Bombay High Court
Hare Krishna Enterprises Thr Its ... vs The City Industrial And Development ... on 28 March, 2025
Author: M. S. Karnik
Bench: M. S. Karnik
2025:BHC-AS:14883-DB
902.wp.18966-2024.odt
IN THE HIGH COURT OF JUDICATURE AT BOMBAY
CIVIL APPELLATE JURISDICTION
WRIT PETITION NO.18966 OF 2024
M/s. Hare Krishna Enterprises ]
Through its partners ]
Shri. Ashok Patel ]
Age 31, Occu. Business, ]
O/at- A-302, Vandana CHSL, ]
SVP nagar, Andheri west, ]
Mumbai - 400053. ] ... Petitioner
Versus
The City Industrial and Development ]
Corporation of Maharashtra Limited ]
(through its vice chairman and ]
managing director) ]
O/at:CIDCO Bhavan, Sector-10, ]
CBD-Belapur, Navi Mumbai-400614. ] .... Respondent
WITH
INTERIM APPLICATION NO.1131 OF 2025
IN
WRIT PETITION NO.18966 OF 2024
M/s Hare Krishna Enterprises ]
Through its partners ]
Shri. Ashok Patel ]
Age 31, Occu. Business, ]
O/at- A-302, Vandana CHSL, ]
SVP nagar, Andheri west, ]
Mumbai - 400053. ] ... Applicant
In the matter between
M/s Hare Krishna Enterprises ]
Through its partners ]
Shri. Ashok Patel ]
Age 31, Occu. Business, ]
O/at- A-302, Vandana CHSL, ]
PMB 1
902.wp.18966-2024.odt
SVP nagar, Andheri west, ]
Mumbai - 400053. ] ... Petitioner
Versus
The City Industrial and Development ]
Corporation of Maharashtra Limited ]
(through its vice chairman and ]
managing director) ]
O/at:CIDCO Bhavan, Sector-10, ]
CBD-Belapur, Navi Mumbai-400614. ] .... Respondent
****
Mr Drupad Patil a/w Mr Prasad Keluskar, for the Petitioner.
Mr Chetan Kapadia, Senior Advocate a/w Mr Soham Bhalerao
i/b. DSK Legal, for the Respondent-CIDCO.
****
CORAM : ALOK ARADHE, CJ &
M. S. KARNIK, J.
DATE : 28th MARCH, 2025
JUDGMENT (Per M. S. Karnik, J.) :
- :
1. The Petitioner-M/s. Hare Krishna Enterprises challenges
the order dated 4th December 2024 passed by the
Respondent-CIDCO in this Petition filed under Article 226 of
the Constitution of India. The Petitioner further prays for
direction to CIDCO to issue a letter of allotment to Petitioner
in respect of Plot No.14, Sector 9E, Node-Kalamboli, Navi
Mumbai ("the said plot" for short).
902.wp.18966-2024.odt
2. Brief facts necessary for a decision in this case are
thus :-
CIDCO launched the scheme for lease of plots for
commercial use in Vashi, Nerul, Kalamboli through
advertisement. In the tender document CIDCO reserved its
right to cancel, amend, revoke, modify the conditions of the
scheme or any plot at its discretion or reject any or all offers
without assigning any reasons thereof. The result of the close-
bid and E-auction bids were opened on 9 th May 2022. One
Varniraj Group submitted bid for Rs.68,889/- per sq. mtr. for
the plot. As the current market range of the rate of the plot
was on the higher side, CIDCO issued a rejection letter to
Varniraj Group on 25th July 2022 cancelling the auction of the
said plot and decided to re-auction the plot. Varniraj Group
filed Writ Petition No.9977 of 2022 on 17 th August 2022
challenging the decision and for injuncting CIDCO from issuing
allotment letter in favour of third party. CIDCO refunded the
EMD deposit back to Varniraj Group.
