Judgment K.Kannan, J. 1. I. The subject of challenge The writ petitions challenge the decision of the Chandigarh Municipal Corporation to set aside the auction of Shop-cum-Office sites Nos. 176-177 and 178-179 in Sector 9-C, Chandigarh that was held on 28.08.2002. The grounds of challenge to the decision essentially are that when admittedly there was no vitiating circumstance attendant on the public sale that was conducted after due publicity and in the manner provided by the rules, there was no scope for setting aside the sale and offering to pay back the amount paid by the successful bidders at the auction. To them the contract became complete when highest bids had been accepted on the spot and when the earnest money had been paid up by the petitioners. A concluded contract could not be rescinded unilaterally by the Chandigarh Administration. II. Circumstances leading to the impugned auction 2. The public auctions impugned now had been actually earned through for the second time and the result of the first auction literally carried a shadow on the second auction and spurred a rethink on the whole issue by the Chandigarh Municipal Corporation. The whole narration must therefore begin wim what transpired in the first auction, the reasons for not going through it as proffered by the Corporation, whether at all there was such a first auction as denied by the petitioners and whether there was justification for setting aside the second auction although there was no fraud attendant at the auction for the only reason that the second auction fetched a price lesser than what was alleged to have been offered at the first auction. III. Background facts 3. The Municipal Corporation, Chandigarh had notified various properties for sale to be held on 23.01.2002 on free-hold basis, that included, inter alia, three numbers of 3- bay SCOs and five numbers of 2-bay SCOs in Sector 9-C. The auction was reported to have been held in the premises of the Municipal Corporation in Sector 17. Two SCOs No. 172-173 and Nos.180-182 were sold for Rs.2.50 crores and 2.55 crores respectively against the reserve price of Rs.1.72 crores. They were placed before the General House for information on 28.01.2002. Properties which had not been sold along with some other properties were also put up for auction on a subsequent date on 04.06.2002. They included SCO Nos.176-177 and 178-179. They were placed before the General House for information on 28.01.2002. Properties which had not been sold along with some other properties were also put up for auction on a subsequent date on 04.06.2002. They included SCO Nos.176-177 and 178-179. It appears that there were no bidders for the auction proposed to be held on 04.06.2002 and therefore, they were again notified for auction to be held on 28.08.2002. This was done after a publication was effected on 18.08.2002 and 25.08.2002. The reserve prices that were notified were lesser than the price quoted at the previous auction, in view of the fact that there had been no bids at all for the auction in June, 2002. The decision for reduction of the reserve price had been placed before the Finance & Contract Committee (for brevity "F&CC). The agenda put before the meeting records the fact that among other shops, the SCO sites in 176- 177 and 178-179 could not be auctioned despite prior notification on the various dates on 02.01.1998, 18.03.1998, 28.10.1998, 04.08.2000, 19.03.2001 ,25.09.2001, 23.01.2002 and 04.06.2002. IV. The perceived reasons for poor response for the shops in dispute 4. Six SCOs that had not been disposed of which included the sites in disputes now in the two writ petitions were perceived as not properly located and they were, therefore, not attractive. The reserve price which had been mentioned against the properties did not attract the prospective buyers and therefore, the agenda read that the reserve price should be reduced suitably so that the dire necessity of funds that the Corporation was beset with, would be made good. A decision had been taken for disposal of the commercial sites for reducing the upset price by 20%. The details of the supplementary agenda and the resolution passed are reproduced as under:- "Suppl. Agenda Item No. 7 Disposal of Commercial sites.- The additional Commissioner put up the agenda item. Thereafter, detailed discussion was held on the issue of fixing of reserve price of the sites to be sold through open auction on 28.08.02. The following decision was taken unanimously by the Finance & Contract Committee. Item No.l: There will be 20% reduction in the existing reserve price already fixed by the F&CC in respect of 6 nos. Thereafter, detailed discussion was held on the issue of fixing of reserve price of the sites to be sold through open auction on 28.08.02. The following decision was taken unanimously by the Finance & Contract Committee. Item No.l: There will be 20% reduction in the existing reserve price already fixed by the F&CC in respect of 6 nos. SCO sites bearing No. 124-125-126, 129-130-131, 156-157, 158-159, 176-177 and 178-179." The proceedings of the F&CC were reported in the newspaper on 28.02.2002 and the Municipal Corporation had also issued a press release regarding the reduction of reserve price by 20% in respect of SCOs in Sector 9-C and 5% in respect of SCOs in Manimajra which was published in the newspaper on 27.08.2002. V. Objection to the highest bids from two quarters 5. The auction was held on 28.08.2002 and SCO Nos.176-177 received the highest bid of Rs. 1.3 5 crores and SCO Nos.178-179 received the highest bid of Rs. 1.35 crores against the respective reserve price of Rs. 1.29 and 1.33 crores. In the normal course of events, the highest prices which were above the reserve price ought to have been accepted and proceedings culminated in completion of sale deeds in the names of the highest bidders. However, the problem arose when the Municipal Councillor, who was reportedly present at the time of auction took objections to concluding sales for a price allegedly lesser than what had been offered 7 months earlier for Rs.1.85 crores to shop No. 178-179. Coming in tandem with the complaint was yet another communication from Sh. Mangat Ram Verma claiming to be Managing Director of M/s Phulkari Estates (P) Limited to the Commissioner on 09.09.2002 reporting that they were the highest bidders for the SCO site No. 178-179 and the details of the complaint as have been by the Municipal Councillor were replicated. Sh. Mangat Ram claimed that he was a NRI and left India after auction on 23.01.2002 and coming to know from his Company Director in India that the property was ultimately sold for a lesser price, he had wanted the Commissioner to look into the matter. 