Andhra HC (Pre-Telangana)
Sri P.V.K. Satyanarayana vs Govt. Of Andhra Pradesh, And Others on 27 April, 1992
Equivalent citations: AIR1993AP42, AIR 1993 ANDHRA PRADESH 42
ORDER
1. The petitioner in this Writ Petition seeks a Writ of Mandamus, declaring the order of the Executive Officer of Sri Bhramaramba Mallikarjuna Swamy Varu Devasthanam, Srisailam (the 3rd respondent herein) issued in his Rc.No. C2/630/92 dated 27-3-1992 signed on 28-3-1992, informing him that the Commissioner, Endowments Department (the 2nd respondent herein) has not approved the lease hold rights for collection of broken coconuts in both the temples for the period from 1-4-1992 to 31-3-1993 granted in favour of the petitioner with directions to conduct fresh public auction, as arbitrary, illegal and unjust etc.
2. The petitioner states that the Devasthanam conducted public auction on 18-2-1992 to lease out the right of collecting the broken coconuts for the period from 1-4-1992 to 31-3-1993 after sufficient advance publication and that the petitioner made the initial deposit of Rs. 10,000/- and participated in the said auction. He states that his bid for Rs.2,50,000/- was the highest bid and it was knocked down in his favour and that he immediately paid Rs. 30.000/- more towards part of 1/3rd of the highest bid amount and the remaining sum of Rs. 13.330/- of the l/3rd of the bid amount on 9-3-1992. The petitioner states that subsequently he was called forby the'3rd respondent on 28-3-1992 evening and was served with the orders of the 3rd respondent in his Re. No.C2/630/92 dated: 27-3-1992. In the said order, which is impugned in this Writ Petition, it is stated that on a representation made by one E. Ramachandra Reddy of Metnala village, the Commissioner did not accord "approval for the licence granted to collect the broken coconuts in the two temples on 18-3-1992 in public auction for the period from 1-4-1992 to 31-3-1993 and directed fresh public auction again" and that the upset bid at the said auction would start from Rs. 2,79,000/-.
3. In the impugned order, reference was made of the Commissioner's D.Ds, No. C.2/630/92 dated 21-3-1992.
4. Notice before admission was directed in this Writ Petition on 31-3-1992 and the learned Government Pleader for Endowments was directed to produce the relevant records of the 2nd respondent. After the records of the 2nd respondent were produced on 1-4-1992 this Court observed as follows :--
"The learned Government Pleader produp-ed the record of the Commissioner, Endowments Department, the 2nd respondent herein. The record discloses that the 3rd respondent in his Rc.No. C2/ 630/92 dated 7-3-1992 reported to the 2nd respondent i.e., the Commissioner, Endowments Department. In the said report, he stated that there was good competition between the participants and that the bid amounts were higher than the amounts of the previous year. In respect of the auction relating to broken coconuts, it was stated that for the previous year the amount realised was Rs. 2,42,000/- and that at the present auction the highest bid was for Rs.2,50,000/-. He also stated in the report that in respect of the said auction the highest bid was that of the petitioner for Rupees 2,50,000/- and that as he felt that the amount was reasonable, the highest bid was accepted. He therefore recommended for the acceptance of the same by the Commissioner. Subsequently, the 3rd respondent in his Re. No. C2/630/92 dated 10-3-1992 sent another report stating that he received a petition from one E. Ramachandra Reddy of Metnala village in Nandyala Mandal, Kurnool district on 7-3-1992 alleging collusion in the auction of right of collection of coconut halves. In the said petition it was slated by E. Ramachandra Reddy that he was ready to bid up to Rs. 2,79,000/- provided fresh auction was ordered to be conducted "in the office of the Commissioner, on security reasons". The 3rd respondent reports that on 18-2-1992 the auction was held in the temple office and that due publicity was given about the auction rights by publication in daily Newspaper Eenadu dated 4-2-1992 and by distributing auction pamphlets and that the auction was conducted in the presence of the Assistant Commissioner, Kurnool and that 8 persons paid Rs. 10,000/- each towards auction deposit and that only two persons participated in the auction. The 3rd respondent also states that the bid was struck down in favour of the petitioner herein and that after the bid was struck down on 18-2-1992 the said E. Ramachandra Reddy came up with a request on 7-3-1992 that he was prepared to raise the bid amount up to Rs. 2,79,000/- as against Rs. 2,50,000/- secured in the public auction held on 18-2-1992. The said report dated 10-3-1992 of the 3rd respondent was received in the Commissioner's Office as noted from the stamp, on 11-3-1992 and thereafter the 1st respondent took a decision thereon around 21-3-1992. The record discloses that the up set price fixed in respect of the auction of the broken cocounuts held on 18-2-1992 was Rs. 2,00,000/-. The record also discloses that the said E. Ramachandra Reddy did not deposit any amount whatsoever, whereas the petitioner deposited by 9-3-1992 1/3rd of the amount bid by him. The record also discloses that the 3rd respondent and the Assistant Commissioner, Kurnool who was said to be present at the time of auction, did not mention anything about any unhealthy atmosphere at the time of auction held on 18-2-1992. It is also to be noted that even though the auction was held on 18-2-1992, the said E. Ramachandra Reddy came up with his petition only on 7-3-1992.
