Hitesh Punamchand Saraiya v. Registrar–Co-operative Societies
2011-03-24
H.K.RATHOD, K.A.PUJ
body2011
DigiLaw.ai
Judgment K.A. Puj, J.—Rule. Ms. Monali Bhatt, learned Assistant Government Pleader waives service of rule on behalf of Respondent Nos. 1 & 2 and Mr. Niral Mehta, Learned Advocate waives service of rule on behalf of Respondent No. 3. Considering the facts and circumstances of the case, the matter is taken up for final hearing. 2. The petitioner has filed this petition under Article 226 of the Constitution of India praying for quashing and setting aside the letter / order dated 11.02.2011 issued and/or passed by the Liquidator and Co-operative Officer (Customer) attached to the office of District Registrar, Co-operative Societies, Dahod, the Respondent No. 2 herein, received by the petitioner on 17.02.2011 accepting the offer of Respondent No. 3 herein. The petitioner has also prayed for the direction to the Respondent No. 2 to accept the offer submitted by the petitioner on 09.02.2011. 3. This Court while issuing urgent notice on 23.02.2011 made it clear that any action of the respondent in respect of the tender and contract in question shall be subject to the further orders that may be passed by this Court. 4. The brief facts giving rise to the present petition are that Panchmahals District Co-operative Oil Mill was taken in liquidation under Section 107 of the Gujarat Co-operative Societies Act. The Liquidator has been appointed who is directly under the control of the Registrar of Co-operative Societies, Gujarat State, Respondent No. 1 herein. The Liquidator has invited the tenders by publishing the public notice on 18.01.2011 for the sale of land and building of the Oil Mill under liquidation. It is mentioned in the advertisement that party submitting the tender must deposit 10% of the offer amount. The petitioner submitted his offer for the amount of Rs. 85 Lacs along with demand draft of Rs. 8.50 Lacs. When the tender was opened, the offer of Respondent No. 3 was found for an amount of Rs. 85,31,000/-. However, the earnest money deposited by the Respondent No. 3 was of Rs. 8,48,800/- only. The petitioner, therefore, pointed out to the Respondent No. 2 that the offer of the petitioner is highest considering 10% earnest money and except the petitioner, there was no higher offer. On finding that the respondents were inclined to consider the offer of Respondent No. 3 being Rs. 85,31,000/- as highest one, the petitioner immediately raised his offer to Rs. 97 Lacs.
On finding that the respondents were inclined to consider the offer of Respondent No. 3 being Rs. 85,31,000/- as highest one, the petitioner immediately raised his offer to Rs. 97 Lacs. The petitioner had also requested that within two days, the petitioner would deposit the requisite amount towards the earnest money. The petitioner has also reiterated this very fact in his subsequent letter dated 11.02.2011 and the petitioner was informed by the Respondent No. 2 that the petitioner would be conveyed the appropriate decision after consulting the District Registrar, Dahod. On apprehension that the Respondent No. 2 would not accept the highest offer of Rs. 97 Lacs made by the petitioner, the petitioner immediately approached the State Government by filing Revision Application under Section 97 of the Act and the State Government directed the Respondent No. 2 to consider the letter submitted by the petitioner dated 11.02.2011 and to act in accordance with Rules. Even if the petitioner submitted a copy of the revision application along with the order passed by the State Government to the Respondent No. 2, the petitioner was not communicated any decision in respect of the acceptance or otherwise of the offer of the petitioner. On persistent demand by the petitioner, the Respondent No. 2 had given a letter to the petitioner alleged to have been written on 11.02.2011, only on 17.02.2011 informing the petitioner that the offer of the Respondent No. 3 was accepted. 5. It is this decision of the Respondent No. 2 which is under challenge in the present petition. 6. Mr. B.S. Patel, Learned Advocate appearing with Mr. Umang Oza for the petitioner submitted that the Respondent No. 2 being a Liquidator under the Act, is bound to act transparently and in the best interest of the Mill in liquidation. He further submitted that the letter dated 11.02.2011 issued by the Respondent No. 2 clearly reveals that the Respondent No. 2 is only interested in disposing of the property of the Oil Mill in favour of Respondent No. 3 instead of considering the interest of the Oil Mill itself. The said action of the Respondent No. 2 is, therefore, absolutely arbitrary and violative of Article 14 of the Constitution of India. He further submitted that the letter dated 11.02.2011 was not immediately served on the petitioner and the same was given by hand delivery to the petitioner only on 17.02.2011.
