Allowed

M. Pedda Mallikarjuna v. Proddatur Municipality

Andhra Pradesh HC21 Feb 2024WP/3279/2024

Case brief

AI extract

What is this about?

A writ petition challenging a municipality's cancellation of a public auction bid for vegetable market fee and vehicle parking collection without reasons. The court held the resolution and endorsement suffered from lack of reasons, citing natural justice principles requiring reasoned orders, set them aside and remitted for fresh orders.

What did the court decide?

Writ petition allowed at admission stage: ROC No.1961/2019/A1 dated 02.02.2024 and Resolution No.1190 dated 31.01.2024 set aside; matter remitted to authority for fresh orders; no costs.

M. Pedda Mallikarjuna Vs Proddatur… — Municipal and Town Planning | Andhra Pradesh HC (2024)

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IN THE HIGH COURT OF ANDHRA PRADESH :: AMARAVATI (Special Original Jurisdiction)

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THURSDAY, THE TWENTY SECOND DAY OF FEBRUARY TWO THOUSAND AND TWENTY FOUR

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PRESENT

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THE HONOURABLE SRI JUSTICE SUBBA REDDY SATTI

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WRIT PETITION NO: 3279 OF 2024

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Between;

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M. Pedda Mallikarjuna, S/o. M.Chinna Marenna, aged about 41 years, Residing at D.No. 5/886, Sreeram Nagar, Proddatur Town and Mandal, Y.S.R Kadapa District. ...Petitioner

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AND

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Proddatur Municipality, Represented by its Commissioner, Proddatur, Y.S R Kadapa District.

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Proddatur Municipal Council, Rep by its Chairman, Proddatur, Y.S.R. Kadapa District.

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The State of Andhra Pradesh, Represented by Principal Secretary, Municipal Administration and Urban Development, Secretariat, Velagapudi, Amaravathi Guntur District.

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...Respondents

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Petition under Article 226 of the Constitution of India praying that in the circumstances stated in the affidavit filed therewith, the High Court may be pleased to issue an order or writ or direction more particularly one in the nature of writ of Mandamus, declaring the action of the and 2"*^ respondents in issuing endorsement R.O.C, No. 1961/2019/A/dated 02-02-2024 and resolution No. 1190 dated 31-01-2024 respectively cancelling the highest bid of the petitioner in the public auction held on 27-01-2024 without assigning any reason, without giving any notice or opportunity of hearing as illegal, arbitrary, irrational and unsustainable and against the principles of Natural Justice and consequently set-aside the same and award the contract of leasehold rights of collection of daily vegetable market and vehicle parking fee to the petitioner.

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lA NO: 1 OF 2024

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Petition under Section 151 CPC praying that in the circumstances stated in the affidavit filed in support of the petition, the High Court may be pleased to direct the respondents not to conduct any re-auction in pursuance of the impugned endorsement dated 02-02-2024 and resolution No. 1190 dated 31-012024 pending the disposal of the Writ Petition.

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Counsel for the Petitioner: SRI T.DIWAKAR REDDY

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Counsel for the Respondents: SRI N.RANGA REDDY, (SC MC RSEEMA SPSR NLR) Counsel for the Respondents: GP FOR MUNICIPAL ADMN & URBAN DEV The Court made the following order:

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IN THE HIGH COURT OF ANDHRA PRADESH AMARAVATI

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THE HON’BLE SRI JUSTICE SUBBA REDDY SATTI

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WRIT PETITION No.3279 of 2024

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M. Pedda Mallikarjuna, S/o M. Chinna Marenna, aged about 41 years, Residing at D.No.5/886, Sreeram Nagar, Proddatur Town and Mandal, Y.S.R. Kadapa District.

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... Petitioners

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Versus Proddatur Municipality, Represented by its Commissioner, Proddatur, Y.S.R. Kadapa District and two others. ... Respondents

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Counsel for the petitioner : Sri T. Diwakar Reddy Counsel for respondents ; Sri N. Ranga Reddy, standing counsel and GP for Municipal Administration and Urban Development

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ORDER

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Challenging the endorsement vide R.O.C.No.1961/2019 /A1 dated 02.02.2024 issued by respondent No.l and^resolution No. 1190 dated 31.01.2024 of respondent No.2, cancelling^the highest bid, the above writ petition is filed.

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The case of the petitioner is that pursuant to the^tender notice issued vide ROC No. 1961/2019-Al dated 18.01.2024, conducting auction for collection of daily fee/rent for vegetable

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SRS,J W.P.No.3279 of 2024

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market and vehicle parking for the year, 2024-25, the^auction was conducted on 27.01.2024. The petitioner emerged as the highest bidder for an amount of Rs. 1,33,00,000/-. However, the bid was cancelled without assigning any reasons.

