S. L. Sachdev vs Dda & Anr.
2010 Latest Caselaw 4932 Del

*             HIGH COURT OF DELHI AT NEW DELHI


%                          Judgment delivered on: October 26, 2010


+                        W.P.(C) 2875/1991

S. L. Sachdev                                         ..... Petitioner


                              -versus-


DDA & Anr.                                          .... Respondents

Advocates who appeared in this case:

For the Petitioner :               Mr. Maninder Singh, Senior Advocate
                                   with Mr. T. Singhdev, Advocate

For the Respondent            :    Ms. Sangeeta Chandra, Advocate for
                                   respondent/DDA.

CORAM:-
HON'BLE MR. JUSTICE BADAR DURREZ AHMED
HON'BLE MS. JUSTICE VEENA BIRBAL


1.     Whether the Reporters of local papers may be allowed to
       see the judgment?

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

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


Veena Birbal, J.

1. By way of this petition, the petitioner has prayed for issuance of

writ of certiorari quashing the order dated 16.7.1991 whereby the bids

of petitioner in respect of plot nos.3, 8 and 9, Local Shopping Centre,

Sector B, Pocket 7, Vasant Kunj, New Delhi, have been rejected by

respondent no.1 i.e Delhi Development Authority. Further, a prayer is

made for issuance of mandamus directing the respondent no. 1 to

issue demand letters in respect of the aforesaid plots to petitioner and

that respondent no.1 be prohibited from allotting the above mentioned

plots to anybody else.

2. Briefly the facts of the present writ petition are as under:-

The petitioner is a permanent resident and citizen of India.

Respondent no.1 had framed rules, inter alia, the "DDA (Disposal of

Developed Nazul Land) Rules, 1981 (hereinafter referred to as the

1981 Rules). The mode prescribed for disposal of the land under the

said rules is by way of public auction. It is stated that the

respondent/Authority on earlier two occasions i.e in January/February

and March/April, 1991 announced auction of the aforesaid three plots

i.e plot nos. 3, 8 & 9, Sector B, Pocket 7, Local Shopping Centre, Vasant

Kunj, New Delhi. Petitioner had participated in the auction. Before the

commencement of auction, the reserve price of each of the plots on

the first occasion was announced as ` 1,00,66,000 and on the second

occasion it was announced as ` 75,00,000. There was no bidder in

respect of the above plots in both of these auctions.

In pursuance of the 1981 Rules, respondent no.1 issued various

advertisements in different newspapers for holding auctions of the

aforesaid three plots. As per the advertisement, the auction in respect

of aforesaid plots was to be held on 20th June, 1991.

On 20th June, 1991 respondent no.1 announced the terms and

conditions of the auction. The petitioner enquired before the auction

as to whether there was any reserve price in respect of aforesaid plots.

The officer conducting the auction informed the petitioner that there

was no reserve price and the bid could be started from any amount.

On that basis the petitioner participated in the bid and gave the

highest bid for a sum of ` 31 lakhs, ` 31 lakhs and ` 33 lakhs for the

three plots respectively and these bids of the petitioner and his wife

were accepted unconditionally by respondent no.1. In pursuance

thereof, respondent no.1 demanded a sum of ` 8 lakhs, ` 8lakhs and `

9 lakhs respectively which is more than 25% of the bid amounts from

the auction purchaser i.e petitioner as detailed in the unconditional bid

form and the same was deposited by petitioner.

As per the terms and conditions published in the advertisement,

the petitioner had gone to collect the demand-cum-allotment letter.

The same was however not issued. Petitioner then requested

respondent no.1 in writing also to issue the same. Petitioner also sent

reminders on 24th, 25th and 27th June, 1991 but to no effect.

On 1st July, 1991, the petitioner gave in writing that he be

informed by registered post as to when the demand letter would be

ready. Petitioner has alleged that respondent no.1 is bound to issue

the demand letter as a concluded contract had come into being upon

an unconditional acceptance of the bids and acceptance of 25% of the

bid amount.

