KAMALJIT CHOPRA v. DELHI DEVELOPMENT AUTHORITY — 1999 DIGILAW 44 (DEL)

K. Ramamoorthy,j. ( 1 ) THE writ petitioners in both the writ petitions participated in the auction on the 28th of July, 1987. Auction notice was issued on the 29th of June, 1987. The petitioners were the highest bidders and they had deposited 20% of the amount on the same date. On the 11th of August, 1987, the Deputy Director (CE) issued the proceedings with reference to the auction on various shops held in several places. The same is as under: "the above details given in the note of programming Assistant dated 7. 8. 87 of the auctions held on various dates be perused. These details reveal that the shops auctioned by the DDA have gone much above the reserve price except for shops in Defence Head Quarters where the Bid was only Rs. 100. 00 above the reserve price. This had happened due to the fact that complete address/ situation of the market was not given in the advertisement released to the Press. . . . . . . . . . . . . . . . . . . . . (illegible) in the bidders also at the time of auction programme. It is, there fore,, recommended that the bids for the units at SI. Nos. 1 to 4 at page 1-N may also not be accepted. VC, may kindly be requested to confirm the bids in respect of units mentioned only at SI. Nos. 5 to 13,15 to 58 and 60 to 61. The bids at SI. Nos. 1 to 4,14 and 59 may kindly be cancelled/rejected and earnest money for bid at SI. No. 59 may be forfeited. " ( 2 ). Ultimately the offer given by the petitioner was not accepted and the reauction was to be held on the 17th of November, 1987. The petitioners had obtained interim injunction and, therefore, the auction could not be held. ( 3 ). The learned Counsel for the petitioners, Mr. D. R. Mahajan, submitted that admittedly the petitioner were the highest bidders for the shops in question and without assigning any reasons, the DDA had proceeded to have the re-auction which was not in accordance with law. ( 4 ). The learned Counsel for respondent, DDA, Ms. ( 3 ). The learned Counsel for the petitioners, Mr. D. R. Mahajan, submitted that admittedly the petitioner were the highest bidders for the shops in question and without assigning any reasons, the DDA had proceeded to have the re-auction which was not in accordance with law. ( 4 ). The learned Counsel for respondent, DDA, Ms. Aruna Tikku, submitted that the conditions of auction are very clear and the acceptance of the offer by any person is subject to confirmation by the Vice-Chairman of the DDA and if the Vice- Chairman, DDA, had not accepted the bid, then the persons who bidded at the auction would not have any right with reference to the subject matter of auction. Clause 2 (iii) of the terms and conditions of auction reads as under: "the officer conducting the auction shall normally accept subject to the confirmation by the Vice-Chairman the highest bid offered at the fall of hammer at the auction and the person whose bid has been accepted shall pay as earnest money, a sum equivalent to 25% of his bid either in the case or by bank draft in favour of the Delhi Development Authority If the earnest money is not paid, the auction already held in respect of that shop shall be cancelled by the officer conducting the auction. " ( 5 ). The fact that there has been no confirmation by the Vice-Chairman, DDA, is not disputed by the petitioners. ( 6 ). The learned Counsel for the petitioners, Mr. D. R. Mahajan, relied upon the judgment of this Court in "subhash Arora v. Delhi Development Authority" (C. W. P. 822/83 decided on 30. 9. 83 ). It is a judgment by Justice S. B. Wad. According to Mr. D. R. Mahajan, the learned Counsel for the petitioners, the facts of that case are similar to the facts of this case. The learned Judge allowed the writ petition, wherein the DDA was directed to accept the bid of the petitioner therein. Therefore, according to the learned Counsel for the petitioners, Mr. D. R. Mahajan, the ratio of the decision would apply to the facts of this case. ( 7 ). The learned Counsel for the petitioners also relied upon the judgment of this Court in "radhey Sham Aggarwal v. DDA", 1994 Rajdhani Law Reporter 242. Therefore, according to the learned Counsel for the petitioners, Mr. D. R. Mahajan, the ratio of the decision would apply to the facts of this case. ( 7 ). The learned Counsel for the petitioners also relied upon the judgment of this Court in "radhey Sham Aggarwal v. DDA", 1994 Rajdhani Law Reporter 242. The learned Judge noticed the facts in the following terms: "it is not disputed that the auction was held on 21. 9. 83 and the petitioner was the highest bidder. He undoubtedly complied with the terms of the auction and paid 25% of the bid amount on the same day. Thereafter the petitioner kept on requesting the first respondent for issuance of the letter of demand and delivery of possession, but without any tangible result. Learned Counsel for the respondent, however, states that a reply was given to the petitioner and in this regard he has invited my attention to paras 4 and 5 of counter-affidavit. These paras refer to a letter of the second respondent dated 3. 