6. Sh. Mangat Ram claimed that he was a NRI and left India after auction on 23.01.2002 and coming to know from his Company Director in India that the property was ultimately sold for a lesser price, he had wanted the Commissioner to look into the matter. 6. The F&CC decided to call the complainants or their authorized representatives to ascertain whether the complainant was a genuine person and whether they had solid proof of the truth of the allegations made in the respective complaints, the minutes of F&CC meeting held on 18.09.2002 recorded as follows:- "Thereafter, the Finance & Contract Committee unanimously decided to adjourn the meeting to 20.09.2002 at 11.00 AM to take decision on the abovesaid two issues, for which no written notice will be issued. The Committee further decided that in the meantime, undertaking in writing may be obtained from the complainant for offering a premium of Rs.1.40 crore for SCO site No.178-179, Sector 9-C, Chandigarh and to deposit a sum of Rs.14 lacs towards 10% of the said amount as security and further that he will be bound to purchase the said site at the said amount in case bid goes down. The Committee also decided that in the meantime, legal opinion from the Law Officer may be obtained in writing and placed before its next meeting to be held on 20.092002." VI. The report of the Enquiry officer and his suggestions for re-auction 7. By a subsequent meeting held on 20.09.2002, it appears that the matter was referred to the Administrator, U.T., Chandigarh for getting the matter enquired by him. The Administrator had ordered the enquiry for sale of SCO sites No.176-177 and 178- 179 in Sector 9-C, Chandigarh. The matter was placed before the Chairman of the Chandigarh Housing Board to enquire into the details of the auction and how the property had been sold for a lesser price at a subsequent auction as regards one of the shops from what was allegedly offered at an auction held seven months earlier. The Officer appointed by the Administrator, Sh. G.C.Marwah, who incidentally was the Chairman of the Housing Board, to enquire into the details of the auction had examined several persons who claimed themselves to be present at the auction and a report had been submitted by him on 17.12.2002. The Officer appointed by the Administrator, Sh. G.C.Marwah, who incidentally was the Chairman of the Housing Board, to enquire into the details of the auction had examined several persons who claimed themselves to be present at the auction and a report had been submitted by him on 17.12.2002. In that report the Enquiry Officer suggested to the Municipal Corporation to reject the bids in respect of the sites No.176-177 and 178-179 and refund the amounts which they had deposited along with interest @10% per annum from the date of deposit to till the date of payment. It was also suggested that the two SCO sites should be re-auctioned. He had also suggested that when a fresh auction schedule was notified, all the complainants, in particular, M/s Phulkari Estate Private Limited would be informed separately the date of auction and suggested that an amount of Rs.1.50 crores should be kept as a minimum amount from where the bid would start. VII. Contentions on behalf of the petitioners 8. Sh. M.L. Sarin, Senior Advocate appearing in C.W.P. No. 14798 of 2003 would contend that there had been no complaints at any point of time for the sale of the property bearing No. 176-177 and for complaint against SCO No. 178-179, the auction of the property in which he was the successful bidder could not have been recalled. It was also his contention that while the auctions held on the same day elsewhere at Manimajra were not set aside, the Municipal Corporation had selectively picked on only the properties in SCO sites No. 176-177 and 178-179 and therefore, they were arbitrary and discriminatory in character. To him, the mere fall in price of the property from the alleged previous bids ought not to have been the basis for setting aside the sales through the auction. If at all, the reduction in the reserve prices had been made after sufficient deliberation and even the properties at Manimajra had also been sold by lowering the up-set price and the auctions held in that place had not been recalled. Referring to the report of the Chairman of the Chandigarh Housing Board, the learned Senior Counsel would contend that even in the report, it was specifically elicited that there was no fraud at the auction or vitiating circumstances. Referring to the report of the Chairman of the Chandigarh Housing Board, the learned Senior Counsel would contend that even in the report, it was specifically elicited that there was no fraud at the auction or vitiating circumstances. Even the decision not to accept the highest bid of Rs.1.85 crores had not been a mala fide decision but it was on a perception that the property would have fetched a price more than Rs.2 crores. In the meanwhile, there was a change in East Punjab Urban Rent Restriction Act, 1949 as applicable to Chandigarh exempting nonresidential sites fetching rent of more than Rs.1500/- from the applicability of statutory protection afforded under the Act. There was consequently a sudden down fall in the rentals by the dampening effect in the market relating to prices of nonresidential buildings. Matters looked up differently only after the Honble Supreme Court held the change in law brought the notification of the Administrator to be bad through its decision in Vasu Dev Singh and others v. Union of India and others, (2006- 3)114 P.L.R. 802. The notification had been issued on 17.11.2002. The date is significant, for, according to the learned counsel for the petitioner the public got the wind of what