Punjab-Haryana High Court
Kawaljit Singh Sehgal vs State Of Punjab And Others on 13 September, 2011
Bench: Hemant Gupta, Jaswant Singh
IN THE HIGH COURT FOR THE STATES OF PUNJAB AND
HARYANA AT CHANDIGARH
CWP.No.1736 of 2011
Date of Order: 13.9.2011
Kawaljit Singh Sehgal ...Petitioner
Vs.
State of Punjab and others ...Respondents
CORAM: HON'BLE MR. JUSTICE HEMANT GUPTA
HON'BLE MR. JUSTICE JASWANT SINGH
Present: Mr. D.S. Patwalia, Advocate for the petitioner.
Mr. Piyush Kant Jain, Addl.A.G, Punjab for respondent No.1.
Mr. Rajinder Sharma, Advocate for respondent Nos.2 & 3.
HEMANT GUPTA, J (ORAL)
Petitioner claims an appropriate writ for confirming the auction of site i.e Booking Agency No.18 in Vikas Scheme Transport Nagar, Patiala (hereinafter to be referred "the site") in pursuance of the auction notice (P.2).
The Improvement Trust, Patiala (for short "Improvement Trust") vide public notice decided to auction various sites including the site No 18. The auction was to be held on 12.1.2011. Each of the participants was to pay an earnest money of Rs.7.50 lacs as the reserve price of the Booth was Rs.75 lacs.
In the auction conducted on 12.1.2011, the petitioner alleges to be highest bidder having given bid of Rs.92.50 lacs. The said bid was not accepted, which led to filing of the present petition. In the written statement, CWP.No.1736 of 2011 2 the Improvement Trust has inter alia asserted that the petitioner, who was present along with his supporters, manhandled the other participants. Thus the auction could not be concluded and the same was cancelled. The incident of manhandling was high lighted by almost all the local news papers along with photographs. The petitioner has denied such incident in the replication filed. It is pleaded that no person has made any complaint either to the Trust or to the Police; therefore, the stand of the Trust is not tenable. We do not find any merit in the arguments raised by learned counsel for the petitioner. The auction was being conducted in the presence of the officers of the Trust. Such Officers have noticed the incidents. Such incidents were reported in the Print Media next day. The trust is expected to act fairly. Since, the Trust was confronted with the situation of manhandling of the participants, the action of the Trust not to confirm such auction cannot be said to unfair. Therefore, the action of the Trust not to confirm the auction cannot be said to be illegal and arbitrary.
The petitioner, who was the highest bidder, does not have any right to seek confirmation of acceptance of his highest bid. The Improvement Trust has decided not to confirm the bid given by the petitioner for the reasons disclosed in the reply. A recent Division Bench in a judgment reported as Amrit Lal Mahajan Vs. State of Punjab and others 2009(2) PLR 105 has considered almost similar situation and has held that being highest bid by itself does not create any right in favour of such bidder. It was held to the following effect:
"14. The question whether the highest bid could be rejected by the competent authority has been repeatedly considered by Hon'ble the Supreme Court. The petitioner cannot seek a direction to the respondent Trust compelling it to accept the highest bid given by him. The rights of auction purchaser were considered and determined by Hon'ble the CWP.No.1736 of 2011 3 Supreme Court in the case of Laxmikant v. Satyawan, (1996)4 SCC 208. The facts of that case are akin to the facts of the present case. There the dispute had arisen out of auction of a plot by Nagpur Improvement Trust. The auction notice, like the case in hand, contained a condition that acceptance of the highest bid was to depend upon the approval of the Board of Trustees and its decision regarding acceptance or rejection of the highest bid was to be binding on the bidder. Before concluding, in Para 4, their Lordships' placed reliance on the earlier judgments rendered by Hon'ble the Supreme Court in Trilochan Mishra v. State of Orissa, (1971)3 SCC 153; State of Orissa v. Harinarayan Jaiswal, (1972)2 SCC 36; Union of India v. Bhim Sen Walaiti Ram, (1969)3 SCC 146; and State of U.P. v. Vijay Bahadur Singh, (1982)2 SCC 365; and observed as under :-
" From a bare reference to the aforesaid conditions, it is apparent and explicit that even if the public auction had been completed and the respondent was the highest bidder, no right had accrued to him till the confirmation letter had been issued to him. The conditions of the auction clearly conceived and contemplated that the acceptance of the highest bid by the Board of Trustees was a must and the Trust reserved the right to itself to reject the highest or any bid. This Court has examined the right of the highest bidder at public auctions in the cases of Trilochan Mishra v. State of Orissa, (1971)3 SCC 153; State of Orissa v. Harinarayan Jaiswal, (1972)2 SCC 36; Union of India 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."
