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Monday, January 30, 2017

Section 149 of IPC. - common object of the unlawful assembly= It is trite law that the common object of the unlawful assembly has to be inferred from the membership, the weapons used and the nature of the injuries as well as other surrounding circumstances. Intention of members of unlawful assembly can be gathered by nature, number and location of injuries inflicted. In the instant case, repeated gun shots fired by Ram Chandra Sah on the person of deceased Ram Udgar Sah, and the injuries caused by lathis by other accused persons on the complainant and his second brother on their heads, clearly demonstrate the objective to cause murder of these persons. We, thus, do not find merit in this appeal which is, accordingly, dismissed.

                                                              NON-REPORTABLE

                        IN THE SUPREME COURT OF INDIA

                       CRIMINAL APPELLATE JURISDICTION

                      CRIMINAL APPEAL NO. 1143 OF 2010


|GANGA RAM SAH & ORS.                       |.....APPELLANT(S)            |
|VERSUS                                     |                             |
|STATE OF BIHAR                             |.....RESPONDENT(S)           |



                               J U D G M E N T


A.K. SIKRI, J.
                 The case of the prosecution, which  has  been  successfully
established before the trial  court  as  well  as  the  High  Court,  is  as
follows:
                 On 27.06.1983, a  fardbayan  was  given  by  the  informant
Yogendra Narayan Sah alleging  that  three  days  ago,  the  cattle  of  Ram
Chandra Sah, accused No. 5 herein (sole accused in Criminal Appeal  No.  285
of 1988 before the High Court) grazed the  paddy  field  of  the  informant,
which incident was  brought  to  the  knowledge  of  the  villagers  by  the
informant.  It was further alleged that on 27.06.1983, at  about  9  am,  he
showed grazed field to the Panches in the presence  of  accused  No.  5  Ram
Chandra  Sah.   The  Panches  advised  them  not  to  get  involved  in   an
altercation.  It was further  alleged  that  while  the  Panches  were  busy
inspecting the field, accused No. 2 Sita Ram Sah  inflicted  lathi  blow  on
the left leg and thigh of the informant's brother, Bauku Sah.   The  Panches
intervened and assured that the matter will be resolved shortly.
                 Further case of the prosecution is that the  informant  and
his brother returned to their house, whereas Ram Chandra Sah  and  Sita  Ram
Sah rushed to their house.  However, no sooner  did  the  informant  reached
his house and was standing south-west of it,  all  the  accused  persons  as
well as one Sukhdeo Sah (since deceased), father of  accused  Nos.4  and  5,
variously armed arrived there.  It was  further  alleged  by  the  informant
that accused No.5 was armed with gun  and  others  were  armed  with  lathi.
Soon thereafter, Sukhdeo Sah and accused  No.1  exhorted  other  accused  to
assault, whereupon accused  No.5  fired  two  gunshots  hitting  informant's
brother Ram Udgar Sah just at his  darwaja  (door  of  the  house),  thereby
causing his death instantaneously on the spot.  The informant  alleged  that
his brother Ram Udgar Sah sustained pellet wounds in  his  chest,  neck  and
mouth.  The other accused assaulted the informant with lathi as a result  of
which the informant sustained injuries on the right side  of  the  head  and
right  hand.   The  accused  persons  also  assaulted  the  brother  of  the
informant, Uday  Chandra  Sah  with  lathi,  on  account  of  which  he  too
sustained injuries on his head and fell on the  ground.   Uday  Chandra  Sah
was then taken to the hospital for treatment.  It was further  alleged  that
the accused persons fled away when the informant raised alarm and  witnesses
Ram Swaroop Yadav, Kapu Yadav, Sadhu Sah (PW-6), Dhodhai Sah  (PW-7),  Bauku
Sah  (PW-2) and others reached  the  place  of  occurrence.   The  informant
alleged that the accused persons herein committed the  offence  because  the
informant had chastised them for damaging his crops.  On the  basis  of  the
aforesaid fardbayan, a formal FIR was  drawn  for  offences  under  Sections
147, 148, 149, 307, 302, 325, 332 of the Indian Penal Code, 1860 (for  short
the 'IPC') and Sections 25A/26 of Arms Act, 1959  being  Mahishi  P.S.  Case
No. 33 of 1983 on 27.06.1983 at 6 pm.  On 28.06.1983,  Dr.  J.  Lal  (PW-13)
held postmortem on the body  of  the  deceased.   It  was  recorded  in  the
postmortem report that on opening the chest, the upper  lobes  of  both  the
lungs were found torn with free blood in both sides  of  the  chest  cavity.
The injury was anti mortem, fatal and caused by gun shot.

2.     After  investigation,  the   police   submitted   final   chargesheet
implicating all five persons named in the FIR, as accused.  The trial  court
framed the charges against them under the aforesaid  provisions.   To  prove
these charges, the prosecution examined 15  witnesses  altogether.   Out  of
the aforesaid 15 witnesses, Uday Chandra Sah (PW-1), Bauku Sah (PW-2),  Anar
Devi (PW-3), wife of deceased Ram Udgar Sah, Parvati Devi (PW-4), mother  of
the deceased, Ful Kumari (PW-8) and the informant Yogendra Narayan Sah  (PW-
10) were eye-witnesses of the occurrence.  One of  the  injured,  Sabo  Devi
(PW-9) did not support  the  prosecution  case  and  was  declared  hostile.
Sadhu Sah (PW-6) and Dhodhai Sah  (PW-7),  both  village  Panches  have  not
supported the occurrence.  They denied to have seen  the  actual  commission
of occurrence and were declared hostile.  Dr. P.K. Jha (PW-11) examined  the
injured persons, namely, Uday Chandra Sah  (PW-1),  Bauku  Sah  (PW-2),  Ful
Kumari  (PW-8),  Sabo  Devi  (PW-9)  at  Maheshi  Hospital  on  the  day  of
occurrence.  Jugeshwar Singh (PW-12) is the Investigating  Officer  of  this
case.  Dr. J.  Lal    (PW-13),  Civil  Assistant  Surgeon,  Sadar  Hospital,
Supaul held postmortem on the dead body of the deceased.  J.K. Mishra   (PW-
14) and Chotelal Yadav (PW-15) are formal witnesses.

