Smt. Amita Mishra vs U.P. Financial Corporation Thru' ...
2017 Latest Caselaw 7772 ALL

HIGH COURT OF JUDICATURE AT ALLAHABAD
 
 

AFR
 

 
Court No. - 29
 

 
Case :- WRIT - C No. - 37642 of 2010
 

 
Petitioner :- Smt. Amita Mishra
 
Respondent :- U.P. Financial Corporation Thru' M.D. & Others
 
Counsel for Petitioner :- Prakash Ch. Srivastava,Lakshmi Kant Mishra
 
Counsel for Respondent :- S.C.,S.K. Srivastava
 

 
Hon'ble Tarun Agarwala,J.

Hon'ble Ajay Bhanot,J.

We have heard Shri Ravi Kant, the learned Senior Counsel assisted by Shri Lakshmi Kant Mishra, the learned counsel for the petitioner and Shri S.K. Srivastava, the learned counsel for respondents-Uttar Pradesh Financial Corporation.

On 19.01.2006, the Board of Directors of U.P. Financial Corporation hereinafter referred to as the 'Corporation' took a decision to sell idle assets of the corporation. A sale policy of immovable property assets was accordingly framed indicating that the assets would be advertised, the property would be evaluated by the technical officers. Further, the terms and conditions of the tender notice would be finalized by the Managing Director and offers so received pursuant to the advertisement would be decided by the negotiating committee. The sale was required to be approved by the Board of Directors. Subsequently, the sale policy that was framed on 22.06.2006 was further modified and instead of the sale being approved by the Board of Directors, the Managing Director was given the power to approve the sale of the property involving evaluation upto Rs. 1 crore.

Pursuant to the aforesaid policy, the corporation issued an advertisement on 01.02.2007 inviting offers from the public for sale of L.I.G. House situate at Preetam Nagar, Allahabad. Based on the said proposal, offers were given which the negotiating committee considered and after negotiation, the price of Rs. 3,75,000/- for each flat was fixed. The petitioner's offer for flat No.393 was tentatively accepted along with the offers of other persons for other flats. The matter was recommended to the competent authority by the negotiating committee. However, since no final action was taken, the present writ petition was filed praying for a writ of mandamus commanding the respondents to approve the sale, which took place on 15.2.2007 and further issue a mandamus to permit the petitioner to pay the balance amount with a further direction to the respondents to execute the sale-deed.

The counter affidavit filed on behalf of the respondents indicates that pursuant to the sale policy, an advertisement was issued and offers were invited. The bid of the petitioner and seven other persons were tentatively recommended by the negotiating committee for approval. The counter affidavit contends that the corporation decided not to sell the property and put the same property for its own use and accordingly, intimated the petitioner and other bidders to take the refund. It was also contended that the other bidders have taken back their money but the petitioner for reasons best known to her refused to accept the cheque of Rs.75,000/- that was deposited as earnest money for reasons best known to the petitioner.

On this factual note, we have heard Shri Ravi Kant, learned Senior Counsel for the petitioner at some length.

The learned Senior Counsel for the petitioner contended that the action of the respondents on the administrative side in cancelling the sale procedure was wholly arbitrary and that the counter affidavit and the supplementary counter affidavit reveals that the reasons for cancellation varied from time to time. It was thus suggested that there was no application of mind nor was there any cogent reason for cancelling the bids given by the petitioner. In support of his submission, the learned counsel for the petitioner has placed reliance upon a decision of the Supreme Court in the case of Messrs Kulja Industries Limited Vs. Chief General Manager, reported in AIR 2014 SC 9, wherein the court ruled that even in a matter of a contractual right, the manner, method and motive behind the decision of the authority was subject to judicial review on the touchstone of fairness, relevance, factual justice non-discrimination, equality and proportionality. It was contended that the action of the respondents in not finalizing the contract was unsustainable in law and since there was no reasons for cancelling the tender process, the action of the respondents was wholly arbitrary, which could be questioned in proceedings under Article 226 of the Constitution, as provided in Mahabir Auto Stores & Others Vs. India Oil Corporation Ltd., AIR 1990 SC 1031.

Learned counsel for the respondents also placed reliance upon a decision in the case of Kalu Ram Ahuja and another Vs. Delhi Development Authority and another, reported in (2008) 10 SCC 696, wherein the decision of the Delhi Development Authority to cancel the auction proceedings without giving any rational or tangible reason was held to be arbitrary and was also found to be against the public interest. The Supreme Court in that scenario held that the action of the Delhi Development Authority in cancelling the auction proceedings was wholly arbitrary and that the auction was required to be finalized.

