The main legal point established in the judgment is the importance of conducting auction processes in public interest and the parameters of judicial review in such matters.

JUDGMENT

R.F. Nariman, J. - Leave granted.

2. The present appeal discloses a very sorry state of affairs in that a property admeasuring 1053.5 square meters bearing Plot No. 27/A, Survey No. 8, 9, 10 Opposite Santacruz Police Station, Junction of Juhu Tara Road and Linking Road, Santacruz (W), Mumbai-54, though acquired by the Union of India in 1994 under Section 269UD(1) of the Income Tax Act, could only be sold in 2018. Despite various attempts to sell the property starting in 1994, several auctions conducted qua the said property failed. Even an auction dated 27.03.2017 with a reserve price fixed at Rs.32.11 crores failed to elicit a response from any buyer. This being the case, the appellant before us then made an offer to the Central Board of Direct Taxes (hereinafter referred to as 'CBDT') to purchase the aforesaid property for a sum of Rs.32.11 crores. This offer could not be accepted as the CBDT stated that accepting such an offer by private treaty would be beyond their jurisdiction. However, in the meanwhile, a fresh valuation report of the aforesaid property was called for, which was submitted on 04.09.2017, valuing the property at Rs.29,91,35,000/-. Pursuant to the aforesaid, a brochure/catalogue was circulated sometime in September, 2017, in which clauses 2, 12 and 16 are material and are set out herein below:

"2. The property is being sold under the instruction from CCIT-2, Mumbai and the auction by way of sealed tenders is subject to confirmation by him/her.

12. The balance amount by the successful bidder will have to be paid within 90 days from the date of confirmation of sale by the Chief Commissioner of Income Tax 2, Mumbai.

16. The Chief Commissioner of Income Tax 2 Mumbai reserves the right to reject any tender form any bid including the highest bid, without assigning any reason. In such an event, the money already paid will be refunded to the intending purchaser without any liability of interest. However, no refunds for amounts forfeited shall be made."

3. Pursuant to the aforesaid, the reserve price being fixed at Rs.30 crores, the appellant was the sole bidder, having bid at a sum which is Rs.21 lakhs above the reserve price at a total sum amounting to Rs.30.21 crores. In its letter dated 26.09.2017, respondent No.3 sent a report to respondent No.2, in which it was stated that though the bid of Rs.30.21 crores offered by the appellant was above the reserve price, it was yet less than the sum of Rs.32.11 crores that had been offered by the same bidder earlier. In this view of the matter, a clarification was sought as to the future course of action in the matter. Given this report, on 20.11.2017, the CBDT directed that the auction proceedings be kept in abeyance for the time being, and appointed a Valuer from outside the State, viz., Mr. P. Ramaraj, District Valuation Officer, Chennai. Pursuant to this, a valuation report dated 23.02.2018 was submitted by the aforesaid Valuer valuing the aforesaid property at Rs.31.07 crores as on 23.01.2018, as a cap in the TDR which would be available by way of FSI, had been introduced in January, 2018. Short of this cap, the Valuer valued the aforesaid property at Rs.36,51,59,000/-. Based on the aforesaid valuation report, the property was put up for yet another auction.

4. Meanwhile, by a letter dated 04.05.2018, the earlier auction which yielded the sum of Rs.30.21 crores from the appellant was treated as cancelled. The said letter specifically called upon the appellant to participate in the upcoming auction to be conducted shortly.

5. The appellant, by its communication dated 12.04.2018, referred to the return of the Demand Drafts of Rs.7.5 crores and Rs.5 lakhs towards Earnest money and Caution money stating that burden of interest liability was continuing. The appellant made it clear that its participation in a future auction will still be very much there as they are not exiting the auction proceedings.

6. As stated hereinabove, pursuant to the valuation report, on