Rajasthan High Court - Jodhpur
Farid Mohammed vs Raj. State Industrial Development And ... on 21 September, 2021
Author: Inderjeet Singh
Bench: Inderjeet Singh
HIGH COURT OF JUDICATURE FOR RAJASTHAN AT
JODHPUR
S.B. Civil Writ Petition No. 1830/2020
Farid Mohammed S/o Shri Kasam Khan, Aged About 41 Years,
Resident Of Gogaji Temple, Khed Road, Balotra, District Barmer
(Raj.).
----Petitioner
Versus
1. Raj. State Industrial Development And Investment
Corporation Limited (Riico), Through Managing Director,
Riico Ltd, Udyog Bhawan, Tilak Marga, Jaipur.
2. Regional Manager, Rajasthan State Industrial
Development And Investment Corporation Ltd., Balotra,
District Barmer (Raj.).
----Respondents
For Petitioner(s) : Mr. Shreyansh Mardia.
For Respondent(s) : Mr. Sanjeet Purohit.
HON'BLE MR. JUSTICE INDERJEET SINGH
Order 21/09/2021 This writ petition has been filed by the petitioner with the following prayer:-
"A) The impugned order dated 22.01.2020[Annex.4] passed by the Respondents rejecting the bid offered by the petitioner, may kindly be quashed and set- aside.
B) The respondents may kindly be directed to make allotment of industrial plot bearing no. H2-287, Industrial Area, Phase-IV, Balotra in favour of the petitioner at the rate to which the petitioner has submitted his bid to the tune of Rs. 3010/- per sqm; C) Any other appropriate order or direction which this Hon'ble Court deems fit and proper may kindly be passed in the favour of the petitioner. D) Cost of the writ petition may kindly be awarded in favour of the petitioner."(Downloaded on 23/09/2021 at 08:53:46 PM)
(2 of 10) [CW-3426/2021] Brief facts of the case are that the respondents, to be referred as RIICO, issued E-Auction notice dated 16.11.2019 by which they invited bids for allotment of various categories of plots in the RIICO area through the E-Auction bidding system in the Industrial Area, Balotra. In pursuance of that, for the allotment of the plot, the offer made by the petitioner was above the reserved rate.
The auction for allotment of plot in question was held on 12.12.2019. Petitioner participated in the bid process for the allotment of plot No. H2-287 for which the reserved price was Rs. 3,000/-, the petitioner offered Single Bid Price of Rs. 3,010/-. The Unit Level Committee of RIICO recommended for acceptance of single bid offered by the petitioner and sent the matter to the Single Bid Approval Committee headed by the Managing Director of RIICO.
The Single Bid Approval Committee headed by the Managing Director of RIICO considered the case of the petitioner and rejected the same, the reasons for rejection is briefed as under:-
"Rejected- The committee observed that the multiple bids received for other plots in same auction are higher than the single bids received for these plots. Looking to increase in demand of plots in this area, the committee decided to reject the single bids."
The petitioner was informed about the rejection of his bid vide order dated 22.01.2020. Hence, this writ petition has been filed by the petitioner challenging the order of rejection passed by the RIICO.
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(3 of 10) [CW-3426/2021] Learned counsel for the petitioner submitted that in the earlier E-Auction proceedings, held just two months back, the RIICO has accepted the single bid. Counsel further submits that the plot in dispute is situated in front of the dumping yard, therefore the rate has been mentioned just above the reserved price by the petitioner and no other bidder has participated in the said E-Auction proceedings for this plot. Counsel further submitted that the High Level Committee has not given any justifiable reason for rejecting the offer made by the petitioner. Counsel further submitted that rejection of bid by the RIICO is in violation of Principles of natural justice.
Learned counsel in support of his contentions relied upon the judgment passed by Hon'ble Supreme Court in the matter of Meerut Development Authority and Ors. Vs. Associated of Management Studies and Ors. wherein para no. 17, 18, 23 and 25, it has been held as under:-
"17. A tender is an offer. It is something which invites and is communicated to notify acceptance. Broadly stated it must be unconditional; must be in the proper form, the person by whom tender is made must be able to and willing to perform his obligations. The terms of the invitation to tender cannot be open to judicial scrutiny because the invitation to tender is in the realm of contract. However, a limited judicial review may be available in cases where it is established that the terms of the invitation to tender were so tailor made to suit the convenience of any particular person with a view to eliminate all others from participating in the biding process.
The bidders participating in the tender process have no other right except the right to equality and fair treatment in the matter of evaluation of competitive bids offered by interested persons in response to notice inviting tenders in a transparent manner and free from hidden agenda. One cannot challenge the terms and conditions of the tender except on the above stated ground, the reason being the terms of (Downloaded on 23/09/2021 at 08:53:46 PM) (4 of 10) [CW-3426/2021] 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.
