Rajasthan High Court - Jodhpur
Kuldeep Lodhawat vs The Rajasthan State Industrial Deve. ... on 27 September, 2023
Author: Nupur Bhati
Bench: Nupur Bhati
[2023:RJ-JD:30968]
HIGH COURT OF JUDICATURE FOR RAJASTHAN AT
JODHPUR
S.B. Civil Writ Petition No. 1423/2021
Kuldeep Lodhawat S/o Shri Ramesh Chandra Lodhawat, Aged
About 32 Years, Resident Of Subhash Marg, Kushalgarh, District
- Banswara, Rajasthan.
----Petitioner
Versus
1. The Rajasthan State Industrial Deve. And Investment
Corporation Limited, Through Senior Regional Manager,
Riico Ltd., Area Pipalwa, Banswara - 327001, Raj. Email -
[email protected]
2. The Chairman, The Rajasthan State Industrial
Development And Investment Corporation Limited,
Udhyog Bhawan, Tilak Marg, Jaipur. Email -
[email protected]
----Respondents
For Petitioner(s) : Mr. Rajesh Panwar, Sr. Adv. With
Mr. Ayush Gehlot
For Respondent(s) : Mr. Surendra Thanvi
HON'BLE DR. JUSTICE NUPUR BHATI
Judgment Reserved on: 19/09/2023 Pronounced on: 27/09/2023
1. At the joint request of learned counsels of the parties, the matter is heard finally today itself.
2. The instant writ petition is filed under Article 226 of the Constitution of India, with the following prayers:
"It is, therefore, most respectfully prayed that this writ petition may kindly be allowed and by an appropriate writ, order or direction:
i) The Decision cum order of the Committee constituted under RIICO (Annex. 4 & 5) may kindly be quashed.(Downloaded on 12/11/2023 at 06:39:46 AM)
[2023:RJ-JD:30968] (2 of 20) [CW-1423/2021]
ii) The commercial plot CP-2 situated at RIICO, Kushalgarh, District Banswara may kindly be allotted in favor of the petitioner.
Any other writ, order or direction which this Hon'ble Court may deem just and proper in the facts and circumstances of the case, may kindly be passed in favour of the petitioner. Costs of the writ petition may kindly be awarded to the petitioner."
3. The factual matrix of the case is that the Rajasthan State Industrial Development and Investment Corporation Ltd. (hereinafter referred to as 'RIICO'), Respondent No. 1, issued an advertisement dated 22.11.2020 (Annexure-1) inviting applications for e-Auction for two commercial plots, i.e; CP 1 and CP 2, situated at Kushalgarh, Dist. Banswara, and the requisite documents were required to be submitted within the dated ranging from 23.11.2020 to 07.12.2020. The e-Auction took place from 08.12.2020 at 1000 hours to 10.12.2020 till 1700 hours.
4. The petitioner after complying with the requisites mentioned in the advertisement dated 22.11.2020 applied for the e-Auction and deposited application amount along with the earnest money The petitioner vide application dated 07.12.2023 (Annexure-2) submitted all the requisite documents and deposited the application amount along with the earnest money to participate in e-Auction.
5. The petitioner was allowed to take part in e-Auction, which was held on 08.12.2020 to 10.12.2020. At the end of e-Auction for plot CP 2, the petitioner was declared succesful bidder for making the highest bid for CP 2 @ Rs. 13,160/- per sqm.
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6. The petitioner being the successful/highest bidder for the commercial plot CP 2 kept waiting for the 'Confirmation of Auction cum Demand Letter' and thereafter, the petioner came to know that the Regional Manager, RIICO with regard to commercial plot CP 2 drew note sheets (Annexure-4) to effect that the Plots No. CP 1 and CP 2 are almost similar in size admeasuring 472.35 sqm and 471.55 sqm, respectively, but there is a huge difference of amount and therefore, the decision that whether the highest bid for Plot No.: CP 2 needs to be accecpted/rejected, is forwarded before the Head Office Committee.
