Judgment :- 1. The petitioner above named has filed the writ petition with the following prayer: To issue a writ of certiorarified mandamus calling for the records relating to the proceedings of the 1st respondent in Letter No.B5/2306/92 dated 16.3.1992 and quash the same and direct the respondents to confirm the auction sale of Plot PC-2 measuring 518 sq.metres in Mogappair West Project for the bid amount of Rs.6,01,000. 2. The 2nd respondent, which is constituted under Sec.9-A of the Tamil Nadu Town and Country Planning Act, 1971, is a body corporate entrusted with the functions and powers enumerated under Chapter II-A of the said Act. In terms of the said statutory provisions, the 2nd respondent had undertaken various urban development projects with World Bank assistance in and around Madras. The 2nd respondent had also constituted the Sites and Services Committee/3rd respondent with respect to allotment, sale and disposal of the developed sites or plots in the Urban Development Projects undertaken by it. Respodnents 2 and 3, for the purpose of implementation of the project, utilise the services of the 1st respondent as its agency. The 1st respondent had been entrusted with the execution of Mogappiar west Project by respondents 2 and 3. 3. The 1st respondent, in terms of the conditions and stipulations prescribed by respondents 2 and 3, notified auction sale of nine prime commercial plots in S & S Scheme, Mogappair West Project in leading Tamil and English dailies under ‘sealed offer-cum-open-auction’. In terms thereof, scaled tenders have to be submitted in the prescribed form on or before 3.00 p.m., on 4.3.1992 and to be opened on 4.3.1992 at 3.00 p.m. in the presence of tenderers. In terms of the said notification, the petitioner submitted tender in the prescribed application Form No.0757 for Plot No.PC-2 measuring 518 sq.mts. The notified upset price for the plot is Rs.5,27,000, while enclosing pay order for Rs.5,30,000 the petitioner quoted a price of Rs.5,30,000 in the sealed tender. Apart from the petitioner, one more tender had been received by the 1st respondent quoting a price of Rs.6,00,000. Both the tenders were found to be in order at the time of opening by the 1st respondent on 4.3.1992. 4. Apart from the petitioner, one more tender had been received by the 1st respondent quoting a price of Rs.6,00,000. Both the tenders were found to be in order at the time of opening by the 1st respondent on 4.3.1992. 4. On 4.3.1992 around 3.30 p.m. once again, auction was conducted by the 1st respondent in which the petitioner and the other tenderer took part/ but the other tenderer did not opt to bid over and above the bid of the petitioner. The petitioner being the successful bidder, was ready and willing to remit 25% of the bid amount within 15 days from the date of receipt of allotment order. However, to her surprise, the 1st respondent had sent a communication in his Letter No.B.5/2306/92 dated 16.3.1992 intimating the petitioner that the offer for the allotment of plot PC-2 is not acceptable and that the petitioner can apply for refund of the deposit in the enclosed form. 5. The petitioner made enquiries on receipt of the said communication from the 1st respondent and came to know that the highest bid of the petitioner has not been placed before the 3rd respondent for consideration in terms of the auction notification. Without the 3rd respondent refusing the highest bid, the 1st respondent on his own accord has sent a communication. The action of the 1st respondent is prima facie illegal arbitrary, excess of jurisdiction and violative of the auction notification. The petitioner also learnt on enquiry with the office of respondents 2 and 3, that the 3rd respondent had not met during the month of March, 1992 or closely following the sealed offer-cum-open auction conducted on 4.3.1992. Considering the highest bid offered by the petitioner in the sealed offer-cum-open auction, neither the 3rd respondent had occasion to consider the petitioner’s offer not the 3rd respondent had rejected her offer as per the auction notification. The petitioner submits that the 1st respondent without following the stipulations contained in the auction notification, had, on his own, rejected the offer and without reference to respondents 2 and 3. The order of rejection proceeds as if the offer of the petitioner is much low when compared to other offers received with respect to prime commercial plots in Mogappiar West Project. The order of rejection proceeds as if the offer of the petitioner is much low when compared to other offers received with respect to prime commercial plots in Mogappiar West Project. The petitioner approached the 1st respondent once again for reconsideration and the 1st respondent was not willing to entertain even a letter in this behalf nor was he inclined to place the matter before respondents 2 and 3. The petitioner has, therefore, filed the present writ petition for the relief mentioned supra. 