3. CIDCO issued a fresh advertisement for the said plot.
The Petitioner participated in the fresh auction on 2 nd
September 2022 and quoted the rate of Rs.92,995/- per
902.wp.18966-2024.odt
sq.mtr. and deposited Rs.88,86,014/- as EMD with CIDCO.
The EMD payment end date is 7th September 2022. The
auction end date is also 7th September 2022. The bids in the
second/fresh tender was opened on 25th October 2022. Total 9
bids were received. The Petitioner emerged as the highest
bidder.
4. Writ Petition No.9977 of 2022 filed by Varniraj Group
was disposed of directing CIDCO to decide the representation
of Varniraj Group. Till the decision on the representation,
further proceedings regarding allotment were stayed. Interim
relief was granted not to take further proceedings regarding
allotment of the plot.
5. Varniraj Group submitted its representation on 26 th
December 2022 and requested to issue allotment letter in its
favour. The Petitioner vide letters dated 8th May 2023 and 17th
July 2023 requested CIDCO to issue allotment letter and to
accept the balance amount against EMD. CIDCO rejected the
representation of Varniraj Group on 18th May 2023 and
confirmed the earlier decision of cancellation.
6. Varniraj Group therefore filed Writ Petition No.11732 of
2023 in this Court on 6 th June 2023. This Court on 9 th October
902.wp.18966-2024.odt
2023 orally directed CIDCO to again give hearing to Varniraj
Group. Varniraj Group was heard on 16th October 2023 by VC
and MD of CIDCO. During the said hearing Varniraj Group had
shown its willingness to match the bid of the Petitioner. On
17th October 2023 the VC and MD of CIDCO passed a detailed
order against Varniraj Group and confirmed earlier orders of
cancellation. Even the contention of Varniraj Group to match
the bid of the Petitioner was rejected after taking into
consideration that the EMD of the Petitioner is lying with
CIDCO.
7. This Court on 9th December 2023 in the Petition filed by
Varniraj Group, passed an interim order thereby restraining
CIDCO from issuing the allotment letter. The Petitioner filed an
Interim Application No.15542 of 2023 dated 28 th June 2024 in
Writ Petition No.11732 of 2023 preferred by Varniraj Group.
The Petitioner was allowed to intervene in Varniraj's Petitions.
8. The Petitioner filed a separate Writ Petition No.13836 of
2023 on 4th August 2023 for an order directing CIDCO to issue
allotment letter in respect of the subject plot on the grounds
that the Petitioner has already paid EMD to CIDCO. In the
reply dated 5th March 2024 filed by CIDCO in Writ Petition
902.wp.18966-2024.odt
No.13836 of 2023, CIDCO inter alia stated that the plot
should be allotted to the Petitioner.
9. This Court on 16th October 2024 dismissed the Petition of
Varniraj Group, and in the Petition filed by the Petitioner,
directed CIDCO to take a decision in respect of bid submitted
by the Petitioner. The Petitioner submitted a detailed
representation before CIDCO and requested to issue allotment
letter. Vide order dated 4th December 2024 impugned in this
Petition, CIDCO informed that the bid of the Petitioner is
cancelled, which order led to the filing of this Petition on 12 th
December 2024.
10. Mr Drupad Patil, learned counsel for the Petitioner
submitted that the circumstances on record warrant allotment
of the plot in favour of the Petitioner. Learned counsel
submitted that the CIDCO had taken a categoric stand in the
Petition filed by Varniraj Group that the allotment of the plot
has to be made in favour of the Petitioner. It is submitted that
once a promise is made by CIDCO that the plot would be
allotted to the Petitioner, CIDCO is now estopped from
denying the fruits of allotment only on account of increase in
the prices of the plots at this distance of time for which the
902.wp.18966-2024.odt
Petitioner is not responsible. Mr Patil submitted that the
Petitioner had deposited substantial amount of EMD being the
highest bidder and at no point of time the said EMD was
returned back, on the contrary a consistent stand was taken
by CIDCO that the allotment has to be made in favour of the
Petitioner. The stand of the CIDCO that the allotment will have
to be made in favour of the Petitioner continued till the
Petition filed by Varniraj Group was dismissed on 16 th October
2024. It is submitted that while disposing of the Petition filed
by the Petitioner, this Court directed the Petitioner to make a
representation on the matter of allotment only as a formality.
