Home Case Index All Cases Indian Laws Indian Laws + SC Indian Laws - 2017 (1) TMI SC This
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2017 (1) TMI 1774 - SC - Indian LawsRejection of bid relating to the commercial tower - non-speaking order - Maintainability of suit in absence of concluded contract - Competency of Administrator to accept/reject bid - Legality of rejection of bid. Maintainability of suit in absence of concluded contract - HELD THAT - In the absence of a concluded contract, i.e. in the absence of allotment letter and acceptance of highest bid, the suit by the plaintiff was wholly misconceived. Even if non-acceptance of the bid was by an incompetent authority, the court had no power to accept the bid and to direct the allotment letter to be issued. Merely on granting the declaration which was sought that rejection was illegal and arbitrary and by incompetent authority, further relief of mandatory injunction could not have been granted, on the basis of findings recorded, to issue the allotment letter, as it would then become necessary to forward the bid to competent authority Chief Administrator - for its acceptance, if at all it was required. Competency of Administrator to accept/reject bid - HELD THAT - The plaintiff has not questioned the delegation of power before the courts below in any manner whatsoever. We decline to examine the submission raised by learned counsel for the plaintiff in this Court that there is no delegation of power under section 51(4) and the power of the Chief Administrator could have been delegated only by the State Government not by HUDA under section 51(1) as per its order dated 13.9.1989. In the absence of challenge to legality of delegation order dated 13.9.1989, and the plaintiff being guilty of suppressio veri, it is not entitled to urge the aforesaid submission so as to invalidate the statutory delegation of power made by HUDA under section 51(1) - it is apparent that the Administrator had the power to reject a bid, not only being the Presiding Officer as per terms and condition N0.4 of auction but otherwise also he had the power. Thus, the decision of the High Court in setting aside the auction on the aforesaid ground cannot be said to be legally sustainable. Legality of rejection of bid - HELD THAT - When it is apparent from the communication that the reports were considered and what was contained in the report was very much pleaded in the written statement, mere non-production of report was not of any significance in the instant case. We are satisfied that the rejection of the bid by the Administrator was absolutely proper and justified and was beyond the pale of judicial scrutiny. The Administrator had the right to reject the bids and he had rejected it on sufficient ground, duly considering the materials on record as is apparent from the communication dated 21.9.2004. In the interest of the public, revenue of the State and in the interest of HUDA the huge property was saved from being plundered. In the instant case reasons have been mentioned in the rejection order and the nature of reports has also been sufficiently explained. Thus the rejection of seven different bids in the auction reflects that there was due application of mind by the concerned authority and rejection could not be said to be illegal, arbitrary or sans of reason - 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. The judgment and decree passed by the High Court is set aside and that of the first appellate court is restored - Appeal allowed.
Issues Involved:
1. Maintainability of the suit in the absence of a concluded contract. 2. Competency of the Administrator to accept/reject the bid. 3. Legality of the rejection of the bid. Detailed Analysis: 1. Maintainability of the Suit in the Absence of a Concluded Contract: The Supreme Court examined whether the suit could be maintained for declaratory relief and mandatory injunction in the absence of a concluded contract. The Court noted that the plaintiff prayed for a declaration that the rejection of the bid was illegal, but this did not entitle the plaintiff to a mandatory injunction for the issuance of a formal allotment letter. The Court emphasized that there was no concluded contract as no allotment letter was issued. The highest bidder has no vested right to have the auction concluded in their favor, and the Government or its authority could validly retain the power to accept or reject the highest bid in the interest of public revenue. The Court cited previous judgments to support this view, concluding that the suit was not maintainable for the relief sought due to the absence of a concluded contract. 2. Competency of the Administrator to Accept/Reject the Bid: The Court addressed the plaintiff's claim that there was no delegation of power to the Administrator. HUDA placed on record the delegation of power made to the Administrator on September 13, 1989, under Section 51 of the Haryana Urban Development Authority Act, 1977. This delegation allowed the Administrator to accept or reject auction bids for commercial/residential/industrial sites. The Court found that the plaintiff had not come to the court with clean hands and had suppressed the delegation order. The Administrator's power to reject the bid was further supported by the terms and conditions of the auction, which stated that the presiding officer reserved the right to reject any bid without assigning any reason. Thus, the Court concluded that the Administrator had the power to reject the bid. 3. Legality of the Rejection of the Bid: The Court examined whether the rejection of the bid by the Administrator was illegal or arbitrary. It found that the rejection was based on reports and recommendations from the Auction Committee, which indicated that the prices fetched were on the lower side compared to other urban estates. The Court noted that the rejection was not limited to the plaintiff's bid but included six other bids as well. The reasons for rejection were adequately explained in the written statement filed by HUDA, and the decision was made in the interest of public revenue. The Court cited previous judgments to support the view that the highest bid does not have to be accepted and that the authority has the right to reject bids for valid reasons. The Court concluded that the rejection of the bid was proper, justified, and beyond judicial scrutiny. Conclusion: The Supreme Court allowed the appeal, set aside the judgment and decree passed by the High Court, and restored the judgment and decree of the first appellate court. The Court imposed costs of ?5 lakhs on the plaintiff/respondent, to be deposited in the Advocates’ Welfare Fund and the Supreme Court Employees’ Welfare Fund within two months.
|