Bombay High Court
Bhagwati Singature Llp vs The City And Industrial Development ... on 17 April, 2025
Author: M. S. Karnik
Bench: M. S. Karnik
2025:BHC-AS:17464-DB
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IN THE HIGH COURT OF JUDICATURE AT BOMBAY
Digitally signed
PRADNYA
by PRADNYA
MAKARAND
BHOGALE
CIVIL APPELLATE JURISDICTION
MAKARAND Date:
BHOGALE 2025.04.17
19:38:03
+0530
WRIT PETITION NO. 10004 OF 2024
Bhagwati Signature LLP,
a Limited Liability Partnership firm
duly registered as a limited liability
partnership having its Registered
Office at Room No.101, Hari Niwas
Plot No.223, Sector 21, Nerul,
Navi Mumbai - 400 614 ... Petitioner
Versus
1. The City and Industrial
Development Corporation of
Maharashtra Limited
Having its registered office at
'Nirmal', 2nd Floor, Nariman Point,
Mumbai - 400 021
And also Head office at CIDCO
Bhavan, CBD Belapur,
Navi Mumbai - 400 614
2. The Managing Director,
CIDCO, having his
office at 'Nirmal', 2nd Floor,
Nariman Point,
Mumbai - 400 021
3. The Manager Marketing (Commercial)
Having his office at
CIDCO Ltd, 3rd Floor, Raigad Bhavan,
CBD Belapur, Navi Mumbai-400 614
4. The State of Maharashtra
Through the Principal Secretary
Urban Development,
Mantralaya, Mumbai-400 032 ... Respondents
****
PMB 1
::: Uploaded on - 17/04/2025 ::: Downloaded on - 17/04/2025 22:22:10 :::
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Mr. Atul Rajadhyaksha, Senior Advocate a/w Mr. Arun Paniker,
Ms. Shweta Yadav, Mr. Aditya Sharma i/b. Juris Salvation, for
the Petitioner.
Dr. Birendra Saraf, Advocate General a/w Mr. Rahul Sinha, Mr.
Soham Bhalerao i/b. DSK Legal, for Respondent Nos.1, 2 and
3.
Mrs. Neha S. Bhide, Government Pleader a/w Mr. O. A.
Chandurkar, Additional Government Pleader, Ms. G. R.
Raghuwanshi, AGP, for Respondent No.4.
****
CORAM : ALOK ARADHE, CJ &
M. S. KARNIK, J.
RESERVED ON : 7th APRIL, 2025
PRONOUNCED ON : 17th APRIL, 2025
JUDGMENT (PER M. S. KARNIK, J.) :
1. The petitioner - Bhagwati Signature LLP, a Limited
Liability Partnership firm invokes the jurisdiction of this Court
under Article 226 of the Constitution of India and prays for
setting aside the e-tender cum e-auction issued by
Respondent No.1-City and Industrial Development Corporation
of Maharashtra ('CIDCO', for short) in respect of subject plot
i.e. Plot No.25, Sector 9, Ghansoli Node, Navi Mumbai
('subject plot', for short). It is further prayed that CIDCO be
directed to comply with the order dated 16 th February 2023
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passed by this Court and accept the highest bid offer put in by
the petitioner in respect of the subject plot in the auction held
in 2022.
2. Mr. Atul Rajadhyaksha, learned Senior Advocate for the
petitioner placed the following facts for our consideration
before advancing his submissions. CIDCO invited bids through
a public advertisement for 20 plots in September 2021. The
base rate per sq. meter in respect of each plot was
mentioned. In respect of the subject plot the base rate was
fixed of Rs.47,273/- per sq. meter and plot No.26 had a
higher base rate of Rs.58,017/-. The closed bids were to be
submitted on or before 13th October 2021. The bids for e-
auction were to be submitted by 14 th October 2021. The bids
were opened on 18th October 2021.
3. The Petitioner submitted its bid for the subject plot
making an offer of Rs.1,51,812/-. This was the highest offer.
The total EMD payable for the subject plot was
Rs.1,22,57,400/- which the petitioner deposited. CIDCO
accepted the EMD as per the tender conditions. There were 11
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other bidders for the plot, but the petitioner's bid was the
highest as can be seen from the letter dated 24 th December
2021 of CIDCO. The letter further stated that CIDCO had
evaluated the rates received taking into consideration the
subjective attributes and the potential of each plot and after
evaluation came to the conclusion that the rate at which the
subject plot should be leased is Rs.2,12,589/- given that the
adjacent Plot No.24 had received that amount as the bid
amount. CIDCO therefore called upon the petitioner to
increase its bid from Rs.1,51,812/- to Rs.2,12,589/- in 15
days or else the bid would be cancelled in order to avoid loss
to CIDCO. An identical letter was issued to M/s. Juhi stating
that plot No.26 for which M/s. Juhi was the highest bidder had
the same potential and evaluation as plot No.24 for which
CIDCO received a bid of Rs.2,12,589/-. M/s. Juhi was
therefore asked to raise its bid from Rs.1,72,245/- to
Rs.2,12,589/-. A letter identical in content to the letter
addressed to the petitioner was also sent to various other
highest bidders in respect of other plots asking them to revise
their bids.