7. The Head Office Committee in it's decision (Annexure-5) rejected the bid for Plot No. CP 2 and further, directed the authorities to conduct re-auction for Plot No. CP 2 and allowed the highest bid done by one Sh. Pritesh Pidiyar for Plot No. CP 1.
8. Aggrieved by the above decision of the Head Office Committee has preferred this writ petition.
9. The learned senior counsel for the petitioner submitted that:
A). The decision taken by the Head Office Committee was without affording the petitioner an opportunity of being heard which is gross violation of the principles of natural justice and also in violation of the provisions of the Rajasthan Transparency in Public Procurement Act, 2012 (hereinafter referred to as 'the Act of 2012') and Rajasthan Transparency in Public Procurement Rules, 2013 (hereinafter referred to as 'the Rules of 2013'). The relevant provision of the Act of 2012 and the Rules of 2013 reads as under:(Downloaded on 12/11/2023 at 06:39:46 AM)
[2023:RJ-JD:30968] (4 of 20) [CW-1423/2021] '4. Fundamental principles of public procurement. - (1) In relation to a public procurement, the procuring entity shall have the responsibility and accountability to -
(a) ensure efficiency, economy and transparency;
(b) provide fair and equitable treatment to bidders;
(c) promote competition; and
(d) put in place mechanisms to prevent corrupt practices.
(2) Subject to the provision of sub-section (3) of section 3, every procuring entity shall carry out its procurement in accordance with the provisions of this Act and the rules and guidelines made thereunder.
69. Negotiations-
(1) Except in case of procurement by method of single source procurement or procurement by competitive negotiations, to the extent possible, no negotiations shall be conducted after the pre-bid stage. All clarifications needed to be sought shall be sought in the pre-bid stage itself. (2) Negotiations may, however, be undertaken only with the lowest or most advantageous bidder under the following circumstances-
(a) when ring prices have been quoted by the bidders for the subject matter of procurement; or
(b) when the rates quoted vary considerably and considered much higher than the prevailing market rates.
(3) The bid evaluation committee shall have full powers to undertake negotiations. Detailed reasons and results of negotiations shall be recorded in the proceedings. (4) The lowest or most advantageous bidder shall be informed in writing either through messenger or by registered letter and email (if available). A minimum time of seven days shall be given for calling negotiations. In case of urgency the bid time evaluation committee, after recording (Downloaded on 12/11/2023 at 06:39:46 AM) [2023:RJ-JD:30968] (5 of 20) [CW-1423/2021] reasons, may reduce the time, provided the lowest or most advantageous bidder has received the intimation and consented to regarding holding of negotiations. (5) Negotiations shall not make the original offer made by the bidder inoperative. The bid evaluation committee shall have option to consider the original offer in case the bidder decides to increase rates originally quoted or imposes any new terms or conditions.
(6) In case of non-satisfactory achievement of rates from lowest or most advantageous bidder, the bid evaluation committee may choose to make a written counter offer to the lowest or most advantageous bidder and if this is not accepted by him, the committee may decide to reject and re-invite bids or to make the same counter-offer first to the second lowest or most advantageous bidder, then to the third lowest or most advantageous bidder and so on in the order of their initial standing and work / supply order be awarded to the bidder who accepts the counter-offer. This procedure should be used in exceptional cases only. (7) In case the rates even after the negotiations are considered very high, fresh bids shall be invited. ' A bare reading of Rule 69 of the Rules of 2013 which deals with 'Negotiations' would reveal that in the situation like the present one, RIICO should have called petitioner for negotiations before reaching out to any decision but in this case, the committee never complied with the procedural mandate of Rule 69 of the rules of 2013 and the aforementioned conditions entailed in the said Rule were blatantly disregarded by the Respondent authority given the fact that neither petitioner was called for negotiations nor any reasons were afforded in the cancellation order relying on which the respondent authority cancelled the allotment of Plot No. CP 2. (Downloaded on 12/11/2023 at 06:39:46 AM) [2023:RJ-JD:30968] (6 of 20) [CW-1423/2021] B) A bare perusal of the order passed by the committee would demonstrate that the decision of the committee is a non-speaking order and it clearly lacks any reasonable reasons on the basis of which the petitioner's name stood cancelled for the allotment of the said plot, i.e., CP-2.
