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2023 Supreme(P&H) 2710
IN THE HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH
G.S. SANDHAWALIA, HARPREET KAUR JEEWAN, JJ.
Sheenam Singla & Anr. – Petitioners
Versus
State of Haryana & Ors. – Respondents
CWP-12558 of 2023 (O&M)
Decided On : 08-08-2023
Mr.Ravinder Bangar, Advocate; For the Petitioners
For the Respondent: Mr.Deepak Bhardwaj, DAG, Haryana.
Mr.Deepak Sabherwal, Advocate, for Respondent-HSVP.
Headnote:(A) Constitution of India - Articles 226 and 227 - Writ petition for issuance of directions for release of letter of intent for residential plot - Petitioners were highest bidders in auction but letter of intent not issued due to alleged incorrect reserve price - Court discussed prior judgments emphasizing the need for valid reasons when canceling highest bids and the avoidance of arbitrariness. (Paras 2, 5, 8)
(B) Legal principle of arbitrariness - Authorities must communicate sufficient reasons for decisions affecting bidders, and non-communication renders decisions illegal and arbitrary. (Paras 7, 8)
Facts of the case:
Petitioners claimed that they were the highest bidders in an auction for a plot and had deposited the requisite bid amount but were not provided the letter of intent due to claim of incorrect reserve price.
Findings of Court:
The court found the reasons for rejecting the highest bid baseless and arbitrary, affirming the validity of the auction process and directing the issuance of the letter of intent.
Issues: Whether the cancellation of the highest bid by the authority was based on valid grounds and if the non-issue of the letter of intent violates the petitioners' rights.
Ratio Decidendi: The court ruled that the reasons provided for canceling the bid were insufficient, emphasizing the importance of objectivity in administrative decisions that impact bidders.
Result: Writ petition allowed; respondents ordered to issue the letter of intent within six months.
| Table of Content |
|---|
| 1. basis of petition for intent of letter (Para 1 , 2) |
| 2. arguments on auction reserve price issues (Para 3 , 4) |
| 3. court’s observations on auction legality (Para 5 , 6 , 7) |
| 4. findings on arbitrariness and lack of valid reason (Para 8) |
| 5. issuance of letter of intent ordered (Para 9) |
JUDGMENT
Mr. G.S. Sandhawalia, J.
Prayer in the present writ petition filed under Articles 226/227 of the Constitution of India is for issuance of directions for release of the letter of intent of a residential plot No.1938, Sector 52, Urban Estate, Gurugram-II measuring 8 marlas.
2. The claim of the petitioners is on the ground that they were highest bidders in an auction held on 24.01.2023 and had deposited the requisite 10% of the bid price of Rs.2,62,02,200/- but the letter of intent had not been issued. Representation dated 26.04.2023 (Annexure P-7) had also been moved regarding the above fact which having not been acted upon, the jurisdiction of the Writ Court has been invoked.
3. In the short reply filed on behalf of respondents No.2 to 4, averment has been made that a wrong reserve price had been fixed on the basis of which the auction had been conducted and no letter of intent/allotment had been issued and therefore, it was not a concluded contract.
4. The State has taken the objection that the matter is covered by the judgment in CWP-19447-2021 titled Dr.Sarita Gautam & others v. Haryana Shehri Vikas Pradhikaran & others, decided on 27.09.2021 and therefore, the reserve price had been wrongly fixed and the correct reserve price had never been depicted in the said affidavit. Therefore, vide order dated 06.07.2023, a better affidavit was directed to be filed as to what was the correct price.
5. A large number of cases were disposed of today wherein the reserve price was fixed at a higher amount. The writ petitions have been dismissed on account of the fact that interest of the Public Exchequer was involved and therefore, in the absence of any vested right, the allottees had no right, keeping in view the law laid down in Dr.Sarita Gautam (supra) and the judgment passed by us in CWP-13656-2023 titled Mahavir Singh v. Haryana Shehari Vikas Pradhikaran & others, decided on 07.08.2023. However, as per the documents supplied today regarding the petitioners, it transpires that the reserve price of the plot in question has rather been reduced from Rs.2,27,82,200/- to Rs.2,26,16,200/-.
6. The judgment of the Apex Court in Haryana Urban Development Authority & others v. Orchid Infrastructure Developers P. Ltd. , 2017 AIR (SC) 882 discussed the issue that whether the authorities have a right to cancel the highest bid and came to the conclusion that there should be valid reasons and that the competency of the authority to cancel was there provided there was valid reason. In the present case, the HSVP has not been able to give any valid reason that the Public Exchequer had been put to a loss and the reserve price had been rather reduced to its detriment. Rather in the present case, it is reverse case and the reserve price has got reduced and therefore, the petitioner cannot be prejudiced on that account and has to be given the due benefit of the bid amount of Rs.2,62,02,200/- of which she had also deposited the requisite 10% as per the terms and conditions of the auction.
7. The sufficient reason for rejection of the bid which have to be got was also highlighted in Meerut Development Authority v. Association of Management Studies & another , (2009) 6 SCC 171 wherein it was held that the authorities in accepting and refunding must be free from arbitrariness and favoritism. Similar view was also taken in M/s Star Enterprises & others v. City and Industrial Development Corporation of Maharashtra , (1990) 3 SCC 280 that sufficient reasons should be there to indicate the stand of the appropriate authority and which should be made available and ordinarily should be communicated to the concerned party. Thus, the reasons which have been given in t
