S.L.Sachdev & Anr vs Uoi & Anr
2010 Latest Caselaw 4936 Del

*              HIGH COURT OF DELHI AT NEW DELHI

%                         Judgment delivered on: 26th October, 2010


+                      W.P.(C) 5143/1994

S.L.Sachdev & anr                                  ..... Petitioners

                       -versus-

UOI & anr                                         ..... Respondents

Advocates who appeared in this case:

For the Petitioners         :Mr. Maninder Singh, Sr. Adv with
                            Mr. T.Singhdev

For the Respondent          :Ms. Sangeeta Chandra, Adv 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 the present petition, petitioners have prayed for

issuance of writ of mandamus directing respondent no.2-DDA to

accept the highest bid of the petitioner and to issue a Demand-

cum-Allotment letter in respect of plot no.2, LSC, Sector B, Pocket

7, Vasant Kunj, New Delhi. Petitioners have also prayed that the

records pertaining to the auction of the aforesaid plot be also

called and the rejection letter dated 11th June, 1993 be quashed by

issuing appropriate directions.

2. Briefly stated the facts relevant for filing the present petition

are as under:-

Petitioner no.1 is the sole proprietor of a recognized export

house namely M/s Allied India International . Petitioner no.2 is the

wife of petitioner no.2. In the month of May/June, 1993,

respondent no.2 i.e DDA advertised for holding an auction for the

sale of various plots in different localities of Delhi on 9.6.1993. The

petitioners participated in the auction process relating to plot no.2,

LSC, Sector B, Pocket 7, Vasant Kunj, New Delhi measuring 135

sq.m. Before the auction, officers of respondent no.2 announced

the reserved price of the said plot being Rs.44.30 lacs. Various

persons participated in the auction and gave different bids for the

said plot. It is alleged that petitioners gave a bid of Rs.45.5 lacs

which was the highest bid. As per the terms and conditions of the

auction, the petitioners deposited 25% of the bid amount i.e Rs.12

lakhs and signed the bid form which was accepted by the official

conducting the bid. On 10th June, 1993, the petitioners approached

the Deputy Director (CL), DDA and requested him to issue the

demand letter for the remaining amount. However, the said

demand letter was not issued to the petitioners. Thereafter on

various dates, the petitioners approached respondent no.2/DDA for

collecting the demand letter and also submitted the request in

writing for issuance of allotment letter. However, no response was

given. In the last week of June, 1993, petitioners received a

letter dated 11th June, 1993 whereby petitioners were intimated

that their bid for the aforesaid plot had been rejected by the Vice

Chairman, DDA. The petitioners immediately approached

respondent no.2-DDA for knowing the reasons of rejection.

However, no reason was given.

On 3rd July, 1993, petitioners approached the Ministry of

Urban Development, being the controlling authority of respondent

no.2/DDA as per provisions of section 41(3) of the DDA Act, 1957

stating their grievances and also pointed out that the bid of the

petitioners was much above the pre determined commercial rate

fixed by the Government of India for Vasant Kunj area for the

applicable FAR. Petitioners requested that the order of rejection of

the highest bid be cancelled and that the respondent no.2-DDA be

directed to accept the highest bid of the petitioners and to

maintain status quo regarding the plot in question. On 12th July,

1993, petitioners received a response from the Government of

India, Ministry of Urban Development wherein the petitioners were

intimated that the record from respondent no.2/DDA had been

summoned and their application would be processed in accordance

with law. It is alleged that despite the fact that matter was under

consideration of the Government of India, respondent no.2/DDA

again advertised the auction of the plot in question for 30th

December, 1994. By way of present petition, the petitioners have

prayed that since there was no reason to reject the highest bid of

the petitioners, the action of respondent no.2-DDA in rejecting the

bid of the petitioners is liable to be quashed.

3. Respondent no.2-DDA has opposed the writ by filing a

counter affidavit. The stand of respondent no.2/DDA is that the bid

of petitioners was merely an offer and the same was not accepted

by the Vice Chairman, DDA. It is alleged that Rules 29 and 30

of the Nazul Rules, 1981 clearly stipulate that the bid is

subject to confirmation by the Vice Chairman, DDA and any bid

including the highest bid can be rejected by the said Authority

without assigning any reason and it is not incumbent to

communicate the reasons for rejection of the highest bid. It is

further stated that the reserved price of plot in question was

inadvertently announced as Rs.44.35 lacs instead of Rs.94.35 lacs

on account of some bonafide clerical mistake and the same plot

had been put to auction earlier on 23.3.1993 at a reserve price of

Rs.94.35 lacs. It is stated that the bid was not confirmed as the

reserved price erroneously announced at the time of auction was

much below the actual reserved price and accordingly the

Competent Authority by exercising the powers under Rule 29 and

30 of the Nazul Rules, 1981 rejected the bid of the petitioners.

The further stand of DDA is that even under the terms and

conditions of auction, the Vice Chairman is not under an obligation

to accept even the highest bid and the same can be rejected by

him without assigning any reasons and the said provision has been

made in order to protect government revenue in public interest. It

is further stated that the plot in question was a nursing home plot

and the same cannot be compared with other commercial

activities. It is further stated that a cheque no.214398 dated

9.7.1993 of Rs.12 lacs towards the refund of the earnest money

was sent to the petitioners vide letter dated 13.7.1993. The

petitioners avoided to receive the delivery of said letter.

