TMI Blog2017 (1) TMI 1774X X X X Extracts X X X X X X X X Extracts X X X X ..... ator 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 - HELD THAT:- When it is apparent from the communication that the reports were considered and what was contained in t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , Ms. 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 allotmen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... junction at ₹ 400 and paid 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er. It was denied that the civil court 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 l ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... being preferred on 2.1.2011 in the High Court 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, dele ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... orporation of Maharashtra Ltd. Ors. (1990) 3 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 j ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... st and another 15 per cent of the bid accepted shall be payable 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 depos ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t authority of the first defendant, there is no concluded contract in 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. Eve ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rity:- Sr. No. Sr. No. of item in Annexure II of the Proposal Nature of power: Authority to Who delegated Extent of power 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ing the powers delegated by the Authority has decided to reject the following bids of Commercial Sites for which auction was held on 24.5.2004:- Sr. Sector Particulars Sr. No. of Site Area in Sq. Mtr. Reserve Price (in rupees) Highest Bid (In rupees) Remarks 1. 29 Commercial Tower Commercia l Tower 9.527 Acre 106.65 Cr. 111.10 Cr. Highest Bid rejected 2. 29 Shopping Mall Adjoining Leisure Valley Park 16500 28.78 Cr . 30.15 Cr. -do- 3. 29 -do- 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- ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... HUDA also conceded that there was no delegation of power made by the State Government under section 51(4). This was done by overlooking the delegation dated 13.9.1989, the factum whereof has not been controverted by the learned counsel appearing on behalf of the respondent in any manner whatsoever. In the absence of having questioned delegation made by HUDA under section 51(1) of the Act, plaintiff could not have succeeded in the suit. 22. 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). 23. In view of the aforesaid fact-situation, it is apparent t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hat the price fetched by the said auction was on lower side. Remaining para to the contrary is wrong and denied. x x x x x The competent authority after going through the individual report/comments/opinion of the Members of the Auction Constituted Committee, comprising of Estate Officer, HUDA, Gurgaon, Senior Accounts Officer, District Town Planner and District Revenue Officer (Representative of the Deputy Commissioner, Gurgaon) as Members under the Chairmanship of Administrator, HUDA, Gurgaon, thoroughly examined the observations and recommendations of the Member of the Auction Committee regarding not to accept the bid prices of big commercial site, since these prices being on apparently lower side which was examined by the Government at the Headquarters level. The entire records of the entire auction proceedings, including the opinion of the Estate Officer, Gurgaon, other members of the Auction Committee and Deputy Commissioner, Gurgaon s report and also after studying the reserve price and auction price trends, decision was taken by the competent authority not to accept the bid prices vide their detailed report. Remaining para to the contrary is wrong and hence denied. 25 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he Government not to accept the bid. There is no reason why the power vested in the Government to refuse to accept the highest bid should be confined to inadequacy of bid only. There may be a variety of good and sufficient reasons, apart from inadequacy of bids, which may impel the Government not to accept the highest bid. In fact, to give an antithetic illustration, the very enormity of a bid may make it suspect. It may lead the Government to realise that no bona fide bidder could possibly offer such a bid if he meant to do honest business. Again the Government may change or refuse its policy from time to time and we see no reason why change of policy by the Government, subsequent to the auction but before its confirmation, may not be a sufficient justification for the refusal to accept the highest bid. It cannot be disputed that the Government has the right to change its policy from time to time, according to the demands of the time and situation and in the public interest. If the Government has the power to accept or not to accept the highest bid and if the Government has also the power to change its policy from time to time, it must follow that a change or revision of policy s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... v. Bhim Sen Walaiti Ram (1969) 3 SCC 146 and State of U.P. v. Vijay Bahadur Singh (1982) 2 SCC 365. It has been repeatedly pointed out that State or the authority which can be held to be State within the meaning of Article 12 of the Constitution is not bound to accept the highest tender or bid. 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. 29. In Meerut Development Authority v. Association of Management Studies Anr. (2009) 6 SCC 171, this Court has laid down that a bidder has no right in the matter of bid except of fair treatment in the matter and cannot insist for further negotiation. The Authority has a right to reject the highest bid. This Court has laid down thus : 27. The bidders participating in the tender process have no other right except the right to equality and fair ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... opriate authority should be made available and ordinarily the same should be communicated to the concerned parties unless there be any specific justification not to do so. No doubt about it that there have to be some reasons for rejection of the bid which are adequately present in the instant case as discussed hereinabove. The decision is of no help to espouse the cause of the plaintiff. 31. Reliance has also been placed on a decision of this Court in Kalu Ram Ahuja Anr. v. Delhi Development Authority Anr. (2008) 10 SCC 696 in which this Court has laid down that the highest bid was rejected without assigning any reason and there was no record showing that the decision was based on rational and tangible reasons and was in public interest. In the instant case we are satisfied from the order that the reports were considered and what were the reports, has been made clear in the reply filed by the respondents which has not been controverted. In the instant case merely the bid being above the reserve price, was not a safe criteria to accept the same. 32. In Mohinder Singh Gill Anr. v. The Chief Election Commissioner, New Delhi Ors. (1978) 1 SCC 405, this Court has laid ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hat the Administrator was delegated with the power to decide the bids. Thus, under compelling circumstances and duly considering the reports, the Administrator had taken the decision to reject the bids not only of the plaintiff but also six others. For the first time in the history of State of Haryana, such big properties were put to hammer on the prices indicated. The hitch in fixing the reserve price also indicates that the reserve price was not determined in a fair manner in the instant case. Not only the plaintiff but HUDA also did not place the delegation of power on record of the courts below. None of the officials of HUDA had been examined. Only an Assistant a junior ranking person had been examined who was not posted there when the auction was held and came only in 2008. As the property was a commercial tower in Sector 29, Gurgaon, with huge commercial complex, the first appellate court was right in dismissing the suit. 34. Plaintiff came to the court for mandatory injunction, for issuance of allotment letter without payment of court fee also. It was incumbent upon the plaintiff to pay the ad valorem court fee as prevailing and the valuation of the suit should not have ..... X X X X Extracts X X X X X X X X Extracts X X X X
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