The defence version of the appellants before the trial court was  that  they
have been falsely implicated in the P.S. Case No.33  of  1983  as  they  had
lodged a complaint case against the prosecution party bearing  No.338(C)  of
1983 for an occurrence of same date under Sections 147, 148, 149, 323,  324,
352 and  380  of  the  IPC  filed  against  the  prosecution  party  wherein
cognizance has been taken.  As a matter of fact,  accused  Ram  Chander  Sah
took the plea of alibi saying that he was being treated for Jaundice by  Dr.
J.K. Thakur, at Laheriasarai between 24.06.1983 to 10.07.1983 and  therefore
on the day of occurrence, he was not present in the village.

On defence side  also,  eight  witnesses  were  examined.   These  witnesses
included one Dr. Gajendra Prasad Thakur (DW-7), a  medical  practitioner  of
Laheriasarai.  After the trial was over,  the  learned  Additional  Sessions
Judge after analysing the evidence and material produced before him came  to
the  conclusion  that  charges  against  the  accused   persons   had   been
satisfactorily proved by the prosecution.  Ram Chandra Sah was sentenced  to
undergo rigorous imprisonment for life  for  the  offence  punishable  under
Section 302 IPC and rest of the  accused  persons  were  also  sentenced  to
undergo rigorous imprisonment for life  for  the  offence  punishable  under
Section 302/109 IPC.

Against the aforesaid conviction, these accused persons  had  preferred  two
criminal appeals which were heard  together  by  the  High  Court  and  have
resulted in dismissal, since the High Court has affirmed the conviction  and
sentence recorded by the trial court.

Two special leave petitions were filed against  the  judgment  of  the  High
Court.  Four accused filed one petition and Ram Chandra  Sah  filed  another
special leave petition.  On 16.11.2009,  while  notice  was  issued  in  the
special leave petition filed by the four accused persons,  the  petition  of
Ram Chandra Sah was  dismissed  in  limine.   In  this  manner,  insofar  as
conviction of Ram Chandra Sah is  concerned,  that  has  attained  finality.
Leave was granted in the other special leave petition  on  13.05.2010  which
was converted into the instant appeal  i.e.  Criminal  Appeal  No.  1143  of
2010.  During the pendency of this appeal, appellant Nos.2 and 4  i.e.  Sita
Ram Sah and Jagdish Sah have passed away and,  therefore,  appeal  qua  them
stood abated.  In these circumstances, we heard the appeal of the other  two
appellants, namely, Ganga Ram Sah and Pitambar Sah.

Mr. Nagendra Rai, learned senior counsel  appearing  for  these  appellants,
submitted that allegation against Ganga  Ram  Sah  was  that  he  had  given
orders and exhorted others to assault whereupon  Ram  Chandra  Sah  shot  at
Uday Chandra Sah.  This was the only role attributed to Ganga  Ram  Sah  but
the same was not proved inasmuch as four eye-witnesses, namely, PW-3,    PW-
4, PW-8 and PW-9 did not make any  such  assertions  in  their  depositions.
Insofar as appellant No. 3 Pitambar Sah is concerned, Mr. Rai has  submitted
that no role is attributed to  him  in  the  FIR  and  because  of  previous
animosity between the parties, he had been falsely implicated.

We are not convinced with the aforesaid  arguments.   It  may  be  mentioned
that the FIR  was  registered  on  the  basis  of  fardbayan  given  by  the
informant Yogendra Narayan Sah immediately after the incident.  There is  no
time lag between the incident and the FIR.  In the said FIR, both  appellant
Nos. 1  and  3  are  specifically  named.   Insofar  as  appellant  No.1  is
concerned,  specific  allegation  is  made  in  the  FIR  that  it  was  the
exhortation of appellant No.1 which led to the said  assault.   Accused  Ram
Chandra Sah fired two gun shots  hitting  Ram  Udgar  Sah  (brother  of  the
informant) which caused instant death.  Two other eye-witnesses, namely, PW-
1 and PW-2 have also  specifically  given  the  statement  to  this  effect,
thereby supporting the version of the  prosecution.   These  witnesses  were
cross-examined at length but their testimony could not be shaken.   Presence
of Ganga Ram Sah at the scene of occurrence has not been denied.   The  role
attributed to him, therefore, stands proved, as rightly held  by  the  trial
court as well as the High Court.