was coming in future that led to the dampening of the market prices. The price that the property was sold at the time was best price that was possible and on their own showing, the auctions had been held several times but the property had no takers and even the suggestion that there was a bid for Rs. 1.85 crores were not borne through any records. The report itself noticed the fact that there were no bid lists for the alleged auction said to have been held on 28.01.2002 and there was no proof that M/s Phulkari Estate Private Limited had offered to purchase for Rs.1.85 crores. The learned Senior Counsel argued that a mere self deprecatory observation that the officers who had conducted the auction were lax in not retaining the auction bids held on 23.01.2002 to make possible documentary proof available for the actual bids on that day would not be sufficient to annul the auction sales. The learned Senior Counsel argued that a mere self deprecatory observation that the officers who had conducted the auction were lax in not retaining the auction bids held on 23.01.2002 to make possible documentary proof available for the actual bids on that day would not be sufficient to annul the auction sales. The decision was made only on some oral evidence of persons that there had been a highest offer of Rs.1.85 crores and that could not have been accepted as true, especially when the transactions relating to public authorities could not have been done otherwise than through records. That the market was reigning low was an admitted fact even by the so-called offer of M/s Phulkari Estate Private Limited, who were not prepared to pay even the price which they had alleged to have offered earlier, but they were only prepared to only pay Rs.1.40 crores on that day. The decision to cancel the auction sale had been taken without notice to the petitioners and hence the whole enquiry was against the principles of natural justice. 9. Sh. Ashok Aggarwal, Senior Advocate arguing for the petitioner in C.W.P. No.20022 of 2003 pointed out that the power to cancel the auction sale itself did not reside with the Municipal Corporation and it was only with the Deputy Commissioner. Referring to Rule 6 of Chandigarh Sale of Sites and Building Rules of 1960, the argument was that what was necessary to conclude the contract for the offer made through public auction is the payment of 25% of the bid and the power of cancellation was limited under the said Rule only to a failure of the purchaser to pay the balance of amount within the stipulated period. Rule 10 provided for payment of the balance of 75% amount in three equated installments with interest @ 6% and even the procedure in case of default of such payment of installments, was to call upon the person to pay the amount within a month together with penalty and if only the amount was still not paid, the liability would be only for recovery of the balance as arrears of land revenue or an action under Section 8A of the Capital of Punjab Development Regulation Act for cancellation of the auction. The cancellation, which had been made by the Municipal Corporation was, therefore, not justified at all and was illegal. The cancellation, which had been made by the Municipal Corporation was, therefore, not justified at all and was illegal. He also argued on the defects in the report of the Chairman of the Chandigarh Housing Board by pointing out to the fact that Sh. Gupta, Municipal Councillor was himself not a bidder and he had no right to treat himself as an aggrieved person to make a complaint. In the absence of the bid list for the auction alleged to have been held on 28.01.2002, Sh. Marwah ought not to have accepted the oral evidence to conclude that there had been a highest offer for Rs.1.85 crores on an earlier date. VIII. The justification for setting aside the sales 10. The controversy that may have to be resolved in these two writ petitions is whether the alleged inadequacy of price is itself a ground for setting aside the sale when there is no proof of fraud or vitiating circumstance attendant on the auction. Since the rights of parties are regulated through the Capital of Punjab (Development and Regulation Act) and the rules relating to Chandigarh (Sale of Sites and Buildings) Rules, 1960, could the Administration decide to act without reference to the Rules or cancel the auction on grounds which are not specified under the Rules? It has to be noticed that the terms and conditions of the auction themselves did not provide for rejection of a highest bidder without assigning any reasons by the authority, who conducts the auction. Learned counsel appearing for the respondents would submit that the actions of authorities have to conform wholly to the Rules, for every sale of the property is purported to be done with the sanction of the Central Government and the Central Government acts through the Administrator. The form of deed of conveyance prescribed in Form B read with Rule 8 itself suggests that without such sanction by the Administrator, a sale cannot be complete and it was necessarily to be understood as a specific stipulation under the terms and conditions of offer for sale. The relevant portion of Form B is reproduced here: "XXX XXX XXX XXX XXX XXX XXX XXX XXX XXX XXX XXX XXX XXX XXX And whereas the Central Government has sanctioned the sale of the site to the transferee in consideration of the sum of Rs.........(Rupees.................) for the purpose of building................ The relevant portion of Form B is reproduced here: "XXX XXX XXX XXX XXX XXX XXX XXX XXX XXX XXX XXX XXX XXX XXX And whereas the Central Government has sanctioned the sale of the site to the transferee in consideration of the sum of Rs.........(Rupees.................) for the purpose of building................ (state here house, shop, factory, temple, sarai, school etc. as the case may be) and using the same exclusively for.............