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TMI Blog2017 (1) TMI 1774X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 - H ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... R. Bhuyan, Adv., Mr. Satish Kumar,Ad JUDGMENT ARUN MISHRA, J. 1. Leave granted. 2. The appeal arises out of judgment and order dated 17.1.2011 passed by the High Court of Punjab & Haryana at Chandigarh thereby setting aside the judgment and decree of District Judge dated 29.11.2010 and restoring the judgment and decree of Civil Judge passed on 14.10.2010. The plaintiff Bhudeep Builders and Exporters Pvt. Ltd. were later renamed as M/s. Orchid Infrastructure Developers P. Ltd. The plaintiff-respondent filed a suit for declaration with consequential relief as against the appellants with regard to rejection of bid relating to the commercial tower situated in Sector 29, Urban Estate, Gurgaon, in area admeasuring 9.527 acres. The bid submitted by the plaintiff was the highest of ₹ 11,17,50,000/-. The reserve price was ₹ 106.65 crores. The main terms and conditions of the auction were as under : (i) 10% of the bid amount to be tendered on the spot at fall of hammer. (ii) 15% of the bid money to be deposited within 30 days from the date of issuance of allotment letter. (iii) 75% of the amount to be paid within 60 days from issuance of allotment letter as one time in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... id the court fee of ₹ 55. Plaintiff has prayed for a declaration that memo dated 24.9.2004 rejecting the bid of the plaintiff to be void ab initio, non est and illegal, and that plaintiff is successful bidder of commercial tower measuring 9.527 acres situated in Sector 29, Urban Estate, Gurgaon. Plaintiff further prayed for mandatory injunction directing the defendants to issue formal letter of allotment pertaining to the suit property in favour of the plaintiff and to complete requisite formalities of allotment including delivery of possession and sanction of site plan. Plaintiff further prayed for an injunction restraining defendants from re-auctioning the suit property and from creating any third party interest of any nature in respect of the suit property. 5. The defendant HUDA in its written statement raised preliminary objection that the civil court has no jurisdiction to entertain the present suit in view of section 15(2) of Haryana Urban Development Authority Act, 1977 (hereinafter referred to as 'the Act'). It was also submitted that the suit was not maintainable in the present form, that the plaintiff has no cause of action to file the suit and has not come to court ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ourt has no jurisdiction and bid price was not inadequate. It also denied the delegation of power to Administrator, HUDA, Gurgaon. 7. The trial court - Civil Judge, Junior Division, Gurgaon decreed the suit vide judgment and decree dated 14.10.2010. Three witnesses were examined by the plaintiff and on behalf of defendant HUDA. Shri P.K.Ramanand, Assistant was examined. The trial court held that Administrator, HUDA was not competent to reject the bid of the plaintiff. As per Regulation 6 of Haryana Urban Development (Disposal of Land and Buildings) Regulations, 1978 (hereinafter referred to as 'the Regulations of 1978'), the authority to accept or reject a bid was vested with Chief Administrator, HUDA and delegation of power to Chief Administrator can only be made by the State Government vide notification as per section 51(4) of the Act. No notification has been placed on record to prove that the power of Chief Administrator has been delegated to Administrator, HUDA. The report on the basis of which bid had been rejected was not placed on record. The trial court held that the plaintiff is entitled to mandatory injunction for issuance of formal letter of acceptance of bid. The tria ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ourt as against the judgment and decree, the same has been allowed on 17.1.2011 within 15 days of it being filed. The High Court has restored the judgment and decree of the trial court on the ground that there is no delegation of power to the Administrator. The rejection by the Administrator was inconsequential and was not a valid decision in the absence of irregularity in auction the bid ought to have been accepted by the Chief Administrator, HUDA and letter conveying acceptance ought to have been issued in favour of the plaintiff. In view of Regulation 6(2) the Chief Administrator was competent authority to take a final decision on the bid. No notification has been issued by the State Government under section 51(4) of the Act. The suit has been held to be maintainable. It has been rightly valued and adequate court fee has been paid. 10. The judgment and decree of High Court has been questioned by filing the appeal in this Court. An application has also been filed on behalf of the appellant to take additional documents on record. HUDA for the first time has filed notification dated 13.9.1989 issued by it under section 51 of the Act, delegating the functions in favour of various o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... SCC 280, Mohinder Singh Gill & Anr. v. The Chief Election Commissioner, New Delhi & Ors. AIR 1978 SC 851, and Kalu Ram Ahuja & Anr. v. Delhi Development Authority & Anr. (2008) 10 SCC 696. In the absence of any notification being issued by the State Government under section 51(4) of the Act, the power of the Chief Administrator could not have been delegated