It has to be borne in mind  that  all  these  persons  are  convicted  under
Section 149 of IPC as well.  It has also to be borne in mind that  appellant
Nos. 1 to 4 are closely related.  In  fact,  appellant  No.  4  Jagdish  Sah
(since dead) was father of the other three  appellants,  namely,  Ganga  Ram
Sah, Sita Ram Sah (since dead) and Pitambar Sah.   The  reason  for  causing
murder of one person and injuring other persons, all of  whom  were  related
and belonged to the rival group, is obvious as stated in the FIR itself.   A
dispute had arisen between the two groups three  days  before  the  date  of
incident in question, which incident was brought to  the  knowledge  of  the
villagers by the informant and Panches had advised both the  groups  not  to
involve in any altercation.  It is the  specific  case  of  the  prosecution
that while the  Panches  were  busy  inspecting  the  field,  Sita  Ram  Sah
inflicted lathi blow on the left leg and thigh of Bauku Sah (brother of  the
informant).  The matter could be resolved with the intervention of  Panches.
 However, when informant and his brother returned to their  house,  convicts
Ram Chandra Sah and Sita Ram Sah along with four others  came  there,  armed
with weapons.  Ram Chandra Sah was  holding  a  gun  whereas  other  accused
persons were carrying lathis.  At that stage, appellant No.1 Ganga  Ram  Sah
exhorted other appellants to charge the members of  the  other  group.   It,
thus, becomes clear that all these appellants had come with clear motive  in
mind to bodily harm the members of the informant's family  and  with  common
objective.  A calculated action was spearheaded.  All  the  accused  persons
were very well aware of the consequence of this action.  The  Courts  below,
therefore, rightly held that ingredients for the offence under  Section  149
also stood proved.  In that event, both these appellants  are  also  equally
liable for the consequence of causing murder of Ram Udgar  Sah  and  attempt
to murder other victims.

We may mention here at this stage that  Mr.  Nagendra  Rai,  learned  senior
counsel appearing for the appellants, had made a fervent plea to the  effect
that offence under Section 149 IPC was not proved inasmuch as there  was  no
clear finding recorded by the courts below regarding the  nature  of  common
object and that the object was unlawful.  For this purpose, he  referred  to
the judgment of this Court in Bhudeo Mandal &  Ors.  v.  State  of  Bihar[1]
wherein the Court has held that before convicting accused with  the  aid  of
Section 149, the Court must give clear  findings  regarding  the  nature  of
common object and that the object was unlawful and that in  the  absence  of
such findings, offence under Section 149 IPC cannot be held  to  be  proved.
In that case, the Court held that mere fact that the  accused  persons  were
armed would not be sufficient to prove the common object.   In  the  instant
case, however, as already described above, there is a  clear  finding  about
the common object and calculated/concerted  action  in  furtherance  of  the
said object.

Mr. Rai also referred to the judgment in the case of Thakore Dolji  Vanvirji
& Ors. v. State of  Gujarat[2]  and  specifically  read  out  the  following
discussion contained therein:
“3. …Now the question is whether all the  accused  would  constructively  be
liable for an offence of murder by virtue of Section 149 IPC. So far A-1  is
concerned, it is the consistent version of  all  the  eyewitnesses  that  he
dealt a fatal blow on the head with a sword and the medical  evidence  shows
that there was a fracture  of  skull  and  the  blow  must  have  been  very
forceful because even the brain was  injured.  Therefore,  he  was  directly
responsible for the death of the deceased and the  High  Court  has  rightly
convicted him under Section 302 IPC. Now coming to the rest of the  accused,
all the eyewitnesses have made an omnibus allegation against them.  Even  A-
2, according to the eyewitnesses, gave only one blow and that the  remaining
accused gave stick blows. All these  injuries  were  not  serious  and  were
simple. The injury attributed to A-2 was on the cheek  and  the  doctor  did
not say that it caused any damage. So it must also be held to  be  a  simple
injury. Then we find only a bruise and an abrasion  on  the  right  arm  and
some bruises on the back. These injuries did  not  result  in  any  internal
injuries. There was not even a fracture of rib. Therefore they must also  be
simple injuries. It is only injury  No.  1  which  was  serious  and  proved
fatal. Therefore the question is whether under  these  circumstances  common
object of the unlawful assembly was to cause the death of the  deceased  and
whether every member of the unlawful assembly  shared  the  same?  No  doubt
Section 149 IPC is wide in its sweep but in fixing  the  membership  of  the
unlawful assembly and in inferring the common object, various  circumstances
also have to be taken into  consideration.  Having  regard  to  the  omnibus
allegation, we think it is not safe to convict every one  of  them  for  the
offence of murder by applying Section 149 IPC. On a careful  examination  of
the entire prosecution case and the surrounding circumstances, we think  the
common object of the unlawful assembly was only to cause grievous hurt.  But
A-1 acted in his own individual manner and caused one injury with the  sword
which proved fatal.”


The aforesaid discussion is in the context of evidence that emerged  in  the
said case wherein the Court found, as a fact,  that  the  common  object  of
unlawful assembly was only to cause grievous hurt. Thus, in that case,  when
common object to commit murder was not established and the Court found  that
apart from the primary accused (A-1) who had inflicted a fatal  blow,  there
were omnibus allegations of involvement qua other accused  persons,  it  was
not safe to convict other persons under Section 302 with the aid of  Section
149 of IPC.  The situation, in the present case,  is  altogether  different.
Here the accused persons had gone to the  house  of  the  complainant  fully
armed with gun and lathis.  This visit was preceded by a scuffle  which  had
taken place just before that.  One person was carrying  gun  whereas  others
were  armed  with  lathis.   The  moment  they  reached  the  house  of  the
complainant, who was there with his family members, appellant No.1  directed
others to attack the victims party.  On this exhortation,  Ram  Chandra  Sah
pulled his gun and shot twice at  Ram  Udgar  Sah.   Other  accused  persons
started assaulting Uday Chandra Sah who sustained wounds on his chest,  neck
and face.  They also assaulted the complainant  as  well  his  brother  Uday
Chandra Sah with lathis.  Complainant sustained injuries on the  right  side
of the head and right hand whereas Uday Chandra Sah  sustained  injuries  on
his head and had to be carried to hospital for treatment.   All  these  acts
and events taken together proved beyond doubt that the common object of  the
unlawful assembly was not only to  cause  grievous  hurt  but  to  kill  the
members of the opposite camp.  The aforesaid judgment, therefore,  does  not
apply to the facts of this case.

