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2009 Supreme(Mad) 3774
High Court of Judicature at Madras
THE HONOURABLE MR. JUSTICE K. VENKATARAMAN
K. Parthasarathy
Versus
Member Secretary, Chennai Metropolitan Development Authority, Chennai & Another
W.P. No. 16041 of 2009 and M.P. No. 1 of 2009
Decided On : 17-09-2009
For the Petitioners:Su. Srinivasan, Advocate.
For the Respondent:C. Kathiravan, Advocate.
Ratios:
a. High Court can entertain writ petition in contractual matters if the action of the State is arbitrary or tainted with malafide.
b. State can cancel the tender process at any stage and the participant cannot challenge the cancellation.
c. Mere participation in the tender process cannot give rise to any legitimate expectation in the participant to give him the right to challenge the cancellation of tender process.
Headnote:(A)Constitution of India-Art.14, 226-Arbitrariness-Legitimate expectation-Tender-Writ-Jurisdiction-Respondent called for tender to auction the shop and accepted EMD of 20%-Later, cancelled the auction-Petitioner challenged the decision to cancel the auction and contended that he deposited substantial amount and it created a legitimate expectation in him and the cancellation is arbitrary-Respondent contended that it is a field of contract and writ petition is not maintainable-Held, even in the filed of contract, if the decision is arbitray writ petition is maintainable-Mere right to participate in the tender process do not create any right in the participant to compel the respondent to proceed with auction on the principle of legitimate expectation-Writ petition dismissed.
(B)Constitution of India-Art.14, 226-Contract-Arbitrariness-Malafide-Writ-Jurisdiction-High Court can entertain writ petition in contractual matters if the action of the State is arbitrary or tainted with malafide.
In exercising power under Article 226 of the Constitution of India, Courts can interfere with contractual matters also, if there is violation of Article 14 of the Constitution of India, if the action is arbitrary and that it is tainted with mala fide. Para 10
(C)Constitution of India-Art.14-Legitimate expectation-Tender-Cancellation-State can cancel the tender process at any stage and the participant cannot challenge the cancellation-Mere participation in the tender process cannot give rise to any legitimate expectation in the participant to give him the right to challenge the cancellation of tender process.
Thus considering the discussion made above, the irresistible conclusion that could be arrived at are :-
(1) The writ petition is perfectly maintainable against the challenge made with regard to tender process of the CMDA.
(2) The petitioner has no legal right to question the cancellation of the auction, since
(i) He is only a mere participant in the auction.
(ii) A mere participation will not cloth with any right to question the cancellation of the auction.
(iii) The petitioner was not allotted any particular shop.
(iv) The CMDA has got power to introduce new policy for the allotment of the shop.
(v) The Court has no power to review administrative decisions and substitute its own reason or decisions.
(3) A mere participation in the auction cannot be heard to say that there was a legitimate expectation on mere participation in the tender process. Para 16
This writ petition is filed challenging the notification of the first respondent published in “Dinakaran” newspaper dated 17. 2009 informing the petitioner about the cancellation of auction scheduled to be held on 1. 2009 at Koyambedu Wholesale Market Complex, Chennai.
2. The grievance of the petitioner in nutshell are set out here under:
1. The second respondent had published a notification dated 1. 2009 in leading newspapers inviting applications for allotment of shops of various sizes, scheduled to be held on 24. 2009 at 11.00 a.m. at Koyambedu Wholesale Market Complex, Chennai. Pursuant to the said notification, the petitioner applied for a shop in question and paid 20% of E.M.I., and Rs. 1,000/- towards registration fees. Though the drawl of lots was fixed on 24. 2009, later it was postponed to 5. 2009. Though it was stated that the postponement was initiated in view of the General Election for Lok Sabha, even after the election, the auction was not conducted. The petitioner made numerous enquiries about the same. While so, the first respondent, vide notification dated 17. 2009, informed that allotment of shops is cancelled due to administrative reasons and the initial deposit amount as well as registration fees would be returned to the applicants by way of demand draft.
Challenging the said proceedings, the petitioner has approached this Court by filing the present writ petition.
3. Additional affidavit was filed on behalf of the petitioner wherein the following facts have been set out:
1. The petitioner was made to believe to participate in the auction process. The respondents have neither reserved their right to cancel the notification or to modify the terms for conducting the drawl of lots either in the notification or in the application. In the absence of such an indication, the cancellation of the drawl of lots is absolutely arbitrary and consequently, the same is unsustainable.
2. The respondents cannot now change their policy to the detriment of the petitioner, that too, for administrative reasons. The respondents are estopped from changing the existing policy to some other policy. The petitioner although have no legal right, but could base their right on the basis of legitimate expectations which have been approved by the Hon’ble Apex Court as well as this Court.
3. He has invested huge amount with the second respondent for initial deposit of 20% of the total value of the shop, without any rhyme or reason, the same cannot be cancelled.
4. Counter affidavit was filed on behalf of the second respondent wherein the following facts have been set out:
1. The drawl of lot scheduled to be held on 6. 2009 was cancelled and it was also informed to the applicants that 20% of the initial deposit amount and the registration fees would be returned to them. It was decided to revise the policy in such a way that the allotment of shops in Vegetables, Fruits and Flower Markets may be allotted based on type of shops in all blocks, instead of calling applications shops number-wise. By this system, all the shops can be allotted through drawl of lot. In the present system, there is a chance for declining the allotment by some successful applicants. It will lead to forfeiting of the initial deposit, which will avoid unhealthy practice of declining the shops after allotment.
2. It was decided to allot the shops in the market to the wholesale traders in Chennai Metropolitan Area instead of calling applications from all the general public because the market is meant only for wholesale traders in perishable goods. Further, it was decided to introduce one shop to one family to provide equal opportunity to everyone.
3. The petitioner have absolutely no locus standi to question the policy decision of the respondents since the same is done in the interest of public and to discourage speculative business. The Hon’ble Apex Court held that the power of judicial review in contractual matters is very limited and only in rare circu
