in Gordhandas Bhanji AIR 1952 SC 16 : “Public orders, publicly made, in exercise of a statutory authority cannot be construed in the light of explanations subsequently given by the officer making the order of what he meant, or of what was in his mind, or what he intended to do. Public orders made by public authorities are meant to have public effect and are intended to affect the actings and conduct of those to whom they are addressed and must be construed objectively with reference to the language used in the order itself. Orders are not like old wine becoming better as they grow older.” There is no dispute from the aforesaid proposition. However, in the instant case reasons have been mentioned in the rejection order and the nature of reports has also been sufficiently explained. Thus the rejection of seven different bids in the auction reflects that there was due application of mind by the concerned authority and rejection could not be said to be illegal, arbitrary or sans of reason.- Plaintiff came to the court for mandatory injunction, for issuance of allotment letter without payment of court fee also. It was incumbent upon the plaintiff to pay the ad valorem court fee as prevailing and the valuation of the suit should not have been less than the bid amount of Rs.111.75 crores, as rightly held by the first appellate court. The plaintiff is directed to pay the ad valorem court fee not only before the trial court but also before the High Court. Plaintiff is directed to deposit the court fee within two months from today, as payable. 35. Resultantly, the appeal is allowed. The judgment and decree passed by the High Court is set aside and that of the first appellate court is restored. In the facts and circumstances of the case, we impose costs of Rs.5 lakhs on the plaintiff/respondent to be deposited as : Rs.2.5 lakhs in the Advocates’ Welfare Fund and Rs.2.5 lakhs in the Supreme Court Employees’ Welfare Fund within a period of two months from today.

ITEM NO.1A               COURT NO.9               SECTION IVB

S U P R E M E  C O U R T  O F  I N D I A



((Arising out of SLP(C) No(s).  12166/2011)

HARYANA URBAN DEV. AUTHORITY & ORS.              Petitioner(s)



Date : 27/01/2017 This MATTER  was called on for Judgment today.

For Petitioner(s)       Mr. Shyam Devan, Sr. Adv.

Mr. Anish Kumar Gupta, Adv.

Mr. Chandra Shekhar Suman, Adv.

Mr. R.K. Rajwanshi, Adv.

Ms. Deepshikha Bharati, Adv.

Mr. Sanjay Kumar Visen,Adv.

Mr. Anil Grover, AAG

For Respondent(s)       Mr. Raja Chatterjee, Adv.

Ms. Nandini Ram Chandran, Adv.

Ms. R. Bhuyan, Adv.

Mr. Satish Kumar,Adv.

Hon’ble Mr. Justice Arun Mishra pronounced the judgment  of  the

Bench comprising His Lordship and Hon’ble Mr. Justice Amitava Roy.

The appeal is allowed. The judgment and  decree  passed  by  the

High Court is set aside and that of the first appellate court  is  restored.

In the facts and circumstances of the case, we impose costs  of  Rs.5  lakhs

on the plaintiff/respondent to  be  deposited  as  :  Rs.2.5  lakhs  in  the

Advocates’ Welfare Fund and Rs.2.5 lakhs in  the  Supreme  Court  Employees’

Welfare Fund within a period of two months from today.

|   (NEELAM GULATI)                |        (TAPAN KR. CHAKRABORTY)    |

|COURT MASTER                      |COURT MASTER                       |

(Signed Reportable Judgment is placed on the file)




CIVIL APPEAL NO.  1016  OF  2017

(Arising out of SLP [C] No.12166/2011)

Haryana Urban Development Authority & Ors.        … Appellants


Orchid Infrastructure Developers P. Ltd.                … Respondent



1.    Leave granted.

2.    The appeal arises out of judgment and order dated 17.1.2011 passed  by

the High Court of Punjab & Haryana at Chandigarh thereby setting  aside  the

judgment and decree of District Judge dated  29.11.2010  and  restoring  the

judgment and decree of Civil  Judge  passed  on  14.10.2010.  The  plaintiff

Bhudeep Builders and Exporters Pvt. Ltd. were later renamed as  M/s.  Orchid

Infrastructure Developers P. Ltd. The plaintiff-respondent filed a suit  for

declaration with consequential relief as against the appellants with  regard

to rejection of bid relating to the commercial tower situated in Sector  29,

Urban Estate, Gurgaon, in area admeasuring 9.527 acres.  The  bid  submitted

by the plaintiff was the highest of  Rs.11,17,50,000/-.  The  reserve  price

was Rs.106.65 crores.  The main terms and conditions of the auction were  as

under :

(i) 10% of the bid amount to be tendered on the spot at fall of hammer.

(ii) 15% of the bid money to be deposited within 30 days from  the  date  of

issuance of allotment letter.

(iii) 75% of the  amount  to  be  paid  within  60  days  from  issuance  of

allotment letter as one time interest free payment or with interest  in  the

manner prescribed.

(iv) The Presiding Officer (Administrative Officer) reserved  the  right  to

withdraw any property from the auction or reject any bid  without  assigning

any reason.

3.    It is  further  averred  in  the  plaint  that  the  auction  held  on

24.5.2004 was presided over by the Administrator, Haryana Urban  Development

Authority (for short ‘HUDA’). Reserve  price  had  been  approved  by  Chief

Administrator, HUDA. Though the reserved price  for  the  other  sites  were

approved by the Administrator. In the plaint it was further averred that  27

persons deposited the  security  amount  of  Rs.50  lakhs  for  bidding  and

various bidders actively participated in the bids.  Ultimately  the  bid  of

the plaintiff amounting to Rs.111.75  crores  being  highest  was  accepted.

Petitioner deposited 10% amount by various drafts on  the  fall  of  hammer.

Formal letter of allotment was not issued inspite of  efforts  made  by  the

plaintiff. Officials of  HUDA  were  dragging  their  feet  over  the  issue

without any rhyme or reason.

Plaintiff ultimately  received  memo  dated  24.9.2004  purporting  to

refund 10% amount Rs.11,17,50,000 deposited by the plaintiff at the time  of

auction held on 24.5.2004 on the ground that the bid had not been accepted.

