Allahabad High Court
Dharmendra Pratap Singh vs State Of U.P. & 2 Others on 1 September, 2014
Bench: Amreshwar Pratap Sahi, Vivek Kumar Birla
HIGH COURT OF JUDICATURE AT ALLAHABAD Court No. - 21 Case :- WRIT - C No. - 45817 of 2014 Petitioner :- Dharmendra Pratap Singh Respondent :- State Of U.P. & 2 Others Counsel for Petitioner :- Prakash Chandra Tiwari,M.D. Singh Shekhar Counsel for Respondent :- C.S.C.,A.P. Srivastava Hon'ble Amreshwar Pratap Sahi,J.
Hon'ble Vivek Kumar Birla,J.
1. Heard Shri M.D. Singh Shekhar, Senior Advocate assisted by Shri Lalta Prasad Tiwari for the petitioner and Shri A.P. Srivastava for the respondents-Avas Evam Vikas Parishad.
2. The petitioner contends that he participated in the auction of a commercial plot advertised by the Parishad on 3.7.2014. He was the highest bidder and his offer was Rs.28,000/- per sq. mtr. in respect of the plot in question. The said bid has now been rejected under the communication dated 20.8.2014, hence this petition on the ground of arbitrariness and unreasonableness as no cogent reasons are visible in the order.
3. Shri Shekhar has relied upon an interim order dated 30.7.2012 passed in Writ C No.36494 of 2012 to advance his submission. We have perused the interim order but we most respectfully do not feel bound by the same as it is no precedent and also for the reasons given hereinunder.
4. The contention is that unless there is any default or infirmity in the offer made by the petitioner or his bid, there is no occasion to cancel the bid without assigning any cogent reason. He submits that the absence of any such valid reason does not authorise the respondents to proceed to issue a fresh auction notice as has been communicated in the impugned notice.
5. Shri Shekhar has invited the attention of the Court to Clause 12 and Clause 13 of the tender notice to contend that the matter has to be approved by the Avas Evam Vikas Parishad/Board but this power of approval does not give any right to the respondents Board to arbitrarily reject the highest bid about which there is no error pointed out by the respondents. He, therefore, submits that absence of any such reason in the impugned order vitiates the same.
6. Having considered the aforesaid submissions it would be appropriate to quote condition no.13, which is extracted hereinunder:-
13. uhykeh es mPpre cksyh@lokZf/kd VsUMj ds vk/kkj ek= ij gh fdlh O;fDr dh lEifRr ds izns'ku dk vf/kdkj ugha gksxkA izns'ku rc gh ekuk tk;sxk tc ¼ifj"kn dh vksj ls izns'ku tkjh gksxkA izns'ku ds ik= ekus tkus ds i'pkr leLr okafNr vkSipkfdrkvksa dh iwfrZ izns'ku i= es fu/kkZfjr vof/k ls djuh gksxh vU;Fkk izns'ku fujLr dj fn;k tk;sxkA ;fn dksbZ cksyh@VsUMj nkrk cksyh Lohdkj gksus ds mijkUr okafNr vkSipkfdrkvksa dh iwfrZ ugha djrk gS vFkok Hkw[k.M dks fujLr djus dh izkFkZuk izLrqr djrk gS vFkok izns'ku vU;Fkk dkj.kksa ls fujLr gksrk gS rks fuEuakfdr dVkSrh dh tk;sxh%& 1&bPNqd dzsrk }kjk mPpre cksyh cksyus ds ckn ns; izFke pj.k dh /kujkf'k tek ugha djus ij@blds }kjk tek dh x;h c;kus dh /kujkf'k dks tCr dj fy;k tk;sA 2&izns'ku i= fuxZr gksus ds ckn izns'ku x`fgrk lEifRr ysus ls bUdkj djrk gS rks Hkqxrku dh x;h /kujkf'k es ls fuEuor dVkSrh dj izns'ku fujLr dj fn;k tk;sxkA v& c;kuk /kujkf'k lfgr izFke pj.k ls tek lEiw.kZ /kujkf'kA c& ;fn lEifRr dk dCtk izkIr dj fy;k gS rks mPpre cksyh dk ,d izfr'kr gzkl VwV&QwV O;; ds :i esa mlls olwy fd;k tk;sxkA blds vfrfjDr lHkh ekeyksa es ifj"kn dks dCtk okil nsus esa gksus okysa jftLV~sª'ku 'kqYd vkfn O;; Hkh izns'ku x`ghrk dks ogu djuk gksxkA
7. A perusal, therefore, makes it abundantly clear that the highest bidder does not have any right to claim the allotment, which is subject to approval. Even otherwise the law laid down by the Apex Court and by this Court to the effect is that a highest bidder does not have any fundamental or legal right to claim the allotment as a matter of right. An illustrative decision on this issue is that of State of Uttar Pradesh and others vs. Vijay Bahadur Singh and others (1982) 2 SCC 365 where in paragraph-3 the Apex Court ruled as under:-
