Petitioners challenging non-confirmation of highest bids in commercial plots auctioned by Rajasthan Housing Board were dismissed. Court held rejection was reasonable as bids were non-competitive vis-a-vis market prices.
Petitions dismissed; deposited amounts ordered to be refunded within four weeks via valid demand draft or cheque.
This page shows the compact analysis of this judgement. The full analysis — procedural history, issue-by-issue holdings with ratio and obiter, advocates, and paragraph-level evidence for every claim — is being added to the record in batches and will appear here when this judgement has been through it.
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IN THE HIGH COURT OF JUDICATURE FOR RAJASTHAN
AT JAIPUR BENCH
ORDER
(S.B. Civil Writ Petition No.8533/2015)
(S.B. Civil Writ Petition No.7696/2015)
(S.B. Civil Writ Petition No.7708/2015)
Date of Order: September 15, 2015.
PRESENT
HON'BLE MR. JUSTICE ALOK SHARMA
Mr. B.B. Ojha ] for the petitioners.
Mr. Rajneesh Gupta ] Mr. Rahul Sharma ]
Mr. Sunil Samdariya]
Mr. Parag Rastogi] for respondents. Mr. P.C. Sharma ]
BY THE COURT:
All these petitions involve the issue as to whether the petitioners, highest bidders, in an auction conducted by the Rajasthan Housing Board (hereinafter `the RHB') in respect of
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different commercial plots have a right in law for a direction by this court that their bids be accepted.
The facts of the case are that the RHB issued a notice for public auction in the Dainik Bhaskar Jaipur Edition of 12-3-2015 inviting bids for various commercial plots in the commercial belt `G' VT Road Manasarovar Scheme Jaipur. The terms and conditions of the bid, as usual provided amongst others that even the highest bidders would have no right to the confirmation of their bids which could be rejected in the discretion of the competent authority. The petitioners submitted their bids for different plots after having deposited the requisite earnest money. On being found the highest bidders in respect of different plots, they proceded to deposit remainder amounts adding upto 10% of the bid amount within the time as provided in terms and conditions of the bid. However, the competent authority i.e. the Chief Revenue Officer of the RHB, vide order dated 5-5-2015 rejected the highest bids of each of the petitioners for various plots on the ground that the bids were non competitive visa-vis the price obtained for other similar plots in the same area. Thereafter on 25-5-2015 fresh bids were invited for the plots for which the petitioners earlier were the highest bidders. The petitioners are aggrieved of non confirmation of their highest bids and RHB's fresh advertisement dated 25-5-2015 for the plots in issue.
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Counsel for the petitioners have submitted that having bid for
amounts higher than the reserve price fixed by the respondent RHB, having been declared the highest bidders and having deposited 10%
of the bid amount, the rejection of the petitioners' bids was wholly arbitrary.
Mr. Parag Rastogi and Mr. Sharma, appearing on behalf of RHB have submitted that the petitioners had not have an indefeasible right for the acceptance of their bids, even though the highest, in view of the terms and conditions of the auction, of which condition 7 read as under:-
"क�स� ए� अथव� समस� ब�ड पस��व� �� ब�न� ��रण ���य� बनरस� �रन� �� सम��ण� अब���र र�जसथ�न आव�सन म डल �� ��स स"रब#� ह% एव इस सम�न� म( ��ई व�द बवव�द सव���य� नह+ ह�ग�!”