In as much as the auction period is to . commence today i.e., l-4-1992,itissurprising that the authorities concerned moved in the matter without the expedition expected of them. The learned Government Pleader for Endowments requests time till 7-4-1992 for filing the counter affidavit of the Commissioner, Endowments Department, the 2nd respondent. The learned counsel appearing for the 3rd respondent also requests time for filing the counter-affidavit of the 3rd respondent. The learned Government Pleader also agrees that it would be in the fairness of things if the period of lease is made to commence from the actual day when the Commissioner gives his approval.
Subject to that condition, the Writ Petition is directed to be posted for orders on 7-4-1992."
5. However, no counter-affidavits were filed by respondents 2 and 3 when the Writ Petition came up for orders. Subsequently, the learned Government Pleader for Endowments placed before the Court the order of the 2nd respondent in D. Dis. No. A3/18155/92 dated 6-4-1992 which is in the following terms:--
"In the circumstances reported by the Executive Officer, Sri Bhramaramba Mallikarjuna Swamy Devasthanam, Srisailam in the reference 3rd cited and whereas registered notice was issued by the Executive Officer, Sri Bramaramba Mallikarjuna Swamy Devasthanam, Srisailam to Sri E. Ramachandra Reddy of Metnala Village, Nandyala Mandalam for payment of 1 / 3 bid amount offered by him i.e., Rs. 93,000/- and whereas he failed to pay the 1/3rd bid amount within the stipulated period to Devasthanam the Commissioner, Endowments Department, A.P., Hyderabad hereby approves the granting of licence for collection of cocunut halves in favour of the highest bidder of Sri P.V.K. Satyanarayana Rs. 2,50,000/- (Rupees Two Lakhs Fifty Thousands only) secured in public auction held on 18-2-1992 for a period of one year with effect from 15-4-1992."
Subsequently, the learned Government Pleader for Endowments also produced the orders of the 3rd respondent in his Re. No. C2/630/92 dated 8-4-1992 and 19-4-1992 wherein the licence was granted in favour of the petitioner herein pursuant to the orders of the 2nd respondent dated 6-4-1992. In the the circumstances, no further orders are necessary in this writ petition for grant of the said licence to the petitioner as it was already granted to him for a period of one year from 15-4-1992.
6. But, it is necessary to consider whether the decision of the 2nd respondent in his D. Dis. No. A3/13204/92 dated 21-3-1992 (not D. Dis. No. C2/630/92 dated 21-3-1992 referred to by the 3rd respondent in his communication to the petitioner dt. 27-3-92) in delaying the approval of the highest bid of the petitioner because one E. Ramachandra Reddy of Metnala village submitted a petition that he would be willing to pay Rs. 2,79,000/ -and directing fresh auction to be conducted if the said Ramachandra Reddy deposited l/3rd of the said order i.e., Rs.93,000/-is proper or wholly unwarranted and arbitrary.