"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 his bid happened to be the highest. Under condition No. 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 No. 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 anti-theatric 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. That is precisely what has happened here. The legislative policy which the Government was bound to implement sooner or later was clearly against auction of forest lots and in favour of allotment of the lots to the Forest Corporation. That was why though forest lots were originally advertised for auction the Government cancelled the proposal to auction the lots and decide to allot them to the Forest Corporation. The decision of the Government to do so was in implementation of the policy laid down by the legislature when it passed the Uttar Pradesh Corporation Act. However, at the intervention of some Members of the legislature the Forest Minister decided to go back upon the previous decision to allot the forest lots to the Forest Corporation in accord with the legislative policy. He decided to sell the lots by public auction, contrary to the policy indicated by the legislature. Though the auction went off smoothly on the first three days, there was a disturbance on the 4th day. The incident on the last day and the fantastic bids spurred the Government to rethink the entire matter and to accept the recommendation of the officials of the Forest Department from Forest Officer to Chief Conservator of Forests that the highest bids offered at the auction held on 1st, 3rd and 4th November should not be accepted by the Government. The Government, not having already ratified the bids and finding itself free to revise its policy, cancelled the auction and allotted the forest lots to the Forest Corporation. It is true that there is no express policy decision of the Government recorded after the date of auction. It is implicit in the very action of 20' the Government in cancelling the auction and allotting the forest lots to the Forest Corporation. The policy decision had already been taken by the legislature when it enacted the Uttar Pradesh Forest Corporation Act and by the Government when it earlier decided to allot all the forest lots to the Forest Corporation. There was a deviation from the policy decision, at the instance of some legislators, in the case of the East Bahraich Forest Division. The events that took place later that is the fantasy of the bids at the auction on 1st, 3rd and 4th and the disturbances that took place on 5th exposed the folly of such deviation and resulted in the Government immediately reverting to its earlier decision to allot all the forest lots to the Forest Corporation. It is true that the auction held on 1st, 3rd and 4th November fetched bids totalling Rs. 1 crore 92 lakhs which was 71 percent over the estimated price of the timber. This was far, far above any amount that might be expected to be realised from the Forest Corporation. In our view that would not make the decision of the Government arbitrary. In the first place the bids were fantastically high and therefore, became suspect. One must wonder how such bids could be offered if the bidders did not propose to indulge in illicit felling. The State is not merely interested in realising revenue but is equally interested in the preservation and development of forests. It cannot knowingly enter into contracts with bidders who must have, at the back of their minds the opportunity or the gamble of illicit felling of trees. In the second place the Corporation is a wholly Government owned Corporation dedicated to the better preservation and development of forests and the better exploitation of forest produce. The profits of the Corporation are in truth the profits of the Slate itself. The circumstance that the Corporation may not be able to pay the same price as forest contractors cannot be a reason for denying the Government the right to give effect to legislative policy. We are, therefore, unable to find any infirmity attaching to the decision of the Government. One of the principal grounds on which the High Court set aside the decision of the Government was that the Government stated no reasons for its decision. It is not correct to say so. The letter of the Government addressed to the Chief Conservator of Forest communicating its decision says: "Government have accepted this proposal that all the forest lots should be got worked through Forest Corporation and the entire auction of all the lots of Major Forest Produce of this Division be cancelled." It is clear that the auction was cancelled because the Government decided to allot the entire forest lots to the Forest Corporation. As already observed by us this decision to allot the forest lots to the Forest Corporation was in conformity with legislative policy and the earlier decisions taken by the Government to implement the legislative policy. It was no more than a reversion to a policy decision already taken. It was a good and sufficient reason for setting aside the auction. We are unable to hold that the decision of the Government was bad for failure to state reasons. In the circumstances we allow both the appeals with costs, set aside the judgment of the High Court and dismiss the Writ Petition."