4.    Plaintiff questioned the rejection of the bid on  the  ground  of  its

being illegal, unlawful, mala fide, arbitrary, discriminatory and  violative

of principles of natural justice. The  bid  for  the  commercial  tower  was

adequate and above the reserved price. The plaintiff relied upon  Regulation

6 regarding  issuance  of  allotment  letter  by  Chief  Administrator.  The

rejection of the bid is without any rhyme  or  reason.  The  order  is  non-

speaking. There was no material available with  the  defendant  to  conclude

that auction of property in question was made at a lower rate  or  that  the

same would fetch a higher price  in  the  event  of  re-auction.  The  Chief

Administrator alone was competent to decide about the bid and no  delegation

of power to Administrator has been shown to  the  plaintiff.  Mere  baseless

apprehension harboured by the defendant  that  the  auction  could  fetch  a

higher rate, could not be said to be in public interest. If such  action  is

permitted, auction process shall be a never ending exercise.  The  plaintiff

valued the suit  for  declaration  and  consequential  relief  of  mandatory

injunction at Rs.400 and paid the court fee of Rs.55.  Plaintiff has  prayed

for a declaration that  memo  dated  24.9.2004  rejecting  the  bid  of  the

plaintiff to be void ab initio, non est and illegal, and that  plaintiff  is

successful bidder of commercial tower  measuring  9.527  acres  situated  in

Sector 29, Urban Estate, Gurgaon. Plaintiff  further  prayed  for  mandatory

injunction directing the defendants to  issue  formal  letter  of  allotment

pertaining to the suit property in favour of the plaintiff and  to  complete

requisite formalities of allotment  including  delivery  of  possession  and

sanction  of  site  plan.  Plaintiff  further  prayed  for   an   injunction

restraining  defendants  from  re-auctioning  the  suit  property  and  from

creating any third party interest of any  nature  in  respect  of  the  suit


5.    The  defendant  HUDA  in  its  written  statement  raised  preliminary

objection that the civil court has no jurisdiction to entertain the  present

suit in view of section 15(2) of Haryana Urban  Development  Authority  Act,

1977 (hereinafter referred to as ‘the Act’). It was also submitted that  the

suit was not maintainable in the present form, that  the  plaintiff  has  no

cause of action to file the suit and  has  not  come  to  court  with  clean

hands, suit is liable to be rejected under Order 7 Rule 11  of  the  C.P.C.,

plaintiff is liable to pay ad valorem court fee on  the  sale  consideration

of Rs.111.75 crores of the commercial site in question, the suit  is  barred

under section 41(h) of the  Specific  Relief  Act.  The  plaintiff  has  not

availed the remedy of arbitration as per the  rules,  regulations  and  bye-

laws of HUDA. There is no concluded contract between the parties.  Plaintiff

has accepted the terms and  conditions  of  the  auction  in  which  it  was

mentioned that the competent authority is entitled to accept or  reject  the

bid without assigning any reason. The  auction  was  presided  over  by  the

Administrator, HUDA. After auction in  question  was  held  complaints  were

received regarding intimidation and threatening of bidders. The bid was  not

accepted for the reason that the price of  urban  estates  at  other  places

like Faridabad, Panipat, Panchkula etc. for similar  kind  of  property  was

higher. The bid in question was  not  acceptable  as  per  prevalent  market

price of the  similar  property  in  Gurgaon.  The  Presiding  Officer  i.e.

Administrator is fully competent to refuse  or  accept  the  bid.  Competent

authority after going through  the  individual  reports/comments/opinion  of

the members of the Auction Committee comprising  of  Estate  Officer,  HUDA,

Gurgaon,  Senior  Accounts  Officer,  District  Town  Planner  and  District

Revenue Officer (representative of  the  Deputy  Commissioner,  Gurgaon)  as

members  under  the  Chairmanship  of  Administrator,  HUDA.   Administrator

thoroughly examined the observations and recommendations of the  members  of

the Auction Committee  regarding  not  to  accept  the  bid  prices  of  big

commercial sites since these prices  being  apparently  on  the  lower  side

which was also examined by the Government at  the  Headquarters  level.  The

records of the entire auction proceedings including opinion  of  the  Estate

Officer,  Gurgaon,  other  members  of   the   Auction   Committee,   Deputy

Commissioner and also after studying the reserve  price  and  auction  price

trends, a decision was taken by the competent authority not  to  accept  the

bid prices vide their written report.

It was further contended by HUDA that Administrator is  the  competent

authority.  Power to accept bid has been delegated to him by  the  competent


6.    In view of the written statement the plaintiff filed a  rejoinder.  It

was denied that the civil court has no jurisdiction and bid  price  was  not

inadequate. It also denied the delegation of power to  Administrator,  HUDA,


7.    The trial court – Civil Judge, Junior Division,  Gurgaon  decreed  the

suit vide  judgment  and  decree  dated  14.10.2010.  Three  witnesses  were

examined  by  the  plaintiff  and  on  behalf  of   defendant   HUDA.   Shri

P.K.Ramanand,  Assistant  was  examined.   The   trial   court   held   that

Administrator, HUDA was not competent to reject the bid  of  the  plaintiff.

As per Regulation 6 of Haryana  Urban  Development  (Disposal  of  Land  and

Buildings) Regulations, 1978 (hereinafter referred to  as  ‘the  Regulations

of 1978’), the authority to accept or reject a bid  was  vested  with  Chief

Administrator, HUDA and delegation of power to Chief Administrator can  only

be made by the State Government vide notification as per  section  51(4)  of

the Act. No notification has been placed on record to prove that  the  power

of Chief Administrator  has  been  delegated  to  Administrator,  HUDA.  The

report on the basis of which  bid  had  been  rejected  was  not  placed  on

record. The trial court held that the plaintiff  is  entitled  to  mandatory

injunction for issuance of formal letter of acceptance  of  bid.  The  trial

court further held that the suit is maintainable.  The payment of court  fee

by the plaintiff was adequate as the suit was not for  specific  performance

of contract. The trial  court  further  directed  the  defendants  to  issue

formal letter of allotment on completion  of  requisite  formalities  within

two months.

8.    On first appeal being  preferred  in  the  court  of  District  Judge,

Gurgaon the same was allowed vide judgment and decree dated 29.11.2010.  The

suit was dismissed by the first appellate court. The first  appellate  court

has opined that the power of  Chief  Administrator  has  been  delegated  to

Administrator, HUDA. As  is  apparent  from  the  letter  written  by  Chief

Administrator to the Administrator. No legal and  vested  right  accrued  in

favour of the plaintiff by submission of the highest  bid  and  10%  of  the

amount on fall of hammer. Bid has not been finally accepted.  The  plaintiff

ought to have paid ad-valorem court fee.  The  first  appellate  court  also

observed that no responsible officer of HUDA has  entered  the  witness  box

and only a junior ranking Assistant has been examined who  was  not  present

when the auction was held. He was posted at Gurgaon on 2.10.2008. The  first

appellate court has observed as under :

“However, the defendants have not produced any document whatsoever to  prove

the  above  averment  and  nor  has  any  responsible   officer,   including

defendants No.2 and 3, cared to step in the witness box to substantiate  the

above referred plea and instead only one witness, and that too an  Assistant

named P.K. Ramanan from the office of HUDA, Gurgaon who is a junior  ranking

official was examined as DW1 who was admittedly  not  even  present  at  the

time of the impugned auction because  he  has  admitted  during  his  cross-

examination that he came to be posted at Gurgaon only w.e.f. 8.8.2008.  Non-

appearance of any responsible official of HUDA thus indicates some  sort  of

unholy news between certain  quarters  for  which  reason  a  copy  of  this

Judgment  is  ordered  to  be  forwarded  to  the  Chief  Secretary  to  the

Government of Haryana for getting  conducted  an  enquiry  as  to  why  such

course of conduct was adopted  despite  huge  stakes  running  into  several

crores.  Was it intended to benefit the plaintiff  by  default.   The  Chief

Secretary to Government of Haryana be requested to  acknowledge  receipt  of

the copy of the judgment.”

