Inderjeet Singh vs Mcd
2009 Latest Caselaw 1416 Del

                   IN THE HIGH COURT OF DELHI AT NEW DELHI

                             WP(C) No. 1107/1991

                                          Reserved on      : 03.02.2009
                                          Date of decision : 16.04.2009

IN THE MATTER OF :

# INDERJEET SINGH                                            ..... Petitioner
                              Through:    Mr. A.S. Chandhiok, Sr. Adv. with
                                          Mr. Ritesh Kumar and
                                          Mr. Nikhil Bhalla, Advocates.
                              Versus

$MCD                                                       ..... Respondent
                              Through:    Ms. Amita Gupta, Advocate.

       CORAM
*      HON'BLE MS.JUSTICE HIMA KOHLI

1.     Whether Reporters of Local papers may be
       allowed to see the Judgment? Yes.

2.     To be referred to the Reporter or not? Yes.

3.     Whether the judgment should be reported in the
       Digest? Yes.

HIMA KOHLI, J.

1. The present writ petition is filed by the petitioner praying inter

alia, amongst others, for issuance of a writ of mandamus, directing the

respondents No. 1 and 2, MCD to execute a lease in perpetuity (99 years) in

respect of shop No. 3635, Ward 11, Faiz Bazar, Netaji Subhash Marg,

Daryaganj, New Delhi in favour of the petitioner, for quashing the notice

dated 24/25.09.1990 calling upon the petitioner to hand over vacant

possession of the aforesaid shop and pay damages for unauthorized use

thereof w.e.f. 11.12.1981, till the date of vacation and for quashing the

proceedings pending before the Estate Officer, respondent No. 3 herein.

2. Briefly stated, the facts of the case are that pursuant to an

auction in respect of the aforesaid shop held by the respondent No. 1 on

15.04.1971, the petitioner was declared the highest bidder and allotted the

shop by virtue of an indenture dated 04.08.1971, for a period of five years

at the rate of Rs.900/- per month. Thereafter, the petitioner continued in

occupation of the aforesaid shop on the basis of extension granted by the

respondent No. 1 for a period of 11 months. In September, 1977, the

petitioner approached the respondent No. 1 with a request that the shop

should be given to him on a 99 years leasehold basis. The said request was

considered by the Standing Committee of the respondent/MCD, which

passed Resolution No. 102 on 01.09.1977(Item No.65), to the effect that the

mode of disposal of the said shop shall be changed on rent from 5 years

license basis, to 33 years through open public auction.

3. On 17.01.1978, the respondent issued a letter to the petitioner

calling upon him to hand over vacant possession of the shop to the MCD. As

the petitioner failed to do so, the respondent issued him a letter dated

18.04.1978, followed by a petition filed under Sections 4 and 7 of the Public

Premises (Eviction of Unauthorised Occupants) Act, 1971 (hereinafter

referred to as „the Act'). The aforesaid petition was disposed of by the

Estate Officer vide order dated 31.03.1980 in favour of the respondent(the

petitioner herein). The operative para of the said order is reproduced

hereinbelow:

"I have gone through the records filed by the petitioner MCD and its pleadings and the defence taken by the respondents. After judging the pros and cons of the case I am of the firm opinion that the duly allotted shop in a bid cannot be taken back without the due process of law and until and unless there is any infringement of the terms and conditions

of allotment and the allotment is cancelled after providing due opportunities and then assigning reasons to the cancellation of the shop. This aspect is totally missing in this case. On the other hand, the respondent‟s credence cannot be disbelieved as he is ready to cooperate with the petitioner MCD in every respect according to its preference of choice.

I, therefore, in the interest of principles of natural justice and finding law and equity in favour of the respondent hereby remand the case back to A.C. (L&E) for taking fresh proceedings in this case in accordance with the laid down procedure of law."

