- Court
- High Court of Punjab and Haryana
- Decided
- 4 December 2024
- Bench
- Arun Palli, Vikram Aggarwal
- Case no.
- CWP 22620/2024
Judgment
VIKRAM AGGARWAL, J.
1. The petitioner prays for the issuance of a writ of certiorari quashing the order dated 04.07.2024 (Annexure P-14), passed by respondent No.3-Haryana Shehri Vikas Pradhikaran, Panchkula (for short 'the respondent HSVP') vide which the claim of the petitioner in respect of residential plot No.2433, Sector-1, Phase-II, Hisar) (hereinafter referred to as the 'plot in dispute') has been declined despite the fact that she was the highest bidder, and further, to quash the impugned decision dated 22.01.2023 (Annexure P-11) vide which the petitioner was informed that her bid had not been accepted. The petitioner also seeks the issuance of a writ of mandamus directing the respondents to issue Letter of Intent (for short 'LOI') to them.
2. The facts, as emanating from the paper book are that the respondent-HSVP framed a policy dated 20.07.2022 (Annexure P-3) for the sale of commercial, residential, institutional properties and independent commercial sites.
On 27.11.2022, e-auction of various commercial properties in different sectors of Fatehabad, Hansi and Hisar was announced. The e-auction was to be held on
13.12.2022. The procedure for e-auction and allotment of plots was laid down in the Policy/Brochure (Annexure P-3). As the petitioner was desirous to purchase the plot in dispute, she registered herself in the said auction. An amount of Rs.2,69,800/- i.e. 5% of the reserve price of Rs.53,94,500/- was deposited as earnest money alongwith registration charges of Rs.1,000/-.
3. Having participated in the e-auction, the petitioner emerged as the highest bidder as depicted in the bid history (Annexure P-4). On that very day i.e.
13.12.2022, an e-mail (Annexure P-6) was received by the petitioner from respondent-HSVP that as per the policy dated 20.07.2022, the petitioner, being the highest bidder was required to make the required payment up to 15.12.2022. Accordingly, the petitioner deposited an amount of Rs.2,71,650/- to make a total of 10% of the quoted bid of Rs.54,14,500/-.
4. As per the policy dated 20.07.2022, after deposit of 10% of the quoted amount, the respondent-HSVP had to issue LOI in favour of the petitioner but it did not issue the same.
5. Instead of issuing LOI in favour of the petitioner, the respondent-HSVP refunded the whole amount as deposited by the petitioner, in the bank account of the petitioner without giving any intimation to her. Thereafter, the petitioner sent an e-mail dated 20.01.2023 (Annexure P-10) to respondent-HSVP seeking reasons for refund of the amount deposited by her. In pursuance to the same, respondent-HSVP responded vide e-mail dated 22.01.2023 (Annexure P-11) that the bid of the petitioner had been rejected as per Clause 17 of the E-auction policy/brochure.
6. Aggrieved by the action of the respondent-HSVP, the petitioner preferred CWP No.2544 of 2023 which was duly contested by the respondent-HSVP in which a stand was taken that the authorities were well within their right to accept or reject any bid or withdraw any or all the properties from e-auction or cancel/postpone the e-auction without assigning any reason. The said writ petition was disposed of vide order dated 12.03.2024 (Annexure P-13) directing the respondents to pass a speaking order within a period of two months from the date of the order.
7. Pursuant to the order dated 12.03.2024, the petitioner submitted a representation dated 23.04.2024 which was, however, rejected vide the impugned order dated 04.07.2024 (Annexure P-14) leading to the filing of the instant writ petition.
8. Learned counsel for the parties were heard.
9. It was strenuously urged by learned counsel representing the petitioner that the action of the respondent-HSVP in rejecting the highest bid given by the petitioner in the e-auction is completely illegal and arbitrary and, therefore, deserves to be quashed. Learned counsel referred to the terms and conditions of the policy and submitted that the power vested with the respondent-HSVP to accept or reject the bids has been exercised arbitrarily. Learned counsel submitted that this power had to be exercised judiciously and it would not mean that highest bids received by the HSVP were to be rejected by taking contradictory stands in different litigations with regard to the same auction. Reference was also made to the document (Annexure P-15) vide which the reserve price of residential/commercial plots to be auctioned on 13.12.2022 had been fixed to show that the reserve price had been fixed after approval of the same by the authorities and, therefore, there was no reason for HSVP to reject the highest
bids which were much above the reserve price. Reliance was also placed upon the judgment of the Supreme Court of India in the case of 'Eva Agro Feeds Pvt. Ltd. Vs. Punjab National Bank and Another', 2023 SCC Online 1138.