9.    On the second appeal being preferred on 2.1.2011 in the High Court  as

against the judgment and decree, the same  has  been  allowed  on  17.1.2011

within 15 days of it being filed. The High Court has restored  the  judgment

and decree of the trial court on the ground that there is no  delegation  of

power  to  the  Administrator.  The  rejection  by  the  Administrator   was

inconsequential and was not a valid decision in the absence of  irregularity

in auction the bid ought to have been accepted by the  Chief  Administrator,

HUDA and letter conveying acceptance ought to have been issued in favour  of

the plaintiff. In view  of  Regulation  6(2)  the  Chief  Administrator  was

competent authority to take a final decision on  the  bid.  No  notification

has been issued by the State Government under  section  51(4)  of  the  Act.

The suit has been held to be maintainable. It has been  rightly  valued  and

adequate court fee has been paid.

10.   The judgment and decree of High Court has been  questioned  by  filing

the appeal in this Court. An application has also been filed  on  behalf  of

the appellant to take additional documents on record.  HUDA  for  the  first

time has filed notification dated 13.9.1989 issued by it  under  section  51

of  the  Act,  delegating  the  functions  in  favour  of  various  officers

indicating that the power has been delegated to the Administrator to  accept

the auction bids for  commercial/residential/industrial  sites.  Apart  from

that, a judgment of Division Bench of the High Court of Punjab & Haryana  in

CWP No.12753/2010 – Jitender Singh v. Haryana  Urban  Development  Authority

has been placed on record in which the impugned decision of the  High  Court

in the present appeal has been held to be not laying down  a  good  law  and

has been overruled.

11.   It was urged by Shri Shyam Divan, learned senior counsel appearing  on

behalf of the appellant that Administrator was Presiding Officer, thus,  had

the authority to accept or to refuse the bid  not  only  as  per  terms  and

condition No.4 of the tender notice but also as per the delegation  made  by

HUDA on 13.9.1989  under  section  51  of  the  Act.  Since  the  letter  of

allotment has not been issued, there was no concluded contract  between  the

parties. Thus  suit  was  not  maintainable  in  the  absence  of  concluded

contract for its enforcement. No allotment order was  issued  by  the  Chief

Administrator as per Regulation 6(2). Chief Administrator was only  required

to issue allotment  letter.  Once  bid  has  been  rejected,  there  was  no

occasion for the court to issue mandatory injunction. The rejection  of  the

bid was fully justified as prices fetched of 7 items were not adequate,  and

no right accrued on the basis of submitting the highest bid.

12.   Shri Abhishek Manu Singhvi and Shri Raju Ramchandran,  learned  senior

counsel  appearing  for  the  respondent   strenuously  contended  that  the

Administrator  had  forwarded  the  bid  to  the  Chief  Administrator   for

acceptance.  However,  the   Chief   Administrator   wrote   back   to   the

Administrator that the Administrator should decide about the  bid  as  power

was delegated to him. As per Regulation 6(2)  the  Chief  Administrator  was

required to decide about  the  acceptance  or  rejection  of  the  bid.  The

rejection of bid is not only arbitrary, unreasoned and no  report  has  been

placed on record by HUDA as to why bid had been rejected. The bid was  above

reserve price and there were several bidders. There being no better  bid  as

such the bid of the plaintiff ought to have been accepted. Rejection of  the

bid without any reason cannot be said to be valid  for  which  reliance  has

been placed  on  M/s.  Star  Enterprises  &  Ors.  v.  City  and  Industrial

Development Corporation of  Maharashtra  Ltd.  &  Ors.  (1990)  3  SCC  280,

Mohinder Singh Gill & Anr. v. The Chief Election Commissioner, New  Delhi  &

Ors. AIR 1978 SC 851, and  Kalu  Ram  Ahuja  &  Anr.  v.  Delhi  Development

Authority & Anr. (2008) 10 SCC 696.  In  the  absence  of  any  notification

being issued by the State Government under section 51(4)  of  the  Act,  the

power of the Chief Administrator  could  not  have  been  delegated  to  the

Administrator.  Thus  rejection  of  the  bid  by  the   Administrator   was

unauthorised.  The delegation of power by HUDA was made under section  51(1)

whereas delegation was required under section 51(4).

In re : Maintainability of suit in absence of concluded contract :

13.   Firstly, we examine the question  whether  there  being  no  concluded

contract in the absence of acceptance  of  bid  and  issuance  of  allotment

letter, the suit could be  said  to  be  maintainable  for  the  declaratory

relief and mandatory injunction sought by the plaintiff.  The plaintiff  has

prayed for a declaration that rejection of the bid was  illegal.  Merely  by

that, plaintiff could not have become entitled for  consequential  mandatory

injunction  for  issuance  of  formal  letter  of  allotment.  Court   while

exercising judicial review could not have accepted  the  bid.  The  bid  had

never been  accepted  by  concerned  authorities.  It  was  not  a  case  of

cancellation of  bid  after  being  accepted.  Thus  even  assuming  as  per

plaintiff’s case that the Administrator was not equipped with the power  and

the Chief Administrator had the power to accept or  refuse  the  bid,  there

had  been  no  decision  by  the  Chief  Administrator.  Thus,   merely   by

declaration that rejection of the bid by the Administrator was illegal,  the

plaintiff  could  not  have  become  entitled  to  consequential  relief  of

issuance of allotment letter.     Thus the suit, in the form it  was  filed,

was not maintainable for relief sought in view of the fact  that  there  was

no concluded contract in the absence of allotment  letter  being  issued  to

the plaintiff, which was a sine qua non for filing the civil suit.