8. The aforesaid decision was noticed in the context of legitimate expectation by a later decision of the Apex Court in the case of Union of India and others vs. Hindustan Development Corporation and others (1993) 3 SCC 449 where the issue of legitimate expectation in contracts has been elaborately discussed in paragraphs 28, 33 and 35 thereof extracted hereinunder:
"28. Time is a three-fold present: the present as we experience it, the past as a present memory and future as a present expectation. For legal purposes, the expectation can not be the same as anticipation. It is different from a wish, a desire or a hope nor can it amount to a claim or demand on the ground of a right. However earnest and sincere a wish, a desire or a hope may be and however confidently one may look to them to be fulfilled, they by themselves cannot amount to an assertable expectation and a mere disappointment does not attract legal consequences. A pious hope even leading to a moral obligation cannot amount to a legitimate expectation. The legitimacy of an expectation can be inferred only if it is founded on the sanction of law or custom or an established procedure followed in regular and natural sequence. Again it is distinguishable from a genuine expectation. Such expectation should be justifiably legitimate and protectable. Every such legitimate expectation does not by itself fructify into a right and therefore it does not amount to a right in the conventional sense.
33.On examination of some of these important decisions it is generally agreed that legitimate expectation gives the applicant sufficient locus standi for judicial review and that the doctrine of legitimate expectation is to be confined mostly to right of a fair hearing before a decision which results in negativing a promise or withdrawing an undertaking is taken. The doctrine does not give scope to claim relief straightaway from the administrative authorities as no crystallised right as such is involved. The protection of such legitimate expectation does not require the fulfilment of the expectation where an overriding public interest requires otherwise. In other words where a person's legitimate expectation is not fulfilled by taking a particular decision then decision-maker should justify the denial of such expectation by showing some overriding public interest. Therefore even if substantive protection of such expectation is contemplated that does not grant an absolute right to a particular person. It simply ensures the circumstances in which that expectation may be denied or restricted. A case of legitimate expectation would arise when a body by representation or by past practice aroused expectation which it would be within its powers to fulfil. The protection is limited to that extent and a judicial review can be within those limits. But as discussed above a person who bases his claim on the doctrine of legitimate expectation, in the first instance, must satisfy that there is a foundation and thus has locus standi to make such a claim. In considering the same several factors which give rise to such legitimate expectation must be present. The decision taken by the authority must be found to be arbitrary, unreasonable and not taken in public interest. If it is a question of policy, even by way of change of old policy, the courts cannot interfere with a decision. In a given case whether there are such facts and circumstances giving rise to a legitimate expectation, it would primarily be a question of fact. If these tests are satisfied and if the court is satisfied that a case of legitimate expectation is made out then the next question would be whether failure to give an opportunity of hearing before the decision affect such legitimate expectation is taken, has resulted in failure of' justice and whether on that ground the decision should he quashed. If that be so then what should be the relief is again a matter which depends on several factors.