18. It is so well-settled in law and needs no restatement at our hands that disposal of the public property by the State or its instrumentalities partakes the character of a trust. The methods to be adopted for disposal of public property must be fair and transparent providing an opportunity to all the interested persons to participate in the process. 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 favoritism.
23. In Tata Cellular(supra) this Court observed that "Judicial quest in administrative matters is to strike the just balance between the administrative discretion to decide matters as per government policy, and the need of fairness. Any unfair action must be set right by judicial review"
25. Large numbers of authorities have been cited before us in support of the submission that even in contractual matters the State or "other authorities"
are bound to act within the legal limits and their actions are required to be free from arbitrariness and favourtism. The proposition that a decision even in the matter of awarding or refusing a contract must be arrived at after taking in to account all relevant considerations, eschewing all irrelevant considerations cannot for a moment be doubted. The powers of the State and other authorities are essentially different from those of private persons.
The action or the procedure adopted by the authorities which can be held to be State within the meaning of Article 12, while awarding contracts in respect of properties belonging to the State, can be judged and tested in the light of Article 14. Once the State decides to grant any right or privilege to others, then there is no escape from the rigour of Article 14. These principles are settled by the judgments of this Court in the cases of Ramana Dayaram Shetty v. International Airport Authority of India MANU/SC/0048/1979: (1979)IILLJ217SC, Kasturi Lal Lakshmi Reddy v. State of J & KMANU/SC/0079/1980: [1980]3SCR1338, Ram and Shyam Co. V. State of Haryana MANU/SC/0017/1985:
AIR1985SC1147, Mahabir Auto Stores v. Indian Oil (Downloaded on 23/09/2021 at 08:53:46 PM) (5 of 10) [CW-3426/2021] Corporation MANU/SC/0191/1990:[1990]1SCR818, Sterling Computers Ltd. v. M & N Publications MANU/ SC/0439/1993: AIR1996SC51 and A.B. International Exports v. State Corporation of India. 2000(3) SCC 553 Executive does not have an absolute discretion, certain principles have to be followed, the public interest being the paramount consideration."
Counsel further relied upon the judgment passed by Hon'ble Supreme Court in the matter of Kalu Ram Ahuja and Anr. Vs. Delhi Development Authority and Anr. which reads as follows:
"Undisputedly, the D.D.A. had taken a conscious decision to auction the plot. It is neither the pleaded case of the respondents nor any material has been produced before this Court to show that the said decision was taken by the competent authority under some mis-apprehension. It is also not in dispute that the appellants participated in the auction held on 1 st June, 1988, and gave highest bid, which, as mentioned above, was rejected by the Vice- Chairman, D.D.A. The communication dated 7th July, 1988, does not make a mention of the reason which may have prompted the Vice-Chairman to reject the bid given by the appellants. No other record has been produced before the High Court to show that the decision of the Vice-Chairman was based on rational and tangible reasons and was in public interest. Therefore, there is no escape from the conclusion that the decision of the concerned authority was wholly arbitrary. The learned Single Judge without property appreciating the nature of the appellants' challenge to the rejection of their bid, dismissed the writ petition. The Division Bench also committed the same error by dismissing the appeal. Therefore, the impugned orders are legally unsustainable. Accordingly, the appeals are allowed, impugned orders passed by the High Court are set aside, writ petition filed by the appellants before the High Court is allowed and the decision of the Vice- Chairman, D.D.A. to reject the bid of the appellants is quashed. The appellants are directed to deposit the amount of bid along with the interest thereon at the rate of eighteen per cent from the date of bid till the....3/-
date of actual payment within a period of three months from today. Thereafter the D.D.A, shall complete all the formalities of land and hand over possession to the appellants. The needful be done (Downloaded on 23/09/2021 at 08:53:46 PM) (6 of 10) [CW-3426/2021] within three months from the date the amount is deposited by the appellants."
Learned counsel appearing on behalf of the respondents opposed the writ petition and submitted that as per the terms and conditions of the E-Auction Policy, the RIICO reserves the right to cancel the highest bid offered by any person. Learned counsel further submits that the Auction Committee has rejected the single bid offered by the petitioner on the ground that multiple bids received for the other plots, in the same auction, are higher then the single bid received for these plots.
Counsel further submitted that looking to increase in bid price of the plots in the area, the Committee decided to reject the single bids which is neither arbitrary nor unreasonable.