The said action of the Respondent No. 2 is, therefore, absolutely arbitrary and violative of Article 14 of the Constitution of India. He further submitted that the letter dated 11.02.2011 was not immediately served on the petitioner and the same was given by hand delivery to the petitioner only on 17.02.2011. Despite the fact that the order of the State Government was delivered on the Respondent No. 2, on or about 15.02.2011, the Respondent No. 2 had made an attempt to overreach the process of law and to help Respondent No. 3, the decision was back-dated and communicated very late. He further submitted that the Respondent No. 2 is under the statutory obligation to act as per the direction issued by the State Government. But by concocting the post-dated letter, the Respondent No. 2 has overlooked the order passed by the State Government. The Respondent No. 2 has accepted the tender of Respondent No. 3 without considering the fact that as per the settled law, after opening of the tender, there must be inter-se bidding and the petitioner had offered Rs. 97 Lacs on the same day, while Respondent No. 3 had not increased the offer. Under these circumstances, the offer submitted by the petitioner was required to be accepted. 7. Mr. Patel further submitted that as per the tender notice, the offerer was supposed to deposit 10% of the offer amount made by the concerned offerer. The Respondent No. 3 had deposited only Rs. 8,48,800/- as earnest money. In that event, his offer was less than the offer of the petitioner and the stand of the Respondent No. 3 was not in accordance with the public notice. The Respondent No. 2 had, therefore, got no authority to accept the same. 8. Mr. Patel, in support of his submissions, had relied on the decision of the Apex Court in the case of Divya Manufacturing Company (P) Limited vs. Union of India and others, AIR 2000 SC 2346 wherein, after considering specific condition No.11 in terms and conditions of sale empowering the Court to set aside the sale even though it is confirmed for the interest of creditors, contributories and all concerned and/or public interest, the Court held that the Court cannot become functus officio after the sale was confirmed as neither the possession of the property nor the sale deed was executed in favour of the highest offerer.
The Court further held in that case that the offer of Rs. 1.30 Crores is totally inadequate in comparison to the offer of Rs. 2 Crores and in case where such higher price is offered, it would be in the interest of the Company and its Creditors to set aside the sale. The Court further held that confirmation of the sale by a Court at grossly inadequate price, whether or not it is a consequence of any irregularity or fraud in the conduct of sale, could be set aside on the ground that it was not just and proper exercise of judicial discretion. In such cases, a meaningful intervention by the Court may prevent, to some extent, underbidding at the time of auction through Court. 9. Mr. Patel further relied on the decision of the Apex Court in the case of Karnataka State Industrial Investment and Development Corporation Limited vs. Cavalet India Limited and others, 2005 (4) SCC 456 wherein while laying down certain legal principles on the basis of decided case law, the Court inter alia held that in the matter of sale of public property, the dominant consideration is to secure the best price for the property to be sold and this could be achieved only when there is maximum public participation in the process of sale and everybody has an opportunity of making an offer. The Court further held that public auction is not the only mode. To secure the best price by inviting maximum public participation, tender and negotiation could also be adopted. The Court further held that reasonableness is to be tested against the dominant consideration to secure the best price. 10. Based on the aforesaid judicial pronouncements on the subject and considering the facts of the case, Mr. Patel has strongly urged that the impugned letter / order issued by the Respondent No. 2 on 11.02.2011 deserves to be quashed and set aside and the offer of the petitioner made on 11.02.2011 at the time of opening of the tender, for an amount of Rs. 97 Lacs, is required to be accepted. 11. Mr. Niral Mehta, Learned Advocate appearing for Respondent No. 3, the highest offerer, has submitted that no fundamental rights of the petitioner have been violated and hence, the present petition under Article 226 of the Constitution of India is not maintainable.