C) The cancellation decision passed by the committee, i.e. Respondent No. 1, wrongfully interferes with the legal right of the petitioner for the allotment of the Plot No. CP 2 and by virtue of the petitioner's due and earnest compliance with the administrative mechanism of the e- auction invited by the Respondent authority, the petitioner's right to be allotted the said piece of land, i.e., CP-2 becomes absolute in light of his compliance with the rules and regulations of the auction process, as was laid out by the Respondent authority itself. D) The petitioner won the bidding for Plot No. CP 2, he did not go ahead with the bidding for Plot No. CP 1 because he was under the assumption that the allotment for CP 2 would be made in his favour and further submitted that it is within the contours of reasonableness and rationality that once a bidder wins the allotment for a specific piece of land, there would be no reason in logic to bid for another allotment of a different plot and hence, the action of cancelling the petitioner's allotment lacks any legal basis and is wholly arbitrary, perverse and contravenes the established bidding practices.
E) The Principle of doctrine of Estoppel stands invoked on the fulfillment of three conditions:
(i)representation is made to another, (Downloaded on 12/11/2023 at 06:39:46 AM) [2023:RJ-JD:30968] (7 of 20) [CW-1423/2021]
(ii) the other person acts on such representation, and
(iii) such action proves to be detrimental to the interests of the person to whom the representation is made.
In the factual matrix of the present case, the Respondent authority is estopped from cancelling the allotment that was duly made to the petitioner as moving under the presumption that Plot No. CP 2 was allotted to him, he didn't bid for CP 1, thereby losing allotment bids to both pieces of land.
F) The Respondent authority invited for an e-auction of the plots in question, it was legally bound to facilitate the petitioner's interaction with the bidding process, and also submitted that the petitioner had a legitimate expectation that since it won the bid for CP 2, the same would be duly allotted to him and it is needless to say, that the Respondent authority, by passing the cancellation order for CP 2 failed in complying with its legal mandate and has wrongfully left the petitioner high and dry and any action of the respondents that is arbitrary, unjust and unfair ipso facto jeopardizes the very tenet of Article 14 of the Constitution of India.
10. The learned senior counsel for the petitioner placed reliance on the judgement dated 25.05.2015 passed by Hon'ble Apex Court in the case of State of Punjab & Ors. v. Bandeep Singh & Ors., 2016 (1) SCC 724, wherein the Court held that:
"6. In the impugned Judgment, the High Court has rightly concluded that no sustainable justification and rationalization was recorded in writing at the relevant time for ordering the re-auction of only the two subject properties. However, we should not be understood to have (Downloaded on 12/11/2023 at 06:39:46 AM) [2023:RJ-JD:30968] (8 of 20) [CW-1423/2021] opined that the Government is bound in every case to accept the highest bid above the reserve price. Needless to say, the presence of cartelization or "pooling" could be a reason for the cancellation of an auction process. In addition, a challenge on the ground that the property has fetched too low a bid when compared to the prevailing market price, would also be valid and permissible provided this approach has been uniformly adhered to. In the case at hand, however, while the latter was ostensibly the reason behind the decision for conducting a fresh auction, no evidence has been placed on the record to support this contention. The highest bids, marginally above the reserve price, have been accepted in the self-same auction. The factual scenario before us is clearly within the mischief which was frowned upon in Mohinder Singh Gill. We therefore uphold the impugned judgment for all the reasons contained therein. The assailed action of the Appellant is not substantiated in the noting, which ought at least to have been conveyed to the Respondents.