Consequent to the making of the representation, CIDCO had
to complete the formalities for allotment and nothing more.
Mr Patil submitted that but for the Petition filed by Varniraj
Group, during the course of which this Court directed that the
allotment should not be made as an interim measure, CIDCO
would have allotted the plot to the Petitioner. Therefore, the
principles of fair play and justice demand that on the Petition
of Varniraj Group being dismissed, the position as on the date
when the Petition was filed by Varniraj Group should be
restored. Reliance is placed on the decision in Union of India
902.wp.18966-2024.odt
and others vs. Godfrey Philips India Ltd. 1 in support of
the contention where the Government makes a promise
knowing or intending that it would be acted on by the
promisee and, in fact, the promisee, acting in furtherance of
it, alters his position, the Government would be held bound by
the promise and the promise would be enforceable against the
Government at the instance of the promisee, notwithstanding
that there is no consideration for the promise and the promise
is not recorded in the form of a formal contract as required by
Article 299 of the Constitution. Mr Patil submits that the
doctrine of promissory estoppel is well settled and held to be
applicable against the government authorities as laid down in
M/s. Motilal Padampat Sugar Mills Co. (P.) Ltd. vs. State of
Uttar Pradesh and ors.2
11. Mr Kapadia, learned Senior Advocate, on the other hand,
submitted that the informed decision of CIDCO is in public
interest. It is submitted that no prejudice will be caused to the
Petitioner as he can always participate in the fresh auction but
on the contrary the public exchequer will suffer a huge loss if
the plot is allotted at the rate as quoted on 25 th October 2022.
1 (1985) 4 SCC 369
2 (1979) 2 SCC 409
902.wp.18966-2024.odt
It is further submitted that no vested right is created in favour
of the Petitioner by virtue of submission of its bid and on
being declared as the highest bidder.
12. We have heard learned counsel for the parties. We have
perused the memo of the Petition, the materials on record and
the affidavit in reply filed by CIDCO. In the fresh auction held
on 2nd September 2022 the Petitioner was the highest bidder.
He had deposited the EMD of Rs.88,86,014/-. The relevant
observations of this Court while dismissing the Writ Petition
filed by Varniraj Group (Writ Petition No.11732 of 2023) needs
to be extracted. This Court observed thus :-
"29. Therefore, having regard to the settled legal position,
as discussed above, the commercial considerations of the
respondent - Corporation cannot be lost sight of while
considering the pleas raised by the petitioner in the instant
case. If the market potential as per the report submitted by
an expert, of the subject plot ranges between Rs.71,638/- to
1,00,067/- per square meter, the commercial considerations
underneath the decision to be taken by the respondent -
Corporation as to whether the bid offered by the petitioner to
be accepted or not, cannot be ignored.
30. As already discussed above, merely because a party is
the highest bidder, it cannot be said that any right stands
vested in such a party for acceptance of the highest bid
offered by it. For reasonable considerations even the highest
bid can be refused. When we analyze the facts of the instant
case and the pleas raised by the petitioner on the touchstone
of the aforementioned legal position, what we find is that the
reason given by the respondent - Corporation in not
accepting the highest bid offered by the petitioner in the first
round of bid cannot be said to be irrelevant or unreasonable.
The commercial aspect of the matter is a guiding factor for
the respondent - Corporation to arrive at a just and proper
decision.
902.wp.18966-2024.odt
31. We are, therefore, unable to hold that the reasons
given by the respondent - Corporation while rejecting the bid
offered by the petitioner in the first round of bidding process
are not tenable; rather the reasons given are acceptable and
admissible in law.