(state here residence, trade, industry, workshop institution etc. as the case may be); XXX XXX XXX XXX XXX XXX XXX XXX XXX XXX XXX XXX XXX According to him, the overall control of all auctions obtained through the relevant statutory provisions and the rules and they shall be read as forming a part of the terms and conditions. IX. Consideration of legal precedents cited by counsel (a) Decision to cancel without show cause notice is bad 11. Learned Senior Counsel, Sh. M.L. Sarin refers to a Full Bench decision in State of Haryana and others v. Vinod Kumar and others," 1986 P.L.J. 161 that held that an action by an Administrative Authority without affording an opportunity of being heard before rendering a transaction as void or voidable is bad in law. This submission is in the context of the decision taken by the Municipal Corporation in setting aside the sales without affording an opportunity to the petitioners for which the said decision was taken. The decision of the Full Bench was rendered under the Punjab Security of Land Tenures Act and the relevant rules and the issue was with reference to the Collectors decision of declaring a particular land as surplus. Such decision without an opportunity of being heard is very different from a situation where a bidder at the auction knows that the sale could be done only in the manner contemplated by the Rules and if the Rules require a sanction for the sale before a sale deed is executed by the Administrator, the decision of the Administrator itself could not be subjected to any principles of hearing before such decision. The decision in Chet Singh v. State of Punjab and others, 1977 P.L.J. 228 was cited to bring home the same point of a decision made without a show cause notice was non est and it should be ignored at any stage. The decision in Chet Singh v. State of Punjab and others, 1977 P.L.J. 228 was cited to bring home the same point of a decision made without a show cause notice was non est and it should be ignored at any stage. The decision was rendered in the context of the East Punjab Holdings (Consolidation and Prevention of Fragmentation) Act with particular reference to Section 42, which contemplated notice to interested parties and an opportunity of being heard and if such an order was passed without going through the statutory mandate, it was non est. The court further held that the fact that the petition had been dismissed for default was irrelevant to consider the merits of the case when the previous order passed under Section 42 itself had not complied with the statutory mandate. In Baku Singh Bains and others v. Union of India and others, (1996)6 S.C.C. 565, the Honble Supreme Court decided on the validity of order of resumption issued under Capital of Punjab (Development and Regulation) Act, 1952 when a challenge was made to the said decision. The Honble Supreme Court upheld the validity of the Section only by making reference to a pre-decisional opportunity to show cause and to adduce evidence for passing a reasoned order and a provision that provided for an appeal as providing sufficient protection for a person not to be deprived of the property. This decision was cited by the learned counsel to urge that a decision to set aside or cancel the sale could not have been taken without putting the parties on notice of the proposal to set aside the auction. (b) A transaction involving allotment of public property cannot be cancelled only because there is a controversy; need for a holistic approach 12. Onkar Lal Bajaj and others v. Union of India and another,5 (2003)2 S.C.C. 673 spells out the manner of exercise of a discretionary power vested in an Administrative Authority and the scope of judicial review for a decision, which is alleged to be arbitrary. The decision was in the context of distribution of State largesse for allotment of retail outlets, dealership/distributorships of petroleum products and the Court held that allotments made due to alleged political patronage for some of the allotments ought not to have been a ground for setting aside of the allotments wholesale. The decision was in the context of distribution of State largesse for allotment of retail outlets, dealership/distributorships of petroleum products and the Court held that allotments made due to alleged political patronage for some of the allotments ought not to have been a ground for setting aside of the allotments wholesale. The learned Senior Counsel refers to paragraph 26 relating to cancellation of an agreement and the extent of power with the Authority and the scope of judicial review in such like matters:- ".......It is evident from the facts that the cancellation of the agreements is not for . violation of any term thereof. The cancellation is on account of a policy decision taken by the Government as noticed hereinbefore. The cancellation is not on account of any uniform reason applicable to all the selectors or whose who have been issued LOIs- holders or any discrepancy having been found in what was required to be fulfilled by them. We are not concerned with any such individual case. Therefore, the cases of LOI-holders are no different in comparison to those cases where agreements have been entered into. Similar is the position of those who are on published merit panels and were awaiting issue of LOIs by the oil companies when the impugned decision was taken. For the present controversy, they are all in the same position except those who may come in the category of alleged tainted class, which aspect we would deal with later." Referring to the cardinal principles of governance, the Honble Supreme Court held that:- "The role model for governance and decision taken thereof should manifest equity, fair play and justice. The cardinal principle of governance in a civilized society based on rule of law not only has to base on transparency but must create an impression that the decision-making was motivated on the consideration of probity. The Government has to rise above the nexus Of vested interests and nepotism and eschew window- dressing. The act of governance has to withstand the test of judiciousness and impartiality and avoid arbitrary or capricious actions. The Government has to rise above the nexus Of vested interests and nepotism and eschew window- dressing. The act of governance has to withstand the test of judiciousness and impartiality and avoid arbitrary or capricious actions. Therefore, the principle of governance has to be tested on the touchstone of justice, equity