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1997 Supreme(All) 494

IN THE HIGH COURT OF ALLAHABAD
M. Katju and B. S. Chauhan, JJ.
UPADHYA AND CO. - Appellant
Versus
STATE OF UTTAR PRADESH - Respondents
Civil Misc. Writ Petition 22439 Of 1992
Decided On : 05/03/1997

A bid subject to approval is not complete until approval is granted by the authority concerned.

Headnote:

AUCTION - APPROVAL OF BID - EFFECT OF APPROVAL - BID SUBJECT TO APPROVAL - AUCTION NOT COMPLETE UNTIL APPROVAL GRANTED - INTERIM ORDER GRANTING APPROVAL - UNWARRANTED - PETITIONER TO REFUND EXTRA ILLEGAL AMOUNT POCKETED.

Fact of the Case:

Petitioner was awarded a contract to collect toll fee on Shastri Bridge for one year from 24-11-1990 to 23-11-1991. Petitioner was the highest bidder in the auction held on 29-10-1991 for 3 years (from 1991 to 1994) but the bid was subject to approval of the Commissioner. Commissioner did not grant approval and petitioner continued collecting toll for the entire period of 3 years pursuant to an interim order of the High Court.

Finding of the Court:

The bid of the petitioner could only be said to be accepted after it had approval by the Commissioner. Since, there was no approval by the Commissioner there was no valid auction in favour of the petitioner at all for the period 1991-94. The interim order of this court dated 24-6-1992 practically amounted to approval of the auction bid of the petitioner, which could only be granted by the Commissioner and not by this Court.

Issues: Whether the petitioner had a valid auction in favour of him for the period 1991-94.

Ratio Decidendi: In the case of a bid which is subject to approval, it is well settled that the auction will not be complete unless approval is granted by the authority concerned.

Final Decision: Both the writ petitions were dismissed with the observation that the petitioner has to refund to the Government, the extra illegal amount which he has pocketed.

M. KATJU AND B. S. CHAUHAN, JJ.

( 1 ) THIS Writ Petition No. 32974 of 1991 and Writ Petition No. 22439 of 1992 are being disposed of by a common judgment. Writ Petition No. 32974 of 1991 has prayed for writ of certiorari to quash the order dated 4-11 -1991 Annexure-3 to the petition and for a mandamus restraining the respondents from interfering with the right of the petitioner of collecting the fee over the Shastri bridge and for a mandamus directing the respondents to accept the contract in favour of the petitioner of realising the fee over Shastri Bridge in respect of auction dated 29-10-1991 for the period 1991-94.

( 2 ) WE have heard learned counsel for the petitioner and learned Standing Counsel We have also perused the two orders of the Honble Supreme Court communicated through a letter of the assistant Registrar, Supreme Court of India to the Registrar of this Court vide letter dated 22-4-1996. These orders have been passed in S. L. P. No. 9835 of 1994 State of U. P. and Ors. v. Upadhyaya and Company, on 14-7-1994 and on 22-4-1996. The Supreme Court has expressed its shock over certain interim orders passed by this Court in these writ petitions.

( 3 ) THE facts of the case are that there is a bridge called Shastri Bridge at National Highway No. , 2 over river Ganges near Allahabad. Petitioner has alleged that he was awarded a contract to collect the toll fee on the said bridge for one year from 24-11-1990 to 23-11-1991 and the contract money for this period of one year was Rs. 85,76,000/ -. Photo copy of the agreement is annexure-1 to the petition. It was alleged in paragraph-3 of the petition that this contract period was going to expire on 23-11-1991. The respondents published an advertisement on 6-9-1991 in the news papers inviting applications from prospective bidders for further auction for a period of 3 years (from 1991 to 1994) of the right to collect the fee over the bridge in question. The petitioner has alleged that he completed all the formalities and he has alleged in paragraph-5 of the petition that he was the highest bidder in the auction held on 29-10-1991 for these 3 years and his bid was Rs. 88,00,000/-per year. In para-6 of the petition it is alleged that on 4-11-1991 the petitioner received a notice from respondent No. 3 in which the petitioner was directed to hand over the charge of collection of fee over Shastri Bridge to the officials of respondent No. 3 on 24-11-1991. A true copy of the said notice is Annexure-3 to the petition. In para-7 of the petition it is alleged that immediately after receipt of notice dated 4-11 -1991 the petitioner made a representation to respondent No. 3 in which the petitioner requested that respondents should not interfere with the right of the petitioner to collect the fee over Shastri Bridge. True copy of the said representation is Annexure-4 to the petition It is alleged in para 20 of the petition that the Commissioner, Allahabad, did not take any decision on the representation of the petitioner dated 31-1-1991. Hence the petitioner filed this writ petition.

( 4 ) IT is not disputed that under the relevant rules the bid was subject to approval of the commissioner. If is settled law that there are two types of auctions, one where the bid is not subject to approval, and the other one where it is subject to approval In the case of a bid which is not subject to approval, the auction is complete on the fall of the hammer. However if the bid is subject to approval, it is well settled that the auction will not be complete unless approval is granted by the authority concerned. In the present case since the Commissioner, Allahabad had not granted approval for the petitioners bid, the auction was not complete and hence the petitioner had no right to continue collecting toll on Shastri Bridge after 23-11-1991. We fail to understand how these petitions could be entertained by this Court when there was no approval by the Commissioner and how interim orders could have been passe







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