4. It is an undisputed position that the respondent herein, did not

challenge the aforesaid order by preferring an appeal or any other

proceedings. Thus the said order became final between the parties. On

09.04.1981, a resolution was passed by the Standing Committee of the

respondent No. 1 changing the mode of disposal of the shop in question and

deciding that the said shop be allotted on leasehold basis for a period of 99

years, instead of 33 years. This was followed by a letter dated 08.05.1981

issued by the respondent/MCD to the petitioner informing him as below :

"Dear Sir,

The Corporation vide decision No.1029/GW/Corpn. dated 18.4.1981 have decided to allow you to continue in the above shop at the already fixed licence fee of Rs.900/- p.m. plus a security of Rs.10,000/- on your undertaking that the shop in question would be vacated at the time of re- auction if the bid does not come in your favour and the security money would be forfeited in case the shop is not vacated on the date of auction and the bid not going in your favour.

You, are, therefore, requested to pay a sum of Rs.38,482.26 p. being the licence fee upto 31.5.1981 in addition to the sum of Rs.10,000/- as surety money for the above purpose as a bank draft within 3 days of the receipt of this letter and execute a bond to this effect. "

5. It is not disputed by the parties that the petitioner deposited a

sum of Rs.10,000/- with the respondent as security deposit. It is also not

denied that the shop was put to auction twice. On the first occasion, it was

put to auction on 18.10.1981. Though a bid of Rs.3,05,500/- was received

for the shop, it is stated that the said bidder backed out and the auction

could not, therefore, materialize. As a result, a second auction notice was

given by the respondent No.1 for holding an auction on 22.11.1981. The

shop of the petitioner was put to auction on a 99 years leasehold basis. The

conditions of the auction included the requirement of additional Rs.2,000/-

as security payable before the start of the auction. It, however, mandated

that in case of shops put to auction on a 99 years leasehold basis, 25% of

the bid amount would be payable at the fall of hammer and the balance

within 30 days of the date of issue of acceptance letter in cash or bank

draft/cheque good for payment. The petitioner deposited a sum of

Rs.2,000/- against the receipt dated 22.11.1981 issued by the respondent.

6. Though the petitioner was the highest bidder at Rs.1,51,000/-

and he tendered 25% of the bid amount in cash on the spot, the said

amount was not accepted by the respondent. The respondent has stated in

its counter affidavit that it refused to accept the said amount on the ground

that the same was on a low side and as a result, the bid of the petitioner

was rejected. Thereafter, in the very next month, i.e., on 10.12.1981, the

Dy. Commissioner, MCD is stated to have cancelled the license of the shop in

question. However, the stand of the petitioner is that the petitioner did not

receive the said cancellation notice. As the petitioner failed to vacate the

said shop in question, the respondent No.1 initiated proceedings under

Sections 4, 5 and 7 of the Act against him. The said proceedings culminated

in an order dated 21.03.1986, passed by the Estate Officer whereby the

petition filed by the respondent was dismissed. The operative paras of the

aforesaid order are reproduced hereinbelow:

"13. That after judging all pros and cons, I am of the considered opinion that the duly allotted shop in a bid cannot be taken back without fulfilling all requirements of law until and unless there had been any infringement of the term and conditions of allotment and allotment cancelled after providing due opportunity and assigning reasons to the cancellation of the allotted shop. This process of action had been totally ignored by the petitioner. On the contrary the Respondent‟s credence cannot be disbelieved as he co-operated with the petitioner, MCD in every respect and the former acted lawfully throughout unto satisfaction of the petitioner. Also, the respondent is paying the licence fee meant for running the confectionery establishment and another licence is invariably got renewed annually by the Police Authority. He has been never taken to task for the infringement of any term and condition as laid down for running the confectionery establishment.

14. That with a view to equate the principles of natural justice and finding law and equity is in favour of the respondent, I decide the case accordingly against the petitioner. Also, with regard to Section 7 of the P.P. Act, 1971 (as amended from time to time) I hereby order that the security money of Rs.10,000/- and the subsequent payments made after the auction held on 22.11.1981 be adjusted towards the highest bid of the auction.