On 2nd August, 1991, the petitioner and his wife received a

communication dispatched by Regd. A.D. post dated 16.7.1991

informing them that the bids of the petitioner were rejected and the

earnest money would be refunded shortly. No reasons were given as

to why the bids of the petitioner had been rejected. Aggrieved with

the same, the present petition is filed making the prayers as are stated

above.

3. Respondent no.1 has opposed the present petition by filing a

counter-affidavit wherein it is contended that under the terms and

conditions of the auction, the bid accepted at the time of auction was

subject to the confirmation of the competent authority. In the present

case, the bid made by the petitioner on 20.06.1991 was not confirmed

by the Competent Authority. It is contended that the Vice Chairman of

DDA is the Competent Authority. The said Authority considering the

relevant facts and circumstances had decided not to grant

confirmation in respect of the highest bid of the petitioner. It is stated

that due to that reason, respondent no.1 vide its letter dated

16.07.1991 duly intimated the petitioner that his bid had not been

confirmed by the Competent Authority. Respondent had made efforts

to refund the earnest money vide cheque nos. 198581, 198582,

198583 dated 01.08.1991 by regd. A.D. post but the same was

received back undelivered. It is stated that under the terms of the

auction, the Vice Chairman of DDA is the Competent Authority who is

authorised to confirm the bid or reject the same. It is submitted that

the highest bid made at the time of auction is subject to confirmation

of the Competent Authority and in the present case the Competent

Authority had refused to confirm the same, as such, the petitioner is

not entitled for any relief. It is further stated that the amount of

earnest money furnished by the petitioner was sent back to him by

account payee cheques but the same was returned by the postal

authorities vide their report dated 23.08.1991 with the remark "out of

India for unknown period. Returned to sender". Thereafter, cheques

were sent to petitioner no.2 through a Junior Engineer of the

respondent deputed for the said purpose who reported that the

petitioner was out of station and his wife had refused to receive the

cheques till the return of the petitioner. Since, the wife of the

petitioner Mrs. Aruna Sachdev was one of the co-bidders, as such,

refusal by her is an avoidance of receiving the refund of the earnest

money. The further stand of respondent no. 1/DDA is that this Court in

Civil Writ Petition No.2202/1990 in the case of M/s Cottage Industries

Exposition v. DDA has dismissed the writ petition challenging the

rejection of the bid by the Competent Authority. The Special Leave

Petition filed against the order of this Court dated 18.07.1990 before

the Supreme Court (SLP No.12031/1990) has also been dismissed on

05.11.1990. Respondent no.1 has stated that plots no. 3 and 8 were

put to auction only once prior to 20.06.1991 and plot no. 9 was put to

auction for the first time on 20.06.1991. It is admitted that no reserve

price was announced on 20.06.1991. It is further stated that the

highest bid could have been rejected and the same has been

stipulated in terms and conditions of auction i.e. clause 2(iv) to (vi) and

the petitioner is presumed to have given the bid on these terms and

conditions. It is further contended that as the bid was not accepted by

the Competent Authority, no contract between the parties had come

into existence. It is contended that writ petition is devoid of merits and

same be dismissed.

4. Counsel for the petitioner has contended that the DDA could not

have rejected the bid of the petitioner as the bid amount offered by

him was the highest amount and no reserve price had been fixed by

the DDA. It is also argued that the rejection in any event was arbitrary

as there was no reason for the same and no reason has been disclosed

in the counter-affidavit. Learned counsel has relied upon Aman

Hospitality Private Limited v. Delhi Development Authority: 135 (2006)

Delhi Law Times 214 (DB).

5. The counsel for the respondent DDA has relied upon the decision

of a Division Bench of this Court in the case of Mamta Taneja v. DDA,

W.P.(C) No.2457/1990, decided on 18.03.1991, and Amrit Lal Gupta v.

DDA, W.P. (C) No.404/1985 decided on 16.05.1997 and contended

that it was open to the Vice Chairman, DDA, to accept or not accept

the highest bid and no enforceable contract came into existence

between the parties.

