Judgment

G.S. Singhvi, J.

1. Leave granted.

2. Whether Chief Executive Officer of the Himachal Pradesh Housing and Urban Development Authority (hereinafter referred to as `the Chief Executive Officer') could reject the highest bid given by respondent No.1 in respect of commercial site measuring 9947 square meters situated at Parwanoo after it had deposited 10% of the bid money is the question which arises for consideration in this appeal filed against order dated 14.6.2010 passed by the Division Bench of the Himachal Pradesh High Court in CWP No.607 of 2010.

3. The Chief Executive Officer invited sealed bids from the general public for allotment of institutional/industrial/school plots at Atal Shiksha Kunj, Kallujhanda (Baddi), Bhatolikalan (Baddi) and Basal at Solan and two commercial sites at Parwanoo, one measuring 475.40 square meters and the other measuring 9947 square meters on leasehold basis for 99 years. The reserve price of both the sites was shown as Rs.9,000/- per square meter. Later on, the same was reduced to Rs.6,000/- per square meter.

4. Respondent No.1 gave bids for both the commercial sites. One, Chunni Lal Chauhan, who was partner of respondent No.1 (averments to this effect have been made in paragraphs 3(i) and 4 of the rejoinder affidavit filed by the appellant to the counter affidavit of the respondents) also gave bid for the site measuring 475.40 square meters. The address disclosed in the bids given by respondent No.1 and Chunni Lal Chauhan was the same (an averment to this effect is contained in paragraphs 11 and 12 of the reply filed by the appellants to the writ petition of respondent No.1). Three other persons gave bids for the site measuring 9947 square meters. The rates quoted by four bidders were as under: Table

5. All the bids were opened on 8.2.2010 and it was found that bid of Rs.25,299/- per square meter given by Chunni Lal Chauhan for the site measuring 475.40 square meters was highest. However, instead of depositing 10% of the bid money as per the requirement of clause 5(2) of the Himachal Pradesh Housing and Urban Development Authority (Allotment, Sale of Houses, Flats and Plots) Regulations, 2004 (for short, `the Regulations'), Chunni Lal Chauhan withdrew his bid on that very day. As a consequence, participation money of all other bidders including respondent No.1, who had offered to pay Rs.20,335.00 per square meter was refunded. In respect of the second site, the bid of Rs.6,551/-per square meter given by respondent No.1 was found to be highest. The representative of respondent No.1 who had already deposited Rs.60 lacs as participation money, deposited another sum of Rs.8,50,000/- to comply with the requirement of Clause 5(2) of the Regulations. However, before the bid could be accepted by the Chief Executive Officer, the State Government intervened in the matter because it had received information that the second commercial site was being disposed of at a low price and vide letter dated 10.2.2010, the Additional Chief Secretary (Housing) directed the Chief Executive Officer not to accept the bids and also give clarification on the following points: (i) In what circumstances were sealed bids invited when normally one would expect an open auction process to be resorted to in order to maximize return. (ii) Given the value of the land what steps were taken to ensure wide dissemination of the sale in Parwanoo, Himachal Pradesh and outside the State. (iii) What was the basis for the fixing of the reserve price and on what basis was it revised downwards.

6. The Chief Executive Officer sent reply dated 17.2.2010 and justified disposal of various sites/plots by inviting sealed bids, but after two days he decided to reject the bid of respondent No.1 on the ground that the rate offered by it was lower than the rate quoted for the other site. This was communicated to respondent No.1 in the form of order dated 24.2.2010.

7. Respondent No.1 challenged rejection of bid by filing a petition under Art