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4. The petitioner assailed the said letter by filing a Writ
Petition in this Court. Twelve of the highest bidders in respect
of 12 different plots challenged the aforesaid action of CIDCO
in demanding a higher price by filing twelve Writ Petitions.
Vide an order dated 7th January 2022, this Court in ten Writ
Petitions including that of the petitioner allowed the
petitioners to make a representation to the Managing Director
of CIDCO who was then required to pass an order on the
representation. In the meanwhile, further action was stayed.
5. The petitioner submitted the representation on 21 st
January 2022. The petitioner along with others were heard by
the Managing Director. By a communication dated 23 rd March
2022, CIDCO rejected the offer of the petitioner. The reason is
that after evaluation of the price quoted by the petitioner for
the subject plot with the bid for plot Nos.23, 24 and 26 and
the evaluation by an independent agency the rate quoted is
low in the bid. CIDCO relied on the rates for plot Nos.23, 24
and 26 to arrive at this conclusion. The letter stated that the
EMD shall be refunded back. The petitioner has challenged
this letter dated 23rd March 2022 by amending the earlier
pending Writ Petition.
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6. Mr. Rajadhyaksha pointed out that on 23rd March 2022
one out of the twelve petitioners received a letter that the bid
at the original rate had been accepted. The said petitioner
therefore withdrew the Writ Petition filed by him on 14 th June
2022 as his grievance stood resolved by CIDCO. The Writ
Petition filed by the petitioner was disposed of by this Court
on 16th February 2023 allowing CIDCO to provide petitioner
with the rates quoted by the independent expert whereupon
the petitioner could make a proposal to CIDCO. By a
communication dated 21st February 2023 the petitioner
requested for the report. CIDCO did not provide the report.
Nine out of the twelve petitioners were allotted plots at the
price originally offered with no enhancement sometime on 23 rd
March 2022.
7. CIDCO issued a public notice in July 2024 inviting bids
for 48 plots including the subject plot. The petitioner filed a
Writ Petition in this Court on 23rd July 2024. This Court passed
an ad-interim order protecting the petitioner. CIDCO
postponed the auction but continued to invite bids for the
plot. On 5th September 2024 an affidavit was filed by CIDCO.
The petitioner filed an affidavit on 3 rd March 2025 that plot
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No.26 was allotted to the bidder at the original price bid which
was lower than the price demanded by CIDCO when it had
earlier threatened to cancel the bid. The petitioner offered the
same price as the price accepted by CIDCO for plot No.26.
8. Mr. Rajadhyaksha, learned Senior Advocate assails the
action of CIDCO while submitting that a public body is bound
by Article 14 and the provisions of law requires a public body
to be fair, equal, rational, not to treat equals unequally, be
discriminatory in any manner and treat likes alike. Mr.
Rajadhyaksha was at pains to point out that CIDCO has
offered several plots of land on lease to the original highest
bidder at the rate quoted by such bidder but when it came to
the petitioner it has applied different standards for obvious
reasons. This approach of CIDCO is not only arbitrary but
discriminatory. CIDCO has adopted a different approach in
respect of the similar plot having almost identical potential
which were subject matter of the same tender notice. Mr.
Rajadhyaksha submitted that the petitioner had quoted the
highest price, but on an assumed technical evaluation which
had no basis, CIDCO called upon the petitioner to increase the
bid. Likewise, other bidders were called upon to do so but in
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respect of those cases CIDCO offered the plot at the price
originally quoted by the highest bidders. This action on the
part of CIDCO is clearly discriminatory in the submission of
the learned Senior Advocate. It is further submitted that
invitation for fresh bids in respect of the subject plot is not in
consonance with the spirit of the order of this Court dated 16th
February 2023 in Writ Petition No.1367 of 2022 filed by the
petitioner. The fresh tender issued is arbitrary and
discriminatory. Mr. Rajadhyaksha submits that even the EMD
was retained by CIDCO which has not been refunded till date
though CIDCO in its communication had indicated that the
EMD would be refunded. Learned Senior Advocate relied upon
the decision of the Supreme Court in Tata Cellular that
tenders by a public body though being in the nature of
contract are subject to judicial review if the decisions taken by
a person or authority issuing the tender are arbitrary, without
any basis and have a colour of malafides. The action of CIDCO
in cancelling the earlier auction despite the initial offer of the
petitioner being almost three times the reserve price is illegal
according to learned Senior Advocate. Mr. Rajadhyaksha
emphasised that CIDCO has acted in a malafide and arbitrary
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manner in as much as out of the 12 petitioners who had filed
various Petitions, CIDCO rejected the representation of only
two parties, one of which is the petitioner though the
petitioner is identically placed as the other petitioners. Mr.