35. Legitimate expectations may come in various forms and owe their existence to different kind of circumstances and it is not possible to give an exhaustive list in the context of vast and fast expansion of the governmental activities. They shift and change so fast that the start of our list would be obsolete before we reached the middle. By and large they arise in cases of promotions which are in normal course expected, though not guaranteed by way of a statutory right, in cases of contracts, distribution of largess by the Government and in somewhat similar situations. For instance discretionary grant of licences, permits or the like, carries with it a reasonable expectation, though not a legal right to renewal or non-revocation, but to summarily disappoint that expectation may be seen as unfair without the expectant person being heard. But there again the court has to see whether it was done as a policy or in the public interest either by way of G.O., rule or by way of a legislation. If that be so, a decision denying a legitimate expectation based on such grounds does not qualify for interference unless in a given case, the decision or action taken amounts to an abuse of power. Therefore the limitation is extremely confined and if the according of natural justice does not condition the exercise of the power, the concept of legitimate expectation can have no role to play and the court must not usurp the discretion of the public authority which is empowered to take the decisions under law and the court is expected to apply and objective standard which leaves to the deciding authority the full range of choice which the legislature is presumed to have intended. Even in a case where the decision is left entirely to the discretion of the deciding authority without any such legal bounds and if the decision is taken fairly and objectively, the court will not interfere on the ground of procedural fairness to a person whose interest based on legitimate expectation might be affected. For instance if an authority who has full discretion to grant a licence and if he prefers an existing licence holder to a new applicant, the decision cannot be interfered with on the ground of legitimate expectation entertained by the new applicant applying the principles of natural justice. It can therefore be seen that legitimate expectation can at the most be one of the grounds which may give rise to judicial review but the granting of relief is very much limited. It would thus appear that there are stronger reasons as to why the legitimate expectation should not be substantively protected than the reasons as to why it should be protected. In other words such a legal obligation exists whenever the case supporting the same in terms of legal principles of different sorts, is stronger than the case against it. As observed in Attorney General for New South Wales' case "To strike down the exercise of administrative power solely on the ground of avoiding the disappointment of the legitimate expectations of an individual would be to set the courts adrift on a featureless sea of pragmatism. Moreover, the notion of a legitimate expectation (falling short of a legal right) is too nebulous to form a basis for invalidating the exercise of power when its exercise otherwise accords with law." If a denial of legitimate expectation in a given case amounts to denial of right guaranteed or is arbitrary, discriminatory unfair or based, gross abuse of power or violation of principles of natural justice, the same can be questioned on the well-known grounds attracting Article 14 but a claim biased on mere legitimate expectation without anything more cannot ipso facto give a right to invoke these principles. It can be one of the ground to consider but the court must lift the veil and see whether the decision is violative of these principles warranting interference. It depends very much on the facts and the recognised general principles of administrative law applicable to such facts and the concept of legitimate expectation which is the latest recruit to a long list of concepts fashioned by the courts for the review of administrative action, must be restricted to the general legal limitations applicable and binding the manner of the future exercise of administrative power in a particular case. It follows that the concept of legitimate expectation is "not the key which unlocks the treasury of natural justice and it ought not to unlock the gates which shuts the court out of review on the merits," particularly when the element of speculation and uncertainty is inherent in that very concept. As cautioned in Attorney General for New South Wales' case the courts should restrain themselves and restrict such claims duty to the legal limitations. It is a well-meant caution. Otherwise a resourceful litigant having vested interests in contracts. licences etc,. can successfully indulge in getting welfare activities mandated by directive principles thwarted to further his own interests. The caution, particularly in the changing scenario, becomes all the more important"
9. A perusal thereof, therefore, leaves no room for doubt that even in the present case where there is a clear dispute being raised with regard to discrepancies in the advertisement and the tender notice and where the tender condition clearly stipulates that a mere participation or highest bid would not confer any right, the contention of Shri Shekhar on behalf of the petitioner cannot be accepted.
10. The object of any State largesse is to obtain the highest revenue. At this stage Shri Srivastava has pointed out that there are discrepancies in the tender notice. Shri M.D. Singh Shekhar has disputed the same. Whatever may be the position the offer of the petitioner was of Rs.28,000/- per sqr. mtr. and he has stated this in para 11 of the writ petition.
11. If the petitioner so chooses, in our considered opinion, he can still participate in the fresh bid provided he tenders his offer afresh, giving the minimum offer of Rs.28,000/- per sqr. mtr. In such an event if the petitioner undertakes to purchase the plot on such minimum price and indemnify in case of default, the respondents Avas Evam Vikas Parishad shall proceed on the minimum of Rs.28,000/- per sqr. mtr. for the plot in question and it shall be open to the Avas Evam Vikas Parishad to proceed to hold the auction in accordance with the brochure, which has been issued and the advertisement, which may be issued afresh.
12. The petitioner, if he applies according to any fresh advertisement, shall be entitled to participate in the same. We are, therefore, for the reasons above, not inclined to interfere at the instance of the petitioner. The petitioner is entitled to refund of any amount that he has deposited against the advertisement as per terms of the advertisement itself, if not already tendered to the petitioner.
13. The writ petition is consigned to records with the aforesaid observations.
Order Date :- 1.9.2014 RKP