Since the respondent has been in legal possession of the allotted shop without any lapse on his part, the bid preferred by him in the auction held on 22.11.81 must be honoured. On the basis of document filled by the parties it is established that the respondent has been in rightful possession of the shop undersuit. The letter purported cancellation of the allotment of the shop No.3635, Daryaganj, Delhi had never been served upon the respondent against his signatures and as such the alleged cancellation stands nonest in the spirit of law. The petition filed by the petitioner under Sections 4,5 & 7 of the P.P. Act, 1971 is hereby dismissed.

Pronounced in the open court today the 21st March, 1986."

7. It is pertinent to note that the aforesaid order of the Estate

Officer was also not assailed by the respondent/MCD by filing an appeal or

any other proceedings. After completion of the aforesaid two rounds of

litigations, the respondent No.1, after a gap of about four years, issued a

notice to the petitioner calling upon him to hand over vacant possession of

the shop in question and pay damages for unauthorized use of the shop at

the rate of Rs.4950/- per month w.e.f. 11.12.1981, till the date of vacation.

In the aforesaid notice dated 24/25.09.1990 issued by the Addl. Dy.

Commissioner(L&E), MCD, mention was made of the earlier order dated

10.12.1981, passed by the Dy. Commissioner, MCD cancelling the license of

the said shop. It was further asserted in the notice that the allotment of the

shop in question stood cancelled since 10.12.1981. The petitioner sent a

reply dated 13.10.1990 to the aforesaid notice, denying the fact that he was

an unauthorized occupant of the shop in question and was liable to be

evicted therefrom. Despite the same, in December, 1990, the respondent

No.1 again filed a petition under Sections 4, 5 and 7 of the Act seeking

eviction of the petitioner and damages for unauthorized occupation.

Aggrieved by the said action, the present petition was filed by the petitioner.

8. Vide order dated 08.04.1991, notice to show cause was issued

in the writ petition and simultaneously, the petitioner was granted an

exparte ad interim injunction that he would not be dispossessed from the

shop in question till further orders and further, the respondents were

restrained from cancelling the bid of the petitioner till the next date of

hearing of the petition. The aforesaid interim order was confirmed vide

order dated 15.11.1991, when `Rule‟ was issued in the writ petition.

9. Counsel for the petitioner submitted that the impugned notice

dated 24/25.09.1990, issued by the respondent/MCD is liable to be quashed

as it is based on a cancellation notice dated 10.12.1981 issued by the Dy.

Commissioner, MCD, which was the foundation of the second round of

proceedings initiated by the respondent before the Estate Officer, under

Section 4, 5 and 7 of the Act, and ultimately decided in favour of the

petitioner herein. He drew the attention of this Court to the order of the

Estate Officer dated 21.03.1986, where in para-2, reference was made to

the very same order dated 10.12.1981 passed by the Dy. Commissioner,

MCD, whereby he cancelled the license of the shop. It was stated by the

counsel for the petitioner that in the order dated 21.3.1986, the Estate

Officer categorically held that the notice for cancellation of allotment of the

shop had never been served upon the petitioner against his signatures and

as such, the said cancellation notice was non est. He submitted that as the

respondent chose not to assail the findings of the Estate Officer, by going in

appeal or preferring any proceedings to challenge the said findings, the

same had attained finality and were binding on the parties.

10. On the other hand, counsel for the respondent/MCD disputed the

aforesaid position and submitted that the respondent was well within its

right to initiate fresh proceedings under the Act since, as per the

respondent/MCD, the petitioner was an unauthorized occupant. She

submitted that such a right was granted by the Estate officer even in the

first round of litigation which culminated in the order dated 31.03.1980. In

this context, she drew the attention of this Court to the operative paras of

the aforesaid order, wherein the Estate Officer remanded the case back to

the MCD for taking fresh proceedings in the case in accordance with the

procedure laid down in law. She stated that it was only thereafter that the

respondent issued the cancellation order dated 10.12.1981 in respect of the

license of the shop and initiated the second round of proceedings under the

Act, against the petitioner. She submitted that the bid of the petitioner

made in the auction held on 22.11.1981, not having been accepted by the

respondent, it was well within its right to take out proceedings against the

unauthorized possession of the shop by the petitioner under the Act.