97 Lacs, is required to be accepted. 11. Mr. Niral Mehta, Learned Advocate appearing for Respondent No. 3, the highest offerer, has submitted that no fundamental rights of the petitioner have been violated and hence, the present petition under Article 226 of the Constitution of India is not maintainable. He further submitted that the entire auction proceedings were held by the Respondent No. 2 in exercise of power envisaged under Section 110 of the Gujarat Co-operative Societies Act, 1961. If the petitioner was aggrieved by the said decision, an equally alternative efficacious remedy under Section 155 of the Act was available to the petitioner. Even on this ground, the present petition is not maintainable. He further submitted that the scope of Article 226 of the Constitution of India in contractual matters including Govt. contract and auction matters is very limited and thereby, this Court should not exercise its extra ordinary jurisdiction conferred under Article 226 of the Constitution of India, especially when the petitioner has not made any cogent, apparent and plausible averment as to mala fide or favoritism. He further submitted that the petitioner has suppressed material facts as well as made certain incorrect statements on oath. As per the tender document, the important condition was to submit the offer with 10% amount of upset price and not the offer amount. It is specifically mentioned in the tender document that EMD was required to be deposited at 10% of the base price i.e. Rs. 84.88 Lacs. Clause No.6 of the tender conditions makes this aspect very clear. The petitioner has not annexed the terms and conditions of the tender so as to canvass before this Court that along with the offer, 10% of the offer amount was required to be submitted by way of earnest money deposit. He further submitted that in the revision application preferred by the petitioner before the State Government, the Respondent No. 3 was not joined as a party despite the fact that the Respondent No. 3 was the highest offerer and it was the apprehension of the petitioner that the offer of the Respondent No. 3 would be accepted by the Respondent No. 2. He further submitted that the petitioner has obtained the order from the State Government without disclosing the correct facts that the decision was already taken by the Respondent No. 2.
He further submitted that the petitioner has obtained the order from the State Government without disclosing the correct facts that the decision was already taken by the Respondent No. 2. He has, therefore, submitted that the conduct of the petitioner of not joining Respondent No. 3 in the revision application and by misrepresenting the facts before the Revisional authority is required to be seriously dealt with and the petition deserves to be dismissed with exemplary cost. 12. Mr. Mehta further submitted that on 09.02.2011, tender proceedings have been held and concluded in presence of all the concerned parties and Officers of the Dist. Registrar. Out of the three tenders, the tender of the Respondent No. 3 being the highest, came to be accepted and rojkam to that effect was also drawn wherein the petitioner has also put his signature. Once having participated in the auction proceedings and having put his signature, it is not now open to the petitioner to challenge the said auction proceedings only by showing his willingness to offer more amount than that of the Respondent No. 3. He further submitted that as per the terms and conditions, there was no provision for inter-se bidding, once the tender is opened. The auction of the property in question was made by inviting sealed cover offers and the property was to be sold to the highest offerer. Thus, the contention of the petitioner regarding inter-se auction is misconceived and dehorse the terms and conditions of the tender. He further submitted that it is settled position in law that no bidder is entitled as a matter of right to insist the authority inviting tenders to enter into further negotiations unless the terms and conditions of the notice so provide for such negotiations. In the present case, inter-se bidding after opening of the sealed cover has not been provided by the authority in the terms and conditions of the auction. Hence, this being purely contractual matter, the petitioner cannot insist for any alteration in the terms and conditions of the tender. He further submitted that the petitioner after having come to know that his offer was less than the offer of Respondent No. 3 and thereby only with a view to prejudice the auction proceedings, has submitted revised offer of Rs. 97 Lacs, which was not accepted by the authority as not permissible.
He further submitted that the petitioner after having come to know that his offer was less than the offer of Respondent No. 3 and thereby only with a view to prejudice the auction proceedings, has submitted revised offer of Rs. 97 Lacs, which was not accepted by the authority as not permissible. He has, therefore, submitted that no interference is called for in the decision of the Respondent No. 2, while exercising the extra ordinary writ jurisdiction of this Court under Article 226 of the Constitution of India. 13. In support of his submissions, Mr. Mehta has relied on the following decisions:— A. In K. D. Sharma vs. Steel Authority of India Limited and others, (2008) 12 SCC 481, the Apex Court held that the jurisdiction of the Supreme Court under Article 32 and of the High Court under Article 226 of the Constitution is extraordinary, equitable and discretionary. Prerogative writs mentioned therein are issued for doing substantial justice. It is, therefore, of utmost necessity that the petitioner approaching the writ court must come with clean hands, put forward all the facts before the Court without concealing or suppressing anything and seek an appropriate relief. If there is no candid disclosure of relevant and material facts and the petitioner is guilty of misleading the Court, his petition may be dismissed at the threshold without considering the merits of the claim. B. In Tata Cellular vs. Union of India, AIR 1996 SC 11 , the Apex Court held that the principles deductible relating to scope of judicial review of administrative decisions and exercise of contractual powers by government bodies are : 1. The modern trend points to judicial restraint in administrative action. 2. The Court does not sit as a court of appeal but merely reviews the manner in which the decision was made. 3. The Court does not have the expertise to correct the administrative decision. If a review of the administrative decision is permitted, it will be substituting its own decision, without the necessary expertise which itself may be fallible. 4. The terms of the invitation to tender cannot be open to judicial scrutiny because the invitation to tender is in the realm of contract.
