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TMI Blog2006 (11) TMI 689X X X X Extracts X X X X X X X X Extracts X X X X ..... s. Reserve price of this plot was fixed at ₹ 167.40 crores @ ₹ 83,700/- per sq. mtrs. of the plot area and ₹ 37,200/- for the built-up area. The petitioner gave bid at ₹ 170.001 crores which was admittedly the highest bid in respect of the said plot in question, and as per the terms of the auction the petitioner had deposited an amount of about ₹ 42.5 crores being 25% of the bid amount. After expiry of more than one month from the date of auction, the petitioner was informed by the DDA through their letter dated 04.04.2006 stating that the bid offered by the petitioner was not approved by the competent authority, i.e., Vice- Chairman, Delhi Development Authority/respondent . Since there was no reason or ground contained in the said letter rejecting the bid of the petitioner, Therefore, the petitioner sought to know the reasons by taking recourse under the provision of Right to Information Act and through this process, the petitioner came to know the detailed history of various bids as invited by the DDA in respect of the same plot prior to the aforesaid bid in question. The petitioner has given details of all these bids and the same are reproduced as u ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . In the present auction, the Reserve Price was increased from ₹ 90.00 Crores to 167.40 Crores. Despite raising almost double the Reserve Price, the multiple bidding has taken place and the bid has been received, which is quite satisfactory, considering the fact that CBD Shahdara is not a very good location for Hotel plots considering its distance from the Airport and other major destination of Delhi. Hence the bid is recommended for acceptance. 4 . Equally important would be to reproduce the observations of the Member (Finance) when he had recommended re-auction of the said plot: In Plot No. 1, the bid price is ₹ 37,778/- per sq.m. In the recent commercial auction on 23.3.06, in Kondli Gharoli, East Delhi, the auction price range is between ₹ 75,960 psq.m. To ₹ 126,068 psq.m. ₹ 37,778 psq.m. seems on the lower side. We may go for re-auction to realize the real value. 5. Needless to state that the competent authority, i.e., the Vice-Chairman had put a seal on the said advise of the Member (Finance) and thereafter the said rejection of the bid was communicated to the petitioner which action of the respondent is assailed in the present writ petition ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 1,26,068/- per sq. meter. Mr. Ajay Verma further submits that the power to accept the bid ultimately lies with the competent authority and it is not necessary that if the bid is above the reserve price, then under all circumstances such a bid is to be accepted. The evaluation of the bid as to whether the same is competitive enough to reflect the market value of the plot, is done subsequently by the competent authority as per Clause 3.2(v) of the terms and conditions of the auction which reads as under: The Officer conducting the auction shall normally accept the highest bid subject to confirmation by the competent authority provided that the highest bid amount is above the reserve price mentioned in the Press advertisement document/ announced in the auction and is found to be competitive enough to reflect the market value of the plot. 7 . Based on the above Clause the counsel for the DDA says that action of the respondent is neither illegal nor arbitrary and the same cannot be interfered with. 8. Delhi Development Authority which was constituted under the provision of Section 3 of the Delhi Development Act is the nodal agency for urban planning and its implementation in Delhi. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t CBD Shahdara include shopping/office complex, wholesale, Service Centre facilities, cultural, hotel and housing functions. On Commercial Plot No. 9 B & 9 C a Commercial-cum-Multiplex is already coming up. Plot No. 9 D has also been disposed of as commercial plot. 9 . It is, thus, evident that large number of bidders turned out to participate in the said auction of Hotel plot No. 01, Central Business District (East), Shahdara, Delhi, taking into consideration, the potentiality of opening a hotel at the said site on account of the Common Wealth Games of 2010. 10. There can be no denial of the fact that there is a wide discretion conferred on the respondent to accept or not to accept a bid in spite of the same being a highest bid and such decision of the DDA may not be open to question unless there is a clear cut case of arbitrariness, mala fide, procedural irregularity or there is a total nonapplication of mind in rejecting the bid of the highest bidder. In the present facts of the case, there are no allegations of mala fides against the respondent and, Therefore, we will be testing the decision of the respondent on the touchstone of arbitrariness, non-application of mind and p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to participate not knowing as to what would be the fate of even a highest bidder. 11. Normally, this Court would have been reluctant to interfere with the decision of the respondent as it is respondent who is the final authority as far as the approval of bid is concerned in terms and conditions of the said auction, but in the present case the decision arrived at by the respondent for re-auction on the basis of a plot of 66 sq. meters to 121.50 sq.mtrs. that too in a shopping/office complex, clearly shows a complete non-application of mind on the part of the approving authority. 