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In the Counter affidavit filed by the Commissioner of respondent No.l, it was contended that basing on the representation, dated 27.01.2024, made by one C.S. Nizamuddin, that the auction was not conducted properly^and the rumour spread out that the bidders, who participated^inthe auction, conspired and committed syndicate, due to^whichthe auction was stopped at the lowest amount, majority^membersof Proddatur Municipal Council suggested for cancellation of auction dated 27.01.2024 and hence, respondent No.2 passed resolution No. 1190. Respondent No.2, to improve the^revenueto the Municipality cancelled the highest bid and resolved to conduct fresh auction by fixing the starting bid amount at Rs. 1,33,00,000/-. As per point No.7 of the Gazette No. 11/2024 Council/Contract Committee can reject the highest bid^without revealing any reason. Eventually, prayed to dismiss the writ petition.

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SRS,J W.P.No.3279 of 2024

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Heard Sri K.S. Murthy, learned Senior Counsel assisted by Sri T. Diwakar Reddy, learned counsel for the petitioner,^SriN. Ranga Reddy, learned standing counsel for respondent^No.land learned counsel for respondent No.2.

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Learned Senior Counsel appearing on behalf of the petitioner would contend that pursuant to the resolution,^dated 31.01.2024, the Commissioner passed the endorsement vide R.O.C.No.l961/2019/Al dated 02.02.2024, cancelling the highest bid offered by the petitioner. He would contend that the resolution is passed by the Council on extraneous reasons and the same is arbitrary. He would also point out that immediately after conducting the auction, one of the participants^addressed letter to the Vice Chairman of Proddatur Municipality stating that auction was not conducted as per the Rules and^theVice Chairman, in turn, addressed letter to the Commissioner,^onthe same day, for initiating necessary action, for which, learned Commissioner replied that the auction was conducted by following procedure. Learned Senior Counsel would contend that resolution No. 1190 passed by the Council does not contain reasons for cancellation.

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SRSJ W.P.No.3279 of 2024

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Learned standing counsel, per contra, would contend^that as per point No.(7) of the gazette notification, the^Councilhas got power to cancel the auction, without assigning any reason. To get more income to the Proddatur Municipality, the^Council cancelled the auction and resolved to conduct fresh auction by fixing the minimum price at Rs. 1,33,00,000/-.

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Whether the endorsement of the Commissioner vide R.O.C.NO.1961/2019/A1 dated 02.02.2024 and resolution No.1190 dated 31.01.2024 are vitiated by arbitrariness and extraneous considerations?

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A perusal of the record discloses that Gazette No.l 1 /2024, dated 10.01.2024 was published, as per resolution No.1139 dated 30.12.2023, to conduct open auction for collection of daily fee of vegetable market and vehicle parking at vegetable market. Meat and Fish market, in the Municipal ground belonging^tothe Municipality, for the year 2024-25, commencing from 01.04.2024 to 31.03.2025. Open auction was conducted on 27.01.2024 and petitioner emerged as the highest bidder for Rs.1,33,00,000/-. Subsequently, auction proceedings were placed before the council for ratification. However,^theCouncil vide resolution No. 1190 dated 31.01.2024 cancelled the auction

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SRSJ W.P.No.3279 of 2024

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in respect of collection of daily fee of vegetable market and vehicle parking bid and resolved to re-conduct the^auctionwith starting price as Rs. 1,33,00,000/-. The highest bid in respect of Meat and Fish Markets, was approved.

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As can be seen from the schedule of the gazette notification, no minimum price is fixed. For the previous year, the highest bid was knocked at Rs. 1,28,00,000/- and for the present year, the highest bid offered by the petitioner is Rs.l,33,00,000/-.

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This Court by order, dated 15.02.2024 directed learned standing counsel to produce original record and in pursuance of said order original record is placed before this Court.

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A perusal of the record shows that immediately after conducting the auction, one of the participants by^name C.S. Nizamuddin made representation dated 27.01.2024 to^theVice Chairman, Proddatur Municipality stating that person conducting auction has not conducted the same as per the procedure and in fact he colluded with one of the persons^inthe auction. The Vice Chairman, in turn, addressed letter to the ^Commissioner, on the same day to cancel the auction^andto

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initiate necessary steps. To the letter addressed by Vice Chairman, Proddatur Municipality, Commissioner, Proddatur Municipality, vide endorsement 77/2024/Al dated 27.01.2024 replied that the auction was conducted under the chairmanship of the Commissioner, Revenue Official Incharge and^Revenue Inspector, by following the procedure and as per the^Rules.The said endorsement would further disclose that none of the participants objected. Later the auction proceedings were placed before the Council for ratification.