6. We have recently decided a similar case vide judgment dated

08.01.2010 in W.P.(C) No.7529/2009 entitled Ira Infra Engineering

Limited v. Delhi Development Authority Limited wherein it is held as

under:-

"Applying the above principles, it is obvious that the petitioner cannot claim any enforceable right to be awarded the contract merely because it happens to be the lowest bidder. Normally, the lowest bidder or the highest bidder, as the case may be, ought to be awarded the contract. But this is not an absolute rule and the governmental authority can deviate from this and award the contract to someone other than the lowest or highest bidder, as the case may be. But, there must be good and valid reasons for this departure. The government body or authority may decide not to award the contract to the lowest bidder/highest bidder or to anyone else and may decide to scrap the tender and/or call for fresh tenders. However, once again, there must be good reasons for doing so. In the present case, the petitioner‟s lowest bid has been rejected and the tender has been recalled. The DDA has acted well within its power having done provided there exist reasons, which are clearly discernible from the record,

justifying the DDA‟s decision to reject the petitioner‟s bid and to call for fresh bids. It is not necessary that the reasons must be communicated to the petitioner at the outset, but it is sufficient if the reasons exist. It is also clear that if the reasons are palpable and are not so outrageous in the „Wednesbury‟ sense, there would be no scope for judicial interference. "

7. In the present case, we had called for the relevant file. The file

had not been produced by the DDA, however, an affidavit dated

15.07.2009 has been filed by the Director (Commercial Land), DDA,

wherein it is stated that all the possible efforts have been made to

trace the record of this case but the same could not be traced. Along

with the affidavit, the steps taken to trace the file have been narrated

in annexure A-1. In response to the affidavit of DDA, the petitioners

have filed a response-affidavit stating therein that vide order dated

07.01.1997 and on other dates, i.e., on 24.02.1997 and 20.05.1997,

this court had directed for keeping the relevant record ready for

perusal despite that they have not produced the same, as such,

adverse inference be drawn against the DDA. We have considered the

steps taken by the DDA in tracing the record. Considering the same,

we are satisfied that ample steps were taken by the DDA in tracing the

record of the concerned file. In the facts and circumstances of the

case, an adverse inference cannot be drawn against the DDA.

8. From the material on record it is seen that on the same date, a

neighbouring plot bearing no.2 was also put for auction. It appears

that the highest bid was made by one Dolphin International Private

Limited and in that case also the bid was rejected by the DDA on

similar grounds. A writ petition filed against the said rejection being

W.P.(C) 2640/1991 was dismissed by a Division Bench of this Court on

05.11.1992. The said order is as follows:-

"By this writ petition, the petitioner seeks a mandamus that the second respondent/Delhi Development Authority to grant him allotment-cum- demand letter for plot No.2, in Sector-B, Pocket-7, Vasant Kunj, New Delhi.

It is stated that the petitioner gave a bid for this plot in an auction on 20th June, 1991 and he being the highest, deposited 25% of the bid amount. The bid was for Rs.46,00,000/-. By letter dated 16th July, 1991, he was however informed that his bid had not been accepted by the Vice Chairman, Delhi Development Authority, the Competent Authority. When the matter came before us for admission, we recorded that no reasons were forthcoming as to why Bid was rejected and, we, therefore, issued show cause notice. Meanwhile, we also stated the further auction of the plot in question.

In answer to show cause notice, an affidavit has been filed, which gives reasons as to why the confirming Authority did not confirm the bid in question. With respect to that it is stated that the bids received at the auction were neither upto the expectation nor reflected the actual market trend. It is stated that when the auction of the plot in question was announced earlier in May, 1991, the reserve price was over Rs.75,00,000/- but the bid which was received in the auction on 20th June, 1991, from the petitioner was only for Rs.46,00,000/-. It was stated that the bid was very low in the absence of any competitive bidding the plot was going for much less price. Then it was stated that when the auction was held on 5th September, 1991 in respect of the some other plots in the same area, the bids were ranging between Rs.65,00,000/- to Rs.72,00,000/-. The fact that the reserve price was not announced at the time of the auction of the plot in question on 20th June, 1991 was also taken into consideration by the Competent Authority in coming to the conclusion that bid did not reflect the real market price. It is not, therefore, that these reasons are not bonafide, though it is contended before us that there has not been proper application of mind while not confirming the bid in question. We have perused the relevant notings of the Delhi Development Authority. We find that there has been application of mind and there are reasons for rejecting the bid in question. We, therefore, find no merit. The petition is dismissed in limine."

