Supreme Court of India
Indore Vikas Praadhikaran (Ida) vs Shri Humud Jain Samaj Trust on 25 November, 2024
Author: Bela M. Trivedi
Bench: Bela M. Trivedi
REPORTABLE
IN THE SUPREME COURT OF INDIA
CIVIL APPELLATE JURISDICTION
CIVIL APPEAL NO(S). OF 2024
[Arising out of SLP (Civil) No. 9940 of 2022]
INDORE VIKAS PRAADHIKARAN
(IDA) & ANR. …APPELLANT(S)
VERSUS
SHRI HUMUD JAIN SAMAJ
TRUST & ANR. …RESPONDENT(S)
JUDGMENT
SATISH CHANDRA SHARMA, J.
1. Leave granted.
2. This present petition is arising out of order dated
08.02.2022 passed in Writ Appeal No. 5/2022, titled as, “Shri
Humad Jain Samaj Trust Vs. The State of Madhya Pradesh &
Ors.”, passed by the High Court of Madhya Pradesh at Indore.
The Division Bench of the High Court has set aside the order
dated 17.12.2021, passed by the learned Single Judge in Writ
Petition No. 26040/2021.
SLP (C) No. 9940/2022 Page 1 of 21
3. The facts of the case reveal that the appellant Indore Vikas
Praadhikaran (IDA), hereinafter referred to as “IDA” issued an
advertisement inviting bids for leasing out land admeasuring
3382 sq. meters situated at Scheme No. 74-C, Sector C, Indore,
on 17.07.2020 and the terms and conditions were specified in the
Notice Inviting Tender (NIT). The reserve price was fixed at Rs.
21,120/- per square meter. The IDA pursuant to the NIT dated
17.07.2020 received three bids and the bid of respondent No. 1-
Shri Humud Jain Samaj Trust was the highest as a bid of Rs.
25,671.90/- per square meter was offered in the matter. The bids
were opened on 09.09.2020. The Tender Committee while it was
finalizing the bids noticed that in respect of the land in question,
a property tax demand to the tune of Rs. 1.25 crores was
outstanding and the same was not taken into account while fixing
the base price and, therefore, the Tender Committee arrived at a
conclusion not to accept any of the bids and to issue a fresh tender
with a reserve price of Rs. 26,000/- per square meter. The matter
was placed before the Board of IDA and on 27.07.2021, the
Board accepted the recommendation of the Tender Committee.
The bid of respondent No. 1 was rejected and it was resolved to
issue a fresh NIT in the matter. Respondent No. 1 was informed
on 23.08.2021 about the rejection of bid of respondent No.1 and
on 01.10.2021, the earnest money was also refunded. On
18.10.2021, the IDA passed a resolution for issuance of a fresh
SLP (C) No. 9940/2022 Page 2 of 21
NIT with a reserve price of Rs. 26,000/- per square meter and
thereafter, a fresh NIT was issued on 17.11.2021. Respondent
No. 1 after issuance of the fresh NIT preferred a writ petition on
24.11.2021 before the High Court of Madhya Pradesh, inter alia,
challenging resolution dated 27.07.2021 rejecting the bid as well
as being aggrieved by the issuance of fresh NIT dated
17.11.2021.
4. It is pertinent to note that respondent No.1 did not
participate in the subsequent NIT issued on 17.11.2021.
Respondent No. 1 before the High Court stated that by no stretch
of imagination, his bid could have been cancelled as he was the
highest bidder. It was further stated by respondent No.1 before
the learned Single Judge that he is ready to negotiate in the matter
and the bid has been cancelled without assigning any reason.
