Public authorities must prioritize transparency and accountability in auction processes, ensuring compliance with contractual obligations to protect public interests.

JUDGMENT

DIPANKAR DATTA, J.

1. Leave granted.

2. The first appellant1 [Board, hereafter]invited sealed bids for disposal of Prime Commercial Plot No. PC-16 at Razaak Garden Road, Arumbakkam, Chennai – 600106 [Plot, hereafter]. An open auction was conducted on 23rd September, 1986. The respondent participated in such auction and offered a bid of Rs. 4,78,921/-. He emerged as the highest bidder and was declared as such.

3. Vide letter No. AS 1/11364/1986 dated 23rd December, 1986, the Board communicated acceptance of the respondent’s offer for the Plot with a request to him to pay Rs. 1,19,731/- towards 25% as the initial deposit within 15 days from date of receipt thereof to enable it issue the Regular Allotment Order.

4. Due to the respondent’s failure to make the initial deposit as aforesaid, the said allotment was cancelled vide order dated 01st June, 1987.

5. The respondent thereafter made several representations to the Board to permit him to pay the arrears, which was ultimately allowed, as a special case, vide letter No. AR2/11364/86 dated 22nd November, 1993. It was stipulated therein that in addition to the initial deposit amount, the respondent must also pay Rs. 1,01,772/- towards 12% interest on the initial deposit for the period from 23rd December, 1986 to 31st December, 1993 (85 months) as well as Rs. 5000/- towards revocation fee on or before 31st December, 1993.

6. Since the respondent had remitted a sum of Rs. 1,19,731/- towards the initial deposit and Rs. 5000/- towards revocation fee, the Board revoked the cancellation order vide letter dated 04th February, 1994. This letter admittedly does not speak about payment of the interest amount.

7. On 28th February, 1994, the Board issued a Regular Allotment Order in favour of the respondent. He was granted permission to pay the balance amount of Rs. 3,57,191/- on “Hire Purchase Scheme” in monthly instalments of Rs. 8260/- over a period of 5 years. Clause 4 thereof stipulated consequences of default, including eviction.

8. Pursuant to the allotment order, the respondent took over possession of the Plot on 22nd March, 1994 and thereafter, on 12th December, 1997, requested the Board to inform the balance amount to be paid. The Board vide letter No. B1/11364/86 dated 27th February, 1998 inadvertently informed the respondent that he was required to pay Rs. 77,300/- towards the balance cost of the Plot with interest and penal interest as on 31st March, 1998. This amount was duly paid by the respondent along with interest and penal interest on 24th March, 1998. On 7th November, 2001, the respondent requested the Board to execute the sale deed in his favour.

9. In due course of time, the Board upon scrutiny of its records detected the error. Upon preparation of a new working sheet, it found that the respondent was liable to pay Rs. 15,26,023/- as of December, 2002. A letter to this effect was sent to the respondent on 16th December, 2002 and the earlier letter dated 27th February, 1998 was withdrawn.

10. Since the respondent did not pay Rs. 15,26,023/-, the Sites and Services Committee resolved to cancel the allotment vide resolution No. 24/2004 dated 30th July, 2004. Cancellation was communicated to the respondent vide letter dated 17th August, 2004.

11. Accepting the request of the respondent, the Board communicated its willingness to revoke the cancellation of allotment subject to the respondent undertaking that the pending dues amounting to Rs.20,77,911/- would be cleared. On 19th November, 2004, the respondent sent a letter undertaking to pay the due amount of Rs. 20,77,911/- within the ne