and fair play and has taken into consideration other matters, though on the face of it, the decision may look legitimate but as a matter of fact, the reasons are not based on values but to achieve popular accolade, that decision cannot be allowed to operate." The power to effect en masse cancellation could be legally permissible but how the power should be exercised was again set through the judgment in the following words:- "The mere reason that a "controversy" has been raised by itself cannot have a devastating effect on a large number of people. In governance, controversies are bound to arise. In a given situation, depending upon facts and figures, it may be legally permissible to resort to such enmasse cancellation where the executive finds that prima facie a large number of such selections were tainted and segregation of good and bad would be difficult and a time consuming affair. That is, however, not the case. Here the controversy raised was in respect of 5 to 10% as earlier indicated. In such a situation, en masse cancellation would be unjustified and arbitrary. It seems that the impugned order was a result of panic reaction of the Government. No facts and figures were gone into. Without application of mind to any of the relevant considerations, a decision was taken to cancel all allotments. The impugned action is clearly against fair play in action. It cannot be held to be reasonable. It is nothing but arbitrary." (c) Possibility of obtaining a higher price could not be a ground for setting aside a sale 13. It was stoutly urged that a mere possibility that the sale could fetch a higher price, if a fresh auction is to be held again or after the conclusion of the auction conducted after following the due procedure, a higher offer is made by some person could not be a ground for setting aside the auction sale. It was stoutly urged that a mere possibility that the sale could fetch a higher price, if a fresh auction is to be held again or after the conclusion of the auction conducted after following the due procedure, a higher offer is made by some person could not be a ground for setting aside the auction sale. In Kartar Singh v. Patiala Improvement Trust, Patiala, (1994-3)108 P.L.R. 542 the issue was with reference to a sale held by the Improvement Trust while the officer conducting the auction accepted the highest bid and got l/4th price deposited. The Trust, however, did not approve the bid only because if a fresh auction were to be held, the property was expected to fetch a little more price. The decision does not refer to any statutory provision of the power of the Trust to resile from the offer or not approving the sale on the possibility of a higher price. In Subhash Chand v. State of Haryana and others (2007-4)148 P.L.R 247, a Full Bench of this Honble Court held that non-acceptance of the highest bid after public auction would be possible only if the competent authority gives reasons for such a course. It was held that the highest bidder at the auction has an indefeasible right to knock at the doors of the appropriate forum including a constitutional Court and the question of legality of the decision of the competent authority on grounds like being contrary to statutes or the rules or the Constitution. The Court held that the refusal to accept the highest bid cannot foreclose the rights of the highest bidder to put the action of the administrative authority to judicial scrutiny. Referring to the power of the States to enter into contract just like any other individual, the Full Bench held that the contract shall not change its legal character merely because the other party to the contract is a State. A citizen no doubt does not possess a legal right to compel the State to enter into a contract but the State itself can neither pick and choose any person arbitrarily for entering into such agreement. This pronouncement came in the context of Displaced Persons (Compensation and Rehabilitation) Act. In para 14 & 16, the Full Bench had ruled thus:- "14. This pronouncement came in the context of Displaced Persons (Compensation and Rehabilitation) Act. In para 14 & 16, the Full Bench had ruled thus:- "14. In our view, the above quoted observations in Surja Rams case (supra) have been made in the context of locus standi of the petitioner. The highest bid, per se, unless it is accepted by the competent authority, and consequential sale certificate is issued, does not grant the highest bidder "right to property" of the type which is protected under Article 3 00-A of the Constitution of India. It, however, also does not mean that even if the highest bid is not accepted by the competent authority, either without citing any reason and/or for totally arbitrary or irrelevant reasons, the highest bidder does not even acquire a right to assail the action of the competent authority. The highest bidder who had a legitimate expectation to acquire ownership of the property, unless his bid was found to be suffering from any legal infirmity, has an indefeasible right to know at the doors of an appropriate form including a constitutional Court and to question the legality of the decision of the competent authority on grounds like it being contrary to the statute or the rules or the Constitution. In other words, the refusal to accept the highest bid cannot foreclose the right of the highest bidder to put the action of the competent authority to judicial scrutiny. We are, thus, of the considered view that observations of the Full Bench in Surja Rams case (supra), in respect of "Right to Property" are limited to confer the highest bidder the right to challenge an action of the appropriate authority in refusing to accept the highest or other bids. 15............... 