5. The IDA did file a detailed and exhaustive reply before the
learned Single Judge and reliance was placed upon the terms and
conditions of the NIT. Heavy reliance was placed upon
Condition No. 6 which empowered the IDA to accept or reject
any or all bids. Learned Single Judge after hearing the parties at
length arrived at the conclusion that the petitioner Trust is not
entitled to any relief as no contract was executed at any point of
time nor any letter of allotment was issued in its favour. Learned
Single Judge also held that the highest bidder does not acquire
SLP (C) No. 9940/2022 Page 3 of 21
any vested right to have the auction concluded in his favour and
the IDA was justified in issuing fresh NIT in the matter.
6. Respondent aggrieved by the orders passed by the learned
Single Judge preferred a writ appeal and the Division Bench of
the High Court of Madhya Pradesh at Indore Bench allowed the
writ appeal directing the IDA to allot the plot to respondent in
case he is ready to pay the price of the land in question at Rs.
26,000/- per square meter. Para 6, 7 and 8 of the order passed
by the Division Bench of the High Court reads as under:
“6. The dates and events of the case are not in
dispute. In the first NIT, the base price of the land
was Rs.21,000/- per sq. meter as fixed by the Indore
Development Authority. Out of three bidders, the
petitioner offered the highest bid. Rs.25671.90/-.
The property tax on land to the Municipal
Corporation is payable by IDA. The resolution has
been passed with the hope that the IDA might fetch
higher prices than the price received in the first
round of NIT. Unfortunately in the second round
not, a single bidder had participated and the tender
proceedings have resulted in an unsuccessful
attempt. In all bona fide, the petitioner has
submitted that the petitioner is still ready to match
the base price fixed by the Indore Development
Authority in the second tender by paying the amount
of Rs.26,000/- per sq. meter.
7. Had the Indore Development Authority
received an offer in the second NIT more than
Rs.26,000/- per sq. meter certainly the petitioner
would not have any case before this court. But in the
second round of NIT, the Indore Development
SLP (C) No. 9940/2022 Page 4 of 21
Authority has failed to receive any bid hence the
right of the petitioner is still survived to claim the
allotment being a successful bidder. The petitioner
had approached this court by way of the writ
petition before issuance of the second NIT and
immediately after dismissal of the writ petition the
writ appeal has been filed therefore, the cause for
the petitioner is still survived. The Indore
Development Authority has wasted public money by
cancelling the first NIT and going for the second
NIT. Learned counsel or the Indore Development
Authority submitted that has the petitioner
/appellant participated in the subsequent tented
process the allotment would have been done on
quoting the price of Rs 26000/- it means the Indore
Development Authority has no issue in giving the
land to the petitioner /appellant but same will not
be given through the court as it is beyond judicial
review. For this approach of the Indore
Development Authority, a cost is liable to be
imposed.
8. Accordingly, the writ appeal is allowed, and
the order passed by the writ court is set aside. If the
petitioner is ready to pay the price of the in question
land @Rs.26,000/- per sq. meter the land in
question be allotted to the appellant.”
7. Hon’ble Division Bench while allowing the writ appeal
has held that the respondent was the highest bidder as in the first
round of the tendering process, the base price of the land was
fixed at Rs. 21,120/- per square meter and the respondent No. 1
offered a bid of Rs. 25,671.90/- per square meter. In the second
round while issuing fresh NIT, the IDA has fixed the base price
SLP (C) No. 9940/2022 Page 5 of 21
at Rs. 26,000/- per square meter and no offer was received by the
IDA in the second round of more than Rs. 26,000/- per square
meter and, therefore, the Division Bench held that in case the
respondent is willing to pay the amount at the rate of Rs. 26,000/-
per square meter, the land in question should be allotted to the
respondent No.1.