11. This Court is unable to agree with the contention of the

respondent that it could have based the subsequent proceedings initiated by

it under the Act, on the strength of a cancellation notice dated 10.12.1981,

which was tested in the earlier proceedings initiated by the respondent MCD

under the Act and was held to be non est, by the Estate Officer in his order

dated 21.03.1986. It is also undisputed that after suffering an adverse order

at the hands of the Estate Officer in the second round of litigation, no appeal

was preferred by the respondent. The aforesaid proceedings had thus

attained finality. Hence, the said order dated 21.03.1986 would operate as

res judicata and the subsequent proceedings sought to be initiated by the

respondent by relying on the very same cancellation notice dated

10.12.1981, would not be maintainable, by application of the doctrine of res

judicata, which is based on the salutary principle of attaching finality to a

litigation and ensuring conclusiveness of a judgment, where both the

proceedings filed, are based on the same cause of action. Reference may

be made in this regard to the following judgments:

      (i)    Daryao vs. State of UP, AIR 1961 SC 1457




       (ii)    Hope Plantations Ltd. vs. Taluk Land Board, Peermade & Anr.,
              1999 (5) SCC 590.

(iii) Swamy Atmananda & Ors. Vs. Sri Ramakrishna Tapovanam and Others., 2005 (10) SCC 51

(iv) Hukum Chand & Ors. vs. DDA., 152(2008) DLT 565 D.B.

12. Pertinently, the respondent has not questioned the aforesaid

order dated 21.3.1986 even in the present proceedings, which fact is borne

out from a perusal of the counter affidavit filed on record by the

respondent/MCD. Hence, it does not lie in the mouth of the respondent to

contend that merely because vide order dated 31.3.1980, the Estate Officer

had remanded the case back to the MCD for taking fresh proceedings, the

very same notice dated 10.12.1981, which was declared non est by the

Estate Officer in the order dated 21.3.1986, in the second round of litigation

initiated by the respondent/MCD under the Act, could lay the foundation of a

third round of litigation under the Act. The principles of res judicata oust

the jurisdiction of the Court for deciding a lis which has been disposed of on

merits by a speaking order. The notice dated 10.12.1981 issued by the

respondent, cannot be permitted to be the launching pad for the respondent

to trigger off another round of litigation against the petitioner under the Act.

13. In these circumstances, this Court has no hesitation in holding

that the petitioner is entitled to grant of the relief as set out in prayer (b) of

the writ petition, and any attempt on the part of the respondent/MCD to

reopen the issue by relying on the aforesaid cancellation notice dated

10.12.1981, is misconceived. As a result, any proceedings sought to be

initiated by the respondent on the strength of the said notice are also liable

to be quashed. Accordingly, the notice dated 24/25.09.1990 and the

subsequent proceedings initiated under the Act on the basis of the aforesaid

notice are, quashed.

14. Insofar as, the first relief sought by the petitioner for issuance of

a writ of mandamus to the respondent to execute a lease in perpetuity for

99 years in respect of the shop in question is concerned, counsel for the

respondent stated that the aforesaid relief sought by the petitioner is

founded on the order of the Estate Officer dated 21.3.1986 passed in the

second round of litigation, wherein it was directed that the bid preferred by

the petitioner in the auction held on 22.11.1981, must be honoured and

further, the Estate Officer ordered that the security money of Rs.10,000/-

and the subsequent payments made after the auction as held on

22.11.1981, be adjusted towards the highest bid of the auction. Counsel for

the respondent stated that the parameters of the powers of the Estate

Officers are well defined and laid down in the Act and that the same do not

permit him to pass orders of the nature as passed by him in the present

case. She contended that the Estate Officer could have either accepted the

petition filed by the respondents under Sections 4, 5 and 7 of the Act, or

rejected the same. However, he could not have called upon the respondent

to honour the bid offered by the petitioner in the auction held on 22.11.1981

and/or directed adjustment of money paid by the petitioner, towards the

highest bid. Hence, it was urged that the said order being beyond the

jurisdiction of the Estate Officer, is not legally binding upon the respondent

and cannot entitle the petitioner to seek any directions to the respondent, to

execute a lease in perpetuity for 99 years in respect of the shop in his

favour.