4. 84. I have perused a copy of this letter but it nowhere replies to the remonstrations and requests of the petitioner. It simply says that the petitioner should meet the Deputy Director on any working day from 3. 00 p. m. to 4. 00 p. m. within one week of the issuance of the letter. The petitioner was not told for a long time that the DDA was willing to give possession of that shop provided the petitioner was ready to pay the reserve price. He was not even notified what the reserve price was. The silence of the authority in such matters is deafening and cannot be tolerated. To say the least, I feel that this should not be the attitude of an authority created for public service. The first respondent is a public authority which has been created for public good and itcannot take an attitude which betrays lack of concern for those it is meant to serve. The letters and the reminders sent by the petitioner should have been replied by the DDA and in case it required petitioner to pay the reserve price it should have indicated that in its reply. The bidders are not at the beck and call of the DDA, and they cannot be asked to run after its officers. " ( 8 ). The bidders are not at the beck and call of the DDA, and they cannot be asked to run after its officers. " ( 8 ). The learned Judge allowed the writ petition and took the view that the DDA cannot be allowed to say that the Vice-Chairman had not accepted the bid. The learned Judge observed: "in the counter-affidavit for the first time a stand has been taken that the petitioner failed to give his consent for paying the reserve price and thereforw his bid was not confirmed by the Vice-Chairman while it is correct that under Rule 29 of the Rules and 2 (iii) of terms and conditions of the auction acceptance of the bid by the officer conducting the auction needs to be further confirmed by the Vice-Chairman in order to constitute a binding contract between the parties but this power has to be exercised in a reasonable manner. The authority should not lose sight of the fact that the petitioner had deposited a sum of Rs. 27,000. 00 and its willingness to refund the said sum did not come earlier than 11. 1. 85 when the counter-affidavit was filed. In other words, the respondents indicated their willingness to refund the earnest money after 15 months of the deposit of the same. Thus money of the petitioner remained tied up with the respondents for a long time. After the fall of hammer the Vice- Chairman must act with promptitude in confirming or disapproving the bid as otherwise delay and inaction on his part would be unfair and will amount to abuse of power which cannot be countenanced in law. The principles of justice and fair play would require the V. C. to decide within a reasonable time. If within reasonable time the Vice-Chairman does not act, it will be presumed that he has confirmed the bid. In the instant case the auction was conducted on 28. 9. 83 and until 11. 4. 84 there was no communication to the petitioner that his bid had not been approved or confirmed by the V. C. or that the petitioner was required to pay the reserve price. The indication to pay the reserve price was given to the petitioner only on 12. 4. 84 when he met the second respondent. 83 and until 11. 4. 84 there was no communication to the petitioner that his bid had not been approved or confirmed by the V. C. or that the petitioner was required to pay the reserve price. The indication to pay the reserve price was given to the petitioner only on 12. 4. 84 when he met the second respondent. However, there was no written communication to the petitioner in this regard and it was for the first time that the respondents in their counter affidavit claimed, in black and while, that the petitioner bid was not confirmed by the V. C. as the same was below the reserve price of Rs. 1,85,500. 00. It is also pertinent to point out that the reserve price was neither notified at the time of auction nor it was announced at that time that the highest bid below reserve price, which may be subsequently fixed by the first respondent, would not be confirmed. As would appear from the reply of the respondents to C. M. 2042 /87, the admitted position is that the Finance Department of DDA was not able to fix the reserve price by the date of the auction and as such same could not be declared at the time. Considering that the auction was held on 28. 9. 83 and the petitioner was not told till 11. 4. 84 that his bid had not been confirmed as he had not paid the reserve price, I am of the opinion that subsequently, after the period of 7 months the DDA cannot be allowed to say that the bid of the petitioner was not confirmed by the V. C. especially when the bid amount remained deposited with the respondent and was not refunded to the petitioner within reasonable time. Petition allowed. " ( 9 ). According to the learned Counsel for the petitioners, Mr. D. R. Mahajan, the ratio of this case also would squarely apply to the case of the petitioners in the instant case. ( 10 ). The learned Counsel for the respondent, DDA, REFERRED TO to the judgment of the Division Bench of this Court in "kusum Lata Khujanchi and Others v. Delhi Development Authority 6- Others", 61 (1996) DLT 37 (DB ). ( 10 ). The learned Counsel for the respondent, DDA, REFERRED TO to the judgment of the Division Bench of this Court in "kusum Lata Khujanchi and Others v. Delhi Development Authority 6- Others", 61 (1996) DLT 37 (DB ). The facts of that case, as noticed by the Division Bench, are: "it is not disputed that plot No. 43 in Residential Scheme Pocket-V, Sector-C, Basant Kunj was advertised by the DDA for sale by public auction. The petitioners made a bid of Rs. 42. 