Rajadhyaksha submitted that considerable prejudice is caused
to the petitioner as the EMD of more than Rs.1 crore is
retained by CIDCO for more than three years and the
petitioner being the highest bidder legitimately expected the
allotment to be made in its favour and therefore planned to
develop the subject plot accordingly by mobilising
infrastructural resources. It is further submitted that the
development potential and topography of the subject plot and
adjacent plot is not the same and that the subject plot has
several disadvantages and drawbacks as compared to
adjacent plot. Plot No.26 being adjacent to subject plot is
allotted by CIDCO to the highest bidder at the rate of
Rs.1,72,245/- whereas for the subject plot, CIDCO was
insisting upon a rate of Rs.2,12,589/- on par with adjacent
plot. Learned Senior Advocate relied upon the decision of the
Supreme Court in Eva Agro Feeds Private Limited vs. Punjab
National Bank and another1 that an auction sale cannot be
(2023) 10 SCC 189
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cancelled by the authority exercising unfettered discretion and
without furnishing any reason. It is submitted that a
reasonable view always is that ordinarily the highest bidder
has to be accepted unless there are statutory infirmities in the
bidding or the bidding is collusive in nature or there is an
element of fraud in the bidding process.
9. Dr. Saraf, learned Advocate General on the other hand
submitted that CIDCO has taken an informed decision to
invite fresh bids in larger public interest as the plot in
question on the basis of the reports placed on record had a
potential to fetch a much higher rate than the one quoted by
the petitioner. Dr. Saraf, learned Advocate General submitted
that the petitioner has no inherent right to claim allotment in
his favour only because he is the highest bidder. Dr. Saraf
invited our attention to the affidavit-in-reply filed by CIDCO to
justify the decision taken by CIDCO. Learned Advocate
General relied on the following decisions in support of his
submissions :-
(1) Haryana Urban Development Authority and
others vs. Orchid Infrastructure Developers Private
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Limited2.
(2) Joshi Technologies International Inc. vs. Union of
India and others3.
(3) PSA Mumbai Investments Pte. Limited vs. Board
of Trustees of the Jawaharlal Nehru Port Trust and
another4.
(4) Rishi Kiran Logistics Private Limited vs. Board of
Trustees of Kandla Port Trust and others5.
(5) Uttar Pradesh Avas Evam Vikas Parishad and
others vs. Om Prakash Sharma6.
(6) Aditya Enterprises vs. City Industrial and
Development Corporation of Maharashtra Ltd.7
10. We have heard learned Senior Advocate and learned
Advocate General. We have perused the pleadings and the
materials on record. It is well settled that if the decision of
CIDCO to cancel the tender is highhanded and an arbitrary
decision is taken without any reason or malafide, this Court in
the exercise of its jurisdiction under Article 226 of the
(2017) 4 SCC 243
(2015) 7 SCC 728
(2018) 10 SCC 525
(2015) 13 SCC 233
(2013) 5 SCC 182
2023 SCC OnLine Bom 876
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Constitution of India is bound to interfere. The stand of CIDCO
is that it has taken a calculated and conscious commercial
decision after having evaluated the market conditions along
with the attributes, potential of the subject plot, independent
expert report after a personal hearing given to the petitioner.
The reason for the termination of the earlier tender process
was communicated to the petitioner vide letter dated 24 th
November 2021. It would be pertinent to extract the contents
of the said letter to consider the submissions of learned
counsel in perspective. The contents are as under :-
"The Corporation has evaluated the rates received against
all the plots taking into consideration the subjective
attributes and potential of individual plots. After evaluation,
it is observed that the Plot No.24 is adjacent/in vicinity to
your plot having similar attributes/potential and has
received Highest bid amount of Rs.2,12,589/- psm."
11. CIDCO being a state entity, financial considerations are
of paramount importance due to the involvement of public
money and further that income from disposal of plots is the
only source to fund the development in Navi Mumbai. CIDCO
therefore took a decision to cancel the said tender due to the
petitioner's inaction to match the highest bid amount of
Rs.2,12,589/-. CIDCO duly heard the petitioner pursuant to
the order passed by this Court on 7th January 2022 in the Writ
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Petition filed earlier. CIDCO passed an order dated 23 rd March
2022 taking into consideration all factors as mentioned by the
petitioner as well as the Marketing Manager. This Court in the
order dated 16th February 2023 recorded that the respondents
may intimate the petitioner about the rates quoted by the
independent agency. The stand of CIDCO is that they were
under the bonafide impression of having a discretion of
intimating the petitioner as this Court had indicated "may
intimate the petitioner". We have our own doubts about the
interpretation placed by CIDCO on the order passed by this
Court. Though CIDCO has taken the stand that this bonafide
understanding of the order may not be held against them, we
refrain from expressing any opinion as in this Petition we are
concerned with the issues raised by the petitioner about the
CIDCO's action in initiating a fresh tender process to the
detriment of the petitioner who was the highest bidder in the
previous tender process. Nonetheless, the inaction on the part
of CIDCO in not intimating to the petitioner the rates quoted
by the independent agency is a factor that we will take into
consideration while testing the action of CIDCO.
