TMI Blog2006 (10) TMI 444X X X X Extracts X X X X X X X X Extracts X X X X ..... ondent acquired no right to claim that the auction be concluded in its favour and the High Court clearly erred in entertaining the writ petition and in not only issuing a direction for consideration of the representation but also issuing a further direction to the appellant to issue a demand note of the balance amount. The direction relating to issuance of the demand note for balance amount virtually amounted to confirmation of the auction in favour of the respondent which was not the function of the High Court. In the present case there was enough material before the State Government to show that in the past plots in the area had fetched a price of ₹ 10,000/- per square meter and the highest bid made by the respondent in the present case was nearly half, i.e., ₹ 5750/- per square meter, which clearly indicated that the auction had not been conducted in a fair manner. If in such a case the State Government took a decision to disapprove the auction held and issued a direction for holding of a fresh auction, obviously the said decision was taken in larger public interest. In these circumstances there was absolutely no occasion for the High Court to entertain the writ p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... published in some newspaper that large scale bungling had been done in the auction due to which the price fetched for the plots in question was much below the market rate. The State Government issued a direction on 22.2.2002 summoning the records and staying all further proceeding relating to auction of the plots. Thereafter, an order was passed by the State Government on 20.3.2002 directing that the officers of the Rajasthan Housing Board, who were responsible for conducting the auction, be placed under suspension and in future no auction shall be conducted through the agency of Satish Auction House which had conducted the auction on 20.2.2002 or through any other auction agency. After a detailed consideration of the matter, including the report of the Financial Commissioner which showed that in the past plots in the said area had fetched a price of ₹ 10,000/- per square meter, the State Government passed an order on 3.4.2002 disapproving the auction held on 20.2.2002 and a further direction was issued for holding a fresh auction. On 23.4.2002 the appellant No. 1 sent a communication to respondent No. 1 that the auction held on 20.2.2002 had been cancelled and it may produce ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ction held on 20.2.2002 and a highest bidder in an auction does not acquire any legal right to have the auction concluded in his favour. Serious allegations were made of unholy alliance between the officers of the Housing Board, the auctioning agency and the respondent No. 1 and taking notice of the same the State Government had stayed further proceedings in the matter and after consideration of the report of the Financial Commissioner which showed that in the past plots in the said area had fetched the price of ₹ 10,000/- per square meter, which was almost double of the price which had been offered by the contesting respondent and also other material, the State Government had issued a direction for initiating disciplinary proceedings against the concerned officers and had also passed an order disapproving the auction held on 20.2.2002. The State Government had taken the said action in exercise of power conferred by Section 60 of the Rajasthan Housing Board Act, 1970. In view of the order passed by the State Government a communication was sent to the contesting respondent on 23.4.2002 that the auction held on 20.2.2002 had been cancelled and it was asked to produce the o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n are necessary or expedient for carrying out the purposes of this Act, and it shall be the duty of the Board to comply with such directions. The language of the provision is very clear and it empowers the State Government to give directions to the Housing Board as in its opinion are necessary or expedient for carrying out the purposes of the Act. The section further enjoins that it shall be the duty of the Board to comply with such directions. The section is couched in very wide language and the Housing Board has to comply with the directions issued by the State Government. Therefore, the State Government was fully empowered to issue the directions whereby it disapproved the auction held on 20.2.2002 and no exception can be taken to such a course of action. The directions have been issued in the interest of the Housing Board to generate revenue and to augment its finances, it cannot be faulted with on any ground. 6. The auction notice dated 3.2.2002 contained a condition to the effect that the Chairman of the Housing Board shall have the final authority regarding acceptance of the bid. The second auction notice issued on 19.2.2002 mentioned that the conditions of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... The acceptance of the highest bid is subject to the conditions of holding the public auction and the right of the highest bidder has to be examined in context with the different conditions under which such auction has been held. In the present case no right had accrued to the respondent either on the basis of the statutory provision under Rule 4(3) or under the conditions of the sale which had been notified before the public auction was held. This being the settled legal position, the respondent acquired no right to claim that the auction be concluded in its favour and the High Court clearly erred in entertaining the writ petition and in not only issuing a direction for consideration of the representation but also issuing a further direction to the appellant to issue a demand note of the balance amount. The direction relating to issuance of the demand note for balance amount virtually amounted to confirmation of the auction in favour of the respondent which was not the function of the High Court. 7. The other question which requires consideration is what are the contours of power which the High Court would exercise in a writ petition filed under Article 226 of the Const ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... must have freedom of contract. In other words, fairplay in the joints is a necessary concomitant for an administrative body functioning in an administrative sphere or quasi- administrative sphere. However, the decision must not only be tested by the application of Wednesbury principles of reasonableness but also must be free from arbitrariness not affected by bias or actuated by mala fides. It was also pointed out that quashing decisions may impose heavy administrative burden on the administration and lead to increased and unbudgeted expenditure. (See para 113 of the reports, SCC para 94.) 13. In Sterling Computers Ltd. v. M/s M.N. Publications Ltd. AIR 1996 SC 51 it was held as under: (SCC p. 458, paras 18-19) 18. While exercising the power of judicial review, in respect of contracts entered into on behalf of the State, the Court is concerned primarily as to whether there has been any infirmity in the decision making process. .... By way of judicial review the Court cannot examine the details of the terms of the contract which have been entered into by the public bodies or the State. Court have inherent limitations on the scope of any such enquiry. But at the same ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... l transaction. Even if some defect was found in the ultimate decision resulting in cancellation of the auction, the court should exercise its discretionary power under Article 226 of the Constitution with great care and caution and should exercise it only in furtherance of public interest. The court should always keep the larger public interest in mind in order to decide whether it should interfere with the decision of the authority. In the present case there was enough material before the State Government to show that in the past plots in the area had fetched a price of ₹ 10,000/- per square meter and the highest bid made by the respondent in the present case was nearly half, i.e., ₹ 5750/- per square meter, which clearly indicated that the auction had not been conducted in a fair manner. If in such a case the State Government took a decision to disapprove the auction held and issued a direction for holding of a fresh auction, obviously the said decision was taken in larger public interest. In these circumstances there was absolutely no occasion for the High Court to entertain the writ petition and issue any direction in favour of the contesting respondent. The orders ..... X X X X Extracts X X X X X X X X Extracts X X X X
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