14.   It is a settled law that the highest bidder has  no  vested  right  to

have the auction concluded in his favour. The Government  or  its  authority

could validly retain power to accept  or  reject  the  highest  bid  in  the

interest of public revenue. We are of the considered opinion that there  was

no right acquired and no vested right accrued in  favour  of  the  plaintiff

merely because his bid amount was highest and had deposited 10% of  the  bid

amount. As per Regulation 6(2) of the Regulations of 1978, allotment  letter

has to be issued on acceptance of the bid by  the  Chief  Administrator  and

within 30 days thereof, the successful bidder has to deposit another 15%  of

the bid amount. In the instant case allotment letter has never  been  issued

to the petitioner as per Regulation 6(2) in view of  non-acceptance  of  the

bid. Thus there was no concluded contract. Regulation 6 of  the  Regulations

of 1978 is extracted hereunder :

“6. Sale of lease of land or building by auction.- (1) In the case of  sale

or lease by auction, the price/premium to be charged shall be  such  reserve

price/premium as may be determined taking  into  consideration  the  various

factors as indicated in sub-regulation (1) of Regulation  4  or  any  higher

amount determined as a result of bidding in open auction.

(2) 10 per cent of the highest  bid  shall  be  paid  on  the  spot  by  the

highest bidder in cash  or  by  means  of  a  demand  draft  in  the  manner

specified in sub-regulation (2) of  Regulation  5.   The  successful  bidder

shall be issued allotment letter in Form ‘CC’ or ‘C-II’ by  registered  post

and another 15 per cent  of  the  bid  accepted  shall  be  payable  by  the

successful bidder, in the manner indicated, within thirty days of  the  date

of  allotment  letter  conveying  acceptance  of  the  bid  by   the   Chief

Administrator; failing which the 10 per cant amount already deposited  shall

stand forfeited to the Authority and the successful  bidder  shall  have  no

claim to the land or building auctioned.

(3)  The  payment  of  balance  of  the  price/premium,  rate  of   interest

chargeable and the recovery of interest shall  be  in  the  same  manner  as

provided in sub-regulations (6) and (7) of Regulation 5.

(4) The general terms and conditions of the auction shall be such as may  be

framed by the Chief Administrator from time to tome  and  announced  to  the

public before auction on the spot.”

15.   We are fortified in our view by a decision  of  this  Court  in  Uttar

Pradesh Avas Evam Vikas Parishad & Ors. v. Om Prakash Sharma  (2013)  5  SCC

182, the  questions arose for its consideration that : whether there is  any

vested right upon the plaintiff/bidder until the  bid  is  accepted  by  the

competent authority in relation to the property in question? Merely  because

the plaintiff is the highest bidder by depositing  20%  of  the  bid  amount

without there being approval of the same by the competent authority  and  it

amounts to a concluded contract in relation to the  plot  in  question;  and

whether the plaintiff could have maintained the suit in  the  absence  of  a

concluded contract ? Considering the aforesaid  questions,  this  Court  has

discussed the matter thus :

“30. In support of the said proposition, the learned Senior Counsel for  the

defendant, Mr Rakesh Dwivedi has also placed reliance upon another  decision

of this Court in State of U.P. v. Vijay Bahadur Singh (1982) 2 SCC 365.  The

learned Senior Counsel has rightly placed  reliance  upon  the  judgment  of

this Court in Rajasthan Housing Board case (2007) 1 SCC 477 which  reads  as

under: (SCC p. 483, para 9)

“9. This being the settled legal position, the respondent acquired no  right

to claim that the auction be concluded in its  favour  and  the  High  Court

clearly erred in entertaining the writ petition and in not  only  issuing  a

direction for  consideration  of  the  representation  but  also  issuing  a

further direction to the appellant to issue a demand  note  of  the  balance

amount. The direction relating to issuance of the demand  note  for  balance

amount virtually amounted to confirmation of the auction in  favour  of  the

respondent which was not the function of the High Court.”

x x x x x In State of Orissa v. Harinarayan Jaiswal (1972) 2  SCC  36  case,

relevant paragraph of which reads as under: (SCC pp. 44-45, para 13)

“13. x x x x x There is no concluded contract  till  the  bid  is  accepted.

Before there was a concluded  contract,  it  was  open  to  the  bidders  to

withdraw their bids (see Union of India v. Bhim Sen  Walaiti  Ram  (1969)  3

SCC 146). By merely giving bids, the bidders had  not  acquired  any  vested

rights. …” (emphasis supplied)

x x x x x

31. In view of the law laid down by this Court in the  aforesaid  decisions,

the learned Senior Counsel Mr Rakesh Dwivedi  has  rightly  placed  reliance

upon the same in support of the case of the  first  defendant,  which  would

clearly go to show that the plaintiff had not  acquired  any  right  and  no

vested right has been accrued in his  favour  in  respect  of  the  plot  in

question merely because his bid amount is highest and he had  deposited  20%

of the highest bid amount along with the earnest money with  the  Board.  In

the absence of acceptance of bid offered by the plaintiff to  the  competent

authority of the first defendant, there is no concluded contract in  respect

of the plot in question, which is evident from letters dated  26-5-1977  and

8-7-1977 wherein the third defendant had rejected the bid  amount  deposited

by the plaintiff and the same was refunded to him by way  of  demand  draft,

which is an undisputed fact and it is  also  not  his  case  that  the  then

Assistant Housing Commissioner who has  conducted  the  public  auction  had

accepted the bid of the plaintiff.”      (emphasis supplied).

This Court has held that in the absence of a concluded contract  which

takes place by issuance of allotment letter, suit could not be  said  to  be

maintainable as there is no vested right in the plaintiff  without  approval

of the bid by the competent  authority.  Thus,  in  the  wake  of  aforesaid

decision, in the absence of a concluded contract, the suit  could  not  have

been decreed for mandatory injunction. It amounted to enforcing of  contract

in the absence thereof.

16.   In the light of the aforesaid discussion, it is evident  that  in  the

absence of a concluded contract, i.e. in the  absence  of  allotment  letter

and acceptance of  highest  bid,  the  suit  by  the  plaintiff  was  wholly

misconceived. Even if non-acceptance  of  the  bid  was  by  an  incompetent

authority, the court had no power to  accept  the  bid  and  to  direct  the

allotment letter to be issued. Merely on granting the declaration which  was

sought  that  rejection  was  illegal  and  arbitrary  and  by   incompetent

authority, further relief  of  mandatory  injunction  could  not  have  been

granted, on the basis of findings recorded, to issue the  allotment  letter,

as it  would  then  become  necessary  to  forward  the  bid  to   competent

authority – Chief Administrator – for its  acceptance,  if  at  all  it  was


In re : Competency of Administrator to accept/reject bid :

17.   The plaintiff has come to the Court with the case that  there  was  no

delegation of power to  the  Administrator.  No  doubt  about  it  that  the

delegation of power made by HUDA under section 51 of the Act  has  not  been

placed on record before the courts below. It has been filed  for  the  first

time in this Court. However, HUDA has placed on record delegation  of  power

to the Administrator by it as is apparent from  the  order  dated  13.9.1989

issued by the Chief Administrator of HUDA in which it is mentioned  that  in

exercise of power conferred under section 51 of the Act,  for  the  sake  of

efficiency,  speedy  development  and  with  a  view  to  decentralize   the

powers/functions the delegation at Annexure A  were  made  by  HUDA  in  its

meeting held on 3.1.1989 in favour of various  officials/officers  of  HUDA.