7. The bid of the Respondents is already over a decade old, which is the period the present Appeal has been awaiting its turn in this Court. We must, therefore, balance the equities and interest of the adversaries before us. It has been submitted by the learned Senior Counsel for the Respondents that although the Appellant had addressed a letter to the Respondents purporting to return the sums received from them, the cheque for this amount was not enclosed with the letter. The fact remains that these sums continue to be in the coffers of the Appellant. It is also submitted by the learned Senior Counsel that the balance sale consideration had been tendered by the Respondents to the Appellant, who declined to accept it on the premise that their Appeal was pending in this Court. Learned Senior Counsel suggested that in the endeavour to do justice to all the parties before this Court, we may direct the Respondents to pay the price of the land at the prevailing Circle Rates, which suggestion has readily been accepted by the learned Counsel for the Appellant with alacrity. Since the Respondents have succeeded in the High Court as well (Downloaded on 12/11/2023 at 06:39:46 AM) [2023:RJ-JD:30968] (9 of 20) [CW-1423/2021] as before us, they should not be deprived of the fruits of the litigation and suffer the disadvantage of losing the land for which they have successfully paid the earnest money and deposited more than twenty five per cent of the sale consideration and have tendered the entire remainder. Learned Counsel appearing for the Appellant conceded that, in the facts of the present case, if the Respondents are directed to pay the circle rates, as existing today, the ends of justice would be met. Accordingly, in the circumstances of the present case, we hold that if the Respondents tender the price of the land equivalent to the prevailing Circle Rate minus the sums already paid by them to the Appellant within ninety days from today, the Appellant shall take all necessary steps to convey the land to the Respondents within sixty days thereafter."
11. The learned senior counsel for the petitioner further placed reliance on the judgment dated 03.11.1992 passed by Hon'ble Supreme Court in the case of Food Corporation of India v. Kamdhenu Cattle Feed Industries, 1993 (1) SCC 71, wherein the Court held that:
"7. In contractual sphere as in all other State actions, the State and all its instrumentalities have to conform to Article 14 of the Constitution of which non-arbitrariness is a significant facet. There is no unfettered discretion in public law : A public authority possesses powers only to use them for public good. This impose the duty to act fairly and to adopt a procedure which is 'fairplay in action'. Due observance of this obligation as a part of good administration raises a reasonable or legitimate expectation in every citizen to be treated fairly in his interaction with the State and its instrumentalities, with this element forming a necessary component of the decision making process in all State actions.
To satisfy this requirement of non-arbitrariness in a State action, it is, therefore, necessary to consider and give due (Downloaded on 12/11/2023 at 06:39:46 AM) [2023:RJ-JD:30968] (10 of 20) [CW-1423/2021] weight to the reasonable or legitimate expectations of the persons likely to be affected by the decision or else that unfairness in the exercise of the power may amount to an abuse or excess of power apart from affecting the bona fides of the decision in a given case. The decision so made would be exposed to challenge on the ground of arbitrariness.
Rule of law does not completely eliminate discretion in the exercise of power, as it is unrealistic, but provides for control of its exercise by judicial review.
8. The mere reasonable or legitimate expectation of a citizen, in such a situation, may not by itself be a distinct enforceable right, but failure to consider and give due weight to it may render the decision arbitrary, and this is how the requirement of due consideration of a legitimate expectation forms part of the principle of non-arbitrariness, a necessary concomitant of the rule of law. Every legitimate expectation is a relevant factor requiring due consideration in a fair decision making process. Whether the expectation of the claimant is reasonable or legitimate in the context is a question of fact in each case. Whenever the question arises, it is to be determined not according to the claimant's perception but in larger public interest wherein other more important considerations may outweigh what would otherwise have been the legitimate expectation of the claimant. A bona fide decision of the public authority reached in this manner would satisfy the requirement of non-arbitrariness and withstand judicial scrutiny. The doctrine of legitimate expectation gets assimilated in the rule of law and operates in our legal system in this manner and to this extent.