40 lacs which was accepted as the highest bid by the officer conducting the sale. The petitioners deposited an amount of Rs. 10,60,000. 00 being the amount of earnest money. The bid was put up before the Vice-Chairman, DDA, for acceptance. The Vice-Chairman has not accepted the bid. The auction was conducted under the Delhi Development Authority (Disposal of Developed Nuzul Land) Rules, 1981 (hereinafter rules, for short ). According to the petitioners the bid made by them was above the reserved price of Rs. 31. 89 lacs and being the highest, ought to have been accepted by the Vice-Chairman. The rejection is arbitrary and hence liable to be struck down. According to the respondent-DDA the bid made by the petitioners was much lower than the other bids fetched for similar size plots in the same area on the same day and thus did not reflect the true market value of the property. All the relevant facts were put up before the Vice-Chairman who in his statutory discretion directed not only the bid made by the petitioners but three other bids also to be rejected which in his opinion were on the lower side. The correctness and reasonableness of the decision taken bythe Vice-Chairman is fortified by the subsequent event as the same plot was reauctioned on 26. 6. 95, only three months later than the date of the bid made by the petitioners, and fetched a bid of Rs. 60 lacs. Moreover no concluded contract had come into existence between the parties. The Rules and the terms and conditions of the auction vest in the Vice-Chairman the ultimate power to accept the bid and the petitioners having participated in the auction under the terms and conditions so notified, cannot raise a grievance if the Vice-Chairman has in his discretion refused to accept the bid. " ( 11 ). The Rules and the terms and conditions of the auction vest in the Vice-Chairman the ultimate power to accept the bid and the petitioners having participated in the auction under the terms and conditions so notified, cannot raise a grievance if the Vice-Chairman has in his discretion refused to accept the bid. " ( 11 ). Rule 29 of the Rules of the Bid would read as under : "29. Sale of the highest bidder-The officer conducting the auction shall normally accept, subject to confirmation by the Vice-Chairman, the highest bid offered at the fall of the hammer at the auction and the person whose bid had been accepted shall pay as earnest money, a sum equivalent to 25% of his bid and he shall pay the balance amount to the Authority within fifteen days of acceptance of the bid or within such period as the Vice-Chairman may specify in the public notice under Rule 27 or in another public notice. " ( 12 ). The Division Bench REFERRED TO to the judgment of the Supreme Court in "state of Orissa and Others v. Hannarayan Jaiswal and Others", AIR 1972 SC 1816 , wherein the Supreme Court held: "the Government is the guardian of the finances of the State. It is expected to protect the financial interest of the State. Hence quite naturally, the Legislature has empowered the Government to see that there is no leakage in its revenue. It is for the Government to decide whether the price offered in an auction sale is adequate. While accepting or rejecting a bid, it is merely performing an executive function. The correctness of its conclusion is not open to judicial review. We fail to see how the plea of contravention of Article 19 (1) (g) or Article 14 can arise in these cases. The Government s power to sell the exclusive privilege set out in Section 22 was not denied. It was also not disputed that these privileges could be sold by public auction. Public auctions are held to get the best possible price. Once these aspects are recognised, there appears to be no basis for contending that the owner of the privileges in question who had offered to sell them cannot decline to accept the highest bid if he thinks that the price offered is inadequate. " ( 13 ). Public auctions are held to get the best possible price. Once these aspects are recognised, there appears to be no basis for contending that the owner of the privileges in question who had offered to sell them cannot decline to accept the highest bid if he thinks that the price offered is inadequate. " ( 13 ). The Division Bench had also REFERRED TO to the judgment of another Division Bench of this Court in "smt. Mamta Taneja v. DDA and Others" (C. W. P. 2457/90 decided on 18th March, 1991), wherein the Division Bench held : "it is not in dispute that the conditions of allotment provide that the officer