If a review of the administrative decision is permitted, it will be substituting its own decision, without the necessary expertise which itself may be fallible. 4. The terms of the invitation to tender cannot be open to judicial scrutiny because the invitation to tender is in the realm of contract. C. In Air India Limited vs. Cochin International Airport Limited and others, AIR 2000 SC 801 , it is held that in a commercial transaction of a complex nature, what may appear to be better, on the face of it, may not be considered so when an overall view is taken. In such matters, the Court cannot substitute its decision for the decision of the party awarding the contract. D. In Hindustan Door Oliver Limited vs. Vadodara Municipal Corporation and another, 1998 (2) GLH 706 , the Court after considering the facts of the case observed that the procedure followed by the respondent Corporation in not calling upon the parties to submit their final bids on the same date was not the best possible procedure. However, the Court would not interfere with the decision of an authority merely because the best possible procedure was not followed. E. In Anilkumar Amolakchand Kansal vs. Administrator (Notified Area) and others, 2009 (1) GCD 557 (Gujarat) (DB), tenders were invited for collection of toll tax. When highest offerer declined to accept the contract, the Respondent No. 3 who had given the next highest offer was called upon and contract was awarded to him without providing inter-se bidding to others. Challenge was made to the said decision on the ground that it was clearly in violation of Condition No.12 of the tender which provided inter-se bidding at the time of opening the tenders taking the highest offer as the upset price for the purpose of such inter-se bidding. The Court, considering the passage of about four months time and further considering that the respondent was awarded contract for the period upto 30.06.2009, did not entertain the petition. However, the relief was moulded and the respondents were directed to issue a fresh advertisement mentioning the upset price of Rs. 11,11,111/- per month for the period commencing from 01.01.2009.
The Court, considering the passage of about four months time and further considering that the respondent was awarded contract for the period upto 30.06.2009, did not entertain the petition. However, the relief was moulded and the respondents were directed to issue a fresh advertisement mentioning the upset price of Rs. 11,11,111/- per month for the period commencing from 01.01.2009. F. In Meerut Development Authority vs. Association of Management Studies and others, (2009) 6 SCC 171 , the Apex Court held that the bidders participating in the tender process have no other right except the right of equality and fair treatment in the matter of evaluation of competitive bids offered by interested persons in response to notice inviting tenders in a transparent manner and free from hidden agenda. One cannot challenge the terms and conditions of the tender except on the above stated ground, the reason being the terms of the invitation to tender are in the realm of contract. No bidder is entitled as a matter of right to insist the authority inviting tenders to enter into further negotiations unless the terms and conditions of notice so provided for such negotiations. G. In Jagdish Mandal vs. State of Orissa and others, (2007) 14 SCC 517, the Apex Court held that the judicial review of administrative action is intended to prevent arbitrariness, irrationality, unreasonableness, bias and mala fides. Its purpose is to check whether choice or decision is made “lawfully” and not to check whether choice or decision is “sound”. When the power of judicial review is invoked in matters relating to tenders or award of contracts, certain special features should be borne in mind. A contract is a commercial transaction. Evaluating tenders and awarding contracts are essentially commercial functions. Principles of equity and natural justice stay at a distance. If the decision relating to award of contract is bona fide and is in public interest, Courts will not, in exercise of power of judicial review, interfere even if a procedural aberration or error in assessment or prejudice to a tenderer, is made out. The power of judicial review will not be permitted to be invoked to protect private interest at the cost of public interest, or to decide contractual disputes. The tenderer or contractor with a grievance can always seek damages in a civil court.