Thereupon, respondent no.2/DDA also issued a public notice in the

leading local newspapers calling upon the petitioners to collect the

cheque but they did not collect the same. It is further stated that

the rejection of the bid was in the best interest of Government

because the bid price was much less than the actual reserve price.

It is prayed that petitioners are not entitled for any relief and the

writ petition may be dismissed with costs.

4. Respondent no.1-UOI have also filed counter affidavit wherein

they have supported the stand of respondent no.2/DDA.

5. By the orders of this court dated 19th January, 2009, the

petitioners were permitted to file an additional affidavit wherein

they have contended that there is a clear nexus between the

builders‟ lobby and respondent no.2 /DDA in holding of auctions for

the commercial plots and even the highest bid of a bonafide

bidder would get rejected without assigning any reasons, if the

highest bidder in an auction of a commercial plot does not belong

to builder lobby.

6. The first contention of the petitioner is that respondent

no.2/DDA could not have rejected the bid of the petitioners without

assigning any reason for the same. Reliance was placed on M/s

Star Enterprises Etc. Vs. The City & Industrial Corporation of

Maharashtra JT 199 (2) (SC) 401. On merits, it is contended that in

any event, respondent no.2/DDA could not have rejected the bid of

the petitioners since the bid was above the reserve price.

7. On the other hand, counsel for the respondent no.2/DDA

has submitted that as per the terms and conditions of auction, the

bid has to be confirmed by the Competent Authority. As in the

present case, as there was a clerical mistake, the Competent

Authority did not confirm the acceptance of bid. Respondent

no.2/DDA has placed reliance on Rules 29 & 30 of the DDA

(Disposal of Developed Nazul Land) Rules, 1981.

8. This Bench has 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. "

The case of respondent no.2/DDA in its counter affidavit is

that there was a bonafide clerical mistake, as a result, the reserve

price of plot in question fixed at Rs.94.35 lacs was wrongly

announced as Rs.44.35 lacs. This mistake is further evident from

the fact that this very plot had been put to auction earlier on

23.3.1993 at a reserve price of Rs.94.35 lacs. It is the case of

respondent no.2/DDA that the Competent Authority taking into

account the facts and circumstances of the case, rightly rejected

the bid of petitioner. It is further stated in the counter affidavit

that on 11th June, 1993, the respondent sent letter of rejection of

highest bid of the petitioners by Regd. A.D as well as through

special messenger and also informed that the earnest money was

being refunded to the petitioners separately. Further the stand of

respondent no.2/DDA is that the bid given by the petitioners

was merely an offer and the same was not accepted by the

Competent Authority i.e the Vice Chairman of DDA, as such no

enforceable contract had come into existence.

We have called for original records relating to the auction.

The records substantiate the case of respondent no.2/DDA.

Perusal of the file shows that the reserved price for the plot in

issue had been earlier approved by the Member (Finance) of

respondent no.2/DDA as Rs.94,34,880 arrived at by taking

Rs.17472/- per sq m for 100 FAR (Floor Area Ratio) for Vasant Kunj

area. Since the total permissible FAR of the plot in issue was 540

sq. m, the reserved price was calculated as Rs.17472 x 540 =

Rs.94,34,880/-. It would also be seen that this reserved price was

used when this plot was earlier put for auction on 23rd March, 1993

though no bid was received at that time. The notings in the file

further shows that the same price was intended to be used when

the plot in issue was again put for auction on 9.6.1993. We do

not find any conscious decision by respondent no.2/DDA which

reduced the reserved price of plot to Rs.44,94,880. It is evident

that the mistake occurred as the figure `94‟ in a hand written

note was read as 4 while declaring the reserve price of the plot in

issue.

The terms and conditions of the allotment by auction also

show that bid was subject to acceptance by Competent Authority.

In view of the above, we are unable to accept the contention of the

petitioner that the action of respondent no.2/DDA in not accepting

the bid of the petitioner was arbitrary. We are also unable to

accept the contention of petitioners that once respondent

no.2/DDA announced the reserve price, may be mistakenly, it

could not have rejected the same as their bid was above the

reserve price. A mistake on the part of respondent

no.2/DDA could not have crystallized any right in favour of the

petitioners.

After the arguments were concluded, the petitioners filed an

affidavit in which it is contended that the auction of respondent

no.2/DDA is motivated and has been taken to help, what the

petitioners term as the builders lobby. The allegations are totally

bereft of particulars. No cognizance can be taken of these

allegations. Even otherwise no such ground was taken in the writ

petition.

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

was arbitrary. The writ petition is accordingly dismissed.

10. The respondent no.2/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 the record shows that the respondent no.2/DDA

had made efforts to refund the said amount on various dates but

the petitioner avoided to take it. This amount be paid to the

petitioners within four weeks from the date of this judgment.

No order as to costs.

Veena Birbal, J

Badar Durrez Ahmed, J October 26, 2010 ssb