6. The 1st respondent filed a counter-affidavit denying the allegations contained in the affidavit of the petitioner. According to him, the applications for sealed offer-cum-open auction was called for the allotment of prime commercial plots3/PC-2, 3/PC-3, 3/PC-4, 3/PC-8 and 3/PC-9 at Mogappiar West Scheme (S & S, M.M.D.A. Scheme). There were two scaled offers for plot 3 /PC-2 viz., one by the petitioner and the other by one Vijaya Pesticides. The tender was opened at 3.05 p.m. on 4.3.1992. The petitioner made the bid upto Rs.6,01,000 only. The same was not accepted since the price quoted was too low when compared to the bids for the other plots in the same area on the same date. In condition No.9 of the advertisement it is clearly stated that the 3rd respondent reserves the right to reject any offer without assigning any reason therefor. As the price offered by the peti-tioner was too low, the same was not accepted and she was asked to apply for there fund of the earnest money deposit. This matter was also discussed during the service and sites committee meeting on 18.3.1992 and the committee has also given its concurrence. The question of reconsidering the non-acceptance by the 3rd respondent does not also arise. 7. Respondents 2 and 3 have also filed a separate counter-affidavit. It is stated that totally seven plots had been auctioned. The highest bids in the auction ranged from Rs.13.7 lakhs to Rs.16.15 lakhs for five plots whereas in the case of the petitioner’s plot, the highest offer was only Rs.6.01 lakhs. When compared to the rates of the other plots, the offer quoted by the petitioner is very low whereas the plot is similar to the others and is even more suitably located. After opening the sealed tender of the petitioner, it was found that comparatively the petitioner’s offer is very low. When compared to the rates of the other plots, the offer quoted by the petitioner is very low whereas the plot is similar to the others and is even more suitably located. After opening the sealed tender of the petitioner, it was found that comparatively the petitioner’s offer is very low. The subject matter of further process of allotment was discussed in Sites and Services Committee meeting and certain guidelines are now issued for disposal of the plot through sealed offer by fixing the minimum price as Rs.15,00,000 per plot. The 1st respondent has, therefore, fixed the upset price of the plot as Rs.15,00,000. 8. The Sites and Services Scheme is developed under the World Bank Loan assistance. The objectives of that scheme are mainly to provide shelter to the poor sections at affordable price. The plots allotted to the poor are subsidised and the losses on those plots are mitigated through cross subsidy allotments i.e., the high income plots, commercial and other marketable lands are allotted at higher rates to compensate the loss on low income group plots. The loan obtained from the World Bank has to be repaid in a prescribed period. To repay the loan, maximum efforts and various steps arc taken. When there is a loss of revenue to the Government, the petitioner shall not compel the respondents to allot the plot for lower than the market price. So, the Sites and Services Committee has taken the decision not to accept the offer of the petitioner as it is comparatively very low in the scheme. So, the 1st respondent, after getting concurrence from the 2nd respondent, has rejected the offer of the petitioner. Hence, the action of the respondents as statutory authority and instrumentality of the Government, is fair and reasonable. 9. Now, I proceed to consider the only two contentions raised by Mr.E.Padmanabhan, learned counsel for the petitioner. According to him, in terms of clause 9 of the Auction Notification and clause 3 of the Terms and Conditions of Sale issued by the Tamil Nadu Housing Board, the bids should be considered only by the 3rd respondent, who alone is invested with the power to reject the highest bid. In other words, it is the submission of Mr.E.Padmanabhan, that the 1st respondent, on his own accord, has rejected the petitioner’s highest bid and that the same was not placed before the 3rd respondent before rejection. In other words, it is the submission of Mr.E.Padmanabhan, that the 1st respondent, on his own accord, has rejected the petitioner’s highest bid and that the same was not placed before the 3rd respondent before rejection. Elaborating his argument, the learned counsel would submit that the 1st respondent had acted in excess of his jurisdiction in rejecting the petitioner’s bid and the same was violative of the Auction Notification as well as the terms and conditions of sale. 10. The other contention raised on behalf of the petitioner is, that the petitioner’s bid being the highest, the allotment should have been made in favour of the petitioner and it is not open to the respondents to reject her bid. In any event, the learned counsel would submit, that the petitioner should have been invited for negotiation if her tender was inadequate. The learned counsel relied on the decision of a Division Bench of this Court reported in M/s.Chokkani International Ltd. v. The Board of Trustees of Port Trust of Madras, 1987 Writ L.R. 529 and the decision of the Apex Court reported in Food Corporation of India v. Kamadhenu Cattle Feed Industries, A.I.R. 1993 S.C. 1601: J.T. (1992)6 S.C. 259. 