32. The second aspect, as argued by the learned Counsel
for the petitioner that the commercial consideration or the
commercial interest of the respondent- Corporation does not
come in the way of acceptance of the bid offered by the
petitioner matching the highest bid submitted by respondent
No.2 in the subsequent bid process, in our opinion, is also not
acceptable for the reason that if such a course is permitted,
the same would be a dent to the fairness and sanctity of the
bid process. Accepting the bid submitted by the petitioner
which matches the highest bid submitted by respondent No.2
in the subsequent bid will be inappropriate for another
reason, and the reason is that the petitioner chose not to
participate in the subsequent bid process. We are also of the
opinion that in case such a course is allowed, it may result in
unending process of offers being made by various parties
though such parties may not have participated in the bid
process. It is to be seen that the petitioner did not participate
in the subsequent bid process and if in the opinion of the
respondent-Corporation the bid submitted by respondent
No.2 is commercially viable, there is no reason why the bid
offered by respondent No.2 in the subsequent bid process
may not be accepted and the petitioner's matching bid may
be accepted.
33. We are further of the opinion that even if the petitioner
offers a higher bid than the bid price offered in the
subsequent bid, the same cannot be accepted for such a
course would be against the doctrine of fairness to be
observed by a public authority in the bidding process. The
petitioner, in paragraph 11 of the rejoinder affidavit filed to
the affidavit in reply on behalf of respondent No.2 has stated
that it is ready to offer the bid of Rs.1,09,503/- per square
meter which is higher than the bid offered by respondent
No.2 and equivalent to the highest base rate of the plots in
the vicinity. Such an offer, at this juncture, in our opinion,
cannot be accepted as the same would again dilute the
sanctity of the bid process and will be opposed to the
principle of fairness which a public authority, in law, is
excepted to observe.
34. For the discussion made and the reasons given above,
in our opinion, the writ petition No.11732 of 2023 is highly
misconceived, which, resultantly, is hereby dismissed."
902.wp.18966-2024.odt
13. So far as the Petition filed by the Petitioner viz. Writ
Petition No.13836 of 2023 which was heard along with Writ
Petition No.11732 of 2023 and decided by a common
judgment, it is pertinent to note that at paragraph 35 this
Court issued the following directions :-
"35. We also direct that the respondent - Corporation shall
take a decision in respect of the bid submitted by respondent
No.2-M/s. Hare Krishna Enterprises (petitioner in writ petition
No.13836 of 2023) pertaining to subject plot in accordance
with law, rules and extant circulars with expedition, say
within a period of four weeks from the date a copy of this
judgment and order is produced before the authority
concerned. Writ petition No.13836 of 2023 stands disposed of
in these terms."
14. Accordingly, the representation was made by the
Petitioner to CIDCO on 21st November 2024 for allotment of
the said plot. We have carefully perused the impugned order.
After considering all the relevant facts the VC and MD of
CIDCO made the following observations which are relevant :-
"9. In Scheme No 40 of 2024-25 in the same Kalamboli
Node, the Corporation has received highest rate of Rs.
1,54,545/- per Sqm for Plot No 79B Sector 17, Kalamboli and
Rs. 1,67,000/- per Sqm for Plot No 10 Sector 16E, Kalamboli
which are evidence of the current market potential.
10. Considering the current market potential, there would
be a considerable loss to the public exchequer, if the plot is
allotted to M/s. Hare Krishna Enterprises on this date, at the
quoted rate of Rs 92,995/- per sqm in the Scheme No
29/2022, the result for the same was opened on 25/10/2022.
No right is created in favour of M/s. Hare Krishna Enterprises
in the subject plot by virtue of submission of its bid and being
declared as the highest bidder. The Hon'ble High Court in the
case of Aditya Enterprises Vs. City Industrial and
902.wp.18966-2024.odt
Development Corporation of Maharashtra Ltd cited in 2023(3)
Bom. C.R. 856 has held that :
"24. We therefore hold that no right is created in
favour of petitioners to have plots allotted to them
by CIDCO by mere reason of they being the highest
bidders in the tender process."