10. From the above, it is clear that even though the highest tenderer can claim no right to have his tender accepted, there being a power while inviting tenders to reject all the tenders, yet the power to reject all the tenders cannot be exercised arbitrarily and must depend for its validity on the existence of cogent reasons for such action. The object of inviting tenders for disposal of a commodity is to procure the highest price while giving equal opportunity to all the (Downloaded on 12/11/2023 at 06:39:46 AM) [2023:RJ-JD:30968] (11 of 20) [CW-1423/2021] intending bidders to compete. Procuring the highest price for the commodity is undoubtedly in public interest since the amount so collected goes to the public fund. Accordingly, inadequacy of the price offered in the highest tender would be a cogent ground for negotiating with the tenderers giving them equal opportunity to revise their bids with a view to obtain the highest available price. The inadequacy may be for several reasons known in the commercial field. Inadequacy of the prince quoted in the highest tender would be a question of fact in each case. Retaining the option to accept the highest tender, in case the negotiations do not yield a significantly higher offer would be fair to the tenderers besides protecting the public interest. A procedure wherein resort is had to negotiations with the tenderers for obtaining a significantly higher bid during the period when the offers in the tenders remain open for acceptance and rejection of the tenders only in the event of a significant higher bid being obtained during negotiations would ordinarily satisfy this requirement. This procedure involves giving due weight to the legitimate expectation of the highest bidder to have his tender accepted unless outbid by a higher offer, in which case acceptance of the highest offer within the time the offers remain open would be a reasonable exercise of power for public good."
12. The learned counsel for the respondents submitted that:
A) The petitioner have failed to demonstrate before this Hon'ble Court the legal right that has been infringed by the respondents upon cancellation of the bid.
B) There is no leagl right created in favour of the petitioner merely by submitting a bid in pursuance of the advertisement dated 22.11.2020 and the auction proceedings were subject to certain mandatory terms and conditions which were informed to the petitioner through the advertisement and even otherwise, the rejection of the bid offered by the petitioner was done because of (Downloaded on 12/11/2023 at 06:39:46 AM) [2023:RJ-JD:30968] (12 of 20) [CW-1423/2021] getting much higher price in the subsequent auction, due to rise in demand in that particular area and hence, the reasoning given by the respondents is just, fair and valid.
C) The provisions cited by the petitioner, that is, Section 4 of the Act of 2012 and Rule 69 of the Rules of 2013 does not apply in the present case and only applies to procurement contracts and the term 'procurement' is defined under Section 2 (xiii) of the Act of 2012, which reads as follows:
'(xiii) "procurement" or "public procurement" means the acquisition by purchase, lease, licence or otherwise of works, goods or services, including award of Public Private Partnership projects, by a procuring entity whether directly or through an agency with which a contract for procurement services is entered into, but does not include any acquisition without consideration, and "procure" or "procured" shall be construed accordingly;' A bare perusal of the definition shows that it applies to contract for procurement of goods and services, however, in the present case, no tender has been invited rather bids have been invited for sale of industrial plots.
D) The plan was to auction 3 adjoining industrial plots, that is, CP 1, CP 2 and CP 3 (this was put for auctioning from 23.02.2021 to 25.02.2021) admeasuring 472.35 sqm, 471.55 sqm and 452.67 sqm, respectively. The highest bids received for Plot No. CP 1 and CP 3 were Rs. 15,330/- and Rs. 18,810/- per sqm respectively and there was significant variation found in the rate as compared to the highest bid foe Plot No. CP 2, which was Rs. 13,160/- and (Downloaded on 12/11/2023 at 06:39:46 AM) [2023:RJ-JD:30968] (13 of 20) [CW-1423/2021] while rejecting the bids, the Field Level Committee has clearly given sound reasoning and valid justification of it's rejection.