The Special Leave Petition filed against the judgment dated

05.11.1992 was dismissed by the Supreme Court on 15.03.1993. It is

also stated by the counsel for DDA that the bid in the said case was

higher than the bid of the plots in issue.

Perusal of record shows that during the pendency of this petition,

the petitioner also moved Central Government under Section 41(3) of

Delhi Development Act, 1957. The Central Government had issued

directions to the DDA to look into the grievances of the petitioner.

Thereafter, Vice Chairman, DDA passed orders dated 02.09.1993 and

27.09.1995 wherein various contentions of the petitioner were

considered. It was held that the contentions of the petitioner had no

merits. In the said order, it was stated that this court by virtue of the

order dated 04.08.1992 was pleased to permit DDA to auction the plot

subject to the decision as and when given. One stand of the petitioner

before the Central Government was that the DDA had neither

confirmed nor rejected the bids finally and in the order dated

02.09.1993 passed by the Vice Chairman DDA it is stated that the

same is not borne out from the records. There was approval of the

Vice Chairman in the file at portion mark-A of the noting of the relevant

file and the said portion clearly states "all the bids need to be rejected"

as such the Vice Chairman had officially rejected all the bids as

proposed by the Commissioner Lands and the order of Vice Chairman

was dated 09.07.1991 and, thereafter, decision was communicated to

all concerned. The said order clearly says that the Vice Chairman DDA

had never confirmed the bids. The said order also mentions that

confirming the bid of the petitioner in respect of the plots in question

would be an act of financial impropriety and would result in a heavy

loss to DDA. It is further stated that the rejection of the bid by the Vice

Chairman cannot be wronged in any way. On an application of the

petitioner under Section 41(3) of Delhi Development Act, 1997 an

order dated 03.08.1995 was passed whereby the matter was

remanded to the DDA in respect of aforesaid plots. The Vice Chairman,

DDA, vide order dated 27.09.1995 has rejected the application made

by the petitioner. The relevant portion of said order is as under:-

"It will be appropriate to mention it here that the said plots under reference bearing Nos. 3,8 and 9 in LSC, Vasant Kunj, Sector-B, Pkt-7 were put to auction on 30.12.1994 and fetched the highest bids for plot No.3, 8 and 9 for Rs.1,40,01,000/-, Rs.1,95,01,000/- and Rs.2,01,00,000/- respectively (total bid amount Rs.5.36 crores) out of which the bid amounting to Rs.1,40,01,000/- for plot No.2 was rejected and the remaining bids of Rs.1,95,01,000/- and Rs.2,01,00,000/- in respect of plot No.8 & 9 have been approved by the Vice Chairman, DDA, subject to disposal of CWP No.2875/91 by the Hon‟ble High Court of Delhi. This clearly reflects that in comparison, the bid of Rs.1.40 crores is manifold higher than Rs.31.00 lacs bid by Sachdevas and even the said bid of Rs.1.40 crore was not approved as it was felt to be incompetitive and not reflecting the market trend. The earnest money deposited by the highest bidders in respect of plot No.8 & 9 (Rs.1.00 crore) on 30.12.94 is with the DDA and the allotment-cum-demand letters will be sent to these bidders after getting the confirmation of the Hon‟ble High Court."

In view of above, it cannot be said that the decision of DDA was

arbitrary. The writ petition is accordingly dismissed.

The respondent DDA does not dispute its obligation to return the

amount which was paid to it at the time of submission of the bid.

Perusal of record shows that the respondent DDA had made efforts to

refund the said amount on various accounts but the petitioner avoided

to take it. This amount be paid to the petitioner within four weeks from

the date of this judgment.

No order as to costs.

Veena Birbal, J

Badar Durrez Ahmed, J October 26, 2010 srb