to the Administrator. Thus rejection of the bid by the Administrator was unauthorised. The delegation of power by HUDA was made under section 51(1) whereas delegation was required under section 51(4). In re : Maintainability of suit in absence of concluded contract : 13. Firstly, we examine the question whether there being no concluded contract in the absence of acceptance of bid and issuance of allotment letter, the suit could be said to be maintainable for the declaratory relief and mandatory injunction sought by the plaintiff. The plaintiff has prayed for a declaration that rejection of the bid was illegal. Merely by that, plaintiff could not have become entitled for consequential mandatory injunction for issuance of formal letter of allotment. Court while exercising judicial review could not have accepted the bid. The bid ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... able by the successful bidder, in the manner indicated, within thirty days of the date of allotment letter conveying acceptance of the bid by the Chief Administrator; failing which the 10 per cant amount already deposited shall stand forfeited to the Authority and the successful bidder shall have no claim to the land or building auctioned. (3) The payment of balance of the price/premium, rate of interest chargeable and the recovery of interest shall be in the same manner as provided in sub-regulations (6) and (7) of Regulation 5. (4) The general terms and conditions of the auction shall be such as may be framed by the Chief Administrator from time to tome and announced to the public before auction on the spot." 15. We are fortified in our view by a decision of this Court in Uttar Pradesh Avas Evam Vikas Parishad & Ors. v. Om Prakash Sharma (2013) 5 SCC 182, the questions arose for its consideration that : whether there is any vested right upon the plaintiff/bidder until the bid is accepted by the competent authority in relation to the property in question? Merely because the plaintiff is the highest bidder by depositing 20% of the bid amount without there being approval of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... respect of the plot in question, which is evident from letters dated 26-5-1977 and 8-7-1977 wherein the third defendant had rejected the bid amount deposited by the plaintiff and the same was refunded to him by way of demand draft, which is an undisputed fact and it is also not his case that the then Assistant Housing Commissioner who has conducted the public auction had accepted the bid of the plaintiff." (emphasis supplied). This Court has held that in the absence of a concluded contract which takes place by issuance of allotment letter, suit could not be said to be maintainable as there is no vested right in the plaintiff without approval of the bid by the competent authority. Thus, in the wake of aforesaid decision, in the absence of a concluded contract, the suit could not have been decreed for mandatory injunction. It amounted to enforcing of contract in the absence thereof. 16. In the light of the aforesaid discussion, it is evident 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... wer delegated 1 2 3 4 5 xxx xxx xxx xxx 60 70 Powers to accept the auction bids for commercial/residential /industrial sites Chief Administrator Administrator Full Powers. Full powers provided the highest bid is more than the reserve price and minimum of 3 bidshave been received. If a siteis not sold even after three attemptsat a price higher than the reserve price the administrators may revise the price downwards upto maximum of 10% of the reserve price. 18. It is apparent that there had been delegation of power by HUDA to the Administrator with respect to the power to accept the auction bids for commercial/residential/industrial sites provided the highest bid is more than the reserve price and minimum of three bids have been received. The Administrator has also the power if the site is not sold in 3 attempts, to revise the price downwards up to a maximum of 10% of the reserve price. Thus plaintiff has not come to the court with clean hands and has suppressed for the reasons best known to it, the aforesaid order of HUDA by which delegation of power has been made. The fact that there was delegation of power is also crystal clear from the communication exchanged betw ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... C-5A 5865.60 10.12. Cr. 10.61 Cr. -do- 4. 29 -do- C-9 Corner 7820.80 14.84 Cr. 15.46 Cr. -do- 5. 29 -do- C-10 Corner 7820.80 14.84 Cr. 15.51 Cr. -do- 6. 55-56 -do- -- 3850.00 6.72 Cr. 7.15 Cr. - do- 7. 29 Multiplex -- 2700.00 4.69 Cr. 5.07 Cr. -do- Bid sheets for the above mentioned sites as received from your office are returned herewith. Sd/- Administrator HUDA, Gurgaon" 19. The Administrator had also mentioned in his letter that there was delegation of power to him. The letter from the Chief Administrator also indicated that the Administrator was armed with the power. That apart, when we see the terms and condition No.4 of the tender notice, subject to which auction was held, provided thus : "4. The presiding officer reserves the right to withdraw any property from the auction or reject any bid without assigning any reason." 