10. Learned counsel for the respondent-HSVP, on the other hand, opposed the submissions made by learned counsel for the petitioner and submitted that the action of the respondent-HSVP in not accepting the highest bid is completely justified as the respondent-HSVP was not to suffer a financial loss by accepting bids at a comparatively lower rate, though being higher than the reserve price. Specific reference was made to the relevant clause of the Policy/Brochure to submit that the respondent-HSVP was well within its authority to accept or reject even the highest bid. It was submitted that it is well settled by now that such actions do not call for any interference while exercising the power of judicial review.
11. We have given our thoughtful consideration to the issue in hand.
12. The facts are not in dispute. The petitioner emerged as the highest bidder qua the plot in dispute. After the decision rendered on 12.03.2024 in CWP No.2544 of 2023, the respondent-HSVP passed a speaking order dated 04.07.2024 thereby justifying its action of not accepting the highest bid. While justifying its action, reliance has been placed upon Clause 17 of the e-auction policy dated
20.07.2022:- "17. The Competent authority of HSVP reserves the right to accept or reject any bid or withdraw any or all the properties from e-auction or cancel/postpone the e-auction, without assigning any reason."
13. A perusal of the aforesaid Clause makes it manifestly clear that the right to accept or reject the bid was retained by the competent authority and it was specifically laid down that even the highest bid may be accepted or rejected
without assigning any reason. Be that as it may, on directions having been issued by this Court, a speaking order was passed after giving due hearing to the petitioner. It has been observed in the impugned order that the highest bid given by the petitioner was more than 20% below the average auction price of such property as a result of which the H1 bid of the disputed plot could not be accepted by the competent authority. We do not find any illegality in the said finding especially in view of Clause 17 (ibid). As regards the fixation of reserve price in Annexure P-15, the same would not come to the aid of the petitioner because of the reasons given in the impugned order about the bid being less than 20% of the average auction price of such a property. The judgment in the case of Eva Agro Feeds (supra) wherein it was held by the Supreme Court that reasons should be recorded for not accepting the highest bid would also not support the case of the petitioner because valid reasons have been given in the impugned order.
14. Now coming to the law on the subject, it is by now well settled that in the absence of a concluded contract, no right would accrue to the highest bidder. The Supreme Court of India was dealing with one such issue in the case of 'Haryana Urban Development Authority and Others Vs. M/s Orchid Infrastructure Developers Private Limited' 2017 (2) RCR (Civil) 145, where after the rejection of the bid of M/s Orchid Infrastructure Developers Private Limited, a suit for declaration had been filed. In that case, the plaintiff had given the highest bid which, as per the plaintiff had been accepted. Formal letter of allotment was, however, not issued and ultimately, the 10% amount deposited by the plaintiff was refunded on the ground that the bid had not been accepted. This action was challenged by way of a suit which was decreed by the trial Court. However, appeal against the same was allowed by the Court of the District Judge and the suit was dismissed. The High Court then allowed the second appeal and
restored the judgment and decree of the trial Court after which the matter reached the Apex Court and the Apex Court ultimately upheld the decision of the First Appellate Court and held that no right had accrued to the highest bidder. The Supreme Court of India while relying upon other decisions in the cases of 'State of Uttar Pradesh and Others Vs. Vijay Bahadur Singh and Others', (1982) 2 SCC 365, 'Laxmikant and Others Vs. Satyawan and Others', (1996) 4 SCC 208, 'Meerut Development Authority Vs. Association of Management Studies and Another', (2009) 6 SCC 171, 'M/s Star Enterprises and Others Vs. City and Industrial Development Corporation of Maharashtra Limited and Others',
(1990) 3 SCC 280 and 'Kalu Ram Ahuja and Another Vs. Delhi Development Authority and Another', (2008) 10 SCC 696, held as under:-"27. This Court in the case of State of Uttar Pradesh & Ors. v. Vijay Bahadur Singh & Ors. (1982) 2 SCC 365 has laid down that there is no obligation to accept the highest bid. The Government is entitled even to change its policy from time to time according to the demands of the time. - - - - - - - -- - - - - - - -
28. In Laxmikant & Ors. v. Satyawan & Ors. (1996) 4 SCC 208, this Court has laid down that in the absence of completed contract when the public auction had not culminated to its logical end before confirmation of the bid, no right accrued to the highest bidder. - - - - - - - -- - - - - - - -