The relevant portion of delegation made in order dated 13.9.1989 along  with

Index is extracted hereunder :




In exercise powers conferred under section 51  of  the  Haryana  Urban

Development Authority Act, 1977,  in  the  interest  of  efficiency,  speedy

development and with  a  view  of  decentralise  the  powers/functions,  the

delegations at Annexure ‘A’ (Pages  1-16)  are  hereby  made  in  favour  of

various Officers of HUDA by the Haryana Urban Development Authority  in  its

meeting held on 03.01.1989.

Dated, Manimajra, the

13th Sep. 1989.







“Delegation of Administrative and Financial powers made under Section 51 of

HUDA Act, 1977 on behalf of the Haryana Urban Development Authority:-

|Sr.  |Sr. No. of |Nature of   |Authority to  |Extent of power   |

|No.  |item in    |power:      |who delegated |delegated         |

|     |Annexure II|            |              |                  |

|     |of the     |            |              |                  |

|     |proposal   |            |              |                  |

|1    |2          |3           |4             |5                 |

|     |xxx        |xxx         |xxx           |xxx               |

|60   |70         |Powers to   |Chief         |Full Powers.      |

|     |           |accept the  |Administrator |                  |

|     |           |auction bids|              |                  |

|     |           |for         |Administrator |                  |

|     |           |commercial/ |              |Full powers       |

|     |           |residential |              |provided the      |

|     |           |/ industrial|              |highest bid is    |

|     |           |sites       |              |more than the     |

|     |           |            |              |reserve price and |

|     |           |            |              |minimum of 3 bids |

|     |           |            |              |have been         |

|     |           |            |              |received.  If a   |

|     |           |            |              |site is not sold  |

|     |           |            |              |even after three  |

|     |           |            |              |attempts at a     |

|     |           |            |              |price higher than |

|     |           |            |              |the reserve price |

|     |           |            |              |the administrators|

|     |           |            |              |may revise the    |

|     |           |            |              |price downwards   |

|     |           |            |              |upto maximum of   |

|     |           |            |              |10% of the reserve|

|     |           |            |              |price.            |

18.   It is apparent that there had been delegation of power by HUDA to  the

Administrator with respect to the power  to  accept  the  auction  bids  for

commercial/residential/industrial sites provided the  highest  bid  is  more

than the reserve price and minimum of three bids  have  been  received.  The

Administrator has also the power if the site is not sold in 3  attempts,  to

revise the price downwards up to a maximum of  10%  of  the  reserve  price.

Thus plaintiff  has  not  come  to  the  court  with  clean  hands  and  has

suppressed for the reasons best known to it, the aforesaid order of HUDA  by

which delegation of power has been made. The fact that there was  delegation

of power is also crystal clear from the communication exchanged between  the

Administrator  and  the  Chief  Administrator.  As  the  Administrator   was

reluctant to accept the bid, as was the case in  the  case  of  fixation  of

reserve price also, the Administrator considering the  huge  property,  said

that the auction involved prime and big commercial sites,  huge  revenue  is

involved and such a big auction has been carried out for the first  time  in

the State of Haryana, therefore, all the record pertaining  to  the  auction

was sent to the Chief Administrator for scrutiny and approval at  the  level

of Chief Administrator, HUDA,  Gurgaon.  However,  the  Chief  Administrator

also washed off his hands. He wrote back to the Administrator on  28.7.2004.

The decision to confirm or otherwise of a bid, should be  taken  only  by  a

competent authority whose order is appealable.  Therefore,  bids  should  be

considered by the competent  authority  and  as  the  Administrator  is  the

competent authority to  take  the  follow-up  action,  the  Headquarters  be

apprised of the decision taken. Thereafter, the Administrator had taken  the

decision not to confirm the seven bids of seven properties. It  is  apparent

from the order dated 21.9.2004 that the Administrator  after  examining  the

relevant aspects and the report,  had  decided  to  reject  the  seven  bids

mentioned therein.  The  said  letter  of  the  Administrator  is  extracted

hereunder :



HUDA, Gurgaon


The Estate Officer

HUDA, Gurgaon

Memo no. 709

Dated: 21.9.04

Sub:  Auction of Commercial Sites-5 sites of  Shopping  Mall,  One  Site  of

Multiplex and one Site of Commercial Tower held on 24.5.2004 at Gurgaon.

Ref:  Your letter No. 11592 dated 28.6.2004 and the  comments  submitted  by

your office in the case files.

After examining the relevant aspects and reports submitted  by  your  office

as well as keeping in view the  contents  of  the  letter  No.  26559  dated

28.7.2004 received from Chief Administrator, HUDA,  Panchkula,  this  office

exercising the powers delegated by the Authority has decided to  reject  the

following bids of Commercial Sites for which auction was held on 24.5.2004:-

|Sr.|Sector|Particular|Sr. No. of|Area in|Reserve   |Highest |Remarks |

|   |      |s         |site      |Sq.    |Price (in |Bid (In |        |

|   |      |          |          |Mtr.   |rupees)   |rupees) |        |

|1. |29    |Commercial|Commercial|9.527  |106.65 Cr.|111.10  |Highest |

|   |      |Tower     |Tower     |Acre   |          |Cr.     |bid     |

|   |      |          |          |       |          |        |rejected|

|2. |29    |Shopping  |Adjoining |16500  |28.78 Cr. |30.15   |-do-    |

|   |      |Mall      |Leisure   |       |          |Cr.     |        |

|   |      |          |Valley    |       |          |        |        |

|   |      |          |Park      |       |          |        |        |

|3. |29    |-do-      |C-5A      |5865.60|10.12. Cr.|10.61   |-do-    |

|   |      |          |          |       |          |Cr.     |        |

|4. |29    |-do-      |C-9 Corner|7820.80|14.84 Cr. |15.46   |-do-    |

|   |      |          |          |       |          |Cr.     |        |

|5. |29    |-do-      |C-10      |7820.80|14.84 Cr. |15.51   |-do-    |

|   |      |          |Corner    |       |          |Cr.     |        |

|6. |55-56 |-do-      |–        |3850.00|6.72 Cr.  |7.15 Cr.|-do-    |

|7. |29    |Multiplex |–        |2700.00|4.69 Cr.  |5.07 Cr.|-do-    |

Bid sheets for the above mentioned sites as received from  your  office  are

returned herewith.