20. Admittedly, the Presiding Officer was the Administrator, HUDA. Thus, as per the terms of the auction also, the Administrator was having the power to accept or reject the bid. That the bid was more than the reserve price and there were more than 3 bidders, is not disputed. Thus, in our opinion, the Administra ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... annot be said to be legally sustainable. In re : Legality of rejection of bid : 24. Coming to the question whether the Administrator had rejected the bid in an illegal or arbitrary manner, the learned counsel for the plaintiff has submitted that the bid had been rejected by an unreasoned order, as such it was an arbitrary rejection. Learned counsel has drawn our attention to the communication dated 24.9.2004 which has been communicated by the Estate Officer to the plaintiff in which it has been mentioned that the bid has not been accepted, hence earnest money had been refunded. However, this communication of the decision reflects only the return of the cheque pursuant to the decision of the Administrator. The order passed by the Administrator is apparent from the communication of the Administrator made to Estate Officer, HUDA on 21.9.2004 which has been extracted above. It is apparent from the rejection order that the reports submitted were considered and decision was taken not to accept the bids with respect to auction of seven properties. It was not a case of singular rejection of the bid made by the plaintiff alone. Six other bids were also not accepted. The reason for reject ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ds and also taking into consideration the higher prices fetched at Panipat, Panchkula and Faridabad, it was decided to reject the seven bids. Thus, there was due application of mind. 26. In our opinion 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. 27. This Court in the case of State of Uttar Pradesh & Ors. v. Vijay Bahadur Singh & Ors. (1982) 2 SCC 365 has laid down that there is no obligation to accept the highest bid. The Government is entitled even to change its policy from time to time according to the demands of the time. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pleted contract when the public auction had not culminated to its logical end before confirmation of the bid, no right accrued to the highest bidder. This Court has laid down as under : "4. Apart from that the High Court overlooked the conditions of auction which had been notified and on basis of which the aforesaid public auction was held. Condition No. 3 clearly said that after the auction of the plot was over, the highest bidder had to remit 1/10 of the amount of the highest bid and the balance of the premium amount was to be remitted to the trust office within thirty days "from the date of the letter informing confirmation of the auction bid in the name of the person concerned". Admittedly, no such confirmation letter was issued to the respondent. Conditions Nos. 5, 6 and 7 are relevant: "5. The acceptance of the highest bid shall depend on the Board of Trustees. 6. The Trust shall reserve to itself the right to reject the highest or any bid. 7. The person making the highest bid shall have no right to take back his bid. The decision of the Chairman of the Board of Trustees regarding acceptance or rejection of the bid shall be binding on the said person. Before taking th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f the invitation to tender are in the realm of the contract. No bidder is entitled as a matter of right to insist the authority inviting tenders to enter into further negotiations unless the terms and conditions of notice so provided for such negotiations. x x x x x 29. The Authority has the right not to accept the highest bid and even to prefer a tender other than the highest bidder, if there exist good and sufficient reasons, such as, the highest bid not representing the market price but there cannot be any doubt that the Authority's action in accepting or refusing the bid must be free from arbitrariness or favouritism." 30. Reliance has been placed on behalf of the respondent on a decision of this Court in M/s. Star Enterprises & Ors. v. City and Industrial Development Corporation of Maharashtra Ltd. & Ors. (1990) 3 SCC 280. The relied upon portion is extracted hereunder : "10. In recent times, judicial review of administrative action has become expansive and is becoming wider day by day. The traditional limitations have been vanishing and the sphere of judicial scrutiny is being expanded. State activity too is becoming fast pervasive. As the State has descended into the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er based on certain grounds, its validity must be judged by the reasons so mentioned and cannot be supplemented by fresh reasons in the shape of affidavit or otherwise. Otherwise, an order bad in the beginning may, by the time it comes to court on account of a challenge, get validated by additional grounds later brought out. We may here draw attention to the observations of Bose, J. in Gordhandas Bhanji AIR 1952 SC 16 : "Public orders, publicly made, in exercise of a statutory authority cannot be construed in the light of explanations subsequently given by the officer making the order of what he meant, or of what was in his mind, or what he intended to do. Public orders made by public authorities are meant to have public effect and are intended to affect the actings and conduct of those to whom they are addressed and must be construed objectively with reference to the language used in the order itself. Orders are not like old wine becoming better as they grow older." There is no dispute from the aforesaid proposition. However, 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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