7. The file produced before me discloses that after the auction was held on 18-2-1992 the 3rd respondent in his letter Re. No. C2/630/92 to the 2nd respondent herein dated 7-3-1992 recommended the acceptance of the highest bid of the petitionerobserving that his bid was higher than that for the earlier period i.e., 1-4-1991 to 31-3-1992 (Rupees 2,42,000/-) and that there was good competition at the auction. Thereafter, in his letter Rc.No.C2/630/92 dated 10-3-1992 to the 2nd respondent, the 3rd respondent observed that he received a petition dated nil from the said E. Ramachandra Reddy on 7-3-1992 alleging collusion in the said auction and expressing his readiness to bid up to Rs. 2,79,000/-provided fresh auction was ordered to be conducted in the office of the Commissioner, on security reasons. The 3rd respondent further stated in the said letter as follows:--
"In this context I submit that the auction of collection right of Coconut Halves along with other auction rights was held on 18-2-92 in the temple office. Due publicity was given about the auction rights by publication in daily Newspaper-Eenadu, dt. 4-2-92 and by distributing auction pamphlets. The auction was conducted in the presence of Asst. Commissioner, Kurnool. 8 persons have paid Rs. 10,000/- each towards auction deposit as per auction conditions. But only 2 people have participated in the auction. The highest bid went up to Rs. 2,50,000/- as against Rs. 2,42,000/- of previous year. The bid was accordingly struck down in favour of the highest bidder Sri P.V.K. Satyanarayana. After the bid was struck down on 18-2-92 one Sri E, Ramachandra Reddy of Metnala Village, the petitioner herein came up with a request on 7-3-92 that he is prepared to raise the bid amount up to, Rs. 2,79,000/- as against Rs. 2,50,000/- secured in the public auction held on 18-2-1992.
According to the condition No. 9 of auction conditions the highest bidder has to pay 1/3 of the said amount immediately after the auction is over. So if reauction is to be ordered it would be justifiable to demand the petitioner to pay 1/3 of the amount set up by him, which comes to Rs. 2,79,000/-; 93,000/-to be paid by D. D. in favour of E.G., Srisailam Devs., and to be sent to the Commissioner. As the period of fresh lease commences from 1-4-92, the petitioner may be asked to send the Demand Draft as said above within a week so that Commissioner could be pleased to order for re-auction sufficiently in advance i.e., before 31-3-92. If the petitioner did not move to pay D.D. before 31-3-92, the auction already held on 18-2-92 in favour of Sri P.V.K. Satyanarayana may be confirmed for Rupees 2,50,000/-for 1 year.e.,from 1-4-92 to 31-3-93."
8. I am of the view that the said proposals of the 3rd respondent in his letter dated 10-3-92 are not warranted in view of his recommendation in his earlier letter dated 7-3-1992 and the observations therein that the auction held on 18-2-1992 was well publicised in advance by advertising the same on the R.T.O. buses, at all important offices of the Endowments department and also in the Eenadu daily and that there was good competition at the said auction. In the said letter dated 10-3-1992, the 3rd respondent did not make any reference to the allegations made by the said Ramachandra Reddy that he was prevented from participating in the said auction by unsocial and gunda elements. It is to be noticed also that the said Ramachandra Reddy did not make any complaint immediately after the auction was conducted on 18-2-1992 or soon thereafter, and that he chose to give his complaint only on 7-3-1992 and that he did not come forward to make any deposit along with the said petition. There is no doubt that a highest bid at an auction need not necessarily be accepted. The Commissioner i.e., the 2nd respondent herein can always refuse to give his approval if he is satisfied that there was no proper publicity for the auction that was held, or that bidders were prevented from participating in the auction or that the participation and the bidding at the auction was far below the expectations, or that the amount that was bid was unreasonably low, etc. But the approval of the highest bid cannot be refused on unreasonable or arbitrary grounds and merely because some third party had made some wild and insubstantial allegations and without participating in the auction, came forward long after the auction offering a higher amount.