11. The Corporation is required to take Commercial
decision in the process of acceptance of bids to ensure that
maximum revenue is generated in public interest by fetching
maximum rates in the process of tender of plots.
15. No doubt CIDCO had taken a stand in the Petition filed
by Varniraj Group that the plot in question is to be allotted to
the Petitioner. The Petitioner had paid the EMD amount. The
Petitioner was the highest bidder. In our opinion merely
because the Petitioner is the highest bidder will not confer
vested right in its favour to have the bid accepted. In
Haryana Urban Development Authority and others vs.
Orchid Infrastructure Developers Private Limited3 the
Supreme Court in paragraph 13 held that the highest bidder
has no vested right to have the auction concluded in their
favour. In State of Punjab and others vs. Mehar Din 4 Their
Lordships in paragraph 18 held that the State is not bound to
accept the highest bid, and the right of the highest bidder is
always provisional. In Aditya Enterprises vs. City
Industrial and Development Corporation of
3 (2017) 4 SCC 243
4 (2022) 5 SCC 648
902.wp.18966-2024.odt
Maharashtra Ltd.5, the Division Bench of this Court in
paragraphs 24, 27 and 41 held that the highest bidders do not
have an inherent right to get a plot allotted.
16. CIDCO is a New Development Authority empowered by
the Maharashtra Regional & Town Planning Act, 1966 ("MRTP
Act" for short). CIDCO has the authority to dispose of land for
development as it deems expedient, subject to the terms and
conditions it considers appropriate. This power is exercised by
its Board of Directors. The New Bombay Disposal of Land
Regulations, 1975, framed under the MRTP Act, govern these
disposals, giving CIDCO the statutory authority to manage
land disposal. Therefore, CIDCO's actions must be viewed in
the context of its dual role as a public authority and a
commercial entity.
17. CIDCO's actions are guided by public interest. The
income derived from land disposal is used to build
infrastructure and fulfil development commitments. Allowing
for competitive bidding ensures maximum returns for public
benefit. In our opinion the public interest has to supersede
any private or personal interests. We are in agreement with
5 2023 SCC OnLine Bom 876
902.wp.18966-2024.odt
Mr Kapadia, learned Senior Advocate when he contends that
by rejecting the Petitioner's representation, CIDCO has taken
a conscious decision in commercial terms and in the interest
of general public. As a public body, CIDCO is responsible for
ensuring that public resources are utilised efficiently and that
it fetches the maximum possible rates for its land. In Shree
Ganesh Enterprises and another vs. City and Industrial
Development Corporation of Maharashtra Limited and
others6 it was held by this Court in paragraph 23 that the
commercial aspect of the tender process cannot be lost sight
of, and CIDCO is not at fault for trying to fetch maximum
rates. In Sterling Computers Limited vs. M/s. M & N
Publications Limited and others7 the Supreme Court in
paragraph 11 held that when there are commercial elements,
authorities need to have some discretion to enter into
contracts, keeping in mind the goal of revenue augmentation.
In Air India Ltd. vs. Cochin International Airport Ltd.
and ors.8 the Supreme Court in paragraph 7 held that the
award of a contract/tender is a commercial transaction, and
commercial considerations are paramount. It is well settled
6 2024 SCC OnLine Bom 2346
7 (1993) 1 SCC 445
8 (2000) 2 SCC 617
902.wp.18966-2024.odt
that the Court should exercise restraint and avoid interfering
in tender or contract matters, unless there is unmistakable
evidence of arbitrariness, bias or irrationality. In Tata
Cellular vs. Union of India9 the Supreme Court in
paragraph 91, 100 and 111 held that the Courts do not have
expertise to correct administrative decisions, and judicial
review would amount to substituting the Court's decision for
the administrations. In JSW Infrastructure Limited and
another vs. Kakinada Seaports Limited and others 10 in
paragraphs 8 to 10 Their Lordships held that superior courts
while exercising their power of judicial review must act with
restraint while dealing with contractual matters so long as
evaluation of tenders if the decision of awarding contracts,
which is essentially commercial function, is bonafide and
taken in the public interest.