The power of judicial review will not be permitted to be invoked to protect private interest at the cost of public interest, or to decide contractual disputes. The tenderer or contractor with a grievance can always seek damages in a civil court. Attempts by unsuccessful tenderers with imaginary grievances, wounded pride and business rivalry, to make mountains out of molehills of some technical / procedural violation or some prejudice to self, and persuade courts to interfere by exercising power of judicial review, should be resisted. Such interferences, either interim or final, may hold up public works for years, or delay relief and succour to thousands and millions and may increase the project cost manifold. Therefore, a court before interfering in tender or contractual matters in exercise of power of judicial review, should pose to itself the following questions :— i. Whether the process adopted or decision made by the authority is mala fide or intended to favour someone; OR Whether the process adopted or decision made is so arbitrary and irrational that the court can say : “the decision is such that no responsible authority acting reasonably and in accordance with relevant law could have reached”; i. Whether public interest is affected. If the answers are in the negative, there should be no interference under Article 226. Cases involving blacklisting or imposition of penal consequences on a tenderer/contractor or distribution of State largesse (allotment of sites/shops, grant of licences, dealerships and franchises) stand on a different footing as they may require a higher degree of fairness in action. 14. Considering the facts of the case and the decisions cited at the bar, Mr. Mehta has strongly urged that there is no infirmity or illegality in the decision taken by the Respondent No. 2 and the same does not call for any interference by this Court. He has, therefore, submitted that the petition deserves to be dismissed with exemplary cost. 15. Ms. Monali Bhatt, learned Assistant Government Pleader appearing for Respondent Nos. 1 & 2 has more or less adopted the arguments of Ms. Niral Mehta, Learned Advocate appearing for Respondent No. 3 and submitted that the Respondent No. 2 being a Liquidator has discharged his duty in inviting tenders and awarding the contract to the highest bidder. She has further submitted that the bids received were opened in front of all the tenderers including the petitioner.
Niral Mehta, Learned Advocate appearing for Respondent No. 3 and submitted that the Respondent No. 2 being a Liquidator has discharged his duty in inviting tenders and awarding the contract to the highest bidder. She has further submitted that the bids received were opened in front of all the tenderers including the petitioner. The Respondent No. 3 was the highest bidder and has offered a price of Rs. 85,31,000/-. The basic price was fixed at Rs. 84,88,000/-. The petitioner had offered a bid of Rs. 85 Lacs whereas the Respondent No. 3 had offered a bid of Rs. 85,31,000/-. Since the petitioner’s bid was lower than the bid of Respondent No. 3, the same was not accepted. She has further submitted that the Respondent No. 3 has deposited the requisite amount of earnest money being 10% of the upset price. The higher offer made by the petitioner at the time of opening of bid was rejected by the Respondent No. 2 only because it was contrary to the terms and conditions of the tender. Once the bids were opened and the letter of acceptance was given to Respondent No. 3, the Respondent No. 2 rejected the proposal of the petitioner. She has, therefore, submitted that the Respondent No. 2 has followed the proper procedure and there is no infirmity in the decision making process. She has, therefore, submitted that the petition deserves to be dismissed. 16. Having heard learned Counsel appearing for the parties and having considered their rival submissions in light of the facts and circumstances of the case and authorities cited before the Court, it appears that the petitioner has made out a case requiring this Court to show an indulgence in the matter and grant the relief prayed for in this petition. The objections raised by Respondent No. 3 against maintainability of the petition do not have much substance. The petitioner has filed the present petition invoking Articles 14 & 19 of the Constitution of India. Every citizen expects a fair and equal treatment from the State or its authorities. The procedure adopted by the Respondent No. 2 in accepting the offer of Respondent No. 3 does not seem to be fair and reasonable. The upset price is fixed at Rs. 84.48 Lacs. The petitioner has made an offer of Rs. 85 Lacs whereas the Respondent No. 3 has made an offer of Rs. 85,31,000/-.