16. Adverting to the questions referred for our consideration, we find that the same are not longer res integra. There can hardly be any room for quarrel with the fact that the State is free to enter into a contract just like any other individual, and the contract shall not change its legal character merely because the other party to the contract is the State. Though no citizen possesses a legal right to compel the State to enter into a contract, yet the latter can neither pick and choose any person arbitrarily for entering into such agreement nor can it discriminate between the persons similarly circumstanced. Though no citizen possesses a legal right to compel the State to enter into a contract, yet the latter can neither pick and choose any person arbitrarily for entering into such agreement nor can it discriminate between the persons similarly circumstanced. Similarly, where the breach of the contract at the hands of the State violates fundamental rights of a citizen of its refusal to enter into a contract is contrary to the statutory provisions or public duty, the judicial review of such State action, is inevitable." M/s Jagdisk Chand Radhey Shyam v. The State of Punjab and others, A.I.R. 1972 S.C. 2587 specifically dealt with the provisions of Capital of Punjab (Development and Regulation) Act and the effect of an auction sale held under Section 3. The Court held that once the auction sale was complete title in land and building did not remain with the Government even though a portion of the consideration would still remain to be paid. This was found different from the language of Section 3, which provided that unpaid portion of the consideration would remain the first charge on the property. The said decision held under Section 9 of the Act to be ultra vires in so far as it provided for a right of forfeiture of the part of the money paid and for the resumption of land. It may be noticed that the decision was with particular reference to Article 19(1X0 of the Constitution recognizing the fundamental right of property which is no longer a fundamental right now by its deletion through 44th amendment. The learned counsel for the petitioner also circulated a judgment of the Honble Supreme Court in Valji Khimji and company v. Official Liquidator of Hindustan Nitro Product (Gujarat) Limited and others, (2008)9 S.C.C. 299 that held that a sale of a property of a company in liquidation after adequate publicity and after confirmation could not be recalled merely because there was a higher offer subsequently, especially when there was no fraud or collusion in the conduct of sale itself. X. The legal premise for respondents actions 14. As against the decisions cited by the learned Senior Counsel appearing for the petitioners, the Administration supports the decision which had taken by reference to the decisions in Harpal Singh and others v. Haryana Urban Development Authority and others, 2006 (Suppl.) Haryana Rent Reporter 257. X. The legal premise for respondents actions 14. As against the decisions cited by the learned Senior Counsel appearing for the petitioners, the Administration supports the decision which had taken by reference to the decisions in Harpal Singh and others v. Haryana Urban Development Authority and others, 2006 (Suppl.) Haryana Rent Reporter 257. That decision was rendered in the context of Section 1(b) of the Haryana Urban Development Authority Act and the bidders right as protected under the Act. A Division Bench of this Honble Court had held that the highest bidder of plot in open auction does not get a right merely by depositing 10% of the amount and the Administrator would have a right to accept it or reject the offer if the amount of the auction was below expectation. It would not be correct, the Bench said to say that he cannot refuse to accept it if offer exceeds the reserve price. A public bid could also be rejected if the amount is considered inadquate and the Court held that there was no arbitrary act of the Administrator. In Nani Gopal Paul v. T. Prasad Singh and others, A.I.R. 1995 S.C. 1971, the Honble Supreme Court was deciding an issue of setting aside an auction sale of hypothecated property by applying the provisions of Order 21 Rule 89 or 90 CPC. The Court held that the Honble Court or the Appellate Authority would not remain mute spectator to obvious and manifest illegality committed in conducting Court sales even if application had not been filed within the time prescribed. This decision will have no bearing to a case where no illegality in sale is averred or alleged even in the report by the Chairman of the Authority-Housing Board. In Divya Manufacturing Co. (P) Ltd. and another v. Union Bank of India and others, 2000(6) S.C.C. 69, the Honble Supreme Court held that the inadequate offer of price for a sale by an Official Liquidator would be a ground for the Court to set aside the sale. In Surja Ram v. State of Haryana and another, (1984)86 P.L.R. 584, a Full Bench of this Court was considering the issue of an auction held under the Rules for Sale of Surplus Rural Properties and held that the Settlement Commissioner or any other officer was not bound to accept the highest bid for sufficient reasons. In Surja Ram v. State of Haryana and another, (1984)86 P.L.R. 584, a Full Bench of this Court was considering the issue of an auction held under the Rules for Sale of Surplus Rural Properties and held that the Settlement Commissioner or any other officer was not bound to accept the highest bid for sufficient reasons. Such reasons have not to be necessarily disclosed to the highest bidder, but in case of an action refusing to accept the highest bid is challenged, the Court would be competent to find out if the reasons are relevant. XI. Solution to the conflict - Public interest is the only acid test (a) A show cause notice is not necessarily an inviolable principle; It is unnecessary when the party knows that he has not obtained a vested right in the subject matter 15. There is indeed a conflict of a fundamental position whether the parties shall be given show cause notice before setting aside the public auction held on a particular date. If Section 8-A of the Capital of Punjab (Development and Regulation) Act, 1952 provides for a detailed procedure to show cause notice before a resumption was made, it is in the context of how a person, who obtains an allotment and who comes upon the property, is made to vacate the property and such a decision, which will have an immediate effect on a right to hold on to possession, could not be made without a transparent process that involves the affected party to show cause as to why the extreme action shall not be taken. The rules of