15. In support of her contention that if an order is a nullity, it cannot

be treated as res judicata for subsequent proceedings, counsel for the

respondent relied on the following judgments:

(i) Shakuntla Devi Vs. Kamla and others, (2005) 5 SCC 390

(ii) State of Haryana and others Vs. M.P.Mohla, (2007) 1 SCC 457

(iii) Rajan Ram Singh Vs. Mahesh, 2008 (12) SCALE 252.

16. Reliance is placed by the respondent on the following

judgments to urge that mere acceptance of bid at a public

auction and deposit of a percentage of the bid amount would

not constitute transfer of title till the same is approved by

the competent authority and a confirmation letter issued to

the bidder :

(i) Laxmi Kant & Ors. Vs. Satyawan, JT 1996 SC 746

(ii) DDA vs. Ravindra Mohan Aggarwal JT 1999 (2) SC

(iii) Rajasthan Housing Board & Anr. Vs. G.S. Investments JT 2006 (11) Scale (HC) 166

(iv) Haryana State Agricultural Marketing Board vs. Sadhu Ram JT 2008 (6) SC 119.

17. Opposing the aforesaid plea, counsel for the petitioner

strenuously urged the Court to consider that the case of the petitioner for

seeking directions to the respondent to execute a lease deed in perpetuity

in respect of the shop was not based solely on the order of the Estate

Officer, dated 21.3.1986. He stated that rather, the claim of the petitioner

for the said relief was based on a Resolution dated 9.4.1981 passed by the

Standing Committee of the MCD, on the basis of a representation made by

the petitioner challenging the mode of disposal of the shop in question by

deciding to allot it on lease hold basis for a period of 99 years instead of 33

years, read together with a communication dated 8.5.1981 addressed to the

petitioner. It was urged that a conjoint reading of the Resolution dated

9.4.1981, letter dated 8.5.1981 and the defence of the petitioner before the

Estate Officer as recorded in the order dated 21.3.1986, entitles the

petitioner to remain in the property for a period of 99 years.

18. It was argued on behalf of the petitioner that the Estate Officer

had framed five issues which were decided vide order dated 21.3.1986 and

that each issue is a finding of fact and ought to be treated as steps in aid of

the decision as to whether the petitioner was in lawful occupation of the

shop in question or not. In support of the plea that a perusal of the

communication dated 8.5.1981 addressed by the MCD to the petitioner

established that the bid was deemed to have been granted in favour of the

petitioner and hence the principles of promissory estoppel came into play, a

judgment of the Supreme Court in the case of Southern Petrochemical

Industries Co.Ltd. Vs. Electricity Inspector & ETIO and other reported as

(2007) 5 SCC 447 was relied upon. Reference was also made to a

judgment of the Division Bench of the Calcutta High Court in the case of Shri

Krishna Investment and others Vs. Union of India and others reported as

AIR 1976 Calcutta 333, to contend that Section 5 of the Act contemplates

adjudication prior to making an order and such adjudication requires reasons

to be recorded by the Estate Officer.