The procedure adopted by the Respondent No. 2 in accepting the offer of Respondent No. 3 does not seem to be fair and reasonable. The upset price is fixed at Rs. 84.48 Lacs. The petitioner has made an offer of Rs. 85 Lacs whereas the Respondent No. 3 has made an offer of Rs. 85,31,000/-. The difference is only of Rs. 31,000/- between the highest and second highest bidders. It cannot, therefore, be said that the offer received is as per the expectation. In any case, it cannot be said to be appropriate or reasonable. In such a situation, the proper course for the authorities is to enter into negotiations and/or to allow inter-se bidding between the parties. In fact, the petitioner has made it clear in his letter dated 11.02.2011 that the Respondent No. 2 has asked the bidders to raise their bid, pursuant to which the petitioner has made an offer of Rs. 97 Lacs. The Respondent No. 3 had not enhanced his bid. The petitioner was asked to convey the decision within two days as the District Registrar was not present. These facts were not denied by the Respondent No. 2. If this has transpired on 09.02.2011 and the same, in fact, reduced to writing on 11.02.2011, in absence of any denial, the same will have to be accepted. The Respondent No. 2 was, therefore, supposed to accept the offer of Rs. 97 Lacs made by the petitioner on the very same day i.e. 09.02.2011 when the tenders were opened. Since this was not done, the petitioner was not given fair and equal treatment and his fundamental right was violated by the Respondent No. 2 and hence, the petitioner has every right to invoke the extraordinary writ jurisdiction of this Court under Article 226 of the Constitution of India. 17. The second objection is with regard to petitioner having an alternative efficacious remedy. The petitioner has in fact availed that remedy and directions were issued to the Respondent No. 2 to consider the letter dated 11.02.2011 and to follow the procedure in accordance with the Rules. Since this order was passed on 14.02.2011 by the Deputy Secretary (Appeals) and copy thereof was served on the Respondent No. 2 on 15.02.2011, the Respondent No. 2 has communicated his decision to the petitioner on 17.02.2011 which was stated to have been taken by him on 11.02.2011.
Since this order was passed on 14.02.2011 by the Deputy Secretary (Appeals) and copy thereof was served on the Respondent No. 2 on 15.02.2011, the Respondent No. 2 has communicated his decision to the petitioner on 17.02.2011 which was stated to have been taken by him on 11.02.2011. The petitioner cannot, therefore, be non-suited on the ground that the petitioner is having an alternative efficacious remedy. For rendering substantial justice to the parties, the Court is empowered to exercise its writ jurisdiction despite there being an alternative remedy available to the aggrieved party. 18. The third objection is with regard to suppression of facts. It is an admitted position that the petitioner was not supplied the copy of terms and conditions of the tender. The Respondent No. 2, in fact, in his communication dated 11.02.2011 has stated that since the request was not made in writing, the copy of terms and conditions of the tender was not supplied to the petitioner. When the copy of terms and conditions of the tender is not made available to the petitioner, there is no question of furnishing the same along with the petition and on this count, the petitioner cannot be blamed for suppression of facts. The petitioner has rightly raised the dispute that the Respondent No. 3 has not made the payment of earnest money to the extent of 10% of the offer amount as the Respondent No. 3 has made the offer of Rs. 85,31,000/-. 10% thereof would come to Rs. 8,53,100/- whereas the Respondent No. 3 has made the payment of Rs. 8,48,800/- only. In the advertisement, it was clearly stated that the offer should be made along with 10%. The petitioner, therefore, bona fide believed that 10% of the offer amount should be sent along with the offer. Since the copy of the terms and conditions was not made available to the petitioner, he was not aware as to whether 10% of the upset price was to be paid along with the offer. Under these circumstances, it cannot be said that the petitioner has suppressed any material or relevant facts or misrepresented before the Court to obtain any favourable order in his favour. 19. So far as the merits of the matter are concerned, it is true that the offers were invited in sealed cover.
Under these circumstances, it cannot be said that the petitioner has suppressed any material or relevant facts or misrepresented before the Court to obtain any favourable order in his favour. 19. So far as the merits of the matter are concerned, it is true that the offers were invited in sealed cover. It is also true that there is no provision for inter-se bidding in the terms and conditions of the tender. It is equally true that under normal circumstances, the tenderer or offerer has no right to seek any variation in the terms and conditions of the tender. However, looking to the facts of the present case, it becomes very obvious that the purchase price offered by the Respondent No. 3 at Rs. 85,31,000/- cannot be said to be adequate or reasonable. Moreover, the petitioner has made the offer of Rs. 97 Lacs on the very same day i.e. on 09.02.2011. The said offer was made by the petitioner when all the bidders were asked to raise their bids. This fact was not denied by the Respondent No. 2 either in his communication dated 11.02.2011 or in the affidavit-in-reply filed before this Court. Even before this Court, an attempt was made to have an inter-se bidding between the Respondent No. 3 and the petitioner. The Court has asked the Respondent No. 3 to raise his bid from Rs. 97 Lacs onwards. The petitioner was ready and willing to participate in the inter-se bidding before the Court. However, Respondent No. 3 has refused to participate in the inter-se bidding and hence, the offer of Rs. 97 Lacs made by the petitioner before the Respondent No. 2 on 09.02.2011 seems to be an adequate offer and the Respondent No. 2 has committed an illegality and infirmity in not accepting the said offer of the petitioner and issuing the letter of acceptance in favour of Respondent No. 3 who has made the offer of Rs. 85,31,000/- only. 20. The legal authorities cited by Mr. Niral Mehta on behalf of Respondent No. 3 have no application to the facts of the present case. The Court has recorded a specific finding that the fundamental right guaranteed by the Constitution of India under Article 14 is violated. The alternative remedy has already been availed of by the petitioner and there is no suppression of facts or no misrepresentation was made by the petitioner.
