The court emphasized that the respondents were not empowered to cancel a concluded contract without hearing the highest bidder, as per the provisions of the Panchayat Raj Act and Rule 59.

1. Petitioner filed writ petition on 12th January, 2011 seeking restraint on respondents for re-tendering the Plantation Beat Gagerdoub Ghat Narbal and also a writ of mandamus commanding respondents to issue formal allotment order in favour of petitioner for Plantation Beat Gagerdoub Ghat Narbal in terms of notifi#31;cation dated 15th December, 2010-Annexure A to the writ petition.

2. Writ petition came up for consideration on 13th January, 2011 when a notice was issued and respondents were also directed not to go for fresh auction.

3. Respondents have filed reply and stated therein that nodoubt the petitioner has figured as highest bidder but the said auction was cancelled because represen#31;tation was received from public that the wealth of Panchayat Halqa Narbal has been handed out against peanuts and accordingly order was made dated 7th January, 2011.

4. Petitioner was constrained to seek permission to amend the writ petition which was granted on 20th December, 2011. Accordingly, the amended writ peti#31;tion came to be filed on 2nd March, 2012. Petitioner has sought writ of certiorari for quashment of the cancellation order dated 7th January, 2011 issued by respondents 3 and 4 and has also sought two more reliefs.

5. Respondents have filed reply and resisted the petition on the ground that as per the law, respondents were within their powers to cancel the bid. It is stated that as per the provisions of Panchayat Raj Act, respondents had to wait for 10 days after closure of bid. And after due consideration it was found that of course the petitioner is the highest bidder but since there were representations from the public against the said bid, therefore, it had to be cancelled-Annexure R1. The petitioner was offered to take back the security deposit of Rs. 1.00 lac, but he refused to accept it.

6. The core question for consideration is, as to whether the respondents were within their rights to cancel the bid of highest bidder?

7. In terms of the auction notice-proclamation-annexure A which was made public by issuing a proclamation that in the premises of Block Office Narbal, an auction of trees as per the schedule and particulars given in the proclamation was to be conducted and all those persons who were interested to participate had to deposit 1/4th of the auction amount. And the successful bidder had to deposit the entire amount in full.

8. In terms of the provisions of Act, bid was to be kept open for 10 days with a condition that the bid could be allotted to a person who may offer 10% more than the highest bid. It is specific case of the petitioner that he figured as highest bidder and nobody appeared within ten days and offered more than 10%, thus offer made by the petitioner was final and contract was concluded.

9. The respondents have admitted in reply filed to amended writ petition in paragraph 3 that "inspite of waiting for ten days no further bidder came for bid". Thus the respondents have admitted that nobody appeared and offered more than 10% within ten days, meaning thereby that the offer and the contract was concluded, therefore, they had no option but to issue allotment order in favour of the petitioner. The cancellation order is not in accordance with their stand. The impugned order came to be passed without hearing the petitioner.

10. The provisions of the Act nowhere provide that respondents are within their powers to cancel the concluded contract that too without hearing the highest bidder. It is apt to record herein that respondents in paragraph 3 of their reply have admitted that none has appeared with an offer to given 10% more.

11. It is apt to reproduce Rule 59 of the Panchayati Raj Rules, herein: 59. Mode of contract

(1) The Panchayat shall be responsible to get the contract auctioned at highest possible amount by all its means.

(2) The auction shall be concluded by Sarpanch or Naib Sarpanch, Secretary and other three or more Panches authorized by the Panchayat and while closing the bid all such record their

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