8. The IDA being aggrieved by the order passed by the
Division Bench of the High Court of Madhya Pradesh at Indore,
dated 08.02.2022, has preferred the present appeal and it has been
vehemently argued by Mr. Balbir Singh, learned Senior Counsel
for the appellant that the order passed by the Division Bench of
the High Court deserves to be set aside as the High Court has in
fact decided a suit for specific performance of contract while
deciding the Writ Appeal. He has vehemently argued before this
Court that in the light of Condition No. 6 of the NIT, dated
17.07.2020, the IDA was having a right to accept or reject any or
all the bids. It was also brought to the notice of this Court that
the bid of respondent No.1 was cancelled only after it came to the
notice of the Tender Committee in its meeting dated 25.09.2020,
that there is an outstanding property tax in respect of the land in
question amounting to Rs. 1,25,82,262/- and considering the
location of the plot and after payment of property tax to the
Municipal Corporation and further keeping in view the fact that
more revenue is likely to be generated in future by disposing of
SLP (C) No. 9940/2022 Page 6 of 21
the property through the tendering process, the bid of the
respondent No. 1 was rejected.
9. Learned Senior Counsel has placed heavy reliance upon
the judgments delivered in the case of State of Jharkhand and
others Vs. CWE-SOMA Consortium (2016) 4 Supreme Court
Cases 172 and Haryana Urban Development Authority and
others Vs. Orchid Infrastructure Developers Private Limited
(2017) 4 Supreme Court Cases 243.
10. Learned counsel appearing on behalf of respondent No. 1-
Trust has vehemently argued before this Court that respondent
No. 1 was the highest bidder in respect of NIT dated 17.07.2020
and merely because the respondent No. 1 has not participated the
second NIT issued on 17.11.2021, the question of setting aside
the order passed by the Division Bench does not arise. It has been
vehemently argued by the learned counsel for respondent No. 1-
Trust that once the respondent No. 1 was declared as the highest
bidder amongst the three bids received in respect of the land in
question, his bid of Rs. 25,671.90/- per square meter should have
been accepted and respondent No.1 should have been declared
the successful bidder and, thence, no case for interference is
made out in the present case. Reliance has been placed on Eva
Agro Feeds Private Limited Vs. Punjab National Bank and Anr.
2023 INSC 809 decided on 06.09.2023 in Civil Appeal No. 7906
of 2021.
SLP (C) No. 9940/2022 Page 7 of 21
11. Heard learned Senior Counsel for the appellant as well as
learned counsel for the respondents at length and perused the
entire documents placed on record in the matter.
12. In the present case, the undisputed facts reveal that first
NIT was issued on 17.07.2020 and respondent No. 1 was
certainly the highest bidder by offering a bid of Rs. 25,671.90/-
per square meter. The Tender Evaluation Committee after
examining the bid arrived at a conclusion to cancel the tender as
it came to its notice that an outstanding property tax demand
amounting to Rs. 1,25,82,262/- was not taken into account while
fixing the base price. It was resolved to issue a fresh NIT and,
therefore, a fresh NIT was issued on 17.11.2021 and for the
reasons best known to the respondent No. 1, it did not participate
in the second NIT and instead preferred a writ petition on
24.11.2021 before the High Court of Madhya Pradesh. Learned
Single Judge was justified in dismissing the writ petition on the
ground that merely by offering highest bid, the respondent No.1
did not acquire any vested right for the execution of the contract
in its favour. The Division Bench of the High Court, however,
allowed the writ appeal and has gone to the extent in directing the
IDA to accept the offer of respondent No. 1 which was made
before the Court for an amount of Rs. 26,000/- per square meter
in respect of the land in question, and further directing IDA to
allot the land in question to respondent No.1. This Court in the
SLP (C) No. 9940/2022 Page 8 of 21
case of State of Jharkhand and others Vs. CWE-SOMA
Consortium (supra) while dealing with the similar issue of
annulment of tender process, in paras 21, 22 and 23 has held as
under:
“21. Observing that while exercising power of
judicial review, the Court does not sit as appellate
court over the decision of the Government but
merely reviews the manner in which the decision
was made, in Tata Cellular v. Union of India [Tata
Cellular v. Union of India, (1994) 6 SCC 651] , SCC
in para 70 it was held as under: (SCC p. 675)
“70. It cannot be denied that the
principles of judicial review would
apply to the exercise of contractual
powers by government bodies in order
to prevent arbitrariness or favouritism.
