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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 ..... 77; 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 under: Date of tender/open ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uld be relevant to reproduce the following paragraph from the proceeding-sheet of the DDA which has been taken out from page 78-A of the paper book: In this regard, it is informed that Plot No. 1 was put for auction on 19.11.2003 and 22.03.2004, but no bid was received. In March, 2004, the Reserve Price was ₹ 90 Crores. 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 m ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... etent authority, i.e., respondent is fully competent to reject the bid without assigning any reason. He further submits that the bid in the present case was rejected on rational grounds after taking into account, the rates of the shop/office at Kondli, Gharoli (East Delhi) which were in the range of ₹ 75,960/- per sq. meter to ₹ 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 . ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d other Institutional Complexes. For Common Wealth Games 2010, DDA is proposing to construct and indoor stadium and an outdoor stadium in Yamuna Sports Complex and a village with 8500 flats in front of Akshardham Temple in East Zone. Total number of plots proposed are about 60 in number with 460.000 sq. mtrs. built up area. The proposed activities at 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 o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ect of eight other plots, out of total nine plots. The non-response from the Hotel Industry/corporate world completely exposes the DDA to its illogical and irrational decision. The people have either not responded on account of the fact that the DDA has kept the reserve price of all these plots at highly exorbitant rates or may be people might have got discouraged 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the touchstone of Article 14 of the Constitution of India. At any stage during the decision making process if any arbitrariness, unfairness, mala fides or unreasonable nesses are traced then such an action of the Government has to be set aside being vocative of Article 14 of the Constitution of India. It would be worthwhile to reproduce the following paragraph from the judgment of Kumari Shrilekha 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 define ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... highest bidder was between ₹ 75,960/- per sq. mtr. to ₹ 1,26,667/- sq.mtr and considering the auction price of these commercial plots the Finance (Member) felt that the auction bid at ₹ 37,778 per sq. mtr. as submitted by the petitioner in the auction of 03.03.2006 was quite on the lower side. The dissent note of the Finance (Member) is at page 83 of the paper book and the recommendations of 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/-. Financ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... D.C. Mayur Vihar may also be brought down by 10% i.e. to ₹ 53,640/- per sq.m. 17. It is, thus, apparent that the Finance (Member) and even the approving authority of respondent/DDA have not taken into consideration all these aforesaid vital circumstances before arriving at the decision of recommending re-auction of the plot in question. The counsel for the petitioner has also submitted that the plots at 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. mete ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ocess suffered from patent arbitrariness. These kind of actions on the part of authorities take away the public confidence in the open bid system as well as results in avoidable delay in completing the projects thereby ultimately affecting the development, planning and growth of the city. It is a case of complete non-application of mind on the part of the respondent. Who will share the blame and who will be held responsible 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 th ..... X X X X Extracts X X X X X X X X Extracts X X X X
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