The learned Senior Counsel for the petitioner also placed reliance upon a decision of the Supreme Court in the case of Union Bank of India and others Vs. Dinesh Engineering Corporation and another, reported in (2001) 8 SCC 491, wherein the Supreme Court held that the court can scrutinize the policy, which was formulated by the respondents and if it was found that any decision, which was taken on the administrative side or the policy decision taken was made without considering the relevant facts in which case the court can scrutinize and can hold the decision as an arbitrary decision in violation of Article 14 of the Constitution. The Supreme Court in Bakshi Security and Personnel Services Private Limited Vs. Devkishan Computed Private Limited and others, reported in (2016)8 SCC 446 again reiterated that the judicial review can be taken on administrative action if it is necessary to prevent arbitrariness, irrationality or unreasonableness in the decision taken by the respondents while awarding contracts. 

In the light of the aforesaid decisions, it is apparently clear that the court is vested with the powers to judicially review the administrative or policy decisions taken by the respondents in commercial transactions. If relevant facts have not been considered, the court can judicially review them and hold it to be an arbitrary decision in consonance with the principles of Article 14 of the Constitution where the Court finds that the process adopted or decision made was arbitrary or irrational or that such decision affected public interest, the court could interfere and pass appropriate orders considering the facts and circumstances of the case that arose in that case.

In the light of the aforesaid decision, the court is required to consider in the instant case as to whether the decision taken by the respondents was arbitrary or was against the policy decision or was against the public interest.

In the instant case, the idle assets of the corporation were advertised for sale and offers were invited. The petitioner gave an offer, which was further processed and a price for sale of the assets was fixed by the negotiating committee. The matter was recommended to the competent authority for approval of the sale of the flat. In the meanwhile, the corporation took a decision not to sell the flats and put them to its own use. The corporation decided to use the flats for their office purposes and thereby save rent. Such decision taken by the respondents, which is asserted in paragraph 19 of the counter affidavit, is not denied. Such decision taken in our opinion is not against public interest. By this decision, the corporation can save money through payment of rent and can put their own property in use for their own purposes. Such decision cannot be termed as arbitrary. In fact, it is in larger public interest.

The contention of the learned Senior Counsel that the corporation has been changing their stand from time to time is erroneous. The court was taken through the information provided by the respondents under the Right to Information Act in the year 2016, which only reiterates the stand taken by the respondents in their counter affidavit. The information so provided under the Right to Information Act was that some of the flats are being used by the corporation as their office, some of the flats have been given on rent to its employees and one of the flats, which was tentatively approved for the petitioner, is in a dilapidated condition and is no longer habitable. Such information in our opinion is consistent with the stand taken by the respondents in paragraph-19.

The court also finds that in the instant case, the contract has not materialized. The offer given by the petitioner is required to be accepted by the respondents in order to have a concluded contract. In the instant case, the negotiating committee had only recommended the acceptance of the offer given by the petitioner and other bidders but the same was never accepted by the competent authority and in the meanwhile, the corporation took a decision not to sell the assets of the corporation. We do not find that the action of the respondents in not selling the property as an arbitrary decision. Thus, the petitioner is not entitled for any relief.

However, in the instant case, we find that the petitioner had deposited a sum of Rs.75,000/- as earnest money, which apparently till date has not been refunded by the corporation in favour of the petitioner. The respondents allege that they had sent the amount by cheque, which has been refused. This refusal has been denied by the petitioner. Without going into the fact as to whether there was refusal to accept the amount by the petitioner, the fact remains that the amount is still in the coffers of the corporation. Had they remitted the amount through a bank-draft, it was open for the corporation to contend that their responsibility ended once they issued a bank draft. But non-encashment of a cheque allows the corporation to retain the money. The court is thus of the opinion that the corporation is liable to refund the amount of earnest money along with interest.

We, accordingly, decline to grant relief to the petitioner as prayed for in the writ petition and dispose of the writ petition with the direction that the corporation will prepare a bank draft in the name of the petitioner refunding the earnest amount of Rs.75,000/- along with the interest to be calculated at the rate of 8% per annum from the date the amount was deposited till 31st December, 2017. The composite amount consisting of the principal and the interest shall be remitted to the petitioner on or before 31st December, 2017.

With the aforesaid observation, the writ petition is disposed of.

Order Date :- 7.12.2017

Ashish Tripathi

(Ajay Bhanot,J.) (Tarun Agarwala,J.)