29. In Meerut Development Authority v. Association of Management Studies & Anr.(2009) 6 SCC 171, this Court has laid down that a bidder has no right in the matter of bid except of fair treatment in the matter and cannot insist for further negotiation. The Authority has a right to reject the highest bid. - - - - - - - -- - - - - - - -
33. We are constrained to observe in the instant case that with respect to reserve price also, there was a hitch to fix and approve it right from the word go. It was a case of auction of big commercial tower having a
huge area of 9.527 acres. Only the reserve price of the same was forwarded for fixation to the Chief Administrator, whereas the reserve prices of other properties were fixed by the Administrator. When the bids were received, the Administrator considering the huge stakes involved, forwarded the matter to the Chief Administrator. However, the Chief Administrator washed off his hands and did not decide it and sent the matter back to the Administrator, clearly indicating that the Administrator was delegated with the power to decide the bids. Thus, under compelling circumstances and duly considering the reports, the Administrator had taken the decision to reject the bids not only of the plaintiff but also six others. For the first time in the history of State of Haryana, such big properties were put to hammer on the prices indicated. The hitch in fixing the reserve price also indicates that the reserve price was not determined in a fair manner in the instant case. Not only the plaintiff but HUDA also did not place the delegation of power on record of the courts below. None of the officials of HUDA had been examined. Only an Assistant ? a junior ranking person had been examined who was not posted there when the auction was held and came only in 2008. As the property was a commercial tower in Sector 29, Gurgaon, with huge commercial complex, the first appellate court was right in dismissing the suit.
34. Plaintiff came to the court for mandatory injunction, for issuance of allotment letter without payment of court fee also. It was incumbent upon the plaintiff to pay the ad valorem court fee as prevailing and the valuation of the suit should not have been less than the bid amount of Rs.111.75 crores, as rightly held by the first appellate court. The plaintiff is directed to pay the ad valorem court fee not only before the trial court but also before the High Court. Plaintiff is directed to deposit the court fee within two months from today, as payable.
35. Resultantly, the appeal is allowed. The judgment and decree passed by the High Court is set aside and that of the first 7 of 14 appellate court is restored. In the facts and circumstances of the case, we impose costs of Rs.5 lakhs on the plaintiff/respondent to be deposited as : L 2.5 lakhs in the Advocates' Welfare Fund and Rs.2.5 lakhs in the Supreme Court Employees' Welfare Fund within a period of two months from today."
15. A similar issue arose before a Co-ordinate Bench of this Court in the case of 'Dr. Sarika Gautam and Others Vs. Haryana Shehari Vikas
Pradhikaran (HSVP) and Others' (CWP-19447-2021, decided on 27.09.2011). The petitioner therein had submitted an online bid for a plot in Sector 38, Gurugram for ₹1,87,99,300/-. Despite being the highest bid, the same was not accepted nor was any specific order passed informing the petitioners as regards the fate of the bid. Here also, the clauses of the E-auction policy were considered and it was held that there would be no vested rights with the petitioner which would obligate the respondents to accept the highest bid of the petitioners. It was held that to the contrary, the highest bidder only had a right of consideration for such bid to be evaluated against the reserve price determined by the committee. The contention regarding deemed acceptance of the highest bid was rejected. Clause 28 of the said policy which obligated the acceptance or rejection of the H-1 bid within a period of 07 working days was also examined and it was held that such provisions were not mandatory and they are incorporated only to prevent undue delays on the part of the competent authority in taking a final decision:- "14. Counsel has not been able to point out any provision under the E-auction policy which would obligate the respondents to accept the highest bid. There would be no such right vested with the petitioners. To the contrary the highest bidder only has a right of consideration and for such bid to be evaluated against the reserve price determined by the Committee. 15. In the facts of the case there is no material for us to conclude that any contract came into force between the petitioners and the respondents. The right of the highest bidder at public auctions has been examined repeatedly by the Apex Court as also this Court and the consistent view taken is that State or the authority which can be held to be State within the meaning of Article 12 of the Constitution is not found to accept the highest bid. A reference in this regard may be made to the decisions of the Hon'ble Supreme Court in Trilochan Mishra etc. v. State of Orissa(1971) 3 SCC 153: AIR (1971) 3 SC 733: State of Orissa v. Harinarayan Jaiswal (1972) 2 SCC 36: AIR 1972 SC 1816; Union of India v. Blum Sen Walaiti Ram (sic), (1969) 3 SCC 146 : AIR 1971 SC 2295 and State of U.P. v. Vijay Bahadur Singh (1982) 2 S.C.C.