9. In this connection, the observations of this Court in B. Sambaiah v. Sri Lakshmi Venkateswara Devasthanam, are to be noted, See also the judgment of this Court in W. P. No. 3258 of 1992 dated 25-3-1992 (Talagani Nagaraju y. The Superintending Engineer and others). In that case also an auction was held and the highest bid for Rs. 35,000/- was recommended for approval to the Commissioner of Endowments who was the authority to approve the highest bid. At that stage a third party addressed a representation to the Commissioner of Endowments stating that he was willing to pay lease amount of Rs. 40.000/-. The Commissioner required the third party to deposit Rs. 40.000/- with the Devasthanam within 3 days, which he did. There upon, the Commissioner expressed the view that the bid of Rs. 35,000/- secured in the public auction already held was not 'found to be fair and reasonable' and on that ground did ndt approve the highest bid and directed re-auction of the leasehold rights which was questioned by way of a writ petition by the highest bidder. Disapproving the action of the Commissioner of Endowments and allowing the Writ Petition, this Court held as follows :--
"There may be cases where the offer of lease amount or sale consideration by private negotiations may be found to be so hopelessly low that the authorities administering public institutions can legitimately come to the conclusion that there was something wrong with private negotiations. That was the reason why Courts frown at private negotiations in the matter of transactions concerning public institutions like Devasthanams. This is not because that every private negotiation is associated with ill-reputation. It is because of, the anxiety to show to the public that there was no possibility of any collusion or abuse of private negotiation. It was for this reason the Courts encourage public auctions. This does not justify that even a public auction held in conformity with rules coutd be considered to be inadequate just because after conclusion of the auction somebody intervenes to pay a farthing more. A person occupying a high office of the Commissioner of Endowments, should not be guided by an advantage in monetary consideration secured by the intervention of a person who did not care; to participate in the public auction. It is the duty of the Commissioner to uphold the public auction if there is no ground to believe that the auction is conducted by questionable considerations. Cases may come to the notice of the authorities who are required to give approval where there is collusion among the bidders or the public auction is not largely attended. In such cases the Commissioner may withhold approval. But in a case where the authorities conducting public auction give a solemn assurance to the Commissioner of Endowments that the public auction was conducted in an atmosphere of great trust, the Commissioner of Endowments should not reject the result 'of such' a public auction taking into consideration that some one who did not participate in the public auction came forward to offer a little more. If this consideration is the guiding principle then it is not possible to draw a line at any particular point For instance a re-auction is held and the highest bid is accepted and when the approval of the Commissioner is sought, another person makes a representation to the Commissioner offering a highest least amount. Would the Commissioner reconduct the whole auction? If so, how many auctions he would be willing to conduct? If one has to set his foot down, as a matter of principle, against considerations like this, it must stop at the point where the first public auction was held in an atmosphere of total trust and without evoking any suspicion. In my opinion it is totally irrelevant on the part of the approving authority to take into consideration the representations from third parties after the closure of the auction proceedings. This is precisely what happened in the present case. The Commissioiner was guided away by, the fact that Koteswararao was willing to offer Rs. 5,000/- more. I am willing to accept that the Commissioner acted absolutely bona fide and in the interests of the institution which is likely to secure Rs. 5,000/- more. But then the action of the Commissioner, notwithstanding his bona fides, is open to criticism that he discarded principles that should really govern an institution like the present one. I must therefore, hold that there is not the slightest justification on the part of the Commissioner to withhold approval in the present case, and it must be stated that the Commissioner acted arbitrarily and unreasonably. The action of the Commissioner must be regarded as violative of Art. 14 of the Constitution of India."
10. I am therefore of the view that the reasoning in the order of the Commissioner in his D.Dis. No. A3/18155/92 dated 64-1992 is erroneous. It discloses that the 2nd respondent has not properly appreciated the legal position. Approval of the highest bid of the petitioner cannot be put under suspended animation because somebody who had participated in the auction had come forward to pay a higher amount long after the auction was held. If the allegations made by the said Ramachandra Reddy that the auction was not a fair one and that he was high-handedly prevented from participating in the auction were found to be true after adue enquiry, then it would have been open to the 2nd respondent not to give his approval to the highest bid in such an improperly conducted auction. But when there were no grounds for setting aside the auction, the 2nd respondent ought not to have kept in abeyance the acceptance of the highest bid of the petitioner.
11. In the circumstances, the order of the 2nd respondent in his D. Dis. No. A3/13204/ 92 dated 21-3-1992 in so far as it relates to the keeping in abeyance of the highest bid of the petitioner herein for the licence for collection of coconut halves for one year from 1-4-1992 to 31-3-1993 communicated to the petitioner herein by the 3rd respondent in his Rc. No. C2/630/92 dated 27-3-1992 is set aside and the Writ Petition is accordingly allowed with costs. As the petitioner was already granted the licence for one year from 15-4-1992, no further consequential directions are necessary. Advocate's fee Rs. 250/-.
12. Order accordingly.