Introduction:

In a strong reaffirmation of constitutional principles governing distribution of State largesse, the Andhra Pradesh High Court, through Justice Gannamaneni Ramakrishna Prasad, held that the practice of allocating multiple commercial spaces by State instrumentalities to a single individual is a “pernicious practice” that encourages monopolistic behaviour, fosters vested interests, and defeats the very purpose of public welfare embedded in the Directive Principles of State Policy, the Court was dealing with a batch of writ petitions filed by V. Rabbani Basha against the State of Andhra Pradesh and the Andhra Pradesh State Road Transport Corporation (APSRTC), wherein the petitioner challenged two distinct actions of the Corporation, first, the termination of his licences to run businesses across several open commercial spaces at Yerraguntla Bus Station, and second, the issuance of a fresh tender notification for the same spaces after termination, the petitioner had earlier secured licences for multiple open spaces within the bus station premises, which, according to APSRTC, were meant for specific categories of small commercial activities, however, allegations surfaced that the petitioner had defaulted in payment of licence fees and had sub-let the spaces to third parties in blatant violation of licence conditions, upon these allegations, APSRTC terminated the licences and proceeded to issue a fresh tender, the petitioner approached the High Court contending that termination was illegal and that the fresh tender was arbitrary, but during the course of adjudication, the Court widened the scope of scrutiny and examined not only the legality of termination but also the larger policy implications of allowing one individual to corner multiple public commercial spaces, linking the issue directly with Articles 38(2) and 39(b) of the Constitution which mandate reduction of inequality and equitable distribution of material resources of the community, the judgment thus emerged not merely as a dispute resolution between a licensee and a public corporation, but as a constitutional reminder that State property must be administered to promote social justice, prevent monopoly, and ensure fair opportunity to those in genuine need of livelihood.

Arguments:

On behalf of the petitioner, it was argued that the termination of licences was arbitrary, disproportionate, and violative of principles of natural justice, it was contended that the petitioner had been lawfully granted licences through due tender process and had been running businesses at the bus station for years, and that sudden termination without giving adequate opportunity to rectify alleged defaults was unjustified, the petitioner further claimed that the so-called third parties occupying the spaces were illegal encroachers and not sub-tenants, and therefore, he could not be blamed for their presence, it was also argued that APSRTC acted with mala fide intent by terminating the licences and immediately issuing a fresh tender, thereby depriving the petitioner of his vested contractual rights, the petitioner further challenged the fresh tender notification, arguing that it was tailored to exclude him and lacked fairness, while on the other hand, APSRTC categorically denied the petitioner’s claims and submitted that the termination was justified due to repeated violations of licence conditions, the Corporation produced letters from the sub-tenants themselves stating that they were paying regular rent to the petitioner, thereby conclusively establishing unauthorized subletting, it was argued that subletting was expressly prohibited under the licence agreement and amounted to serious breach justifying termination, APSRTC also pointed out that the petitioner had defaulted in payment of licence fees and had not conducted the businesses for which the spaces were originally allotted, instead converting them into revenue-generating sublet properties, the Corporation further submitted that public property at bus stations is meant to support small vendors and economically weaker sections, and that monopolization of multiple spaces by one individual defeats that objective, APSRTC defended issuance of fresh tender as a necessary administrative step to ensure continuous commercial utility of the bus station and revenue for the Corporation, however, it fairly conceded that the tender conditions did not expressly bar a single person from bidding for multiple spaces, which allowed concentration of licences in one hand, though it maintained that such concentration had earlier occurred through open competitive bidding and not by favoritism, nevertheless, the State defended termination as lawful, necessary, and in public interest.

Judgment:

After an exhaustive analysis of facts, licence conditions, and constitutional principles, the Andhra Pradesh High Court delivered a judgment of wide policy significance, the Court first addressed the challenge to termination and held that the petitioner had clearly violated licence conditions by subletting the open spaces to third parties and by defaulting in payment of licence fees, the Court relied upon documentary evidence including letters of sub-tenants admitting payment of rent to the petitioner, and observed that the petitioner offered no credible rebuttal except claiming that those occupants were illegal encroachers, which the Court rejected as a dishonest defence, the Court categorically held that the petitioner had approached the Court with “unclean hands” by falsely portraying his own sub-tenants as trespassers, and therefore, he was not entitled to any equitable relief, the Court further held that violation of licence terms regarding purpose of business, non-payment of dues, and unauthorized subletting fully justified termination, and hence, the writ petitions challenging termination were devoid of merit and deserved dismissal, however, the Court did not stop there and proceeded to examine the systemic issue revealed by the case, namely the allotment of multiple open spaces to a single individual, the Court termed this practice as “pernicious” and observed that it creates an ecosystem encouraging subletting, profiteering, and development of vested interests, thereby distorting the very purpose of State largesse, the Court emphatically held that State property cannot be distributed in a manner that facilitates monopoly or concentration of economic opportunity in one hand, and that such distribution must align with Article 39(b) which requires material resources of the community to be distributed to subserve the common good, and Article 38(2) which mandates reduction of income inequalities, the Court observed that by allowing one person to obtain several licences, the authorities had failed in their constitutional duty and had indirectly enabled commercial exploitation of public property, the Court further held that such practices are contrary to social justice and livelihood-based economic distribution, particularly in public spaces like bus stations meant to support small vendors, hawkers, and self-employed persons, turning to the fresh tender notification, the Court found that the new tender still did not restrict a single person from bidding for more than one open space, thereby perpetuating the same unhealthy and unconstitutional practice, the Court thus quashed the tender notification dated 04.01.2024, directed refund of all deposits to bidders including the petitioner within three weeks, and mandated APSRTC to issue a fresh tender explicitly providing that one person cannot bid for more than one licence for an open space, thereby ensuring fair distribution, preventing monopoly, and aligning tender policy with constitutional objectives, thus, while upholding termination of licences, the Court intervened to correct institutional policy failure and directed reform in public tendering to protect broader public interest, making the judgment not only corrective but also transformative in nature.