HUDA, Gurgaon”

19.   The Administrator had also mentioned in  his  letter  that  there  was

delegation of power to him. The letter from  the  Chief  Administrator  also

indicated that the Administrator was armed with the power. That apart,  when

we see the terms and condition No.4 of the tender notice, subject  to  which

auction was held, provided thus :

“4. The presiding officer reserves the right to withdraw any  property  from

the auction or reject any bid without assigning any reason.”

20.   Admittedly, the Presiding Officer was the Administrator,  HUDA.  Thus,

as per the terms of the auction  also,  the  Administrator  was  having  the

power to accept or reject the bid.  That the bid was more than  the  reserve

price and there were more than 3 bidders, is  not  disputed.  Thus,  in  our

opinion, the Administrator had the power  to  reject  the  bid  as  per  the

delegation made to him on 13.9.1989.

21.   The learned counsel representing the  plaintiff-respondent  vehemently

contended that there was no delegation of power under section 51(4)  and  it

was the State Government only who could have  delegated  the  power  of  the

Chief Administrator as found by the High Court. As delegation had been  made

by HUDA under section 51(1) of the Act of 1977, it was  incumbent  upon  the

plaintiff to question it and assail the same.  However,  the  plaintiff  had

feigned ignorance as to delegation  on  its  part  which  does  not  inspire

confidence as  the  line  of  arguments  advanced  on  its  behalf  that  no

delegation was there under section 51(4) was clearly grounded upon the  fact

that the delegation made under section 51(1) was in fact  to  the  knowledge

of the plaintiff that is why the aforesaid argument had  been  advanced  and

unfortunately learned counsel for HUDA  also  conceded  that  there  was  no

delegation of power made by the State Government under section  51(4).  This

was done by overlooking the delegation dated 13.9.1989, the  factum  whereof

has not been controverted by the learned counsel appearing on behalf of  the

respondent in any manner whatsoever. In the  absence  of  having  questioned

delegation made by HUDA under section 51(1) of the Act, plaintiff could  not

have succeeded in the suit.

22.   The plaintiff has not questioned the delegation of  power  before  the

courts below in any manner whatsoever. We decline to examine the  submission

raised by learned counsel for the plaintiff in this Court that there  is  no

delegation of  power  under  section  51(4)  and  the  power  of  the  Chief

Administrator could have been delegated only by the State Government not  by

HUDA under section 51(1) as per its order dated 13.9.1989.  In  the  absence

of challenge to legality  of  delegation  order  dated  13.9.1989,  and  the

plaintiff being guilty of suppressio veri, it is not entitled  to  urge  the

aforesaid submission so as to invalidate the statutory delegation  of  power

made by HUDA under section 51(1).

23.   In view of the aforesaid  fact-situation,  it  is  apparent  that  the

Administrator had the power to reject a bid, not only  being  the  Presiding

Officer as per terms and condition N0.4 of auction  but  otherwise  also  he

had the power, as discussed above. Thus, the decision of the High  Court  in

setting aside the auction on the aforesaid  ground  cannot  be  said  to  be

legally sustainable.

In re : Legality of rejection of bid :

24.   Coming to the question whether the Administrator had rejected the  bid

in an illegal or arbitrary manner, the learned  counsel  for  the  plaintiff

has submitted that the bid had been rejected  by  an  unreasoned  order,  as

such it was an arbitrary rejection. Learned counsel has drawn our  attention

to the communication dated 24.9.2004 which  has  been  communicated  by  the

Estate Officer to the plaintiff in which it has been mentioned that the  bid

has not been accepted, hence earnest money had been refunded. However,  this

communication of the  decision  reflects  only  the  return  of  the  cheque

pursuant to the decision of the  Administrator.  The  order  passed  by  the

Administrator is apparent from the communication of the  Administrator  made

to Estate Officer, HUDA on 21.9.2004 which has been extracted above.  It  is

apparent  from  the  rejection  order  that  the  reports   submitted   were

considered and decision was taken not to accept the  bids  with  respect  to

auction of seven properties. It was not a case of singular rejection of  the

bid made by the plaintiff alone. Six other bids were also not accepted.  The

reason for rejection  has  been  made  clear  in  para  15  of  the  written

statement filed by HUDA. The relevant portion is extracted hereunder :

“The action of not accepting the bid is very much sustainable  in  the  eyes

of law as the prices fetched by the auction was not in consonance  with  the

prices fetched in other urban  estates  like  Faridabad  and  Panchkula  for

similar kind of property.  The bid prices received for the above  said  site

was also not on the rising trend as per the prevalent market prices  of  the

similar property in Gurgaon.  The  judicial  view  had  been  taken  by  the

competent authority to safeguard the revenue interest of  HUDA.   The  price

of the site in question fetched in Gurgaon was on lower side as compared  to

the prices fetched in Panchkula, Faridabad  and  Panipat.   The  statistical

date for analysing the  trend  of  price  rising  and  revenue  fetched  was

considered by the competent authority and it was  revealed  that  the  price

fetched by the said auction was  on  lower  side.   Remaining  para  to  the

contrary is wrong and denied. x x x x x

The   competent   authority   after    going    through    the    individual

report/comments/opinion  of  the  Members   of   the   Auction   Constituted

Committee, comprising of Estate  Officer,  HUDA,  Gurgaon,  Senior  Accounts

Officer, District Town Planner and District Revenue Officer  (Representative

of the Deputy Commissioner, Gurgaon) as Members under  the  Chairmanship  of

Administrator, HUDA,  Gurgaon,  thoroughly  examined  the  observations  and

recommendations of the Member of the  Auction  Committee  regarding  not  to

accept the bid prices of big commercial site, since these  prices  being  on

apparently  lower  side  which  was  examined  by  the  Government  at   the

Headquarters level.  The entire records of the entire  auction  proceedings,

including the opinion of the Estate Officer, Gurgaon, other members  of  the

Auction Committee and Deputy Commissioner, Gurgaon’s report and  also  after

studying the reserve price and auction price trends, decision was  taken  by

the competent authority not to accept the bid  prices  vide  their  detailed

report.  Remaining  para  to  the  contrary  is  wrong  and  hence  denied.”

25.   Thus, it is apparent  that  the  report  and  recommendations  of  the

Auction  Committee consisting of 5 members, was not to accept  the  bids  of

big commercial sites as the prices fetched were  on  lower  side  which  was

examined by the  Government  at  the  Headquarters  level.  Considering  the

auction trends and also taking into consideration the higher prices  fetched

at Panipat, Panchkula and Faridabad, it was  decided  to  reject  the  seven

bids. Thus, there was due application of mind.

26.   In our opinion when it is apparent from  the  communication  that  the

reports were considered and what was contained in the report was  very  much

pleaded in the written statement, mere non-production of report was  not  of

any significance in the instant case. We are satisfied  that  the  rejection

of the bid by the Administrator was absolutely proper and justified and  was

beyond the pale of judicial scrutiny. The Administrator  had  the  right  to

reject  the  bids  and  he  had  rejected  it  on  sufficient  ground,  duly

considering the materials on record as is apparent  from  the  communication

dated 21.9.2004. In the interest of the public, revenue of the State and  in

the interest of HUDA the huge property was saved from being plundered.

