2016 (5) TMI 1409 - SC - Indian Laws

Biding - reserve price sale eligibility - Himachal Tourism inviting bids from interested parties for outright purchase of sites located at three places in Himachal Pradesh including Caf Aabshar in District Solan situated at 3 kilometers from town named Kandaghat - Held that - Mr. Bakshi, learned Advocate is right in his submission that no reserve price was fixed while inviting bids from interested parties. The Expert Committee may have indicated a figure as reserve price, however, the advertisement did not indicate any. Precisely for this reason, even the bid given by respondent No.1 was far below the figure of ₹ 30,78,000/-. The High Court was clearly in error in accepting this plea on behalf of respondent No.1 Now, the question that remains to be considered is whether requirement to furnish Annual Turnover and Net Worth for last three years was a mandatory condition for infraction of which the bid made by the appellant had to be rejected. We, therefore, allow this Appeal and set aside the decisions rendered by the Single Judge and the Division Bench of the High Court in the present matter. The Letter of Intent dated 02.03.2010 and consequent Sale Deed dated 31.03.2010 in favor of the appellant are held valid and correct.

Summary

Issues:
Challenge to correctness of judgment and order by High Court regarding bid process for outright purchase of a site, Compliance with conditions of bid process, Validity of bid submission, Essential conditions of eligibility in bid process.

Analysis:

1. Challenge to High Court Judgment:
The appeal challenges the correctness of the judgment and order passed by the High Court of Himachal Pradesh regarding the bid process for the outright purchase of a site. The appellant participated in the bid process for a café site, and the highest bid submitted by the appellant was accepted, leading to the execution of a Sale Deed in the appellant's favor. However, respondent No.1, who had submitted a lower bid, filed a Writ Petition alleging non-compliance with the conditions of the bid process.

2. Compliance with Bid Process Conditions:
The main contention revolved around the requirement for bidders to submit their annual turnover and net worth for the last three years as stipulated in the advertisement. The Single Judge of the High Court held that this condition was mandatory and that the bid submitted by the appellant should have been rejected for non-compliance. The Division Bench upheld this view, leading to the dismissal of the appellant's appeal.

3. Validity of Bid Submission:
The appellant argued that the condition regarding the submission of annual turnover and net worth was not an essential condition for the bid process. The Supreme Court analyzed the nature of this condition, emphasizing that it was ancillary to ensure prompt payment of the bid amount and not a continuous financial obligation. The Court held that the authorities were justified in not strictly enforcing this condition, especially since the appellant had paid the bid amount promptly and executed the Sale Deed.

4. Essential Conditions of Eligibility:
Referring to the case law, the Supreme Court clarified that essential conditions of eligibility must be rigidly enforced, while ancillary conditions could be deviated from in appropriate cases. In this context, the Court determined that the condition regarding annual turnover and net worth did not fall under essential conditions, as its purpose was limited to ensuring timely payment of the bid amount, not a sustained financial commitment.

In conclusion, the Supreme Court allowed the appeal, setting aside the judgments of the Single Judge and the Division Bench of the High Court. The Court held the Letter of Intent and Sale Deed in favor of the appellant as valid, dismissing the Writ Petition filed by respondent No.1. The amount deposited by respondent No.1 was ordered to be returned with accrued interest. The appeal was disposed of without any order as to costs.