RAJASTHAN HIGH COURT
Akil Kureshi, CJ., Sandeep Mehta, JJ.
Rohit Burad - Appellant
Versus
Rajasthan Industrial Development And Investment Coropration Ltd. (Riico) & Ors. - Respondents
Spl. Appl. Writ No. 599/2021, Spl. Appl. Writ No. 600/2021 , Spl. Appl. Writ No. 601/2021 , Spl. Appl. Writ No. 602/2021 , Spl. Appl. Writ No. 596/2021 , Spl. Appl. Writ No. 597/2021, Spl. Appl. Writ No. 598/2021 , Spl. Appl. Writ No. 603/2021 , Spl. Appl. Writ No. 604/2021
Decided On : 27-10-2021
Auction - Industrial Plots - Article 226, 227 - The court upheld the authority's discretion to reject bids, emphasizing that participation in an auction does not guarantee acceptance of the highest bid, especially when multiple higher bids exist.
Fact of the Case:
The appellant applied for e-auction of industrial plots and was the sole bidder for one plot, offering a price above the reserved rate. The RIICO rejected the bid, leading the appellant to challenge this decision in court.
Finding of the Court:
The court found that the RIICO had the right to reject bids based on the auction terms, which allowed for discretion in accepting offers, particularly when higher competitive bids were present.
Issues: Whether the RIICO's rejection of the sole bid was justified despite it being higher than the reserved price.
Ratio Decidendi: The court held that participation in an auction does not confer a right to have a bid accepted, and authorities can exercise discretion in bid acceptance based on competitive bidding.
Result: All appeals are dismissed.
JUDGMENT
These appeals arise out of a common background and are directed against the common judgment passed by the learned Single Judge dated 13.09.2021 involving similar issues of facts and law. For convenience, we may refer to the facts arising in Spl. Appl. Writ No. 599/2021.
The appellant-original petitioner had applied for e-auction in response to the notice issued by the RIICO on 04.09.2020 for allotting industrial plots in Naya Goan, Pali area. The reserved price for the plots in question was fixed at Rs. 1200 per sq. mtrs.
There were several bids for individual plots, however, for the plot which the petitioner had made his offer, he was the sole bidder. He had offered rate of Rs. 1210 per sq.-mtrs. Several similar instances of single bid making offer for the individual plots also came to the notice of RIICO authorities. The RIICO decided to reject all these offers and returned the earnest money deposited.
Thereupon, the petitioner approached this Court by filing Civil Writ Petition No. 249/2021 and challenged the decision of the authorities.
In brief, the case of the petitioner was that the petitioner's bid was higher than the offset price fixed by the RIICO and was wrongly rejected on the ground that the petitioner was the sole bidder. The petitioner relied on the case of one Ankit Burad, in whose case, the bid offer dated 24.07.2020 through e-auction process was accepted by RIICO by order dated 10/11 th September, 2020, though he was also the sole bidder and had offered the rate of Rs. 1210 per sq. mtrs.
Before the learned Single Judge, the respondents authorities appeared and filed a detailed reply inter-alia pointing out that the auction notice itself specified that it was not compulsory for RIICO to accept the bid simply because it is the highest bid. The case of the petitioner and other similarly situated bidders was placed before a Committee. The Committee noted that higher multiple bids were received during the same auction and therefore single bids received from the petitioner and other similarly situated bidders were not competitive. It was on these grounds, that the bid of the petitioner and other single bidders were rejected.
The learned Single Judge relied on the judgment of the Supreme Court in case of Haryana Urban Development Authority and Others v. Orchid Infrastructure Developers Private Limited ( (2017) 4 SCC 243 ) and a decision of the Division Bench of this Court in the case of Komal Aggrawal v. State of Rajasthan in D.B. Spl. Appl. Writ No. 274/2012 and dismissed the petition by making following observations:-
These writ petitions have been filed by the petitioners deserves to be dismissed for the reasons firstly the petitioners have participated in the e-auction proceeding after reading the terms and condition of the auction and as per the terms and condition of the auction, the RIICO reserves right to cancel the highest bid offered by the petitioners. Secondly, the Auction Committee considered the fact that the higher multiple bids have been received in the same auction for another plots, therefore, the single bid offered by the petitioners does not seems to be competitive. Thirdly, in view of the judgment passed by the Hon'ble Supreme Court in the matter of Haryana Urban Development Authority (supra) as well as Division Bench of this Court in the matter of Komal Aggarwal (supra), I am not inclined to exercise the jurisdiction of this Court under Article 226 and 227 of the Constitution of India in these matters.
Hence, these writ petitioners are dismissed."
Having heard learned counsel for the parties and having perused the documents on record, we do not find that the appellant has made out any case for interference. It is undisputed position that the auction notice itself specified that the RIICO reserves the right to accept the bid. The circular issued by the Rajasthan State Industrial Development and Investment Corporation Ltd. also specifie
Haryana Urban Development Authority and Others v . Orchid Infrastructure Developers Private Limited
The court affirmed that auction authorities have discretion to reject bids, even if they are the highest, based on competitive bidding considerations.
The authority has the right to cancel the highest bid and the bids must be competitive. The authority reserves the right to accept or reject any bid without assigning any reason.
Bidders participating in tender process have no other right except right to equality and fair treatment in matter of evaluation of competitive bids offered by interested persons in response to notice....
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 authority conducting an auction has the right to reject the highest bid and the decision-making process must be fair and reasonable.
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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