It is trite law that the common object of the unlawful assembly  has  to  be
inferred from the membership,  the  weapons  used  and  the  nature  of  the
injuries as well as other surrounding circumstances.  Intention  of  members
of unlawful assembly can be gathered  by  nature,  number  and  location  of
injuries inflicted.  In the instant case, repeated gun shots  fired  by  Ram
Chandra Sah on the person of  deceased  Ram  Udgar  Sah,  and  the  injuries
caused by lathis by other accused persons on the complainant and his  second
brother on their heads, clearly demonstrate the objective  to  cause  murder
of these persons.  We, thus, do not find merit  in  this  appeal  which  is,
accordingly, dismissed.


                             .............................................J.
                                                                (A.K. SIKRI)



                             .............................................J.
                                                              (R.K. AGRAWAL)

NEW DELHI;
JANUARY  27, 2017.


-----------------------
[1]
      (1981) 2 SCC 755
[2]   1993 Supp (2) SCC 534

in Gordhandas Bhanji AIR 1952 SC 16 : “Public orders, publicly made, in exercise of a statutory authority cannot be construed in the light of explanations subsequently given by the officer making the order of what he meant, or of what was in his mind, or what he intended to do. Public orders made by public authorities are meant to have public effect and are intended to affect the actings and conduct of those to whom they are addressed and must be construed objectively with reference to the language used in the order itself. Orders are not like old wine becoming better as they grow older.” There is no dispute from the aforesaid proposition. However, in the instant case reasons have been mentioned in the rejection order and the nature of reports has also been sufficiently explained. Thus the rejection of seven different bids in the auction reflects that there was due application of mind by the concerned authority and rejection could not be said to be illegal, arbitrary or sans of reason.- Plaintiff came to the court for mandatory injunction, for issuance of allotment letter without payment of court fee also. It was incumbent upon the plaintiff to pay the ad valorem court fee as prevailing and the valuation of the suit should not have been less than the bid amount of Rs.111.75 crores, as rightly held by the first appellate court. The plaintiff is directed to pay the ad valorem court fee not only before the trial court but also before the High Court. Plaintiff is directed to deposit the court fee within two months from today, as payable. 35. Resultantly, the appeal is allowed. The judgment and decree passed by the High Court is set aside and that of the first appellate court is restored. In the facts and circumstances of the case, we impose costs of Rs.5 lakhs on the plaintiff/respondent to be deposited as : Rs.2.5 lakhs in the Advocates’ Welfare Fund and Rs.2.5 lakhs in the Supreme Court Employees’ Welfare Fund within a period of two months from today.

ITEM NO.1A               COURT NO.9               SECTION IVB

               S U P R E M E  C O U R T  O F  I N D I A
                       RECORD OF PROCEEDINGS

                        CIVIL APPEAL NO. 1016 OF 2017
                 ((Arising out of SLP(C) No(s).  12166/2011)

 HARYANA URBAN DEV. AUTHORITY & ORS.              Petitioner(s)


                                VERSUS


ORCHID INFRASTRUCTURE DEVELOPERS P.LTD.            Respondent(s)

Date : 27/01/2017 This MATTER  was called on for Judgment today.

For Petitioner(s)       Mr. Shyam Devan, Sr. Adv.
                        Mr. Anish Kumar Gupta, Adv.
                        Mr. Chandra Shekhar Suman, Adv.
                        Mr. R.K. Rajwanshi, Adv.
                        Ms. Deepshikha Bharati, Adv.
                     Mr. Sanjay Kumar Visen,Adv.
                        Mr. Anil Grover, AAG

For Respondent(s)       Mr. Raja Chatterjee, Adv.
                        Ms. Nandini Ram Chandran, Adv.
                        Ms. R. Bhuyan, Adv.
                     Mr. Satish Kumar,Adv.


            Hon'ble Mr. Justice Arun Mishra pronounced the judgment  of  the
Bench comprising His Lordship and Hon'ble Mr. Justice Amitava Roy.
            The appeal is allowed. The judgment and  decree  passed  by  the
High Court is set aside and that of the first appellate court  is  restored.
In the facts and circumstances of the case, we impose costs  of  Rs.5  lakhs
on the plaintiff/respondent to  be  deposited  as  :  Rs.2.5  lakhs  in  the
Advocates’ Welfare Fund and Rs.2.5 lakhs in  the  Supreme  Court  Employees’
Welfare Fund within a period of two months from today.

|   (NEELAM GULATI)                |        (TAPAN KR. CHAKRABORTY)    |
|COURT MASTER                      |COURT MASTER                       |


            (Signed Reportable Judgment is placed on the file)
                                                             Reportable
                        IN THE SUPREME COURT OF INDIA
                        CIVIL APPELLATE JURISDICTION
                      CIVIL APPEAL NO.  1016  OF  2017
                   (Arising out of SLP [C] No.12166/2011)

Haryana Urban Development Authority & Ors.        … Appellants

Vs.

