than permitting an interim order to indefinitely stall the concluded auction.
The Court’s observations concerning public revenue were equally significant. Where a public authority leases a public asset, the process should ordinarily be structured so that public resources are not disposed of arbitrarily or for inadequate consideration. E-auction, by inviting competing bids, can facilitate price discovery and ensure that the authority receives the best available financial return consistent with the law.
At the same time, revenue maximisation cannot be treated as the only consideration whenever public property is involved. Public authorities must also consider the common good, statutory requirements and the public purpose associated with the resource. The Division Bench’s reasoning reflects both considerations: the auction should maximise revenue where appropriate, while the ferry service itself must continue to serve the villagers who depend upon it.
The Court therefore permitted the authorities to proceed on the basis of the concluded auction. However, it carefully preserved the position of the writ petitioner by clarifying that all steps taken pursuant to the auction would remain subject to the final outcome of the pending writ petition.
This qualification is important. The Division Bench did not finally adjudicate every substantive issue raised in the writ petition. It did not declare that the writ petition itself was without merit. Instead, it held that the interim order could not be sustained because the requirements for such extraordinary interlocutory protectin had not been demonstrated and because material circ