E) The Condition No. 3 mentioned in the circular dated 25.07.2018 (Annexure-R/2) which deals with the general directions to be followed at the time of finalizing of highest bid received in the auction of plot, clearly states that "rate received higher than the reserve price shall not only be the criteria while finalizing the highest bid. The Senior Most Accounts and Finance Officer should make a rational comparision of rates received in the bids on the basis of reserve rate/price, rate received in previous auctions in the same area, rates received in adjacent areas and prevalent market price", which shows that the bid cancelled by the respondents is well within their powers and as per the advertisement
13. The learned counsel for the respondents placed reliance upon the judgment dated 23.03.2022 passed by this Court in the case of Madhu Lunawat & Ors. v. State of Rajasthan & Ors., SBCWP 2995/2022, the relevant portion of which is reproduced hereunder:
"The Hon'ble Supreme Court in Haryana Urban Development Authority & Ors. v. Orchid Infrastructure Developers Private Limited : (2017) 4 SCC 243, has held as under:-
27. This Court in the case of State of Uttar Pradesh & Ors.
v. Vijay Bahadur Singh & Ors. (1982) 2 SCC 365 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 (Downloaded on 12/11/2023 at 06:39:46 AM) [2023:RJ-JD:30968] (14 of 20) [CW-1423/2021] accrued to the bidder merely because 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 (Downloaded on 12/11/2023 at 06:39:46 AM) [2023:RJ-JD:30968] (15 of 20) [CW-1423/2021] reason for the Government's refusal to accept the highest bid at an auction..."
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 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 abovestated ground, the 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. x x x x x 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."
In the case of Rohit Burad v. RIICO & Anr. : D.B.S.A.W. No.599/2021 alongwith connected appeals, decided on 27.10.2021, the Division Bench of this Court held as under:-
"Having heard learned counsel for the parties and having perused the documents on record, we do not find that the appellant has made out any case for interference. It is undisputed position that the auction notice itself specified that the RIICO reserves the right to accept the bid. The circular issued by the Rajasthan State Industrial Development and Investment Corporation Ltd. also specifies that reserved rate (Downloaded on 12/11/2023 at 06:39:46 AM) [2023:RJ-JD:30968] (16 of 20) [CW-1423/2021] should not be the only criteria while finalizing the highest bid. Even otherwise, it is well settled principle by the judgments of the Supreme Court that a person participating in the auction does not have a vested right for the offer to be accepted, simply because it happens to be the highest bid. The authority inviting offers reserves the right to accept or not to accept the bid even if the same happens to be the highest offer. Such right, of course, has to be exercised reasonably and cannot be a matter of arbitrary exercise of pick and choose. In the present case, the RIICO authorities have placed full material on record justifying its action of canceling the bids. It is pointed out that in large number of cases, multiple bids of much higher value were offered for adjacent plots. Whereas in some of the cases, there were single bids and the price offered was marginally over the offset price. The analysis placed before the Court along with the affidavit filed, would show that other plots were auctioned at the rate of Rs. 1330 per sq. mtrs. to Rs. 1790 per sq. mtrs. which was substantially higher than the bid offered by the petitioner at Rs. 1210 per sq. mtrs."
14. The learned counsel for the respondents also placed reliance upon the judgment dated 04.11.2020 passed by this Court in the case of M/S Nehal Enterprises & Ors. v. State of Rajasthan & Ors., SBCWP 3946/2022, the relevant portion of which is reproduced hereunder:
"29. In Laxmikant & Ors. v. Satyawan & Ors. , this Court has laid down that in the absence of completed contract when the public auction had not culminated to its logical end before confirmation of the bid, no right accrued to the highest bidder. This Court has laid down as under:
"4. Apart from that the High Court overlooked the conditions of auction which had been notified and on (Downloaded on 12/11/2023 at 06:39:46 AM) [2023:RJ-JD:30968] (17 of 20) [CW-1423/2021] basis of which the aforesaid public auction was held. Condition No. 3 clearly said that after the auction of the plot was over, the highest bidder had to remit 1/10 of the amount of the highest bid and the balance of the premium amount was to be remitted to the trust office within thirty days "from the date of the letter informing confirmation of the auction bid in the name of the person concerned". Admittedly, no such confirmation letter was issued to the respondent. Conditions Nos. 5, 6 and 7 are relevant: "5. The acceptance of the highest bid shall depend on the Board of Trustees. 6. The Trust shall reserve to itself the right to reject the highest or any bid. 7. The person making the highest bid shall have no right to take back his bid. The decision of the Chairman of the Board of Trustees regarding acceptance or rejection of the bid shall be binding on the said person. Before taking the decision as above and informing the same to the individual concerned, if the said individual takes back his bid, the entire amount remitted as deposit towards the amount of bid shall be forfeited by the Trust." 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 (Downloaded on 12/11/2023 at 06:39:46 AM) [2023:RJ-JD:30968] (18 of 20) [CW-1423/2021] 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 learned senior counsel for the petitioner in rejoinder submitted that there was no such order of cancellation of bid which was in consonance with Condition No. 3 of the circular dated 25.07.2018, that is, a cancellation order which contained a rational comparison done by Senior Accounts and Finance Officer. The order of cancellation was a non-speaking order.