Orchid Infrastructure Developers P. Ltd.                … Respondent

                               J U D G M E N T

ARUN MISHRA, J.

1.    Leave granted.
2.    The appeal arises out of judgment and order dated 17.1.2011 passed  by
the High Court of Punjab & Haryana at Chandigarh thereby setting  aside  the
judgment and decree of District Judge dated  29.11.2010  and  restoring  the
judgment and decree of Civil  Judge  passed  on  14.10.2010.  The  plaintiff
Bhudeep Builders and Exporters Pvt. Ltd. were later renamed as  M/s.  Orchid
Infrastructure Developers P. Ltd. The plaintiff-respondent filed a suit  for
declaration with consequential relief as against the appellants with  regard
to rejection of bid relating to the commercial tower situated in Sector  29,
Urban Estate, Gurgaon, in area admeasuring 9.527 acres.  The  bid  submitted
by the plaintiff was the highest of  Rs.11,17,50,000/-.  The  reserve  price
was Rs.106.65 crores.  The main terms and conditions of the auction were  as
under :
(i) 10% of the bid amount to be tendered on the spot at fall of hammer.
(ii) 15% of the bid money to be deposited within 30 days from  the  date  of
issuance of allotment letter.
(iii) 75% of the  amount  to  be  paid  within  60  days  from  issuance  of
allotment letter as one time interest free payment or with interest  in  the
manner prescribed.
(iv) The Presiding Officer (Administrative Officer) reserved  the  right  to
withdraw any property from the auction or reject any bid  without  assigning
any reason.
3.    It is  further  averred  in  the  plaint  that  the  auction  held  on
24.5.2004 was presided over by the Administrator, Haryana Urban  Development
Authority (for short ‘HUDA’). Reserve  price  had  been  approved  by  Chief
Administrator, HUDA. Though the reserved price  for  the  other  sites  were
approved by the Administrator. In the plaint it was further averred that  27
persons deposited the  security  amount  of  Rs.50  lakhs  for  bidding  and
various bidders actively participated in the bids.  Ultimately  the  bid  of
the plaintiff amounting to Rs.111.75  crores  being  highest  was  accepted.
Petitioner deposited 10% amount by various drafts on  the  fall  of  hammer.
Formal letter of allotment was not issued inspite of  efforts  made  by  the
plaintiff. Officials of  HUDA  were  dragging  their  feet  over  the  issue
without any rhyme or reason.
      Plaintiff ultimately  received  memo  dated  24.9.2004  purporting  to
refund 10% amount Rs.11,17,50,000 deposited by the plaintiff at the time  of
auction held on 24.5.2004 on the ground that the bid had not been accepted.
4.    Plaintiff questioned the rejection of the bid on  the  ground  of  its
being illegal, unlawful, mala fide, arbitrary, discriminatory and  violative
of principles of natural justice. The  bid  for  the  commercial  tower  was
adequate and above the reserved price. The plaintiff relied upon  Regulation
6 regarding  issuance  of  allotment  letter  by  Chief  Administrator.  The
rejection of the bid is without any rhyme  or  reason.  The  order  is  non-
speaking. There was no material available with  the  defendant  to  conclude
that auction of property in question was made at a lower rate  or  that  the
same would fetch a higher price  in  the  event  of  re-auction.  The  Chief
Administrator alone was competent to decide about the bid and no  delegation
of power to Administrator has been shown to  the  plaintiff.  Mere  baseless
apprehension harboured by the defendant  that  the  auction  could  fetch  a
higher rate, could not be said to be in public interest. If such  action  is
permitted, auction process shall be a never ending exercise.  The  plaintiff
valued the suit  for  declaration  and  consequential  relief  of  mandatory
injunction at Rs.400 and paid the court fee of Rs.55.  Plaintiff has  prayed
for a declaration that  memo  dated  24.9.2004  rejecting  the  bid  of  the
plaintiff to be void ab initio, non est and illegal, and that  plaintiff  is
successful bidder of commercial tower  measuring  9.527  acres  situated  in
Sector 29, Urban Estate, Gurgaon. Plaintiff  further  prayed  for  mandatory
injunction directing the defendants to  issue  formal  letter  of  allotment
pertaining to the suit property in favour of the plaintiff and  to  complete
requisite formalities of allotment  including  delivery  of  possession  and
sanction  of  site  plan.  Plaintiff  further  prayed  for   an   injunction
restraining  defendants  from  re-auctioning  the  suit  property  and  from
creating any third party interest of any  nature  in  respect  of  the  suit
property.
5.    The  defendant  HUDA  in  its  written  statement  raised  preliminary
objection that the civil court has no jurisdiction to entertain the  present
suit in view of section 15(2) of Haryana Urban  Development  Authority  Act,
1977 (hereinafter referred to as ‘the Act’). It was also submitted that  the
suit was not maintainable in the present form, that  the  plaintiff  has  no
cause of action to file the suit and  has  not  come  to  court  with  clean
hands, suit is liable to be rejected under Order 7 Rule 11  of  the  C.P.C.,
plaintiff is liable to pay ad valorem court fee on  the  sale  consideration
of Rs.111.75 crores of the commercial site in question, the suit  is  barred
under section 41(h) of the  Specific  Relief  Act.  The  plaintiff  has  not
availed the remedy of arbitration as per the  rules,  regulations  and  bye-
laws of HUDA. There is no concluded contract between the parties.  Plaintiff
has accepted the terms and  conditions  of  the  auction  in  which  it  was
mentioned that the competent authority is entitled to accept or  reject  the
