2014 (4) TMI 1138 - SC - Indian Laws

Cancellation of tender process - discrepancies crept in the process of transfer of the land in favour of the respondent - Held that - According to the material placed on record, the land concerned involves significant amount of public money. Therefore, its transfer in favour of the respondent attracts the greatest amount of responsibility and caution. The competent valuer had already determined the registered value of land at ₹ 4,24,72,124/-. Therefore, it was the responsibility of the concerned authority to ensure all steps which should have been undertaken to sell the land at a minimum cost of ₹ 4,24,72,124/- or above instead of its attempt to sell the same at a lower price merely on the pretext that no one would come up to purchase the land at the valuer s price or that since the land is an encroached land, the lower price is justified cannot be accepted. The strong reliance placed by the learned senior counsel, Mr. Mehta on the report of the Joint Registrar of Co- operative Societies, is the basis for the High Court for grant of relief in favour of the respondent is wholly untenable in law and therefore, the same cannot be accepted by this Court. The High Court should have noticed the above relevant aspects of the case in passing the impugned order which would certainly affect the public interest. In the light of the legal principle laid down by this Court with regard to Public Trust Doctrine in Mahesh Chandra s case (1992 (2) TMI 367 - SUPREME COURT) we are inclined to observe that the liquidator did not act fairly and reasonably in the best interest of the public of the State whose interest he is required to uphold. As per the material evidence put on record, the liquidator and the concerned authority did not take any step to improve the condition of the land and sell it at reasonable and standard price prevalent at the time of sale of the property in question. Hence, we hold that the tender process initiated by the appellants is not legal and is liable to be set aside. We direct the concerned authority to issue fresh notice of tender for selling the land. The notice shall be made available in government websites and other local and national newspapers so as to encourage and invite more bidders. In the meanwhile, the authority shall take all necessary steps to improve and restore the condition of the land so as to make the purchase of the land free from legal encumbrances. Since, the respondent had paid up the entire bid amount, it is entitled to refund of the entire amount. Further, since it is also proved that the amount paid by the respondent has been used to pay the arrears, the respondent is entitled to interest for the amount paid @7% p.a. from the date of payment till the date of refund.

Summary

Issues Involved:
1. Validity of the cancellation of the tender process.
2. Delay in filing the appeal.
3. Compliance with government instructions for alienation of tea garden land.
4. Determination of the correct market value of the land.
5. Fairness in the tender process and adherence to the Public Trust Doctrine.

Issue-wise Detailed Analysis:

1. Validity of the Cancellation of the Tender Process:
The appellants questioned the correctness of the tender process cancellation. The tender for the sale of Chincoorie Tea Estate, measuring 9000 bighas, was floated without prior government approval, as required by letter no. RSS 573/94/25 dated 26.3.2001. The Liquidator cancelled the tender process on 21.4.2007, citing unjustifiable price quotes and additional conditions imposed by one of the bidders. The High Court initially restrained the initiation of a fresh tender process and later directed the execution of the sale deed in favor of the respondent. However, the Supreme Court found that the tender process was flawed due to non-compliance with government instructions and discrepancies in the process.

2. Delay in Filing the Appeal:
The appellants filed a Review Petition which was dismissed by the High Court due to a delay of 9 months. The Supreme Court noted that the delay was due to unavoidable government procedures and cited the case of G. Ramegowda, Major and Ors. v. Special Land Acquisition Officer, Bangalore, emphasizing that public interest should not suffer due to procedural delays. The Court condoned the delay, stating that the High Court erred in dismissing the appeal on this ground, given the substantial public interest involved.

3. Compliance with Government Instructions for Alienation of Tea Garden Land:
The tender process was initiated without the required prior approval from the Government of Assam. The Supreme Court highlighted the necessity of following government instructions and found that the appellants failed to comply with the procedural requirements, rendering the tender process invalid.

4. Determination of the Correct Market Value of the Land:
The bid amount of Rs. 1.11 crores for 9000 bighas was significantly lower than the market value. The Joint Registrar of Co-operative Societies had valued the land at Rs. 4,24,72,124/-. The Supreme Court noted that the appellants did not take adequate steps to ensure the land was sold at its correct market value, which was necessary to protect public interest and prevent loss to the public exchequer.

5. Fairness in the Tender Process and Adherence to the Public Trust Doctrine:
The Supreme Court emphasized the importance of fairness and reasonableness in the tender process, referring to the Public Trust Doctrine. The Court found that the liquidator and concerned authorities did not act in the best interest of the public by failing to improve the condition of the land and sell it at a reasonable price. The principles laid down in Mahesh Chandra v. Regl. Manager, U.P.F.C. were applied, stressing the need for public functionaries to act prudently and ensure maximum advantage in the sale of public property.

Conclusion:
The Supreme Court set aside the High Court's order dated 2.2.2012, condoned the delay in filing the appeal, and directed the issuance of a fresh tender notice for the sale of the land. The Court mandated that the notice be widely publicized to attract more bidders and instructed the authorities to improve the land's condition. The respondent was entitled to a refund of the bid amount with interest at 7% per annum from the date of payment till the date of refund. The judgment underscored the necessity of adhering to legal and procedural requirements, ensuring fairness, and protecting public interest in governmental transactions.