19. Counsel for the petitioner argued that the respondent being an

instrumentality of the State, is under an obligation to act in public good and

in public interest, not only while discharging its constitutional and statutory

obligations, but also in discharging its contractual obligations. In this

regard, he relied on a judgment of the Supreme Court in the case of ABL

International Ltd. and another Vs. Export Credit Guarantee Corporation of

India Ltd. and others reported as (2004) 3 SCC 533. Reference was made

to Explanation VIII of Section 11 of the CPC to contend that the order of the

Estate Officer dated 21.3.1986 will operate as res judicata in the present

proceedings, and in the said context, reliance was placed on the following

judgments:

(i) Satish Nambiar Vs. Union of India & another, (150) 2008 DLT

(ii) Hukum Chand & Ors. Vs. Delhi Development Authority & Ors. 152 (2008) DLT 565(DB)

(iii) Daya Sapra Vs. Vishnu Dutt Sharma 2008 (100) DRJ 578

20. While deciding the first issue, a brief reference has been made to

the doctrine of res judicata, but in the context of examining the attempt on

the part of the respondent to yet again initiate proceedings under Sections 4

and 7 of the Act by relying on a cancellation notice dated 10.12.1981, which

was a subject matter of determination in the earlier proceedings filed by the

respondent under the very same provisions of law, and turned down by the

Estate Officer, vide order dated 21.03.1986.

21. However, can reliance on the findings of the Estate Officer as

contained in the order dated 21.03.1986 entitle the petitioner to invoke the

doctrine of res judicata, in terms of Section 11 of the CPC to claim

entitlement to execution of a lease deed in perpetuity in respect of the shop?

One must remember that the Estate Officer can exercise his powers and the

discretion vested in him by virtue of the provisions of the Act, only within the

parameters as defined under the Statute. In other words, the Estate Officer

is vested with the power to give a decision only on the issue of eviction

and/or damages in respect of a public premises. Reference was made by

the counsel for the petitioner to the findings of the Estate Officer in respect

of issue No.(e) to the effect that the respondent having failed to refund the

security amount and the earnest money deposited by the petitioner, when

he participated in the auction bid, the bid ought to be honoured by the

respondent. The said reliance on the part of the petitioner has to be

examined in the light of the binding nature of the decision in respect of the

issues that arose for consideration in the lis between the petitioner and the

respondent before the Estate officer.

22. The findings returned by the Estate Officer in the order dated

21.3.1986 were in the context of arriving at a conclusion as to whether the

petitioner was liable to be evicted from the shop and pay damages as

claimed by the respondent. In the process of returning a finding to the said

effect, if the Estate Officer examined the factual position pertaining to the

efforts made by the respondent to put the shop in question to auction and

participation of the petitioner in the said auction process, it cannot be

accepted that the said findings of fact are of such a nature that they would

bind the respondent to execute a lease deed in perpetuity in favour of the

petitioner, in respect of the shop in question. The facts pertaining to the

auction process could have at best been treated as the ground work for the

decision taken by the Estate Officer on the issues of unauthorized occupation

of the shop by the petitioner and the damages, if any, liable to be paid by

him. But the same cannot be stretched to the point of being treated as

conclusive with regard to execution of a lease deed in perpetuity in favour of

the petitioner, on the assumption that the bid made by him was accepted by

the respondent and was binding on it. For the said reason, this Court is

unable to agree with the contention of the counsel for the petitioner that the

findings with regard to the auction bid, as returned by the Estate Officer,

ought to be treated as res judicata between the petitioner and the

respondent with regard to his claim for execution of a perpetual lease deed

in his favour in respect of the shop.