bid without assigning any reason. The  auction  was  presided  over  by  the
Administrator, HUDA. After auction in  question  was  held  complaints  were
received regarding intimidation and threatening of bidders. The bid was  not
accepted for the reason that the price of  urban  estates  at  other  places
like Faridabad, Panipat, Panchkula etc. for similar  kind  of  property  was
higher. The bid in question was  not  acceptable  as  per  prevalent  market
price of the  similar  property  in  Gurgaon.  The  Presiding  Officer  i.e.
Administrator is fully competent to refuse  or  accept  the  bid.  Competent
authority after going through  the  individual  reports/comments/opinion  of
the members of the Auction Committee comprising  of  Estate  Officer,  HUDA,
Gurgaon,  Senior  Accounts  Officer,  District  Town  Planner  and  District
Revenue Officer (representative of  the  Deputy  Commissioner,  Gurgaon)  as
members  under  the  Chairmanship  of  Administrator,  HUDA.   Administrator
thoroughly examined the observations and recommendations of the  members  of
the Auction Committee  regarding  not  to  accept  the  bid  prices  of  big
commercial sites since these prices  being  apparently  on  the  lower  side
which was also examined by the Government at  the  Headquarters  level.  The
records of the entire auction proceedings including opinion  of  the  Estate
Officer,  Gurgaon,  other  members  of   the   Auction   Committee,   Deputy
Commissioner and also after studying the reserve  price  and  auction  price
trends, a decision was taken by the competent authority not  to  accept  the
bid prices vide their written report.
      It was further contended by HUDA that Administrator is  the  competent
authority.  Power to accept bid has been delegated to him by  the  competent
authority.
6.    In view of the written statement the plaintiff filed a  rejoinder.  It
was denied that the civil court has no jurisdiction and bid  price  was  not
inadequate. It also denied the delegation of power to  Administrator,  HUDA,
Gurgaon.
7.    The trial court – Civil Judge, Junior Division,  Gurgaon  decreed  the
suit vide  judgment  and  decree  dated  14.10.2010.  Three  witnesses  were
examined  by  the  plaintiff  and  on  behalf  of   defendant   HUDA.   Shri
P.K.Ramanand,  Assistant  was  examined.   The   trial   court   held   that
Administrator, HUDA was not competent to reject the bid  of  the  plaintiff.
As per Regulation 6 of Haryana  Urban  Development  (Disposal  of  Land  and
Buildings) Regulations, 1978 (hereinafter referred to  as  ‘the  Regulations
of 1978’), the authority to accept or reject a bid  was  vested  with  Chief
Administrator, HUDA and delegation of power to Chief Administrator can  only
be made by the State Government vide notification as per  section  51(4)  of
the Act. No notification has been placed on record to prove that  the  power
of Chief Administrator  has  been  delegated  to  Administrator,  HUDA.  The
report on the basis of which  bid  had  been  rejected  was  not  placed  on
record. The trial court held that the plaintiff  is  entitled  to  mandatory
injunction for issuance of formal letter of acceptance  of  bid.  The  trial
court further held that the suit is maintainable.  The payment of court  fee
by the plaintiff was adequate as the suit was not for  specific  performance
of contract. The trial  court  further  directed  the  defendants  to  issue
formal letter of allotment on completion  of  requisite  formalities  within
two months.
8.    On first appeal being  preferred  in  the  court  of  District  Judge,
Gurgaon the same was allowed vide judgment and decree dated 29.11.2010.  The
suit was dismissed by the first appellate court. The first  appellate  court
has opined that the power of  Chief  Administrator  has  been  delegated  to
Administrator, HUDA. As  is  apparent  from  the  letter  written  by  Chief
Administrator to the Administrator. No legal and  vested  right  accrued  in
favour of the plaintiff by submission of the highest  bid  and  10%  of  the
amount on fall of hammer. Bid has not been finally accepted.  The  plaintiff
ought to have paid ad-valorem court fee.  The  first  appellate  court  also
observed that no responsible officer of HUDA has  entered  the  witness  box
and only a junior ranking Assistant has been examined who  was  not  present
when the auction was held. He was posted at Gurgaon on 2.10.2008. The  first
appellate court has observed as under :
“However, the defendants have not produced any document whatsoever to  prove
the  above  averment  and  nor  has  any  responsible   officer,   including
defendants No.2 and 3, cared to step in the witness box to substantiate  the
above referred plea and instead only one witness, and that too an  Assistant
named P.K. Ramanan from the office of HUDA, Gurgaon who is a junior  ranking
official was examined as DW1 who was admittedly  not  even  present  at  the
time of the impugned auction because  he  has  admitted  during  his  cross-
examination that he came to be posted at Gurgaon only w.e.f. 8.8.2008.  Non-
appearance of any responsible official of HUDA thus indicates some  sort  of
unholy news between certain  quarters  for  which  reason  a  copy  of  this
Judgment  is  ordered  to  be  forwarded  to  the  Chief  Secretary  to  the
Government of Haryana for getting  conducted  an  enquiry  as  to  why  such
course of conduct was adopted  despite  huge  stakes  running  into  several
crores.  Was it intended to benefit the plaintiff  by  default.   The  Chief
Secretary to Government of Haryana be requested to  acknowledge  receipt  of
the copy of the judgment.”