15. The aforementioned view was followed by Hon'ble the Supreme Court in the case of Rajasthan Housing Board v. G.S. Investments, (2007)1 SCC 477. Dealing with the rights of highest bidder and after referring to the aforementioned judgments of Hon'ble the Supreme Court, it was observed that the petitioner merely because it is a highest bidder could CWP.No.1736 of 2011 4 acquire no right to claim that the auction be concluded in his favour. Hon'ble the Supreme Court further held that the High Court would not enjoy jurisdiction under Article 226 of the Constitution to entertain challenge to the cancellation of an auction held by a public body where the prime consideration is fairness and generation of public revenue. In that regard reliance was placed on the judgment of Hon'ble the Supreme in the case of Marine Services (P) Ltd. v. Metcalfe & Hodgkinson (P) Ltd., (2005)6 SCC 138, and their Lordships' held that the judicial review would apply to the exercise of contractual power by governmental bodies only in order to prevent arbitrariness and favouritism and the power is tampered with inherent limitation. The Government being the guardian of the finances of the State is expected to protect its financial interests, which include the right to refuse the lowest tender although the principles laid down in Article 14 of the Constitution have to be complied with. It was further held that if the power has been exercised for any collateral purposes then such an order may have to be struck down and to that extent judicial restraint in administrative action is imperative because Court does not sit as a Court of appeal and it is only to review the manner in which the decision was made. The Court does not also have any expertise to correct the administrative decision. Therefore, we are of the considered view that the instant petition is liable to be dismissed." Another Division Bench in a judgment reported as State of Haryana and others Vs. Kundan Lal and others 2005(1) RCR (Civil) 381 has culled down the principals of confirmation of sale in favour of the Highest Bidder. It observed:
"17. The principles which can be culled out from the above noted decisions are:
(i) the Government/public authority is under an obligation to hold public auction for allotment of land etc. strictly in accordance with the statutory provisions, if any, and/or the conditions of auction;
(ii) the Government/public authority is not bound to accept/confirm/approve the highest bid given at a public auction and the highest bidder cannot claim allotment of land/plot as of right.CWP.No.1736 of 2011 5
(iii) the government/public authority can, for reasons having nexus with public interest, refuse to accept the highest bid and/or direct re- auction; and
(iv) it is not necessary to communicate the reasons for such decision to the highest bidder. However, if the auction of the government/public authority is challenged by an aggrieved person, then such reasons are required to be disclosed to the Court. In a given case, the reasons can also be gathered from the record maintained by the government/public authority."
Petitioner has alleged that he is Congress Supporter and therefore, the action of not confirming the sale by the Government of Akali Party is mala-fide. It is easy to level allegations of mala-fide than to prove the same. We do not find that such allegations warrant any credence in the facts of the case. The sale of the plot is by Improvement Trust, which is a separate juristic entity than the State Government. There is no specific allegation of mala-fide against any one or more person nor has any such person been impleaded as party in the writ petition. Therefore, we do not find any substance in allegations of mala-fide, which require any consideration.
In our opinion, the decision of the Improvement Trust not to confirm highest bid of the petitioner does not suffer from any illegality or irregularity, which may warrant interference by this Court in exercise of its writ jurisdiction.
Dismissed.
( HEMANT GUPTA )
JUDGE
September 13, 2011 ( JASWANT SINGH )
manoj/Vimal JUDGE