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IN THE HIGH COURT OF ANDHRA PRADESH AT AMARAVATI
Ravi Nath Tilhari, J.
Atavur Rahaman Kamaal – Petitioner
Versus
The State Of Andhra Pradesh – Respondent
Writ Petiton No. 7482 of 2023
Decided On : 19-06-2023
Auction Proceedings - Market Fee Collection - A.P. Municipalities Act, 1965 - Sections 271, 277, 289(2), 351 - The auction proceedings for collection of market fee for the year 2023 – 2024 within the limits of Pedana Municipality were challenged under Article 226 of the Constitution of India. The auction was conducted contrary to the procedure envisaged in G.O.Ms. No. 94, as there was no time gap of minimum 14 days from the date of publication and date of auction. The court held that the auction deserved to be quashed due to lack of reasonable period notice through newspaper publication, and granted liberty to proceed for auction afresh in accordance with the law under the Rules 1968.
Fact of the Case:
The Petitioner challenged the auction proceedings for collection of market fee for the year 2023 – 2024 within the limits of Pedana Municipality, citing that the procedure adopted was contrary to G.O.Ms. No. 94, which required a minimum 14-day time gap between the date of publication and the date of auction. The auction was held on 04.03.2023, following newspaper publication on 02.03.2023 and 03.03.2023, and was confirmed in favor of the 4th Respondent. The Petitioner raised grievance through Spandana Portal, requesting to cancel the auction, but the reply informed that there were no infirmities in the procedure adopted.
Finding of the Court:
The court found that the auction proceedings were conducted contrary to the procedure envisaged in G.O.Ms. No. 94, as there was no time gap of minimum 14 days from the date of publication and date of auction. It held that the auction deserved to be quashed due to lack of reasonable period notice through newspaper publication, and granted liberty to proceed for auction afresh in accordance with the law under the Rules 1968.
Issues: 1) Whether the Petitioner has the locus to challenge the auction, dated 04.03.2023? 2) Whether the impugned auction deserves to be quashed on the ground that the newspaper publication was made on 02.03.2023 & 03.03.2023 and the auction was conducted on 04.03.2023?
Ratio Decidendi: The court held that the Petitioner had locus to challenge the auction proceedings as there was a specific pleading that due to lack of wide publicity, the Petitioner had no opportunity to participate in the auction proceeding. It also held that the auction deserved to be quashed due to lack of reasonable period notice through newspaper publication, and granted liberty to proceed for auction afresh in accordance with the law under the Rules 1968.
Final Decision: The Writ petition was allowed, and the impugned auction proceedings, dated 04.03.2023, were quashed, granting liberty to the Respondent No. 3 to proceed for auction afresh in accordance with law under the Rules 1968 in the light of the observations and the directions made herein above. No order as to costs. As a sequel thereto, miscellaneous petitions, if any pending, shall also stand closed.
JUDGMENT :
1. Heard Sri. Sai Gangadhar Chamarty, learned Counsel for the Petitioner, learned Government Pleader for Municipal Administration and Urban Development for Respondent No.1, learned Government Pleader for Revenue for Respondent No. 2, Sri. G. Naresh Kumar, learned Counsel, representing Sri. M. Manohar Reddy, learned Standing Counsel for Respondent No. 3 and Sri. C. Raghu, learned Senior Advocate, assisted by Ms. V. Sesha Kumari, learned Counsel for Respondent No. 4.
2. The Petitioner has filed the present Writ Petition under Article 226 of the Constitution of India, for writ, order or direction in the nature of writ of mandamus challenging the auction proceedings for collection of market fee for the year 2023 – 2024 within the limits of Pedana Municipality, by the 3rd Respondent under auction notice published in Sakshi Telugu Daily Newspaper, dated 02.03.2023.
3. The facts as disclosed in brief are that, the 3rd Respondent – Pedana Municipality issued auction notification, publishing in Sakshi Telugu Daily Newspaper, dated 02.03.2023, and Andhra Jyothi Telugu Daily Newspaper, dated 03.03.2023, informing the public that the said Municipality in exercise of power under Sections 271, 277, 289(2) and 351 of the A.P. Municipalities Act, 1965, [for short the ‘Municipalities Act, 1965’], is proposing to conduct auction for collection of market fee for sale of vegetables, fruits, flowers and fishes as also other market products for the year 2023 – 2034 with effect from 01.04.2023 to 31.03.2024. The paper publication was made pursuant to the Council Resolution No. 161, dated 02.03.2023.
4. The tender notice/publication in newspaper was made on 02.03.2023 and the auction was held on 04.03.2023, which has been confirmed in favour of the 4th Respondent.
5. The Petitioner who is the Ex-Vice Chairman of the 3rd Respondent as well as interested to protect the revenue of the 3rd Respondent, raised grievance on 06.03.2023 through Spandana Portal, requesting to cancel the auction, to which the reply endorsement, dated 10.03.2023, was received informing that there were no infirmities in the procedure adopted in conducting the auction.
6. The challenge to the auction proceedings is mainly on the ground that the procedure adopted was contrary to G.O.Ms. No. 94, Irrigation and CAD (PW-COD) Department, dated 01.07.2003. The said G.O.Ms. No. 94 provided that, the time allowed from the date of publication of tender notice to the date of receipt of tender is 14 days for the first call and 7 days for the second call.
7. This Court prima facie finding that the auction was conducted contrary to the procedure envisaged in G.O.Ms. No. 94, as there was no time gap of minimum 14 days from the date of publication and date of auction, granted interim stay of further proceedings pursuant to the auction held on 04.03.2023, vide interim order, dated 27.03.2023, which is still continuing.
8. Learned Counsel for the Petitioner submitted that, in the auction held on 04.03.2023, due to lack of wide publicity only two [02] people participated. The 4th Respondent is declared as highest bidder for a sum of Rs.14,11,000/-against reserved price of Rs.13,99,889/-. It is submitted that, the reserve price so fixed was also contrary to the rules, as in the last auction, the 4th Respondent, for the year 2022 – 2023 succeeded at Rs.22,50,000/-.
9. Sri. G. Naresh Kumar, learned Counsel for Respondent No. 3, submitted that, the gazette rates were approved by the Municipal Council, Pedana, vide M.C.R. No.161, dated 27.12.2022, for the financial year 2023 – 2024. He submitted that the auction notification was duly published in Sakshi Daily Telugu Newspaper on 02.03.2023 and in Andhra Jyothi Newspaper on 03.03.2023, fixing the date of auction as 04.03.2023, in accordance with the provisions of the Municipalities Act, 1965. It is further submitted that, the Public Auction Notice Roc. No. 148/2011/A1, dated 21.02.2023, was displayed in the Public Offices of Tahsildar Office Notice Boa
The main legal point established in the judgment is that the auction proceedings must adhere to the procedure envisaged in the relevant laws and regulations, and must provide a reasonable period noti....
If the impugned auction is not interfered with, it would amount to upholding partial auction and permitting perpetuation of illegality, which would be contrary to the Act and the Rules.
The validity of the sale/e-auction notice under the SARFAESI Act and the Security Interest (Enforcement) Rules, 2002.
Confirmed auction sales cannot be set aside for alleged inadequacy of price or lack of publicity without proof of fraud or substantial injury.
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