However, it must be clearly stated that
there are inherent limitations in
exercise of that power of judicial
review. Government is the guardian of
the finances of the State. It is expected
to protect the financial interest of the
State. The right to refuse the lowest or
any other tender is always available to
the Government. But, the principles
laid down in Article 14 of the
Constitution have to be kept in view
while accepting or refusing a tender.
There can be no question of
infringement of Article 14 if the
Government tries to get the best person
or the best quotation. The right to
choose cannot be considered to be anSLP (C) No. 9940/2022 Page 9 of 21
arbitrary power. Of course, if the said
power is exercised for any collateral
purpose the exercise of that power will
be struck down.”
22. The Government must have freedom of
contract. In Master Marine Services (P)
Ltd. v. Metcalfe & Hodgkinson (P) Ltd. [Master
Marine Services (P) Ltd. v. Metcalfe & Hodgkinson
(P) Ltd., (2005) 6 SCC 138] , SCC in para 12 this
Court held as under: (SCC p. 147)
“12. After an exhaustive consideration
of a large number of decisions and
standard books on administrative law,
the Court enunciated the principle that
the modern trend points to judicial
restraint in administrative action. The
court does not sit as a court of appeal
but merely reviews the manner in
which the decision was made. 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.
The Government must have freedom of
contract. In other words, fair play in
the joints is a necessary concomitant
for an administrative body functioning
in an administrative sphere or quasi-
administrative sphere. However, the
decision must not only be tested by the
application of Wednesbury principles
of reasonableness but also must be free
from arbitrariness not affected by bias
SLP (C) No. 9940/2022 Page 10 of 21
or actuated by mala fides. It was also
pointed out that quashing decisions
may impose heavy administrative
burden on the administration and lead
to increased and unbudgeted
expenditure. (See para 113 of the
Report, SCC para 94.)”
The Court does not have the expertise to correct the
administrative decision as held
in Laxmikant v. Satyawan [Laxmikant v. Satyawan,
(1996) 4 SCC 208], the Government must have
freedom of contract.
23. The right to refuse the lowest or any other
tender is always available to the Government. In the
case in hand, the respondent has neither pleaded
nor established mala fide exercise of power by the
appellant. While so, the decision of the Tender
Committee ought not to have been interfered with
by the High Court. In our considered view, the High
Court erred in sitting in appeal over the decision of
the appellant to cancel the tender and float a fresh
tender. Equally, the High Court was not right in
going into the financial implication of a fresh
tender.”
13. This Court in the aforesaid case has held that while
exercising power of judicial review, the Court does not sit as an
appellate Court over the decision of the government but merely
reviews the manner in which the decision was made [Tata
Cellular v. Union of India, (1994) 6 SCC 651]. In the considered
opinion of this Court, the Division Bench should not have
interfered in the matter and could not have gone to the extent of
SLP (C) No. 9940/2022 Page 11 of 21
fixing the base price/modifying the offer made by respondent
and, therefore, in light of the aforesaid judgment as the High
Court has virtually passed an order sitting in appeal over the
decision of the government in absence of any mala fide exercise
of power by the IDA, the judgment passed by the Division Bench
of the High Court deserves to be set aside and is, accordingly set
aside. This Court in the case of Haryana Urban Development
Authority Vs. Orchid Infrastructure Developers Pvt. Ltd.
(supra) again dealing with the cancellation of a bid of the highest
bidder, in paragraphs 12,13,14,15, 16 and 30 has held as under:
“12. Firstly, we examine the question whether there
being no concluded contract in the absence of
acceptance of bid and issuance of allotment letter,
the suit could be said to be maintainable for the
declaratory relief and mandatory injunction sought
by the plaintiff. The plaintiff has prayed for a
declaration that rejection of the bid was illegal.