27.   This Court in the case of State of  Uttar  Pradesh  &  Ors.  v.  Vijay

Bahadur Singh & Ors. (1982) 2 SCC  365  has  laid  down  that  there  is  no

obligation to accept the highest bid. The Government  is  entitled  even  to

change its policy from time to time according to the demands  of  the  time.

It was observed thus :

“3. It appears to us that  the  High  Court  had  clearly  misdirected

itself.  The  Conditions  of  Auction  made  it  perfectly  clear  that  the

Government was under no obligation to accept the highest  bid  and  that  no

rights accrued to the bidder merely because  his  bid  happened  to  be  the

highest. Under Condition 10 it was expressly provided  that  the  acceptance

of bid at the time of auction was entirely provisional and  was  subject  to

ratification by the  competent  authority,  namely,  the  State  Government.

Therefore, the Government had the right, for good and sufficient reason,  we

may say, not to accept the highest bid but even to prefer a  tenderer  other

than the highest bidder. The High Court was  clearly  in  error  in  holding

that the Government could not refuse to accept the  highest  bid  except  on

the ground of inadequacy of the bid. Condition 10 does not so  restrict  the

power of the Government not to accept the bid. There is no  reason  why  the

power vested in the Government to refuse to accept the  highest  bid  should

be confined to inadequacy of bid only. There may be a variety  of  good  and

sufficient reasons, apart from inadequacy  of  bids,  which  may  impel  the

Government not to accept the highest bid. In fact,  to  give  an  antithetic

illustration, the very enormity of a bid may make it suspect.  It  may  lead

the Government to realise that no bona  fide  bidder  could  possibly  offer

such a bid if he meant to do  honest  business.  Again  the  Government  may

change or refuse its policy from time to time  and  we  see  no  reason  why

change of policy by the Government, subsequent to  the  auction  but  before

its confirmation, may not be a sufficient justification for the  refusal  to

accept the highest bid. It cannot be disputed that the  Government  has  the

right to change its policy from time to time, according to  the  demands  of

the time and situation and in the public interest.  If  the  Government  has

the power to accept or not to accept the highest bid and if  the  Government

has also the power to change its policy from time to time,  it  must  follow

that  a  change  or  revision  of  policy  subsequent  to  the   provisional

acceptance of the bid but before its final  acceptance  is  a  sound  enough

reason for the  Government’s  refusal  to  accept  the  highest  bid  at  an


28.   In Laxmikant & Ors. v. Satyawan & Ors. (1996) 4 SCC  208,  this  Court

has laid down that in the absence of  completed  contract  when  the  public

auction had not culminated to its logical end  before  confirmation  of  the

bid, no right accrued to the highest bidder. This Court  has  laid  down  as

under :

“4. Apart from that  the  High  Court  overlooked  the  conditions  of

auction which had been notified and on basis of which the  aforesaid  public

auction was held. Condition No. 3 clearly said that  after  the  auction  of

the plot was over, the highest bidder had to remit 1/10  of  the  amount  of

the highest bid and the balance of the premium amount was to be remitted  to

the trust office within thirty days “from the date of the  letter  informing

confirmation of the auction bid  in  the  name  of  the  person  concerned”.

Admittedly, no such  confirmation  letter  was  issued  to  the  respondent.

Conditions Nos. 5, 6 and 7 are relevant:

“5. The acceptance  of  the  highest  bid  shall  depend  on  the  Board  of


6. The Trust shall reserve to itself the right to reject the highest or  any


7. The person making the highest bid shall have no right to  take  back  his

bid. The decision of  the  Chairman  of  the  Board  of  Trustees  regarding

acceptance or rejection of the bid shall be  binding  on  the  said  person.

Before  taking  the  decision  as  above  and  informing  the  same  to  the

individual concerned, if the said individual takes back his bid, the  entire

amount remitted as deposit towards the amount of bid shall be  forfeited  by

the Trust.”

From a bare reference to  the  aforesaid  conditions,  it  is  apparent  and

explicit that even  if  the  public  auction  had  been  completed  and  the

respondent was the highest bidder, no right had  accrued  to  him  till  the

confirmation letter had been issued to him. The conditions  of  the  auction

clearly conceived and contemplated that the acceptance of  the  highest  bid

by the Board of Trustees was a must and the  Trust  reserved  the  right  to

itself to reject the highest or any bid. This Court has examined  the  right

of the highest bidder at public auctions in the cases  of  Trilochan  Mishra

v. State of Orissa (1971) 3 SCC 153, State of Orissa v. Harinarayan  Jaiswal

(1972) 2 SCC 36, Union of India v. Bhim Sen Walaiti Ram  (1969)  3  SCC  146

and State of U.P. v. Vijay Bahadur Singh (1982)  2  SCC  365.  It  has  been

repeatedly pointed out that State or the authority which can be held  to  be

State within the meaning of Article 12 of the Constitution is not  bound  to

accept the highest tender or bid. The  acceptance  of  the  highest  bid  is

subject to the conditions of holding the public auction  and  the  right  of

the highest bidder  has  to  be  examined  in  context  with  the  different

conditions under which such auction has been held. In the  present  case  no

right had accrued to the respondent either on the  basis  of  the  statutory

provision under Rule 4(3) or under the conditions  of  the  sale  which  had

been notified before the public auction was held.”

29.   In Meerut Development Authority v. Association of  Management  Studies

& Anr. (2009) 6 SCC 171, this Court has laid  down  that  a  bidder  has  no

right in the matter of bid except  of  fair  treatment  in  the  matter  and

cannot insist for further negotiation. The Authority has a right  to  reject

the highest bid. This Court has laid down thus :

“27. The bidders participating in the tender process  have  no  other  right

except the right to equality and fair treatment in the matter of  evaluation

of competitive bids offered by interested  persons  in  response  to  notice

inviting tenders in a transparent manner and free from  hidden  agenda.  One

cannot challenge the terms and  conditions  of  the  tender  except  on  the

abovestated ground, the reason being the terms of the invitation  to  tender

are in the realm of the contract. No bidder  is  entitled  as  a  matter  of

right to insist  the  authority  inviting  tenders  to  enter  into  further

negotiations unless the terms and conditions of notice so provided for  such


x x x x x

29. The Authority has the right not to accept the highest bid  and  even  to

prefer a tender other than the highest  bidder,  if  there  exist  good  and

sufficient reasons, such as, the highest bid  not  representing  the  market

price but  there  cannot  be  any  doubt  that  the  Authority’s  action  in

accepting  or  refusing  the  bid  must  be  free  from   arbitrariness   or


30.   Reliance has been placed on behalf of the respondent on a decision  of

this  Court  in  M/s.  Star  Enterprises  &  Ors.  v.  City  and  Industrial

Development Corporation of Maharashtra Ltd. & Ors. (1990)  3  SCC  280.  The

relied upon portion is extracted hereunder :