Counsel further submits that in the present auction proceedings, the RIICO has received the bid of Rs. 3850 to 4640 in the same Auction proceedings for other plots. Therefore, the decision taken by the Committee in not accepting the bid offered by the petitioner is justifiable, and the counsel, in support of his contentions has relied upon the judgment passed by Hon'ble Supreme Court in the matter of Haryana Urban Development Authority and Ors. vs. Orchid Infrastructure Developers Private Limited rendered in (2017) 4 SCC 243 wherein para Nos. 28 and 30 reads as follows:
"28 This Court in State of Uttar Pradesh vs. v. Vijay Bahadur Singh 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. It was observed thus :
"3. It appears to us that the High Court had clearly misdirected itself. The Conditions of Auction made it perfectly clear that the Government was under no obligation to accept the highest bid and that no rights accrued to the bidder merely because (Downloaded on 23/09/2021 at 08:53:46 PM) (7 of 10) [CW-3426/2021] his bid happened to be the highest. Under Condition 10 it was expressly provided that the acceptance of bid at the time of auction was entirely provisional and was subject to ratification by the competent authority, namely, the State Government. Therefore, the Government had the right, for good and sufficient reason, we may say, not to accept the highest bid but even to prefer a tenderer other than the highest bidder. The High Court was clearly in error in holding that the Government could not refuse to accept the highest bid except on the ground of inadequacy of the bid. Condition 10 does not so restrict the power of the 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 subsequent to the provisional acceptance of the bid but before its final acceptance is a sound enough reason for the Government's refusal to accept the highest bid at an auction..."
30. In Meerut Development Authority vs. Association of Management Studies & Anr., 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 treatment in the matter of evaluation of competitive bids offered by interested persons in response to notice inviting tenders in a transparent manner and free from hidden agenda. One cannot challenge the terms and conditions of the tender except on the above stated ground, the (Downloaded on 23/09/2021 at 08:53:46 PM) (8 of 10) [CW-3426/2021] reason being the terms of 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.
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."
Learned counsel further relied upon the judgment passed by the Division Bench of this Court in the matter of Komal Aggrawal and State of Rajasthan and Ors in D.B. Special Appeal (Writ) No. 274/2012 wherein it has been held under:-
"Having heard learned counsel for the parties and on the perusal of the material available on record, in our opinion, the impugned order passed by the learned Single Judge calls for no interference.
Admittedly as per the terms and conditions of the NIT, the bid offered were subject to confirmation and the RIICO had reserved its right to accept or reject any bid without assigning any reason. Since the sale was subject to confirmation, therefore, no concluded contract could come into existence till the sale is confirmed by the competent authority. In the instance case, the appellant on her own accepting the terms and conditions applied for the plot in question and the competent committee of RIICO rejected the bid of the appellant for Plot No.GI-958 and that of one Ms. Parul Gupta for Plot No.H419 for the reason that offer made by them were just little higher than the reserve price. The learned Single Judge has relied on the decision of the Hon'ble Supreme Court in Desh Bandhu Gupta vs. N.L.Anand (1994(1) SCC-131) wherein it has been held that the auction purchaser gets a right only on confirmation of sale and till then his right is nebulous and has only right to consideration for confirmation of sale. Thus, the learned Single Judge after considering the facts and circumstances of the case formed opinion that the rejection of the bid by the competent authority cannot be said to be illegal (Downloaded on 23/09/2021 at 08:53:46 PM) (9 of 10) [CW-3426/2021] or arbitrary and we find no good ground to interfere with the same.
The learned Single Judge has also taken into account scope of judicial review in such contractual matter and noticed the decision of the Hon'ble Supreme Court in Rajasthan Housing Board vs. G.S. Investment and Anr. (2007(1) SCC-477) wherein it has been observed that in the matter of sale of the plots by the public body which are commercial transaction, even if some defects are found the Court should exercise its discretionary power under Article 226 of the Constitution of India with great care and caution and should exercise only in furtherance of public interest. That apart it has come on record that in the subsequent NIT inviting the sealed bids for the said plot, the reserve price is fixed at Rs.3500/- and the highest bid received is Rs.5130/- which is more than double the price offered by the appellant and the learned Single Judge considering the fact that the cost of the plot has doubled just within a period of four months refused to grant indulgence as it will be against the public interest.
Under these circumstances, the learned Single Judge has rightly declined to invoke extra ordinary jurisdiction in favour of the appellant. Thus, we do not find any error in the impugned order passed by the learned Single Judge and the intra court appeal deserved to be dismissed.
Consequently, the intra court appeal being bereft of merit is dismissed. D.B. Civil Misc. Stay Petition No.6002/2012 also stands dismissed."
Heard learned counsel for the respective parties and perused the records. This writ petition filed by the petitioner deserves to be dismissed for the reasons that Firstly, the petitioner has participated in the E-Auction proceedings after carefully reading the terms and conditions of the Auction and as per the terms and conditions, the RIICO reserves the right to cancel the highest bid offered by the petitioner, Secondly, that the Auction Committee considered the fact that multiple higher bids have been received in the same Auction for another plots, thirdly, in view of the judgments passed by Hon'ble Supreme Court in the matter of Haryana Urban Development Authority(supra), I am not inclined (Downloaded on 23/09/2021 at 08:53:46 PM) (10 of 10) [CW-3426/2021] to exercise the jurisdiction of this Court under Article 226 and 227 of the Constitution of India in this matter.
Hence this writ petition is dismissed.
(INDERJEET SINGH),J 29-jayesh/-
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