IN THE HIGH COURT OF GUJARAT AT AHMEDABAD
Umesh A. Trivedi, Rajendra M. Sareen
M/s Vaishwi Infrastructure Private Limited – Petitioner
Versus
State of Gujarat – Respondent
R/Special Civil Application No. 358 of 2022
Decided On : 15-02-2024
Misconception - Auction of Plot - Gujarat Town Planning and Urban Development Act, 1976 - Section 119, Urban/Area Development Authorities Allotment of Land/Site/Grant of Development Rights Regulation, 2002 - [Clause 9, 10, 13] - The court dismissed the petition filed by the preferred bidder challenging the decision to offer the plot for long-term lease instead of outright sale. The court found that the petitioner participated in the auction with full knowledge of the terms and conditions, including the lease period of 99 years, and failed to deposit the bid amount within the specified time, leading to the forfeiture of the Earnest Money Deposit. The court held that the authority acted in accordance with the terms of the tender and dismissed the petition.
Fact of the Case:
The petitioner participated in an e-auction for a plot offered for long-term lease of 99 years. Despite being the highest bidder, the petitioner failed to deposit the bid amount within the specified time, leading to the forfeiture of the Earnest Money Deposit.
Finding of the Court:
The court found that the petitioner participated in the auction with full knowledge of the terms and conditions, including the lease period of 99 years, and failed to deposit the bid amount within the specified time, leading to the forfeiture of the Earnest Money Deposit. The court held that the authority acted in accordance with the terms of the tender and dismissed the petition.
Issues: Misconception about the nature of the auctioned plot, Failure to deposit bid amount within specified time, Forfeiture of Earnest Money Deposit
Ratio Decidendi: The petitioner participated in the auction with full knowledge of the terms and conditions, including the lease period of 99 years, and failed to deposit the bid amount within the specified time, leading to the forfeiture of the Earnest Money Deposit. The authority acted in accordance with the terms of the tender.
Final Decision: The court dismissed the petition challenging the decision to offer the plot for long-term lease instead of outright sale, holding that the authority acted in accordance with the terms of the tender.
JUDGMENT :
Umesh A. Trivedi, J.
1. This petition is filed under Article 226 of the Constitution of India praying for following reliefs:
(B) Your Lordships may be pleased to issue a writ of mandamus /or writ of appropriate nature directing respondent no.2 to grant time up to 31.12.2022 to the petitioner to pay the remaining balance bid amount under the tender (Annexure-A);
(C) During the pendency, hearing and final disposal of the present petition, Your Lordships may be pleased to restrain respondent no.2 from issuing another tender for auction /sale /lease of Final Plot No.127 situated at Kudasan TPS No.6 (Kudasan – Saragasan – Dholakuva – POR), Opposite Pramukh Arcade, Kudasan in Gandhinagar;
(D) In the alternative, Your Lordships may be pleased to direct respondent no.2 to refund the Earnest Money Deposit (EMD) of Rs.1,00,58,400/- alongwith interest;
(E) Ex-Parte ad-interim relief in terms of para 7(B) may kindly be granted in the interest of justice;
(F) Such other and further reliefs as may be deemed just and proper in the circumstances of the present case, may kindly be granted.
2. This petition is filed by the petitioner, who is preferred bidder of e-auction conducted by Gandhinagar Urban Development Authority (‘GUDA’ for the sake of brevity) in respect of Final Plot No.127 (sale for commercial) admeasuring 12573 sq meters on a long term lease of 99 years by way of online e-auction. The petitioner being the highest bidder, in accordance with the terms and conditions of Request For Proposal (RFP) and general terms and conditions of the tender, was issued an intimation letter dated 16.03.2021 whereby, as per the terms of tender, he has been asked to deposit 10% amount of bid within 10 days thereof and remaining 90% of the amount, the petitioner was required to deposit within 30 days thereof. The said intimation further reveals that if no amount is deposited, as aforesaid, the amount deposited so far, as per the terms of tender, will be forfeited and action in accordance therewith would be initiated. It is further made clear in that intimation that it may not be treated as allotment of plot or it may not be presumed that possession thereof is given. It is coming out from the record that several communications were made by the petitioner seeking extension of time and it is extended on so many occasions. Despite the same, the petitioner has failed to deposit the bid amount. Neither 10%, which was required to be deposited is paid within 10 days of the letter of intimation nor 90% remaining amount, which was required to be deposited within 30 days thereof, is paid. The respondent–authority was constrained to, vide communication dated 14.10.2021, forfeit the Earnest Money Deposit on the petitioner’s failure to pay the amount within time limit mentioned in the payment schedule of RFP as per Condition No.22.1 and 22.4. Despite petitioner being preferred bidder in accordance with that terms, since 180 maximum days as per the terms and conditions of RFP /tender was over, despite further prayer for extension of time was made by the petitioner, it came to be declined and the respondent-authority was constrained to pass the aforesaid order forfeiting the Earnest Money Deposit. In the aforesaid background, though the petitioner is a successful bidder, having failed to deposit the amount offered by him as per the payment schedule, order for forfeiture of Earnest Money Deposit
Auction /Bid - Bidders participating in the tender process have no other right except the right to equality and fair treatment in the matter of evaluation of competitive bids offered by interested pe....
Bidders in a tender process must adhere to the terms and conditions outlined in the auction documents; failure to comply justifies cancellation of bids and forfeiture of earnest money.
The demand for misc. expenses, development charges, and lease money was illegal and non est in law as the Guidelines governing the auction did not authorize the respondent-Board to realize these amou....
A letter of intent signifies acceptance of a bid, forming a binding contract. Subsequent withdrawal due to administrative reasons must be justifiable and non-arbitrary under contractual principles.
A party cannot be penalised disproportionately for the lapses of the other party.
A bidder cannot claim EMD refund due to an inadvertent error in a bid amount when sufficient safeguards exist in the bidding process to prevent such mistakes.
The DDA's right to withdraw any plot from auction or reject any bid without assigning any reason is not untrammelled or unrestricted. It must be exercised in a fair and reasonable manner and cannot b....
The main legal point established is that a buyer's knowledge of encroachment and pending litigation, as disclosed in the E-tender document, precludes the claim of ignorance and supports the interpret....
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