IN THE HIGH COURT OF KARNATAKA AT BENGALURU
Anu Sivaraman, G Basavaraja, JJ.
Sri Ravish Hastantram - Appellant
Versus
Sri. Sachin Nagarajappa S/O Dr. A. H. Nagarajappa And Ors. – Respondents
Writ Appeal No. 593 of 2024 (BDA), Writ Appeal No. 883 of 2022 (BDA)
Decided On : 30-09-2024
BDA (Disposal of Corner Sites and Commercial Sites) Rules, 1984 - Rule 7 - Writ Appeal against rejection of bid in e-Auction - The BDA has the right to confirm or cancel any sale in auction without assigning any reason - The respondent's bid was rejected as it was less than 5% of the minimum bidding price - The learned Single Judge's order directing confirmation of the bid was set aside as it contravened the Rules. (Paras 10, 22, 24)
Facts of the case:
The BDA issued an e-Auction notification for corner sites, and the respondent's bid was rejected for being inadequate. The learned Single Judge ordered the BDA to confirm the bid, which the BDA appealed against.
Findings of Court:
The BDA's rejection of the bid was lawful under Rule 7, and the learned Single Judge's order was contrary to the Rules.
Issues: Whether the BDA's rejection of the bid was justified under the Rules and if the learned Single Judge's order was valid.
Ratio Decidendi: The court held that the BDA's discretion to reject bids is valid and does not require justification, reaffirming the principle that auction rules must be adhered to strictly. The learned Single Judge's order was found to be erroneous.
Result: Writ Appeal No.883 of 2022 is allowed; the order of the learned Single Judge is set aside.
JUDGMENT :
G BASAVARAJA, J.
1. These intra-court appeals are preferred against the order dated 21st June 2022 passed by the learned Single Judge in Writ Petition No.11179 of 2020.
2. Writ Appeal No.883 of 2022 is filed by the Bangalore Development Authority (for short hereinafter referred to as "BDA"), challenging the order passed by the learned Single Judge in Writ Petition No.11179 of 2020. One Ravish Hastantaram has preferred Writ Appeal No.593 of 2024 challenging the order passed by the learned Single Judge in the above mentioned writ petition, contending that he has purchased the property in question in public e-auction conducted by the Bangalore Development Authority.
3. Facts leading to Writ Appeal No.883 of 2022 are that, the appellant-Bangalore Development Authority (for short hereinafter referred to as "BDA") issued e-Auction notification dated 4th September 2020, to auction several of its corner sites and intermediate sites under BDA (disposal of corner sites and commercial cites) Rules, 1984 (for short hereinafter referred to as "Rules"), as per the terms and conditions stipulated therein.
3.1. In respect of e-Auctioning site No.276, HSR-IV Sector is concerned, the initial bidding price was fixed at Rs.1,50,000/-per square metre and a minimum raise of bid price in multiples of Rs.500/-per square metre. Rule 7 of the Rules provides that BDA has the right to confirm or cancel any sale in e-Auction without assigning any reasons. It was specifically mentioned at condition No.13 to the said notification that, BDA reserves the right to accept or reject a bid made by the successful bidder, without assigning any reason. The respondent participated in the said e-Auction and has submitted his bid for two sites, i.e. site No.176 and site No.276, the respondent has quoted the highest bid at Rs.1,54,000/-per square metre. The said bid of the respondent was placed before the e-Auction Committee. The e-Auction Committee has not accepted the said bid of the respondent and intimation for rejection of said bid was communicated to the respondent on 28th September 2020 along with statement of objection. As per the terms of e-Auction, the Earnest Money Deposit is to be deposited by the bidder with the e-Governance and not with BDA Account. As regards the earnest money amount deposited in respect of site No.276 is concerned, BDA has sent suitable advice to the e-Governance Department on 03rd October, 2020 for refund of the initial deposit of Rs.4,00,000/-deposited by the respondent and the same has also been refunded to the respondent. The respondent filed writ petition and sought for quashing of the intimation of rejection of his bid dated 28th September, 2020 in respect of the site in question and to direct the appellant to confirm his bid in respect of the site in question and to execute the conveyance deed by accepting the e-Auction amount of Rs.5,57,33,000/-. The said Writ Petition came to be allowed, quashing the intimation letter and further directing the appellant-BDA to confirm the bid of the respondent as per the tender at Rs.1,54,000/-per square metre. Being aggrieved by the said order passed by the learned Single Judge, BDA is before this Court in Writ Appeal No.883 of 2022.
3.2. Facts leading to filing of Writ Appeal No.593 of 2024 are that, in response to the publication of the e-Auction notification dated 4th September 2020, the respondent participated in the e-Auction and submitted bid for site No.276 situate in HSR layout. The respondent had quoted his bid at Rs.1,54,000/-per square metre the said bid was placed before the e-Auction Committee and the Committee rejected the bid of the respondent as the bid amount was lesser than 5% of the initial bidding price. The e-Auction Committee communicated the rejection of the said bid of the respondent No.1 through endorsement dated 28th September 2020 and intimated the same to respondent No.1, so also, refund of earnest money deposit to respondent No.1 has been approved by the e-Gove
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State Of Gujarat And Others V. Dilipbhai Nathjibhai Patel And Another (1998)3 SCC 234
State Of Orissa V. Harinarayana Jaiswal AIR 1972 SC 1816
Union Of India And Another V. Deoki Nandan Aggarwal AIR 1992 SC 96
The BDA has the authority to reject bids in e-Auctions without justification, as per its Rules, and such discretion is not subject to judicial review unless proven arbitrary.
The highest bidder at public auctions only has a right of consideration and is subject to evaluation against the reserve price. No concluded contract comes into being until the bid is accepted by the....
Point of Law - Once State decides to grant any right or privilege to others, then there is no escape from rigour of Article 14.
The highest bidder is not entitled to the issuance of a Regular Letter of Allotment unless the bid is accepted by the competent authority. The rejection of the bid by the competent authority must be ....
No vested right is established from bid submission; rejection of bid is valid when corporation ensures public interest and current market rates prevail.
The highest bidder at public auctions has no vested right until the bid is confirmed by the competent authority, and the court's interference in contractual and commercial matters should be minimal.
The highest bidder in an auction does not have a vested right, and the authority has the discretion to cancel bids in the interest of public revenue.
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