23. Hence, the principles laid down in the case of Daya Sapra

(supra) cannot come to the aid of the petitioner. Even in the case of Hukum

Chand & Ors. (supra), a Division Bench of this Court observed that for a

former decision to operate as res judicata, the requirement of Section 11 of

the CPC is that the Tribunal which decided the former proceedings must

either be a court of exclusive jurisdiction or a court of limited jurisdiction

competent to try the issue raised in the subsequent suit. In the present

case, though the court of the Estate Officer is a court of special and

exclusive jurisdiction in respect of matters it is competent to adjudicate

upon, it cannot be held to be a court competent to try an issue pertaining to

grant of a perpetual lease deed in favour of the petitioner, pursuant to an

auction process undertaken by the respondent in respect of the shop in

question. The determination of the Estate Officer in the case in hand would

be on the question as to whether the petitioner was an unauthorized

occupant of the public premises or not. As a step in aid of the said

determination, if the Estate Officer examined the factual background of the

case including the auction bid process undertaken by the respondent, it

cannot be concluded that merely because the respondent/MCD did not

challenge the order of the Estate Officer, whereby the petition filed by the

respondent under Sections 4,5 and 7 of the Act was dismissed, the latter

was under an obligation to execute the lease deed in perpetuity in favour of

the petitioner in respect of the shop in question. While the Estate Officer was

entitled to examine the effect of the auction process so as to decide as to

whether the petitioner was in authorized or unauthorized occupation of the

shop in question, as elaborated in the judgments rendered in the cases of

Satish Nambiar (supra) and Hukum Chand (supra), however, it has to be

held that he lacked the inherent jurisdiction to direct the respondent/MCD to

honour the bid made by the petitioner in the auction held on 22.11.1981.

24. Counsel for the respondent is justified in stating that any such

findings returned by the Estate Officer would be a judgment without

jurisdiction and hence the principles of res judicata would not apply. The

Estate Officer lacked inherent jurisdiction to take a decision with regard to

the auction process in respect of the shop in question and consequently

declare the petitioner to be a successful bidder in a proceeding of limited

jurisdiction where the scope of examination was limited only to whether the

petitioner could be declared as an unauthorized occupant of the shop in

question and, if so, the damages, if any, liable to be claimed by the

respondent from him. Hence, the findings of the Estate Officer to the

aforesaid extent are held to be a nullity and cannot bind the respondent on

account of inherent lack of jurisdiction. As a result, neither the doctrine of

res judicata, nor that of estoppel would be of any assistance to the

petitioner.

25. The argument of the counsel for the petitioner that a conjoint

reading of the resolution dated 9.4.1981 passed by the respondent, the

letter dated 8.5.1981 issued to the petitioner by the respondent and the

defence of the petitioner before the Estate Officer as recorded in the order

dated 21.3.1986, would entitle the petitioner to remain in the property for

99 years, is misconceived. Simply because the respondent changed the

mode of disposal of the shop in question on the representation of the

petitioner by deciding to convert it from that of lease on 5 years‟ licence

basis to 33 years through open public auction and subsequently to a 99

years‟ lease hold basis, would not confer any special privilege on the

petitioner. Similarly, the letter dated 8.5.1981 issued by the respondent to

the petitioner did not contemplate that if the bid went in his favour, the

petitioner would automatically be entitled to claim execution of a 99 years‟

lease deed in his favour. For a bid to conclude in favour of a party in a

public auction, acceptance thereof by the respondent is a pre-requisite.

Merely because the earnest money was not refunded by the respondent to

the petitioner, the same cannot vest any right in favour of the petitioner to

enable him to claim that the auction had been concluded successfully in his

favour. The petitioner has not been able to show any communication from

the respondent confirming its acceptance of his bid at the public auction,

which can be construed as a conclusive transfer of the shop in his favour.

26. The fact that the bid had not conferred any transfer of title in

respect of the shop in favour of the petitioner, is also borne out by the fact

that even the petitioner understood the same to be true by not following up

the matter with the respondent by depositing the balance 75% of the bid

amount with the respondent, after completion of the auction. Merely

because after a lapse of almost 10 years from the date the public auction

was held, the petitioner unilaterally remitted a sum of Rs.1,32,070/- in

August 1990 to the respondent as the balance price of the bid, cannot be the

basis for accepting the contention of the petitioner that the bid had been

finalized in his favour. Rather, even in the writ petition, the petitioner

admitted that he never received any response from the respondent after he

was declared as a highest bidder.