conducting the auction shall normally accept the bids but such acceptance is subject to confirmation by the Competent Authority. The terms further provide that the person whose bid is accepted at the fall of the hammer by the officer conducting the auction shall be required to pay the earnest money which is deposited in the bank account of the respondents. The deposit in the bank account does not mean that there is concluded contract because this tentative acceptance is subject to the confirmation of the Competent Authority which, it is admitted, is the Vice-Chairman. The terms of the allotment further provide that if the bid is not accepted then the earnest money is to be refunded to the bidder without any interest. This clearly shows that if the bid is not accepted then even though the earnest money may have been realised and deposited by the respondent the same has to be refunded. The auction of deposit of earnest money and the subsequent return of the same clearly show that the principles of promissory estoppel would have no application. " ( 14 ). The Division Bench had also REFERRED TO to the judgment of another Division Bench of this Court who had took the same view in "arun Kanotra and Others v. DDA and Another" (C. W. P. 1556/92 decided on 20. 3. 95 ). That Division Bench held: "if the amount of the bidder was considered not acceptable and on the lower side by the Competent Authority, interference in writ jurisdiction could not be made"the aforesaid view-point was confirmed by the Vice-Chairman of respondent- authority and the bids including the one in question were cancelled. 3. 95 ). That Division Bench held: "if the amount of the bidder was considered not acceptable and on the lower side by the Competent Authority, interference in writ jurisdiction could not be made"the aforesaid view-point was confirmed by the Vice-Chairman of respondent- authority and the bids including the one in question were cancelled. According to the terms and conditions of auction the bids could be provisionally accepted by the Presiding Officer conducting the auction subject to the confirmation by the Competent Authority. The cancellation of the bid in question on the aforesaid approach of the respondent-Authority cannot be termed as malafide or arbitrary. ( 15 ). The Division Bench had also REFERRED TO to its decision in "dr. Hotchandani and Others v. DDA" (C. W. P. 250/95 decided on 17. 10. 95 ). In that case, the Division Bench held: "law is well settled that while exercising our writ jurisdiction, we are not to sit as an Appellate Authority over the decision of an authority like the Vice Chairman of DDA. We have only to examine whether the decision taken by the Vice-Chairman, DDA, is a reasonable decision, a decision which a reasonable man guided by relevant considerations could have taken in the circumstances of the case. It is pertinent to note that there is no allegation of mala fides made against the Vice-Chairman, DDA. If the Vice-Chairman was of the opinion, having taken into consideration the relevant data placed before him, that the bids which were below a certain figure, did not reflect the market trend of prices of land and the DDA was likely to gain on the plots being offered for sale by public auction once again, there is nothing wrong in it. The Vice-Chairman has acted in the interest of the DDA. He has tried to save the DDA from the huge financial loss which was likely to result to the DDA in the event of all the bids being accepted. He was, therefore, justified in rejecting the bids relating to five plots including the one made by the petitioners. The terms and conditions of the auction also gave such an authority to the Vice-Chairman. It is true that reasons must exist for rejecting a bid including the highest bid. The reasons do exist though they were not conveyed to the petitioners. It is enough if the reasons exist throught not communicated. The terms and conditions of the auction also gave such an authority to the Vice-Chairman. It is true that reasons must exist for rejecting a bid including the highest bid. The reasons do exist though they were not conveyed to the petitioners. It is enough if the reasons exist throught not communicated. " ( 16 ). In paragraph 11 of the judgment, the division Bench held that as per the terms and conditions it is clear that there is a discretion conferred on the Vice-Chairman, DDA to accept or not to accept the bid in spite of the same having been accepted as the highest bid by the officer conducting the sale. The division Bench posited: "we are of the opinion that the discretionary decision taken by the Vice-Chairman is not open to the question. " ( 17 ) , In view of the decision of the Division Bench of this Court in Kusum Lata Khajanchi s case, relied by the learned counsel for the DDA, the judgements of the learned Single Judges in "subhash Arora v. Delhi Development Authority" (C. W. P. 822/83 decided on 30. 9. 83) and in "radhey Sham Aggrawal v. DDA", 1994 Rajdhani Law Reporter 242, cannot help the petitioners. Accordingly, both the writ petitions are dismissed. ( 18 ). There shall be no order as to costs.