16. The learned senior counsel for the petitioner in rejoinder further submitted that the respondents in anticipation of receiving higher bids in subsequent auctions, cancelled the bid of the petitioner and while justifying their stand rather than mentioning the factors or documents for determining the market rates for the stated commercial plot, showcased a situation that for commercial Plot No. CP 3 which was put to auction vide dated 23.02.2021 to 25.02.2021, the highest bid received for the said plot was Rs. 18,810/- and hence, in this eventuality, the rate on which Plot No. CP 3 was alloted, was higher than the rates of CP 1 and CP 2, thus, the bids ought to have been cancelled for both the plots and not for CP 2 only and if price is the only criteria, then it would definitely become a never ending process, always hoping for the better prices.
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17. Heard learned counsels for both the parties and perused the record of the case as well as the judgements cited at the bar.
18. This Court observes that it is always for the authority to decide whether the price offered in an auction is adequate or not, and acceptance or rejection of a bid, is mere performance of an executive function. The correctness of its conclusion is not open to judicial review unless the decision making process is unfair or the action of the State or its instrumentality is violative of Article 14 or has failed to adhere to the mandatory provisions of law which the petitioner has not been able to demonstrate before this court from the material placed on record in the instant case.
19. This Court further observes that the bidder if has been declared as a highest bidder does not have a vested right and no right crystallizes in his favour merely upon being declared as the highest bidder. The petitioner company was not alloted the land in question and much prior to such allotment the bid was cancelled by the respondent. There can be no iota of doubt that the respondent reserve right to cancel the bid if there is any cogent reason for the same. The petitioner has failed to point out the particular right which was created in his favour prior to the cancellation of bid.
20. This court also observes that as per the Condition No. 3 of the Circular dated 25.07.2018 (Annexure-R/2), the respondents are under an obligation to make a rationale comparison of the rates received in the bids on the basis of reserve rate/price rate or rate reserved in auctions in the same area. Admittedly the highest bid (Downloaded on 12/11/2023 at 06:39:46 AM) [2023:RJ-JD:30968] (20 of 20) [CW-1423/2021] received for Commercial Plot No. CP 1 (Rs. 15,330/-) and Plot No. CP 3 (Rs. 18,810/-) were higher than the bid received for Plot No. CP 2 (Rs. 13,160/-). Thus, after comparison of the bid prices received for Plot No. CP 1 & CP 3 and the bid price for Plot No. CP 2 being the lowest, the respondent have decided to cancel the bid as receiving the highest bid in the auction plot cannot be the only criteria while finalizing the highest bid as per the condition No. 3 of the Circular dated 25.07.2018 (Annexure-R/2).
21. This Court also observes that the respondent authority RIICO is not bound to accept the highest bid and the competent authority could validly retain its power to accept or reject the highest bid obviously in the interest of public revenue and in absence of there being any concluded contract the conclusion reached by the authority does not infringe rights of the highest bidder.
22. This Court further observes that the cancellation of bid of the petitioner of the Commercial Plot No. CP 2 was not ultravires to the powers of the authority and hence, the order of the respondent authority cancelling the highest bid does not invite any illegality and therefore, stands good in the eye of law.
23. In view of the above discussion, the writ petition being devoid of merit is dismissed and all pending applications, if any, shall also stands dismissed.
(DR. NUPUR BHATI),J 179-/devesh/-
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