The duty of the auction holder to ensure no encroachment and the illegality of canceling the allotment without addressing the encroachment issue

ORDER :

1. The facts pleaded by the counsel appearing for the petitioners are that an auction notice was issued by the respondent-Rajasthan Housing Board for auction of a plot situated at Ranthambore Road, Sawai Madhopur for establishing a hotel. The auction was held on 23.06.2009 and the petitioners were the highest bidders for the aforesaid plot measuring 1746.390 sq. meter.

2. In furtherance of the auction proceedings and the petitioners being the highest bidders, the respondent-Rajasthan Housing Board issued an allotment letter on 22.07.2009 to the petitioners and asked them to deposit the remaining amount of Rs.1,27,98,901/- within thirty days.

3. The petitioners made a representation dated 06.08.2009 to the respondent-Rajasthan Housing Board to allow them some more time to deposit the remaining amount which is a heavy amount. Another representation was submitted on 11.08.2009 in regard to the miscalculation of the amount to be paid by the petitioners.

4. The respondent-Rajasthan Housing Board issued a letter dated 13.08.2009 asking the petitioners to deposit the remaining amount before 21.08.2009 so that the proceedings for giving the possession of the plot of hotel could be completed. On 17.08.2009 the petitioners received another letter stating that the petitioners who are the highest bidders are required to deposit the auction amount within thirty days. The petitioners then submitted a representation to the Minister for Local Self Bodies and Urban Development Department for extension of time to deposit the auction amount. The respondent-Rajasthan Housing Board issued letters dated 11.09.2009 and 25.09.2009 informing the petitioners that the time period for depositing the auction amount has been extended for three months to run w.e.f. 22.07.2009.

5. The petitioners submitted a representation dated 20.11.2009 that they are ready to deposit the remaining auction amount, however, during the inspection of the plot it was found that it is not upto the measurement as per the auction and some persons may have made encroachment over some part of the auctioned plot and requested the respondent-Rajasthan Housing Board to remove the encroachment from the plot so that the amount can be deposited with the respondent-Rajasthan Housing Board.

6. In furtherance of the legal notice served by the petitioners, the respondent-Rajasthan Housing Board vide letter dated 07.12.2009 directed the petitioners to deposit the remaining auction amount within ten days. The respondent-Rajasthan Housing Board vide its letter dated 18.01.2010 addressed to the Chairman, Municipal Council, Sawai Madhopur, directed to remove the encroachment as alleged by the petitioners because the said encroachment is causing hindrances in the petitioners’ establishment of a hotel for which they have purchased the plot in question. The respondent-Rajasthan Housing Board vide reply to the legal notice dated 15.01.2010 stated that the period for depositing the amount i.e. upto 22.10.2009 has already come to an end and as per the condition No.3 of the auction notice the Chairman of the Rajasthan Housing Board can regularize the auction bid of the petitioners. After the reply to the legal notice the petitioners preferred this writ petition on 16.02.2010 with the prayer to extend the period of depositing the amount and to issue directions to the respondents to remove the encroachment from the plot purchased by the petitioners in auction prior to accepting the remaining amount and further not to levy any kind of interest on depositing the amount.

7. The facts pleaded from the respondents side are that the claim of the petitioners is that the calculation of the amount has been incorrectly made, has no substance because the amount has been calculated on the basis of the actual size of the plot given in auction to the petitioners. The respondents have not controverted the facts in regard to making of representation by the petitioners and the letters issued by the respondents. However,