27. Counsel for the respondent is justified in relying upon the

judgments in the cases of Ravindra Mohan Aggarwal (supra), Laxmi Kant

(supra), Shilpa Shares and Securities (supra) and Haryana State Agricultural

Marketing Board (supra) to contend that the acceptance of a bid at public

auction and deposit of 25% of the bid amount would not constitute transfer

of property, and an auction attains finality only after it is approved by the

competent authority and the decision is communicated to the bidder, by

issuance of a confirmation letter. The present case cannot be treated as

one where the petitioner altered his position pursuant to a promise made by

the State. The doctrine of promissory estoppel is, therefore, not applicable

to the facts of the present case. The respondent had neither withdrawn

from any assurances given to the petitioner, nor had it sanctioned any

benefits in favour of the petitioner, based on which, the petitioner could

claim that he had altered his position pursuant to or in furtherance of the

promises or representations made by the respondent. Thus, the principles

of equity which is the very foundation of the doctrine of promissory estoppel,

cannot be invoked in the present case by the petitioner.

28. The contention of the counsel for the petitioner that the

petitioner is entitled to claim the relief of a mandamus against the

respondent, by directing it to execute a 99 years‟ lease deed in perpetuity in

favour of the petitioner in respect of the shop in the present proceedings on

the ground that even in contractual matters, the State must act fairly and

reasonably, as per the requirements of Article 14 of the Constitution of

India, has to be examined in the background of the facts of each case. No

doubt the contractual obligation on the part of the State cannot divest a

claimant to the guarantees offered under Article 14 of the Constitution of

India. However, it is equally true that the scope of judicial review in respect

of the disputes pertaining to contractual obligations is far more limited,

particularly, when the nature of dispute is such that the parties are required

to be relegated to adjudication of their rights when there is a suitable

efficacious alternative remedy available under the civil law. Refusal on the

part of the respondent to accept the bid of the petitioner, even if it was the

highest bid, cannot be treated as an unfair or unreasonable action on the

part of the respondent while operating in the contractual field. It has been

held in a catena of judgments that a bidder does not acquire any right to

claim that an auction be concluded in his favour. A direction to the

respondent/MCD to accept the bid of the petitioner as sought by the

petitioner, would virtually amount to confirmation of the auction in favour of

the petitioner, which is not a function of the court which falls within the

scope of judicial review. (Ref. : Union of India vs. Mis. Bhim Sen Walaiti

Ram, (1969) 3 SCC 146, Trilochan Mishra, etc. vs. State of Orissa, (1971)

3 SCC 153, State of Orissa vs. Harinarayan Jaiswal, (1972) 2 SCC 36 and

State of Uttar Pradesh & Ors. vs. Vijay Bahadur Singh, (1982) 2 SCC 365.

29. As held by the Supreme Court in the case of Tata Cellular vs.

Union of India, reported as (1994) 6 SC 651, the scope of judicial review

under Article 226 of the Constitution of India in contractual matters, would

be to prevent arbitrariness and favoritism. However, the right of the State to

refuse the lowest or the highest tender cannot be questioned on the ground

of infringement of Article 14 of the Constitution of India. Since the power of

judicial review is not that of an appeal from the decision taken by the State

in accepting or refusing a tender, the Court ought not to substitute its own

decision with that taken by the State. The stand of the respondent in the

present case that though the offer made by the petitioner was the highest,

the same was rejected on the spot being on a lower side, cannot be

questioned as the prime consideration for a State is not only to ensure

fairness, but also to generate public revenue while dealing with public

property and it is only in furtherance of public interest that the court ought

to exercise its discretionary powers under Article 226 of the Constitution of

India.

30. In the background of the present case, it cannot be stated that

refusal on the part of the respondent to accept the bid of the petitioner, was

unfair, arbitrary or invalid. The respondent was under no obligation to accept

the bid of the petitioner even if it was the highest bid and as such, no right

of such a nature could be held to have accrued in favour of the petitioner,

the enforcement of which can be sought in the present proceedings. For the

foregoing reasons, this Court declines to grant the first relief sought by the

petitioner. The writ petition is therefore partly allowed to the extent

indicated above. Parties are left to bear their own costs.

       APRIL 16, 2009                                 ( HIMA KOHLI )
      rkb/sk                                              JUDGE