Merely by that, the plaintiff could not have become
entitled for consequential mandatory injunction for
issuance of formal letter of allotment. The court
while exercising judicial review could not have
accepted the bid. The bid had never been accepted
by the authorities concerned. It was not a case of
cancellation of bid after being accepted. Thus, even
assuming as per the plaintiff’s case that the
Administrator was not equipped with the power and
the Chief Administrator had the power to accept or
refuse the bid, there had been no decision by the
Chief Administrator. Thus, merely by declaration
that rejection of the bid by the Administrator was
illegal, the plaintiff could not have become entitledSLP (C) No. 9940/2022 Page 12 of 21
to consequential relief of issuance of allotment
letter. Thus the suit, in the form it was filed, was not
maintainable for relief sought in view of the fact that
there was no concluded contract in the absence of
allotment letter being issued to the plaintiff, which
was a sine qua non for filing the civil suit.
13. It is a settled law that the highest bidder has no
vested right to have the auction concluded in his
favour. The Government or its authority could
validly retain power to accept or reject the highest
bid in the interest of public revenue. We are of the
considered opinion that there was no right acquired
and no vested right accrued in favour of the plaintiff
merely because his bid amount was highest and had
deposited 10% of the bid amount. As per Regulation
6(2) of the 1978 Regulations, allotment letter has to
be issued on acceptance of the bid by the Chief
Administrator and within 30 days thereof, the
successful bidder has to deposit another 15% of the
bid amount. In the instant case, allotment letter has
never been issued to the petitioner as per
Regulation 6(2) in view of non-acceptance of the
bid. Thus, there was no concluded contract.
Regulation 6 of the 1978 Regulations is extracted
hereunder:
“6. Sale of lease of land or building
by auction.—(1) In the case of sale or
lease by auction, the price/premium to
be charged shall be such reserve
price/premium as may be determined
taking into consideration the various
factors as indicated in sub-regulation
(1) of Regulation 4 or any higher
amount determined as a result of
bidding in open auction.
SLP (C) No. 9940/2022 Page 13 of 21
(2) 10 per cent of the highest bid shall
be paid on the spot by the highest
bidder in cash or by means of a
demand draft in the manner specified
in sub-regulation (2) of Regulation 5.
The successful bidder shall be issued
allotment letter in Form CC or C-II by
registered post and another 15 per cent
of the bid accepted shall be payable by
the successful bidder, in the manner
indicated, within thirty days of the date
of allotment letter conveying
acceptance of the bid by the Chief
Administrator; failing which the 10
per cent amount already deposited
shall stand forfeited to the authority
and the successful bidder shall have no
claim to the land or building
auctioned.
(3) The payment of balance of the
price/premium, rate of interest
chargeable and the recovery of interest
shall be in the same manner as
provided in sub-regulations (6) and (7)
of Regulation 5.
(4) The general terms and conditions
of the auction shall be such as may be
framed by the Chief Administrator
from time to time and announced to the
public before auction on the spot.”