It has been further submitted that the petitioners while depositing 10% amount of the bid subsequent to their being declared the highest bidders had made a declaration under their hand that the deposit of the said amounts would not confer any right on the petitioner/s for acceptance of their bid. Hence also for the reason no right at all could accrue till acceptance of bids by the competent authority of the RHB. It has been submitted that about 84 commercial plots in the area were auctioned pursuant to
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advertisement dated 12-3-2015, in respect of which varying prices were received. For commercial plots for shops admeasuring 27.00 square meter bids received were between Rs.1,51,200 and Rs.3,71,100 per square meter and for commercial plots admeasuring 13.50 meters the bids ranged between Rs.1,39,200 to Rs.2,64,000 per square meter. It has been submitted that in the context of the higher bids received for other shops in the area, the petitioners' quoted price as under:-
The bids of the petitioners were thus apparently non competitive vis-a-vis the market price and in the circumstances the RHB in public interest rejected the said bids in the exercise of its powers under the terms and conditions of the auction circulated by the RHB. It has been submitted that under the fresh advertisement dated 25-5-2015 much higher reserve price for various plots of similar size i.e. between Rs.2,30,000 and Rs.3,46,000 have been fixed. It has been submitted that mere quoting of a price more than
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the reserve price at an auction is of no event. A bid is only an offer and its acceptance or rejection the discretion reasonably exercised
by the competent authority, if such authority falls within the meaning of a “State” under Article 12 of the Constitution of India. The discretion to reject the highest bid has been in the cases at hand reasonably exercised as evident from the facts on record which establish that the petitioners' bids were clearly non competitive and below the prevailing market price. The amounts deposited were refunded but some of the petitioners refused to accept the refunds. Reliance has been placed on the judgment in the case of Deepak Mathur Vs. Rajasthan Housing Board [2015(2) WLC 507] wherein this court relying on various judgments of the Hon'ble Supreme Court has held that till confirmation of the bid even the highest bidder has no indefeasible right for his bid to be confirmed and contract accordingly executed.
Heard. Considered.
It needs no reiteration that a highest bidder has no
indefeasible right for the confirmation of his bid, more particularly where under the terms and conditions of the auction the competent authority has a right to reject the highest bid. It is no doubt true that the Rajasthan Housing Board as a statutory corporation cannot act arbitrarily and that is the only test to be applied in the facts of the cases at hand. The discretion of RHB in the present cases has not
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been arbitrarily exercised. From the facts it is evident that the
highest bids of the petitioners were non competitive vis-a-vis the current market price of similar plots sold in the area. The mere deposit of 10% of the bid amount did not circumvent the right of the competent authority to reject the highest bids. In fact the petitioners' own declaration at the time of the said deposit admitted to this fact. The Hon'ble Supreme Court in the case of M/s. Star Enterprises Vs. City and Industrial Development Corporation of Maharashtra Ltd. [(1990)3 SCC 280] has held that highest bidder has no indefeasible right of confirmation of his bid. What has to be seen is as to whether good reasons obtained for rejection of the highest bid. As recorded hereinabove in the cases at hand, they did. RHB's rejection of the petitioners' highest bids was not unreasonable.
The writ petitions are therefore dismissed. The amounts deposited by the petitioners be refunded, if not so already done, on any count whatsoever, including for reason of the petitioners' refusal to accept the amount. The amounts in issue be refunded through a valid demand draft/ cheque not later than four weeks from today.
arn/
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All corrections made in the order have been incorporated in the order being emailed.
Arun Kumar Sharma, Private Secretary.
2 issues framed by the court
Whether highest bidders in a public auction have a right for confirmation of their bids when terms allow rejection.
Whether the rejection of highest bids by the Rajasthan Housing Board was arbitrary or reasonably exercised in the exercise of its powers.
Colour shows how this judgement treated each authority
Deepak Mathur Vs. Rajasthan Housing BoardRelied on¶41
Deepak Mathur Vs. Rajasthan Housing Board [2015(2) WLC 507]
M/s. Star Enterprises Vs. City and Industrial Development Corporation of Maharashtra Ltd.Relied on¶47
M/s. Star Enterprises Vs. City and Industrial Development Corporation of Maharashtra Ltd. [(1990)3 SCC 280] · Who else cites this
Mayank Mittal & Another
Rakesh Gupta
Raghunath Singh
Shakti Prakash Yadav
M/s. Ram Construction
Ganesh Meena
ALOK SHARMA
As recorded by the court registry
Judgements on the same questions, provisions and authorities, from every court
ALOK SHARMA
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