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The record further reveals that the Chairman of Proddatur Municipality, signed the resolution cancelling the auction in respect of fee collection of vegetable market and vehicle parking for vegetable market and directed the authorities to fix the price at Rs. 1,33,00,000/-. However, no reasons were assigned by the Council to cancel the auction conducted on 27.01.2024.

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This Court is conscious of the fact that while adjudicating the validity of the endorsement, impugned in the writ petition; it will not act as appellate authority. The court has^toseewhether the authority followed the procedure and whether any proper reasons were assigned?

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SRSJ W.P.No.3279 of 2024

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The counter affidavit is filed by another Commissioner i .e.: respondent No.l, wherein it was stated in para No. 10 as follows:

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“It is further submitted that after completion of auction dated 27.01.2024 one roomer spread out entire Proddatur town i.e. the bidders are who participated in the auction held on 27.01.2024 conducted by Proddatur Municipal authorities conspired and committed syndicate and stand as ring and not properly participated in the open auction^with the help of other political leaders caused to stopped the auction in lowest amount which is stands in the name of the highest bidder.”

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The reason assigned at para No. 10 of the counter affidavit is nobody’s case. No doubt as per point No.7 of the Gazette, the authority got power to cancel the auction. However, the authority should have assigned reason for such cancellation.

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In Assistant Commissioner, Commercial Tax Department, Works Contract and Leasing, Kota v. Shukla and Brothers^, the Hon’ble Apex Court held as under:

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“The principle of natural justice has twin ingredients; firstly the person who is likely to be adversely affected by the action of the authorities should be given notice to show cause thereof and granted an opportunity of hearing and secondly, the orders so passed by the authorities should give^reasonfor (2010T4 see 785

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arriving at any conclusion showing proper application of mind. Violation of either of them could in the given^factsand circumstances of the case, vitiate the order itself.^Suchrule being applicable to the administrative authorities certainly requires that the judgment of the court should meet^withthis requirement with higher degree of satisfaction. The^order of an administrative authority may not provide reasons like a judgment but the order must be supported by the reasons^of rationality. The distinction between passing of an order by an administrative or quasi-judicial authority has practically extinguished and both are required to pass reasoned^orders.”

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In Siemens Engg. and Mfg. Co. of India Ltd. V. Union^of

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India^, the Hon’ble Apex Court held as under:

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“6. ... If courts of law are to be replaced by administrative authorities and tribunals, as indeed, in some kinds of cases, with the proliferation of administrative law, they may have to be so replaced, it is essential that administrative^authorities and tribunals should accord fair and proper hearing^to the persons sought to be affected by their orders and give sufficiently clear and explicit reasons in support^oftheorders made by them. Then alone administrative authorities^and tribunals exercising quasi-judicial function will be able to justify their existence and carry credibility with the people by inspiring confidence in the adjudicatory process. The rule requiring reasons to be given in support of an order is, like the principle of audi alteram partem, a basic principle of natural justice which must inform every quasi-judigical

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^(1976) 2 see 981

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SRSJ W.P.No.3279 of 2024

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process and this rule must be observed in its proper spirit and mere pretence of compliance with it would not satisfy^the requirement of law.”

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In the case at hand, the Municipal Council without assigning any reason cancelled the petitioner’s bid. Therefore, in the opinion of this Court, Resolution 1190 passed by the Council and the consequential endorsement of Commissioner vide ROC 1961/2019/Al dated 02.02.2024, suffer from lack of reasons and hence, they are liable to be set aside.

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Accordingly, this writ petition is allowed at the stage of admission, setting aside R.O.C.No. 1961/2019/Al dated 02.02.2024 and resolution No.ll90 dated 31.01.2024. The matter is remitted to the authority for passing fresh^orders.No costs.

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As a sequel, pending miscellaneous petitions, if any,^shall stand dismissed.

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To,

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Sd/-SHAIK MOHD RAFl ASSISTANTvREGISTRAR SECTION OFFICER

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//TRUE COPY//

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The Commissioner, Proddatur Municipality, Proddatur,^{Y.S.RKadapaDistrict.}

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The Chairman, Proddatur Municipal Council, Proddatur,^Y.S.R.Kadapa District.

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The Principal Secretary, Municipal Administration^{andUrbanDevelopment,} State of Andhra Pradesh, Secretariat, Velagapudi, Amaravathi,^Guntur District.

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One CC to Sri T Diwakar Reddy, Advocate [OPUC] 5. One CC to Sri N Ranga Reddy, (SC MC RSEEMA SPSR^NLR)[OPUC] 6. Two CCs to GP for Municipal Administration & Urban^{Development,High} Court of Andhra Pradesh. [OUT]

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