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VIVEK CHAUDHARY, MANISH KUMAR
Mohd. Rehan – Appellant
Versus
Lucknow Development Authority – Respondent
JUDGMENT :
Heard Sri Prashant Chandra, learned Senior Advocate assisted by Ms. Richa Mishra, appearing for petitioner and Sri Ratnesh Chandra, learned counsel for respondents.
2. This petition is filed seeking quashing of the order dated 13.04.2007 passed by Vice Chairman, Lucknow Development Authority whereby allotment of the plot in favour of the petitioner is cancelled and the token money deposited by the petitioner for the said allotment has been forfeited.
3. Brief facts of the case are that the Lucknow Development Authority (for brevity hereinafter referred to as 'LDA') published a notice dated 14.06.2005 for auction of certain plots in Gomti Nagar area for housing and commercial projects. Only builders/firms with prior real estate experience were qualified to participate in the bidding. The auction was held on 17.11.2006, petitioner's bid of Rs. 10860/- per sqm. for Group Housing plot No. 1/26, Gomti Nagar measuring 6307 sqm. was declared successful. Petitioner deposited Rs. 27,24,000/- towards the earnest/token money. The aforesaid auction was confirmed by the Vice Chairman, LDA on 22.11.2006 and the same day a demand for Rs. 1,42,94,190/- towards the remaining dues of the ins
The court upheld the legality of forfeiting auction deposits due to non-payment, affirming that the auction terms did not require a hearing prior to cancellation.
The court held that no hearing is required prior to cancellation of allotment when auction terms do not provide for it, and the allotment can be cancelled for non-payment.
The cancellation of allotment was justified due to the petitioner's failure to comply with payment terms, emphasizing the importance of adhering to auction conditions and public interest.
Bidders in a tender process must adhere to the terms and conditions outlined in the auction documents; failure to comply justifies cancellation of bids and forfeiture of earnest money.
No vested right is established from bid submission; rejection of bid is valid when corporation ensures public interest and current market rates prevail.
The principles of natural justice require that an allotment cannot be cancelled without due process, including notice and an opportunity to be heard.
A binding contract arises once a bid is accepted, requiring adherence to principles of natural justice before cancellation, especially when objections are pending.
The demand for misc. expenses, development charges, and lease money was illegal and non est in law as the Guidelines governing the auction did not authorize the respondent-Board to realize these amou....
A party cannot be penalised disproportionately for the lapses of the other party.
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