“10. In recent times, judicial  review  of  administrative  action  has

become  expansive  and  is  becoming  wider  day  by  day.  The  traditional

limitations have been vanishing and  the  sphere  of  judicial  scrutiny  is

being expanded. State activity too is becoming fast pervasive. As the  State

has  descended  into  the  commercial  field   and   giant   public   sector

undertakings have grown up, the stake of the public exchequer is also  large

justifying larger social audit, judicial control and review  by  opening  of

the public gaze;  these  necessitate  recording  of  reasons  for  executive

actions including cases of rejection of  highest  offers.  That  very  often

involves large stakes and availability of reasons for actions on the  record

assures credibility to the action; disciplines public conduct  and  improves

the culture of accountability.  Looking  for  reasons  in  support  of  such

action provides an opportunity for an objective review in appropriate  cases

both by the  administrative  superior  and  by  the  judicial  process.  The

submission of Mr Dwivedi, therefore,  commends  itself  to  our  acceptance,

namely, that when highest offers  of  the  type  in  question  are  rejected

reasons sufficient to  indicate  the  stand  of  the  appropriate  authority

should be made available and ordinarily the same should be  communicated  to

the concerned parties unless there be any specific justification not  to  do


No doubt about it that there have to be some reasons for rejection  of

the bid which are adequately  present  in  the  instant  case  as  discussed

hereinabove. The decision is  of  no  help  to  espouse  the  cause  of  the


31.   Reliance has also been placed on a decision of this Court in Kalu  Ram

Ahuja & Anr. v. Delhi Development Authority & Anr.  (2008)  10  SCC  696  in

which this Court has laid down that the highest  bid  was  rejected  without

assigning any reason and there was no record showing that the  decision  was

based on rational and tangible reasons and was in public  interest.  In  the

instant case  we  are  satisfied  from  the  order  that  the  reports  were

considered and what were the reports, has  been  made  clear  in  the  reply

filed by the respondents which has not been  controverted.  In  the  instant

case merely the bid being above the reserve price, was not a  safe  criteria

to accept the same.

32.   In Mohinder Singh Gill & Anr. v. The Chief Election Commissioner,  New

Delhi & Ors. (1978) 1 SCC  405,  this  Court  has  laid  down  that  when  a

statutory functionary makes an order, its validity must  be  judged  by  the

reasons so mentioned and cannot be supplemented  by  fresh  reasons  in  the

shape of affidavit or otherwise. This Court has held thus :

“8.  The second equally relevant  matter  is  that  when  a  statutory

functionary makes an order based on certain grounds, its  validity  must  be

judged by the reasons so mentioned  and  cannot  be  supplemented  by  fresh

reasons in the shape of affidavit or otherwise. Otherwise, an order  bad  in

the beginning may, by the time it comes to court on account of a  challenge,

get validated by additional grounds later brought  out.  We  may  here  draw

attention to the observations of Bose, J. in Gordhandas Bhanji AIR  1952  SC

16 :

“Public orders, publicly made, in exercise  of  a  statutory  authority

cannot be construed in the light of explanations subsequently given  by  the

officer making the order of what he meant, or of what was in  his  mind,  or

what he intended to do. Public orders made by public authorities  are  meant

to have public effect and are intended to affect the actings and conduct  of

those to whom they are addressed and  must  be  construed  objectively  with

reference to the language used in the order itself.   Orders  are  not  like

old wine becoming better as they grow older.”

There is no dispute from the aforesaid proposition.  However,  in  the

instant case reasons have been mentioned in  the  rejection  order  and  the

nature of reports has also been sufficiently explained. Thus  the  rejection

of seven  different  bids  in  the  auction  reflects  that  there  was  due

application of mind by the concerned authority and rejection  could  not  be

said to be illegal, arbitrary or sans of reason.

33.   We are constrained to observe in the instant case  that  with  respect

to reserve price also, there was a hitch to fix and approve  it  right  from

the word go. It was a case of auction of big commercial tower having a  huge

area of 9.527 acres. Only the reserve price of the same  was  forwarded  for

fixation to the Chief Administrator, whereas the  reserve  prices  of  other

properties were fixed by the Administrator. When  the  bids  were  received,

the Administrator  considering  the  huge  stakes  involved,  forwarded  the

matter to the Chief Administrator. However, the Chief  Administrator  washed

off his hands and did not  decide  it  and  sent  the  matter  back  to  the

Administrator, clearly indicating that the Administrator was delegated  with

the power to decide the bids. Thus, under compelling circumstances and  duly

considering the reports, the Administrator had taken the decision to  reject

the bids not only of the plaintiff but also six others. For the  first  time

in the history of State of Haryana, such big properties were put  to  hammer

on the prices  indicated.  The  hitch  in  fixing  the  reserve  price  also

indicates that the reserve price was not determined in a fair manner in  the

instant case. Not only the  plaintiff  but  HUDA  also  did  not  place  the

delegation of power on record of the courts below. None of the officials  of

HUDA had been examined. Only an Assistant –  a  junior  ranking  person  had

been examined who was not posted there when the auction was  held  and  came

only in 2008. As the property was a commercial tower in Sector 29,  Gurgaon,

with huge commercial  complex,  the  first  appellate  court  was  right  in

dismissing the suit.

34.   Plaintiff came to the court for mandatory injunction, for issuance  of

allotment letter without payment of court fee also. It  was  incumbent  upon

the plaintiff to pay  the  ad  valorem  court  fee  as  prevailing  and  the

valuation of the suit should not have been  less  than  the  bid  amount  of

Rs.111.75 crores,  as  rightly  held  by  the  first  appellate  court.  The

plaintiff is directed to pay the ad valorem court fee not  only  before  the

trial court but also  before  the  High  Court.  Plaintiff  is  directed  to

deposit the court fee within two months from today, as payable.

35.   Resultantly, the appeal is allowed. The judgment and decree passed  by

the High Court is set aside  and  that  of  the  first  appellate  court  is

restored. In the facts and circumstances of the case,  we  impose  costs  of

Rs.5 lakhs on the plaintiff/respondent to be deposited as : Rs.2.5 lakhs  in

the  Advocates’  Welfare  Fund  and  Rs.2.5  lakhs  in  the  Supreme   Court

Employees’ Welfare Fund within a period of two months from today.


(Arun Mishra)

New Delhi;                                   …………………………..J.

January    27,    2017.                                    (Amitava     Roy)