9.    On the second appeal being preferred on 2.1.2011 in the High Court  as
against the judgment and decree, the same  has  been  allowed  on  17.1.2011
within 15 days of it being filed. The High Court has restored  the  judgment
and decree of the trial court on the ground that there is no  delegation  of
power  to  the  Administrator.  The  rejection  by  the  Administrator   was
inconsequential and was not a valid decision in the absence of  irregularity
in auction the bid ought to have been accepted by the  Chief  Administrator,
HUDA and letter conveying acceptance ought to have been issued in favour  of
the plaintiff. In view  of  Regulation  6(2)  the  Chief  Administrator  was
competent authority to take a final decision on  the  bid.  No  notification
has been issued by the State Government under  section  51(4)  of  the  Act.
The suit has been held to be maintainable. It has been  rightly  valued  and
adequate court fee has been paid.
10.   The judgment and decree of High Court has been  questioned  by  filing
the appeal in this Court. An application has also been filed  on  behalf  of
the appellant to take additional documents on record.  HUDA  for  the  first
time has filed notification dated 13.9.1989 issued by it  under  section  51
of  the  Act,  delegating  the  functions  in  favour  of  various  officers
indicating that the power has been delegated to the Administrator to  accept
the auction bids for  commercial/residential/industrial  sites.  Apart  from
that, a judgment of Division Bench of the High Court of Punjab & Haryana  in
CWP No.12753/2010 – Jitender Singh v. Haryana  Urban  Development  Authority
has been placed on record in which the impugned decision of the  High  Court
in the present appeal has been held to be not laying down  a  good  law  and
has been overruled.
11.   It was urged by Shri Shyam Divan, learned senior counsel appearing  on
behalf of the appellant that Administrator was Presiding Officer, thus,  had
the authority to accept or to refuse the bid  not  only  as  per  terms  and
condition No.4 of the tender notice but also as per the delegation  made  by
HUDA on 13.9.1989  under  section  51  of  the  Act.  Since  the  letter  of
allotment has not been issued, there was no concluded contract  between  the
parties. Thus  suit  was  not  maintainable  in  the  absence  of  concluded
contract for its enforcement. No allotment order was  issued  by  the  Chief
Administrator as per Regulation 6(2). Chief Administrator was only  required
to issue allotment  letter.  Once  bid  has  been  rejected,  there  was  no
occasion for the court to issue mandatory injunction. The rejection  of  the
bid was fully justified as prices fetched of 7 items were not adequate,  and
no right accrued on the basis of submitting the highest bid.

12.   Shri Abhishek Manu Singhvi and Shri Raju Ramchandran,  learned  senior
counsel  appearing  for  the  respondent   strenuously  contended  that  the
Administrator  had  forwarded  the  bid  to  the  Chief  Administrator   for
acceptance.  However,  the   Chief   Administrator   wrote   back   to   the
Administrator that the Administrator should decide about the  bid  as  power
was delegated to him. As per Regulation 6(2)  the  Chief  Administrator  was
required to decide about  the  acceptance  or  rejection  of  the  bid.  The
rejection of bid is not only arbitrary, unreasoned and no  report  has  been
placed on record by HUDA as to why bid had been rejected. The bid was  above
reserve price and there were several bidders. There being no better  bid  as
such the bid of the plaintiff ought to have been accepted. Rejection of  the
bid without any reason cannot be said to be valid  for  which  reliance  has
been placed  on  M/s.  Star  Enterprises  &  Ors.  v.  City  and  Industrial
Development Corporation of  Maharashtra  Ltd.  &  Ors.  (1990)  3  SCC  280,
Mohinder Singh Gill & Anr. v. The Chief Election Commissioner, New  Delhi  &
Ors. AIR 1978 SC 851, and  Kalu  Ram  Ahuja  &  Anr.  v.  Delhi  Development
Authority & Anr. (2008) 10 SCC 696.  In  the  absence  of  any  notification
being issued by the State Government under section 51(4)  of  the  Act,  the
power of the Chief Administrator  could  not  have  been  delegated  to  the
Administrator.  Thus  rejection  of  the  bid  by  the   Administrator   was
unauthorised.  The delegation of power by HUDA was made under section  51(1)
whereas delegation was required under section 51(4).
In re : Maintainability of suit in absence of concluded contract :
13.   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, plaintiff could not have become entitled for  consequential  mandatory
injunction  for  issuance  of  formal  letter  of  allotment.  Court   while
exercising judicial review could not have accepted  the  bid.  The  bid  had
never been  accepted  by  concerned  authorities.  It  was  not  a  case  of
cancellation of  bid  after  being  accepted.  Thus  even  assuming  as  per
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  entitled  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.
14.   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 Regulations of 1978, 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  Regulations
of 1978 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.
(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 cant 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 tome  and  announced  to  the
public before auction on the spot.”

15.   We are fortified in our view by a decision  of  this  Court  in  Uttar
Pradesh Avas Evam Vikas Parishad & Ors. v. Om Prakash Sharma  (2013)  5  SCC
182, 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 :
“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 (1982) 2 SCC 365.  The
learned Senior Counsel has rightly placed  reliance  upon  the  judgment  of
this Court in Rajasthan Housing Board case (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
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.”
x x x x x In 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. x x x x x 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  (1969)  3
SCC 146). By merely giving bids, the bidders had  not  acquired  any  vested
rights. ...” (emphasis supplied)
                                  x x x x x
31. In view of the law laid down by this Court in the  aforesaid  decisions,
the learned Senior Counsel Mr Rakesh 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.”      (emphasis supplied).