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12. It is well settled that matters pertaining to tenders are
subject to judicial review only on limited grounds. The
relevant conditions of the bid document in Part-A Clause 5
provides that "the issue of this BID document does not imply
that CIDCO is bound to allot the said Plots to the Bidder and it
reserves the right to reject all or any of the Bids without
assigning any reasons in respect thereof." Further Clause 15
provides that "The Vice Chairman and Managing Director,
CIDCO reserves all rights to reject any or all bids submitted
without assigning any reason thereof." Clause 10 of Part-B of
the bid document provides that "CIDCO reserves the right to
amend, revoke any or all the above condition or to cancel the
scheme at any time at its sole discretion. The right to reject
any or all the offers without assigning any reason whatsoever
is reserved with the Corporation." It is material to note that in
the order dated 23rd March 2022 passed by the Vice
Chairman and Managing Director it was held thus :-
"I have observed that for this particular plot i.e. plot no.25,
Sector 9, Ghansoli, 12 bidders have participated in the
process however, the quoted rate is not comparable to
existing market potential as revealed from the rates
received for the adjacent plots i.e. Plot No.23, 24 and 26.
The rate is also not recommended by the independent
expert agency."
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13. In the affidavit-in-reply it is stated that based on
empirical evidence of the research conducted by CIDCO as
well as the Independent Expert Agency, CIDCO considered the
adjoining plot of land and the subject land on the basis of
parity. Based on the evaluation of the market conditions the
letters of allotment were issued to the respective bidders. It is
well settled that the petitioner has no vested right in the plot
only on the basis of it emerging as the highest bidder. The
Government or its authority could validly retain power to
accept or reject the highest bid in the interest of public
revenue. This Court in Aditya Enterprises (supra) held that no
right is created in favour of the petitioners to have the plot
allotted to them by CIDCO by mere reason of they being the
highest bidders in the tender process.
14. In Uttar Pradesh Avas Evam Vikas Parishad and others
(supra) the Apex Court in paragraph 31 observed thus :-
"31. In view of the law laid down by this Court in the
aforesaid decisions, 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
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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."
15. There is no communication of acceptance of offer by the
Corporation in respect of the plot towards which the petitioner
has deposited the EMD. In fact, Clause 26 of Part-A of the bid
document provides that "The letter communicating the
acceptance of offer by the Corporation in respect of the Plot
(i.e. allotment letter) shall be mailed on registered e-mailed id
of the offeror/bidder given in the offer. The letter mailed to
the applicants e-mail id must be deemed to have been
received by the offeror/bidder. The offeror/bidder will have no
claims of any sort for delay/refusal once allotment letter is
issued to the offeror/bidder." Thus, there is no acceptance of
offer of the bidder and there cannot be said to be a concluded
contract between the parties.
16. In our opinion the action on the part of CIDCO cannot be
said to be arbitrary or capricious. We are in agreement with
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the submissions of learned Advocate General that the
consideration of larger public interest would prevail over the
private interest of the petitioner. No doubt the petitioner's
expectations and hopes were raised being the highest bidder
and also having deposited the EMD but we cannot lose sight
of the fact that there was no concluded contract between the
parties for the petitioner to claim a vested right. The decision
of CIDCO cannot be said to be arbitrary or unreasonable to
warrant interference. Moreover, it is the submission of learned
Advocate General that the market potential of the plot in
question has materially altered since the first tender and
therefore the commercial considerations of CIDCO which is in
furtherance of public interest cannot be over looked. Learned
Advocate General submits that the EMD which has been
deposited by the petitioner will be returned forthwith. Should
the petitioner have any grievance about the damages suffered
by them, it is open for them to adopt the appropriate
remedies to seek redressal for such claim.
17. Consequently, the Writ Petition is dismissed with no
order as to cost.
(M. S. KARNIK, J.) (CHIEF JUSTICE)
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18. At this stage, learned counsel for the petitioner prays for
continuing the interim protection granted during the pendency
of the petition for a reasonable period. We are not inclined to
grant the request. Hence, rejected.
(M. S. KARNIK, J.) (CHIEF JUSTICE)