12 . It is true that the law of judicial review in relation to actions of a statutory authority and in relation to discretionary exercise of power by the statutory authority is limited, in that, save and except determining the legality of a statutory action within the parameters of reasonableness as understood in Wednesbury's case, judicial interference has to be avoided. In the decision in Tata Cellular's case reported as AIR 1996 SC 11, principles as under noted were laid down by the Hon'ble Supreme Court: 1. The modern trend points to judicial restraint in administrative action; 2. The ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... kha Vidyarthi etc. etc. v. State of U.P. and Ors. reported in : AIR1991SC537 . 35. It is now too well settled that every State action, in order to survive, must not be susceptible to the vice of arbitrariness which is the crux of Article 14 of the Constitution and basic to the rule of law, the system which governs us. Arbitrariness is the very negation of the rule of law. Satisfaction of this basic test in every State action is sine qua non to its validity and in this respect, the State cannot claim comparison with a private individual even in the field of contract. This distinction between the State and a private individual in the field of contract has to be borne in the mind. 36. The meaning and true import of arbitrariness is more easily visualized than precisely stated or defined. The question, whether an impugned act is arbitrary or not, is ultimately to be answered on the facts and in the circumstances of a given case. An obvious test to apply is to see whether there is any discernible principle emerging from the impugned act and if so, does it satisfy the test of reasonableness. Where a mode is prescribed for doing an act and there is no impediment in following that proc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f other officers from Programme Assistant (CL) to Principal Commissioner are placed at pages 78 and 79 of the paper book. It would be interesting to note that when the DDA had fixed the reserve price of the plot in question, the prices of the two plots which were sold in East Delhi at Karkardooma were not taken into consideration by holding that the rates of these plots being single storied and of different sizes cannot be taken into consideration for fixing the reserve price for the hotel plot. Relevant portions from the notes and proceedings-sheet of the DDA as placed at page 98,100-101 are reproduced as under: 1.CBD Shahdara: The price fixed by the Price Fixation Committee and approved by the VC was ₹ 17,800/-. Now the price has been fixed as ₹ 49,000/-. Finance has taken the current auction zonal rates of 2005-2006 as ₹ 82,729/- per sq.m. This plot was earlier put in the auction in March, 2004 and prior to that also, this plot did not get any bid. In March, 2004, the rate was ₹ 20,000/- per sqm. And no bid was received. It is further mentioned that very few plots have been auctioned in the east zone this year, and this can not become basis for fixing t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Kondli, Gharoli which were sold in auction held on 23.03.2006 are of very small size measuring from 66 sq mtrs. to 121.50 sq.mtrs. and the size of the hotel plot in question is about 20,000 sq.mtrs. and, Therefore, there cannot be any comparison of the two sites after taking into consideration the wide disparity in the size of the plot. It is also submitted that the plots at Kondli, Gharoli were meant for shopping/office whereas the plot in question of Central Business District (East), Shahdara, Delhi is primarily for hotel use. When the reserve price for a hotel plot measuring 20,000 sq. mtrs. in East Delhi could not have been fixed after comparing the same with the auction price of the single storied shopping/commercial plots ad measuring 240 sq. meters and 112 sq. meters situated in East Delhi then the DDA fell in grave error by fixing the same criteria at the time of recommending re-auction of the plot after simply taking into consideration the auction bid of 23.03.2006 of two plots of smaller size at Kondli, Gharoli. Taking into consideration the prices of plots, which were for the shopping/office complex, that too of a smaller sizes comparing it with a hotel plot of 20,000 s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... esponsible if the DDA does not even get the price which has been offered by the petitioner and what would happen if there is adverse trend in the market or the market people feels that they may not be able to complete their projects of setting up hotels in a short duration. The DDA must take decisions which can inspire the trust and confidence of the people keeping in view the larger public and national interest utmost while fulfilling its obligation to accomplish its laid down objectives. The bidding process cannot be an unending process. In the present case itself the petitioner had deposited 42.5 crores being the 25% of the bid amount and was the highest bidder amongst 51 participants. 18 . We, Therefore, hold that non-acceptance of the bid of the petitioner and the decision taken by the respondent suffers from the vice of irrationality, arbitrariness and lack of credibility. The parameters adopted by the DDA in comparing the prices for the hotel plot of 20,000 viz.-a-viz. the price of a commercial shop/office of 66 sq. meters and 121.50 sq. mtrs. has vitiated the decision of the respondent. For the foregoing, we quash the decision of the respondent in rejecting the bid of the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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