365. Same view was taken by a Division Bench of this Court in Laxmi Narain Vs., State of Haryana and another (2009) 1 RCR (Civil ) 556.
16. The contention raised by counsel as regards a deemed acceptance of the highest bid and on the basis thereof a concluded contract having come into force between the petitioners and the respondents in the light of Clause 28 of the E-auction policy, is not well founded."
Another such view was taken by a Co-ordinate Bench of this Court in the case of Mahavir Singh Vs. Haryana Shehari Vikas Pradhikaran (HSVP) and Others, 2023 (4) RCR (Civil) 121, in which it was held as under: "8. The Apex Court also in Orchid Infrastructure's case (supra) examined the issue of the competency of the Administrator to accept or reject the bid and also the issue whether there was legality regarding the rejection of the bid and held that any action where there are sufficient reasons to indicate the stand of the authorities and there are valid reasons and on account of public money being involved, interference should be minimal. - - - - - - - -- - - - - - - -
11. It is in such circumstances, the respondents have taken a conscious decision to refund the amount. The reasons, thus, are apparent on the file and, therefore, in our considered opinion that the same has been done in view of the settled position of law. Merely because the petitioner was the highest bidder, there is no vested right as such on the basis of which a writ of mandamus can be issued to him for confirmation of the auction. There are no such allegations that the process of rejection of bids was mala fide or intended to grant benefit to another set of persons and, therefore, interference would not be warranted as one has to keep in mind the fact that the larger issue would be of public funds involved which would be affected if the reserve price was not properly fixed. The stipulations as such of the clause which provided that the action had to be taken within a specified period cannot be held to be mandatory and binding as such and it has only been put in for the purpose of expediting the process so that the authorities should act at the earliest. The perusal of the files would go on to show that the larger picture all over the State as such was examined and a conscious decision was thereafter taken and there have been valid reasons as such in taking such stand. We do not find any reasonable ground as such to take a PRINCE CHAWLA contrary view keeping in mind the above settled position and are also of
the considered opinion that the petitioner has not been able to make out a case as such for interference."
16. The law is, therefore, very clear that the highest bidder would have no right in the absence of her bid having been accepted by the competent authority.
17. Having considered the arguments addressed by learned counsel for the parties, the relevant Clause of the policy dated 20.07.2022 as has been discussed in the preceding paragraphs, the impugned order dated 04.07.2024 (Annexure P-14) and impugned decision dated 22.01.2023 (Annexure P-11) as also the law on the subject, we are of the considered opinion that no interference is called for in the impugned order which is well reasoned and perfectly legal and valid in view of the power vested in the respondent-HSVP by virtue of the clause incorporated in the policy/brochure. The impugned order also does not appear to have been passed for reasons which may be found to be extraneous and malafide warranting interference. In view of the facts and circumstances aforementioned, we find the writ petition to be devoid of merit and the same is accordingly dismissed.
(ARUN PALLI) (VIKRAM AGGARWAL) JUDGE JUDGE
Pronounced on: 04.12.2024 Prince Chawla Whether speaking/reasoned : Yes/No. Whether reportable : Yes/No.
Case details
Parties and counsel
IN THE HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH CWP-22620-2024 Reserved on: 25.09.2024 Pronounced on: 04.12.2024 Monika Chopra ….Petitioner Versus State of Haryana and Others ....Respondents CORAM: HON'BLE MR. JUSTICE ARUN PALLI HON'BLE MR. JUSTICE VIKRAM AGGARWAL Present: Mr. Harsh Vardhan Shehrawat, Advocate, for the petitioner. Mr. Deepak Sabherwal, Advocate, for the respondents. ****
Source: High Court of Punjab and Haryana, through the eCourts High Court services, via the Indian High Court Judgments open dataset by Dattam Labs (CC BY 4.0). Text was extracted from the official PDF and may contain conversion errors. Check the official PDF before relying on it.