natural justice themselves are not to be understood as fully complied with only in cases where a notice is sent to a party to explain as to why a benefit which has come to the person shall not be withdrawn It may all depend on the nature of transaction and when a party who obtains a benefit also knows that the right that he obtains, is merely inchoate that is susceptible to withdrawal for valid reasons, a show cause notice may be an empty formality. If there had been an outright sale of the property and the person, who conducts the auction was himself competent to conclude the contract and a contract had been concluded/confirmed, a decision to annul the contract could not be made without giving a notice to the person to explain the same and to take a decision of the basis on such objections. However, in a case where an auction is subject to a confirmation by another authority, a person that bids at the auction ought to know that by the mere fact that he has made the highest bid does not conclude the contract and if a decision is taken by yet another officer not to confirm the sale, such a decision need not be put to the party before a decision is taken. It is not the same thing as to state that a sanctioning authority may take an arbitrary decision. The validity of such a decision will still be a subject to judicial review. From the rule in Ridge v Baldwin, (1964 A.C. 40:1942)2 A11.E.R. 337, which put extracting requirements of right of hearing as paramount to Malloch v Aberdeen Corporation, (1971)2 ALL.ER.1273 the requirement of proof of prejudice before person could complain for want of personal hear- ing, the Indian law has followed the English law principles. The Managing Director, ECU v. B.Karunkar,(1993)4 S.C.C. 727 precisely gave a new direction to the law of pre-decisional hearing and looked to proof of prejudice before a person could complaint for not being given the report of enquiry officer before a decision is taken to dismiss him from service. The Supreme Court approved the following observations of Sir William Wade (Administrative Law, 9th Edn. Pp 468-471) in Aligarh Muslim University v. Mansoor Ali Khan, (2000)7 S.C.C. 539 (cf., V.G.Ramachandrans Law of Writs, 6th Edn.): "It is not possible to lay down rigid rules as to when the principles of natural justice are to apply, nor as to their scope and extent. There must also have been some real prejudice to the complainant; there is no such thing as a merely technical infringement of natural justice. There must also have been some real prejudice to the complainant; there is no such thing as a merely technical infringement of natural justice. The requirements of natural justice must depend on the facts and circumstances of the case, the nature of enquiry, the rules under which the tribunal is acting, the subject matter to be dealt with, and so forth." If, the auction had been set aside attributing any practice of fraud or collusion against any of the petitioners, they would be justified in stating that decision without putting them on notice of such decision was illegal. In this case, the auction is being set aside on existence of some supervening events that had a bearing on the unjustness of the result of the auction in which the petitioners had themselves no part. Again, it is no argument that even the objection had been only with reference to the price secured by one of the petitioners. Both the properties were proximate to each other and what was said of one property applied to another also. The loss of property is itself not the prejudice which the lav contemplates. The prejudice shall be to show how the notice would have made a difference. In my view, no such attempt was even made by the respective counsel for the petitioners. (b) Public auction at a time when the market was reigning low due to an attempted change in law and other factors 16. At that time the predominent considerations would be whether the State action is not arbitrary and non-discriminatory that could satisfy the parameters of Article 14 of the Constitution. In this case, the decision of the Municipal Council was not taken hastily on any oblique motive. It was spirited wholly by a public interest consideration of securing to itself the best price. It may be that there was no fraud attendant in the auction sale but there was really a situation where the price that it fetched although above the reserve price was still perceived to be not the best price. We have already seen that the prevailing unusual situation through an attempted change in law by a notification to exempt commercial properties above Rs.1500 rent from Rent Control legislation had a dampening effect in the market conditions. We have already seen that the prevailing unusual situation through an attempted change in law by a notification to exempt commercial properties above Rs.1500 rent from Rent Control legislation had a dampening effect in the market conditions. The poor response was also reported to be a public perception that no sale would be concluded if it was less than Rs.2 crores, as believed to have been expressed by the auction officer at the first time when the aborted auction sale took place. If the market had dampened, it could have been prudent to wait for some time for the market forces to pick up for a court could well take judicial notice that real estate in India, which is a developing economy has never floundered, except during brief patches of time. There may have been a dampening situation for a short while but in a growing economy, inflation always shows an upward trend for prices of immovable properties. The authority had a reason to sell the property for it had failed in its attempt to find buyers on several dates and it had compulsions to reduce the price. But if there was an offer within a week by yet another person for a price of Rs.1.40 crores, i.e. above what was offered in this case for the property in SCO No. 178-179, it only showed that it would have been prudent to keep back the property from sale without offering it for public when the market forces were pulling the prices down, (c) Decision to set aside auction taken after an enquiry report of a high ranking officer and his recommendations 17. The