11. Mr.R.Krishnamurthi, learned Senior Counsel appearing for the 1st respondent would submit that though the bid of the petitioner was rejected by the 1st respondent, she would raise a faint defence that the 3rd respondent had not considered the matter, which is not correct. According to the learned Senior Counsel, the 3rd respondent considered the matter in its meeting held on 18.3.1992 and given their concurrence to the rejection of the offer of the petitioner. It is also stated that subsequently the sites and services committee decided to conduct re-auction. According to the learned Senior Counsel, the Housing Board would have incurred a financial loss of Rs.10 lakhs if it has accepted the offer of the petitioner and for this purpose, he invited my attention to the highest bid made in respect of the very adjoining prime commercial plots. A look at the highest bid made in respect of those plots discloses that those bids were in the region of Rs.16 lakhs and odd. 12. A look at the highest bid made in respect of those plots discloses that those bids were in the region of Rs.16 lakhs and odd. 12. While meeting the second contention, the learned Senior Counsel would submit that the purpose of inviting tenders is to procure the highest price and the same would be in public interest and that inadequacy of price would be a reasonable ground even to reject the highest tender. In support of the above proposition, my attention was drawn to some of the passages in the decision reported in Food Corporation of India v. Kamadhenu Cattle Feed Industries, A.I.R. 1993 S.C. 1601: J.T. (1992)6 S.C. 259, on which reliance was placed by the learned counsel for the petitioner as well. The further contention of Mr.R.Krishnamurthi is, that under the terms and conditions of sale, the highest bids could be rejected without assigning any reason therefor. 13. Mr. A.Chellakumar appearing for respondents 2 and 3, adopted the arguments of the learned Senior Counsel for the 1st respondent. 1.4. I have given my anxious consideration to the rival submissions made and 1 am of the view that the first contention raised by the petitioner merits acceptance. In order to, appreciate the first contention, it is necessary to extract Clause 9 of the Public Auction Notification and Clause 3 of the Terms and Conditions of Sale issued by the 1st respondent. Clause 9 of the Auction Notification runs thus: Clause 3 of the Terms and conditions of sale runs thus: “Who will be selected: The allotment will be made only to the highest bidder. In case two or more applicants offer the same price, the allotment will be decided through drawal of lots, the Sites and Service Committee reserves the rights to reject any or all the applications without assigning any reasons therefor.” 15. It cannot be gainsaid that the petitioner gave a sealed offer for Plot No.3/PC-2 and the same was opened on 4.3.1992 and the petitioner’s offer was for Rs.5,30,000. Apart from the petitioner, one Vijaya Pesticides also gave a sealed offer. On the very same day, an open auction was conducted in which the petitioner increased her offer upto Rs.6,01,000. According to the respondents, the rate quoted by the petitioner, even though highest, was inadequate and the Housing Board would have incurred a financial loss of Rs.10 lakhs if the offer of the petitioner was accepted. On the very same day, an open auction was conducted in which the petitioner increased her offer upto Rs.6,01,000. According to the respondents, the rate quoted by the petitioner, even though highest, was inadequate and the Housing Board would have incurred a financial loss of Rs.10 lakhs if the offer of the petitioner was accepted. Therefore, the offer of the petitioner was rejected by the 1st respondent and by the impugned communication dated 16.3.1992, the petitioner was informed about the rejection of her offer and she was requested to apply for refund of the Earnest Money Deposit. 