A binding contract arises once a bid is accepted, requiring adherence to principles of natural justice before cancellation, especially when objections are pending.

1. Delhi Improvement Trust was the owner of plot No. 2 in Block No. 3, bearing Municipal No. XV / 8995 (new), situate on Original Road, Paharganj, New Delhi. It was leased out by the Trust in favour of one Sultan Ahmed. On his migration to Pakistan it vested in the Custodian and was later on acquired under Seetion 12 of the Displaced Persons (Compensation and Rehabilitation) Act (for short 'the Act'). The lease - hold rights were auctioned on October 21, 1959. The petitioner, Dwarka Nath Bhasin, offered the highest bid of Rs.42,000/-. He tendered his compensation towards the earnest money of the bid price. A sum of Rs.8,333/- was adjusted out of the compensation payable to the petitioner towards this price.

2. One Sukh Dev Verma was in occupation of the plot and had made some superstructure on it. He filed objections alleging that the plot in question was not an evacuee property. He had raised the superstructure and, therefore, it could not be acquired or sold as an acquired evacuee property, etc. It appears that his objections were decided by the Managing Officer but on appeal the case was remanded by the Assistant Settlement Commissioner vide his order dated February 29, 1960. Thereafter the Managing Officer by means of order dated July 10, 1962 (Annexure P - 7) held that the bid favour of the petitioner has been confirmed by the Chief Settlement Commissioner who had also ordered to grant Verma ex. gratia equivalent to the cost of unauthorised superstructure raised by him and, therefore, nothing remained to be decided in the case. Feeling aggrieved, Varma filed an appeal which was dismissed by the Assistant Settlement Commissioner on October 31, 1962 (Annexure P - 8). The revision petition was dismissed by the Assistant Settlement Commissioner on delegated powers of Chief Settlement Commissioner by order dated August 13, 1963 (Annexure P - 10). The application of Verma under S.33 of the Act against the said order was dismissed by the Central Government by order dated September 20, 1963 (Annexure P - 11). Verma thereafter filed a writ petition under Art.226 and Art.227 of the Constitution of India in the Circuit Bench of the Punjab High Court at Delhi which was dismissed on February 25, 1972 (Annexure P - 15). Letters Patent Appeal against the said judgment was dismissed on March 4, 1975 (Annexure P - 16). Special Leave Petition filed by Verma in the Supreme Court was also dismissed on April 7, 1976 (Annexure P - 20).

3. The Assistant Settlement Commissioner (Sales) acting for Regional Settlement Commissioner, Delhi, informed the petitioner by letter dated April 4, 1962 (Annexure P - 5) that his bid had been accepted by the Regional Settlement Commissioner. The petitioner was asked to deposit the balance amount, i.e. Rs.42,000/- and produce the treasury challan within fifteen days from the receipt of the intimation. It was made clear that the confirmation of the bid was subject to the decision of appeal, if any, filed by the objector (Sukh Dev Verma). The petitioner made an application dated April 23, 1962 to, the Regional Settlement Commissioner requesting for extension of time and the time was extended up to May 26, 1962 by Memo dated April 27, 1962 (Annexure I to the counter - affidavit). The petitioner made another representation dated May 25, 1962 (Annexure P - 6) stating that the appeal filed by Verma was still pending and acceptance of the appeal would result in setting aside of the auction and in these circumstances time be extended till the decision of the appeal. With reference to this representation the petition