The Court has recorded a specific finding that the fundamental right guaranteed by the Constitution of India under Article 14 is violated. The alternative remedy has already been availed of by the petitioner and there is no suppression of facts or no misrepresentation was made by the petitioner. Hence, the authorities cited by Mr. Mehta in this regard do not apply to the facts of the present case. 21. As far as the tenderer’s right to demand for negotiation or inter-se bidding is concerned, the petitioner has not asked for any such inter-se bidding or negotiation. On the contrary, Respondent No. 2 has asked the bidders to raise their bids and accordingly, the petitioner has made an offer of Rs. 97 Lacs. This is much more higher than the offer of Rs. 85,31,000/- made by Respondent No. 3. All authorities relied upon by Mr. Mehta in this regard have also no application to the facts of the present case. 22. As far as the two authorities relied upon by Mr. Patel are concerned, they are squarely applicable to the facts of the present case. Though the letter of acceptance was issued in favour of Respondent No. 3, no sale deed was executed in his favour nor possession of the properties was handed over to Respondent No. 3. The offer of Rs. 85,31,000/- made by Respondent No. 3 is totally inadequate in comparison to the offer of Rs. 97 Lacs made by the petitioner. Such higher offer made by the petitioner is in the interest of the Society in liquidation and its Creditors. When the challenge is made to the inadequate offer accepted by the Respondent No. 2, the Court cannot dismiss the petition and approve an offer made at grossly inadequate price, whether or not it is a consequence of any irregularity or fraud in the conduct of sale. It can certainly be set aside on the ground that it was not just and proper exercise of the judicial discretion. This is what the Apex Court held in the case of Divya Manufacturing Company (P) Limited vs. Union of India and others (Supra).
It can certainly be set aside on the ground that it was not just and proper exercise of the judicial discretion. This is what the Apex Court held in the case of Divya Manufacturing Company (P) Limited vs. Union of India and others (Supra). Even in the case of Karnataka State Industrial Investment and Development Corporation Limited vs. Cavalet India Limited and others (Supra), a categorical finding is given by Apex Court that the dominant consideration is to secure the best price for the property to be sold and this could be achieved only when there is maximum public participation in the process of sale and everybody has an opportunity of making an offer. The Court has also approved the factum of inviting maximum public participation, tender and negotiation for the purpose of securing the best price. The best price in the form of an offer made by the petitioner for Rs. 97 Lacs should have been secured by Respondent No. 2 instead of issuing the letter of acceptance in favour of Respondent No. 3 on the ground that terms and conditions do not permit inter-se bidding. Such terms and conditions are considered to be faulty and for the larger public interest, he should have made such variation. 23. In view of the foregoing discussion, the Court hereby grants the prayers made in this petition. The letter of acceptance issued in favour of Respondent No. 3 is hereby quashed and set aside and the Respondent No. 2 is hereby directed to accept the offer of Rs. 97 Lacs made by the petitioner and on payment of the amount of Rs. 97 Lacs as reduced by the earnest money, if any, paid, he is directed to execute necessary documents in favour of the petitioner and handover the possession soon thereafter. 24. The petition is accordingly allowed. Rule is made absolute with no order as to costs. 25. At this stage, Mr. Niral Mehta, Learned Advocate appearing for Respondent No. 3 asked for stay against implementation of this order so as to approach the higher forum. Considering the request and looking to the facts and circumstances of the case, the Court hereby grants stay against the implementation of this order for a period of four weeks from today.