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MADHYA PRADESH HIGH COURT
Sanjay Dwivedi, J.
Deepak Sharma - Appellant
Versus
Jabalpur Development Authority And Another - Respondents
Writ Petition No. 9909 of 2018
Decided On : 22-01-2020
ARBITRARY ACTION - PUBLIC AUCTION - HIGHEST BID - REJECTION - REASONS - JUDICIAL REVIEW - ESTOPPEL - REVIEW OF DECISION - POWER OF AUTHORITY - TENDER PROCEEDINGS - FAIRNESS AND TRANSPARENCY - PUBLIC PROPERTY - GOVERNMENT INSTRUMENTALITY - RIGHT TO EQUALITY AND FAIR TREATMENT - ALLOTMENT OF PLOT - CANCELLATION OF BID - INTERIM ORDER - STATUS QUO - POSSESSION OF LAND - RETURN OF SECURITY AMOUNT - INTEREST.
Fact of the Case:
Petitioner participated in an auction for a plot of land, offered the highest bid, and the offer was approved by the Board of Directors. However, a complaint was made alleging irregularities, an inquiry was conducted, and the report found no substance in the allegations. Despite this, the Board decided to cancel the allotment to the petitioner without assigning any reason. The petitioner challenged this decision, and the High Court admitted the petition and granted an interim order maintaining the status quo.
Finding of the Court:
1. The delay in filing the petition was condoned considering the facts and circumstances, including the assurance given by the authority to consider the petitioner's representation. 2. The authority had no right to review its own decision, especially when a frivolous complaint was made by a Board member who was part of the decision-making process. 3. The principle of promissory estoppel applies against public authorities, and the government cannot claim immunity from the doctrine. 4. The authority's action in rejecting the highest bid without assigning any reason was arbitrary and liable to be invalidated. 5. The authority's power to cancel the bid is not absolute and must be exercised for good and sufficient reasons. 6. The authority's conduct in overturning its decision without any valid reason was arbitrary and frustrated the petitioner's right to equality and fair treatment.
Issues: 1. Whether the petition was barred by delay and laches. 2. Whether the authority had the power to review its own decision. 3. Whether the principle of promissory estoppel applied against the authority. 4. Whether the authority's action in rejecting the highest bid was arbitrary and liable to be invalidated. 5. Whether the authority's power to cancel the bid was absolute or subject to certain conditions.
Ratio Decidendi: 1. Delay in filing a petition may be condoned if there is a reasonable explanation and the rights of others have not been prejudiced. 2. Public authorities cannot exercise the power of review when it is not available to them, especially when a frivolous complaint is made by a member of the decision-making body. 3. The principle of promissory estoppel applies against public authorities, and they cannot claim immunity from the doctrine. 4. The authority's action in rejecting the highest bid without assigning any reason is arbitrary and liable to be invalidated, as the authority must act fairly and cannot act arbitrarily. 5. The authority's power to cancel a bid is not absolute and must be exercised for good and sufficient reasons.
Final Decision: The petition was allowed, the decision of the authority to cancel the allotment to the petitioner was set aside, and the authority was directed to allot the plot to the petitioner and hand over possession after completing the necessary formalities.
JUDGMENT
Sanjay Dwivedi, J. - This petition, under Article 226 of the Constitution of India, has been filed by the petitioner seeking quashment of the orders dated 04.08.2012 (Annexure P/8) passed by the respondent No.2 and 31.03.2018 (Annexure P/17) passed by the respondent No.1. The petitioner has also sought direction to the respondents to implement the decision taken by the Board in the meeting held on 15.06.2012 for allotment of the plot in favour of the petitioner by executing a lease deed.
2. Before deciding the issue involved in the case, certain facts are required to be mentioned. In response to an advertisement issued in the Newspapers on 01.03.2012 by the respondent-authority inviting offers for allotment of various plots including Plot No. 936-B area 4675 sq.ft. situated in Scheme No. 6, Sanjeevni Nagar, Jabalpur (hereinafter the said plot will be referred to as 'disputed plot'). The petitioner submitted his offer for the disputed plot and after completing all the required formalities, he deposited the earnest money, Rs. 3,05,932/- by way of demand draft.
As per the procedure, for allotment of plots, a proposal was placed before the Allotment Committee of the respondent-authority in the meeting held on 31.03.2012. The Allotment Committee duly considered the matter and recommended for allotment of plot to the petitioner as his offer was found to be highest amongst the three offers received in that behalf. The matter was thereafter placed before the Board of Directors of the respondent-authority in its meeting held on 15.06.2012. The Board of Directors approved the recommendation made by the Allotment Committee. As per the petitioner, despite approving his offer, when nothing was done by the respondentauthority, he approached the authority time and again and also moved an application on 28.07.2012 requesting them to issue a letter for depositing the premium amount. As per the petitioner, one of the Members of the Board namely Smt. Bindiya Ajay Adhikar raised some objection to the allotment of plot and also made a complaint to the Chairman on 25.06.2012 (Annexure P/4) stating therein that there appeared to be unholy alliance of the officers of the authority in the offers as the plot has been sold for a very low price. It is also alleged that the publication of the notices inviting offers in Nav Bharat, Desh Bandhu, Swatantra Mat was an irregularity as the publication should have been made in the newspapers having wide circulation like Dainik Bhaskar, Nai Duniya, Patrika etc. She also alleged that the authority has suffered financial loss in the sale of the disputed plot.
3. The complaint made by the said Member of the Board was entertained by the Chairman and it was referred to the Estate Officer to submit a report thereon. The Estate Officer conducted an enquiry into the matter and submitted a detailed report and as per the report, the allegations made in the complaint were found frivolous. It was also observed by the Enquiry Committee that the rates for sale of the plots were fixed in accordance with the instructions issued by the Government based on the Collector's guidelines. As per the petitioner, the report though came in his favour, but, surprisingly, when the matter was placed before the Board in its meeting held on 04.08.2012 (Annexure P/8), a decision was taken by the Board to annul its earlier decision and consequently the allotment made in favour of the petitioner was cancelled without assigning any reason. The said order dated 04.08.2012 was served upon the petitioner cancelling his allotment. Against the order of cancellation of allotment of the plot, a writ petition i.e. WP No. 15148/2012 was filed by the petitioner challenging the action of the respondents. The said petition was entertained by the High Court and an interim order, directing respondents to maintain status quo, was also passed on 12.09.2012. During the pendency of the said petition, the petitioner made a representation to the State Governm
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