petitioners had done no mistake but if the authority who had taken a decision after putting it through a higher ranking official to conduct an enquiry, the enquiry report cannot be dumped as inconsequential if that Officer had given substantial reasons for recalling the bids and putting it through a fresh auction process. It is not denied by either party that over the period of years, the prices of the property have gone up several times and that the property offered for sale in the year 2002 had gone up in value by more than ten times. It is not denied by either party that over the period of years, the prices of the property have gone up several times and that the property offered for sale in the year 2002 had gone up in value by more than ten times. If it was merely a transaction between private individuals, a mere increase in price may not be a ground to refuse a specific enforcement, as Section 20 of Specific Relief Act states. The governing principles between a private individual and a State authority cannot be the same; a fortiorari, the remedy under the private law and public law cannot also be the same. While fairness principle must attend all State actions, the element of public interest is seldom a matter of concern in private transactions. In the latter, commercialism and profit making could be the major factors. Justice to a private individual is what goes for maximizing his own benefit and personal aggrandizement. On the other hand, in State actions, public interest it is the most predominant principle, as the litigation has stood on and comes up for consideration only eight years after the auction was held. Lord Wilberforce said in Gouriet v. Union of Post Office Workers, (1977)3 A11.E.R. 70: "The distinction between public rights and private rights is fundamental in our law. To break it is not the development of law, but destruction of one of its pillars." Justice Krishna Iyer said in Shiv Shankar Dal Mills v. State of Haryana, (1980)2 S.C.C. 437, "Article 226 grants an extraordinary remedy which is essentially discretionary, although founded on legal injury. It is perfectly open for the court, exercising this flexible power to pass such order as public interest dictates and equity projects." (d) Balancing equities between commercial interest of private bidders and public interest of a State functionary 18. I have given serious and thoughtful consideration on the whole matter with a view to balance the conflict in interests between private individuals who bid at the auction for their own commercial interests and the State functionary which is keen on securing greater resources for its coffers. In this case, the petitioners have not invested any big sums. Their deposits were in terms of a few lakhs and they have not had the benefit of possession all these years. In this case, the petitioners have not invested any big sums. Their deposits were in terms of a few lakhs and they have not had the benefit of possession all these years. The State has staked its all and bided by time for no personal benefit, save for securing what was best to improve its resources. There were certainly factors existing at that time dampening the market conditions for securing a good price, although the petitioners themselves were not responsible for the relatively poor market. If the sales were allowed to stand, the private individuals would come to enormous benefit that would benefit only them. If, on the other hand, the sales were to be set aside, I am informed at the time of arguments by the counsel for the Administration, it would make possible for realisation of over Rs.50 crores for the property on Madhya Marg, the pulsating commercial hub of Chandigarh, an up market of what the Mount Road is to Chennai, the Connaught Place is to New Delhi, the Cuffe Parade is to Mumbai or the Chowringhee Road is to Kolkatta . (e) Contract is not complete without sale and payment of full consideration after sanction 19. There is another reason why I hold that the auction sales shall be cancelled. We do not have the situation of a sale which has become complete. The sales had not been approved and sale deeds had not been executed in the manner contemplated in the Rules. The consideration for the property had not been paid in full. The petitioners had not taken possession and the property had not been put to use by the petitioners. It is not a case where the auction purchasers had to close down business by the action of the respondents. The petitioners could no more than complain of loss of hypothetical profits, if the property had been sold, if the property had been delivered possession, if the property had been put to use for the business, if profits had accrued and a host of imponderables. XII. Disposition 20. Between a windfall gain to private individuals and an opportunity to redeem the benefit for the public, I would lean in favour of the Administration, but without still hurting the individual interests. The petitioners cannot go back empty handed. The petitioners would be entitled to refund of their moneys with interest @24% per annum. XII. Disposition 20. Between a windfall gain to private individuals and an opportunity to redeem the benefit for the public, I would lean in favour of the Administration, but without still hurting the individual interests. The petitioners cannot go back empty handed. The petitioners would be entitled to refund of their moneys with interest @24% per annum. The petitioners had denied to themselves the offer of 10% interest and the refund of money shall be made within 4 weeks from the date of receipt of this order. The petitioners will now come by a benefit of additional interest @14% for all these years. It would better serve the ends of justice if the Administration is given the full right to offer the property for sale through auction afresh and secure to itself what the market could best fetch. The Administration will come by more funds at their disposal which, it is hoped, shall go for the public benefit. The impugned orders of the Municipal Corporation setting aside the auctions held in favour of the petitioners are upheld and the writ petitions are dismissed. There shall be, however, no direction as to costs.