14. We are fortified in our view by a decision of this
Court in U.P. Avas Evam Vikas Parishad v. Om
Prakash Sharma [U.P. Avas Evam Vikas
Parishad v. Om Prakash Sharma, (2013) 5 SCC 182
SLP (C) No. 9940/2022 Page 14 of 21
: (2013) 2 SCC (Civ) 737] , wherein the questions
arose for its consideration that : whether there is
any vested right upon the plaintiff bidder until the
bid is accepted by the competent authority in
relation to the property in question? Merely because
the plaintiff is the highest bidder by depositing 20%
of the bid amount without there being approval of
the same by the competent authority and it amounts
to a concluded contract in relation to the plot in
question; and whether the plaintiff could have
maintained the suit in the absence of a concluded
contract? Considering the aforesaid questions, this
Court has discussed the matter thus : (SCC pp. 195-
97, paras 30-31)
“30. In support of the said proposition,
the learned Senior Counsel for the
defendant, Mr Rakesh Dwivedi has
also placed reliance upon another
decision of this Court in State of
U.P. v. Vijay Bahadur Singh [State of
U.P. v. Vijay Bahadur Singh, (1982) 2
SCC 365] . The learned Senior
Counsel has rightly placed reliance
upon the judgment of this Court
in Rajasthan Housing Board
case [Rajasthan Housing
Board v. G.S. Investments, (2007) 1
SCC 477] which reads as under : (SCC
p. 483, para 9)
‘9. This being the settled legal
position, the respondent acquired no
right to claim that the auction be
concluded in its favour and the High
Court clearly erred in entertaining the
writ petition and in not only issuing a
SLP (C) No. 9940/2022 Page 15 of 21
direction for consideration of the
representation but also issuing a
further direction to the appellant to
issue a demand note of the balance
amount. The direction relating to
issuance of the demand note for
balance amount virtually amounted to
confirmation of the auction in favour
of the respondent which was not the
function of the High Court.’
In State of Orissa v. Harinarayan
Jaiswal [State of
Orissa v. Harinarayan Jaiswal, (1972)
2 SCC 36] case, relevant paragraph of
which reads as under : (SCC pp. 44-
45, para 13)
‘13. … There is no concluded contract
till the bid is accepted. Before there
was a concluded contract, it was open
to the bidders to withdraw their bids
(see Union of India v. Bhim Sen
Walaiti Ram [Union of India v. Bhim
Sen Walaiti Ram, (1969) 3 SCC 146] ).
[Ed.: The matter between two asterisks
has been emphasised in Avam Evam
Vikas Parishad case, (2013) 5 SCC
182.] By merely giving bids, the
bidders had not acquired any vested
rights [Ed.: The matter between two
asterisks has been emphasised
in Avam Evam Vikas Parishad case,
(2013) 5 SCC 182.] ’.
31. In view of the law laid down by this
Court in the aforesaid decisions, the
learned Senior Counsel Mr Rakesh
SLP (C) No. 9940/2022 Page 16 of 21
Dwivedi has rightly placed reliance
upon the same in support of the case of
the first defendant, which would
clearly go to show that the plaintiff
had not acquired any right and no
vested right has been accrued in his
favour in respect of the plot in question
merely because his bid amount is
highest and he had deposited 20% of
the highest bid amount along with the
earnest money with the Board. In the
absence of acceptance of bid offered by
the plaintiff to the competent authority
of the first defendant, there is no
concluded contract in respect of the
plot in question, which is evident from
letters dated 26-5-1977 and 8-7-1977
wherein the third defendant had
rejected the bid amount deposited by
the plaintiff and the same was refunded
to him by way of demand draft, which
is an undisputed fact and it is also not
his case that the then Assistant
Housing Commissioner who has
conducted the public auction had
accepted the bid of the plaintiff.”
15. This Court in Om Prakash Sharma case [U.P.
Avas Evam Vikas Parishad v. Om Prakash Sharma,
(2013) 5 SCC 182 : (2013) 2 SCC (Civ) 737] has
held that in the absence of a concluded contract
which takes place by issuance of allotment letter,
suit could not be said to be maintainable as there is
no vested right in the plaintiff without approval of
the bid by the competent authority. Thus, in the
wake of the aforesaid decision, in the absence of a
concluded contract, the suit could not have been
SLP (C) No. 9940/2022 Page 17 of 21
decreed for mandatory injunction. It amounted to
enforcing of contract in the absence thereof.
16. In the light of the aforesaid discussion, it is
evident that in the absence of a concluded contract
i.e. in the absence of allotment letter and
acceptance of highest bid, the suit filed by the
plaintiff was wholly misconceived. Even if non-
acceptance of the bid was by an incompetent
authority, the court had no power to accept the bid
and to direct the allotment letter to be issued.