18. It is further well settled that the authorities are not
required to give reasons for rejecting the bid. In Silppi
Constructions Contractors vs. Union of India and
another11 supports this proposition. Nonetheless, in our
opinion CIDCO rejected the Petitioner's bid for valid reasons,
9 (1994) 6 SCC 651
10 (2017) 4 SCC 170
11 (2020) 16 SCC 489
902.wp.18966-2024.odt
the primary reason was that the bid was below market
potential. From the relevant portion of the impugned order
extracted herebefore, it is seen that in the same Node, CIDCO
received the highest rate of Rs.1,54,545/- per sq.mtr. for plot
No.79B, Sector 17 and Rs.1,67,000/- per sq.mtr. for plot
No.10, Sector 9E, which evidenced that the current market
potential was much higher. If the plots were to be allotted to
the Petitioner at the same quoted rate as on 5 th September
2022 of Rs.92,995/- per sq.mtr., the same does not reflect the
current market rate and it would have resulted in significant
loss to the public exchequer. M/s. Varniraj expressed
willingness to offer a higher bid of Rs.1,09,503/- per sq.mtr.
considering the market potential of the plot. So also a third
party, one Bhavesh Patel vide letter dated 17th October 2024
offered to pay Rs.1,20,000/- per sq.mtr. after getting
knowledge of M/s. Varniraj's offer, which supports the
contention of CIDCO that there has been considerable
increase in the market value.
19. Mr Patil, learned counsel for the Petitioner was at pains
to pursuade us that if such re-auction goes on, at this rate,
the bid process will never come to an end. This contention can
902.wp.18966-2024.odt
only be stated to be rejected. The Petitioner has no vested
right for the allotment only because he is the highest bidder
or for that matter the EMD amount is deposited. The plea of
promissory estoppel cannot be of any assistance to the
Petitioner. No doubt it is a settled principle of law that the
doctrine of promissory estoppel as explained in Union of India
and others vs. Godfrey Philips India Ltd . (supra) was also held
to be applicable against the public authorities. The decision is
distinguishable on facts. For one, the position of the Petitioner
is not altered. He can always bid in the re-auction. The
Petitioner is entitled to the refund of the EMD, in fact the EMD
has been refunded after the Petition filed by Varniraj Group
was rejected. Further CIDCO's action are guided in public
interest as having regard to its commercial consideration it is
trying to get a maximum price for the plot. The larger public
interest has to outweigh the private interest of the Petitioner.
If the Petitioner does not have a legally enforceable right, the
question of issuing a mandamus in the facts and
circumstances of the case directing the allotment of the plot in
favour of the Petitioner does not arise. In our opinion the
impugned order cannot be said to be arbitrary or irrational
902.wp.18966-2024.odt
and in fact, is well reasoned order based on sound
considerations furthering public interest.
20. It is also pertinent to note that though the Petitioner had
filed Writ Petition No.13836 of 2023 for a direction that the
plot be allotted to them which was heard along with Writ
Petition No.11732 of 2023, despite dismissal of Writ Petition
filed by Varniraj Group, this Court did not issue the
mandamus sought but directed CIDCO to take a decision in
respect of the bid submitted by the Petitioner in accordance
with law. The representation made is not granted for valid and
cogent reasons.
21. The impugned order in our opinion does not call for any
interference.
22. The Writ Petition is accordingly dismissed. There shall be
no order as to costs.
23. Interim Application No.1131 of 2025 does not survive
and is disposed of.
(M. S. KARNIK, J.) (CHIEF JUSTICE)
Signed by: Pradnya Bhogale
Designation: PA To Honourable Judge