16. A reading of Clause 9 of the Public Auction Notification and Clause 3 of the Terms and Conditions of Sale makes it manifestly clear that the offer made by the bidder has to be considered by the 3rd respondent and it is that committee which is vested with powers to reject any or all the applications without assigning any reason. Therefore, it is incumbent on the part of the respondents to establish that the offer of the petitioner was considered by the 3rd respondent and the said committee decided to reject the offer of the petitioner. It cannot be gainsaid in the instant case, that the petitioner’s offer was not placed before the 3rd respondent and no decision was taken by the said committee to reject the highest bid of the petitioner. It is the 1st respondent who has not accepted the offer made by the petitioner and the decision of the 1st respondent was communicated under the impugned letter dated 16.3.199.2. No doubt, the 3rd respondent appears to have discussed this matter in its meeting held on 18.3.1992 and it has also concurred with the views of the 1st respondent. But, that would not amount to compliance with the specific provisions of the Public Auction Notification and the Terms and Conditions of sale. On this short ground, the impugned letter is liable to be set aside. 17. The decision of the Supreme Court reported in Food Corporation of India v. Kamadhenu Cattle Feed lndustries, A.I.R. 1993 S.C. 1601:J.T. (1992)6 S.C. 259, would not lend support to the contention of the petitioner that she should be invited for negotiations even assuming that the highest tender made by her is inadequate. 17. The decision of the Supreme Court reported in Food Corporation of India v. Kamadhenu Cattle Feed lndustries, A.I.R. 1993 S.C. 1601:J.T. (1992)6 S.C. 259, would not lend support to the contention of the petitioner that she should be invited for negotiations even assuming that the highest tender made by her is inadequate. As per the ratio in the above decision, inadequacy of the price can be a valid ground for rejecting the highest bid, and also a good ground for negotiating with tenderers giving them equal opportunity to revise their bid with a view to obtain the highest available price. In my opinion, on the facts and circumstances of the present case, the petitioner cannot insist that she should have been invited for negotiation for revising her bid. As already noticed, in the instant case, there were only two bidders, out of whom the petitioner alone increased her bid amount in the open auction whereas the other bidder stopped with the submission of sealed offer. Therefore, there is no point in inviting the petitioner alone for negotiation to revise her offer. Further, this assumes more importance because of the specific-case of the respondents that in respect of adjacent plots viz., PC-4, PC-8, PC-9, PC-10, PC-11, PC-12 and PC-13, the highest bid was more than Rs.14 lakhs and odd despite the fact that some of the above plots were of a lesser extent viz., 472 sq.metres, 493 sq.metres and 501 sq.metres whereas the plot in question was of an extent of 518 sq.metres. Hence, I reject the contention of Mr.E.Padmanabhan that the petitioner should have been invited for negotiation for revising her bid. 18. I am not able to lend support to the contention of Mr.E.Padmanabhan that the petitioner’s bid being the highest, the respondents are obliged to accept the same, as the decision of the Apex Court referred to above clearly points out that the highest tenderer can claim no right to have his tender accepted and that inadequacy of the price offered in the highest tender would be a valid ground for rejecting the same. It has to be pointed out that in the present case, the reason given for rejecting the only highest tender of the petitioner is on the ground of inadequacy. It has to be pointed out that in the present case, the reason given for rejecting the only highest tender of the petitioner is on the ground of inadequacy. The decision reported in M/s.Chokkani International Ltd. v. The Board of Trustees of Port Trust of Madras, 1987 Writ L.R. 529, is an authority for the proposition that the reservation of the power to reject all offers without assigning any reason in the tender cannot be exercised arbitrarily or unreasonably. I have already come to the conclusion that the petitioner’s bid has been rejected on a valid ground viz., in adequacy of price, and the said reason cannot be termed either as arbitrary or uncasonable. I am constrained to set aside the impugned order on the sole ground that the petitioner’s offer is rejected by an authoirty who is not empowered to consider the offers and reject the same. There would not have been any grievance and the 3rd respondent considered the tenders of the petitioner and another and taken a decision thereon. 19. For the foregoing reasons, I allow the writ petition in part and quash the impugned proceedings of the 1st respondent dated 16.3.1992 in Letter No.B5/2306/92. However, it will be open to the respondents to act in accordance with the terms and conditions of Auction Notification and the Terms and Conditions of Sale, consider the tender of the petitioner and pass suitable orders thereon and also proceed further in accordance with law. However, there will be no order as to costs.