Merely on granting the declaration which was
sought that rejection was illegal and arbitrary and
by incompetent authority, further relief of
mandatory injunction could not have been granted,
on the basis of findings recorded, to issue the
allotment letter, as it would then become necessary
to forward the bid to competent authority—Chief
Administrator—for its acceptance, if at all it was
required.
30. In Meerut Development Authority v. Assn. of
Management Studies [Meerut Development
Authority v. Assn. of Management Studies, (2009) 6
SCC 171 : (2009) 2 SCC (Civ) 803] , this Court has
laid down that a bidder has no right in the matter of
bid except of fair treatment in the matter and cannot
insist for further negotiation. The authority has a
right to reject the highest bid. This Court has laid
down thus : (SCC p. 182, paras 27 & 29)
“27. The bidders participating in the
tender process have no other right
except the right to 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
SLP (C) No. 9940/2022 Page 18 of 21
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 the 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.
29. The Authority has the right not to
accept the highest bid and even to
prefer a tender other than the highest
bidder, if there exist good and
sufficient reasons, such as, the highest
bid not representing the market price
but there cannot be any doubt that the
Authority’s action in accepting or
refusing the bid must be free from
arbitrariness or favouritism.”
14. Keeping in view of the aforesaid judgments, this Court is
of the considered opinion that in the absence of allotment letter
and acceptance of highest bid, no relief could have been granted
in favour of respondent No.1 as there was no concluded contract
in the matter and the decision taken by the Tender Evaluation
Committee to generate more revenues could not have been
interfered with in the manner and method as has been done by the
Division Bench of the High Court of Madhya Pradesh at Indore
Bench. The bidder has no right in the matter of bid except of fair
SLP (C) No. 9940/2022 Page 19 of 21
treatment and cannot insist for further negotiation as has been
done in the present case. The terms and conditions of NIT,
particularly condition No. 6, empowers the IDA to accept or
reject any or all bids. In the present case, the bid was rejected for
valid and cogent reasons and, therefore, the order passed by the
Division Bench of the High Court of Madhya Pradesh is set aside.
15. Learned Counsels for respondent No. 1 placed heavy
reliance on Eva Agro (supra) stating that the Appellant does not
have absolute or unfettered discretion to cancel the auction.
While we agree with the principle that the auctioning authority
must adhere to the rule of law, the facts of the present case are
entirely distinguishable from Eva Agro (supra). In that case, after
the Appellant therein was declared the highest bidder, the auction
was cancelled without providing any reason. This decision was
found to be manifestly arbitrary by this Court and therefore, the
appeal was allowed. However, in the present case, the decision
to cancel the auction was not unfounded, it was undertaken to
remedy the erroneous minimum rate provided in the NIT dated
07.07.2020, as noted in the report of the Div. Commissioner of
the IDA. Therefore, the Appellants were well within their rights
to cancel the auction. More importantly, in the present case,
pursuant to the cancellation of the first NIT, a second NIT was
issued wherein the respondent No. 1 did not participate. Despite
this fact, the Division Bench of the High Court effectively
SLP (C) No. 9940/2022 Page 20 of 21
usurped the powers of the auctioning authority and fixed the price
at Rs. 26,000/- per square meter. Hence, being entirely
distinguishable on facts, the reliance placed is of no assistance to
respondent No. 1.
16. Resultantly, the IDA is directed to issue a fresh NIT for
disposal of the land in question enabling the IDA to generate
more revenues in respect of the land in question. The appellant
shall certainly be free to participate in the fresh NIT as and when
issued by the IDA. It is made clear that the IDA shall not dispose
of the land in question except by way of public auction/by issuing
NIT in future.
17. With the aforesaid, the appeal stands allowed.
……………………………………J.
[BELA M. TRIVEDI]
……………………………………J.
[SATISH CHANDRA SHARMA]
NEW DELHI
November 25, 2024
SLP (C) No. 9940/2022 Page 21 of 21