      This Court 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  aforesaid
decision, in the absence of a concluded contract, the suit  could  not  have
been 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  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.
In re : Competency of Administrator to accept/reject bid :
17.   The plaintiff has come to the Court with the case that  there  was  no
delegation of power to  the  Administrator.  No  doubt  about  it  that  the
delegation of power made by HUDA under section 51 of the Act  has  not  been
placed on record before the courts below. It has been filed  for  the  first
time in this Court. However, HUDA has placed on record delegation  of  power
to the Administrator by it as is apparent from  the  order  dated  13.9.1989
issued by the Chief Administrator of HUDA in which it is mentioned  that  in
exercise of power conferred under section 51 of the Act,  for  the  sake  of
efficiency,  speedy  development  and  with  a  view  to  decentralize   the
powers/functions the delegation at Annexure A  were  made  by  HUDA  in  its
meeting held on 3.1.1989 in favour of various  officials/officers  of  HUDA.
The relevant portion of delegation made in order dated 13.9.1989 along  with
Index is extracted hereunder :
                     “HARYANA URBAN DEVELOPMENT AUTHORITY
                         MANIMAJRA (UT), CHANDIGARH
                                   ORDER.

      In exercise powers conferred under section 51  of  the  Haryana  Urban
Development Authority Act, 1977,  in  the  interest  of  efficiency,  speedy
development and with  a  view  of  decentralise  the  powers/functions,  the
delegations at Annexure ‘A’ (Pages  1-16)  are  hereby  made  in  favour  of
various Officers of HUDA by the Haryana Urban Development Authority  in  its
meeting held on 03.01.1989.
Dated, Manimajra, the
13th Sep. 1989.
                                                                  R.K. SINGH
                                                         CHIEF ADMINISTRATOR
                                               HARYANA URBAN DEV. AUTHORITY”

                                    “INDEX
   DELEGATION OF FUNCTIONS/POWERS OF AUTHORITY AS INCORPORATED IN HARYANA
                   URBAN DEVELOPMENT AUTHORITY ACT, 1977.

 “Delegation of Administrative and Financial powers made under Section 51 of
    HUDA Act, 1977 on behalf of the Haryana Urban Development Authority:-

|Sr.  |Sr. No. of |Nature of   |Authority to  |Extent of power   |
|No.  |item in    |power:      |who delegated |delegated         |
|     |Annexure II|            |              |                  |
|     |of the     |            |              |                  |
|     |proposal   |            |              |                  |
|1    |2          |3           |4             |5                 |
|     |xxx        |xxx         |xxx           |xxx               |
|60   |70         |Powers to   |Chief         |Full Powers.      |
|     |           |accept the  |Administrator |                  |
|     |           |auction bids|              |                  |
|     |           |for         |Administrator |                  |
|     |           |commercial/ |              |Full powers       |
|     |           |residential |              |provided the      |
|     |           |/ industrial|              |highest bid is    |
|     |           |sites       |              |more than the     |
|     |           |            |              |reserve price and |
|     |           |            |              |minimum of 3 bids |
|     |           |            |              |have been         |
|     |           |            |              |received.  If a   |
|     |           |            |              |site is not sold  |
|     |           |            |              |even after three  |
|     |           |            |              |attempts at a     |
|     |           |            |              |price higher than |
|     |           |            |              |the reserve price |
|     |           |            |              |the administrators|
|     |           |            |              |may revise the    |
|     |           |            |              |price downwards   |
|     |           |            |              |upto maximum of   |
|     |           |            |              |10% of the reserve|
|     |           |            |              |price.            |

18.   It is apparent that there had been delegation of power by HUDA to  the
Administrator with respect to the power  to  accept  the  auction  bids  for
commercial/residential/industrial sites provided the  highest  bid  is  more
than the reserve price and minimum of three bids  have  been  received.  The
Administrator has also the power if the site is not sold in 3  attempts,  to
revise the price downwards up to a maximum of  10%  of  the  reserve  price.
Thus plaintiff  has  not  come  to  the  court  with  clean  hands  and  has
suppressed for the reasons best known to it, the aforesaid order of HUDA  by
which delegation of power has been made. The fact that there was  delegation
of power is also crystal clear from the communication exchanged between  the
Administrator  and  the  Chief  Administrator.  As  the  Administrator   was
reluctant to accept the bid, as was the case in  the  case  of  fixation  of
reserve price also, the Administrator considering the  huge  property,  said
that the auction involved prime and big commercial sites,  huge  revenue  is
involved and such a big auction has been carried out for the first  time  in
the State of Haryana, therefore, all the record pertaining  to  the  auction
was sent to the Chief Administrator for scrutiny and approval at  the  level
of Chief Administrator, HUDA,  Gurgaon.  However,  the  Chief  Administrator
also washed off his hands. He wrote back to the Administrator on  28.7.2004.
The decision to confirm or otherwise of a bid, should be  taken  only  by  a
competent authority whose order is appealable.  Therefore,  bids  should  be
considered by the competent  authority  and  as  the  Administrator  is  the
competent authority to  take  the  follow-up  action,  the  Headquarters  be
apprised of the decision taken. Thereafter, the Administrator had taken  the
decision not to confirm the seven bids of seven properties. It  is  apparent
from the order dated 21.9.2004 that the Administrator  after  examining  the
relevant aspects and the report,  had  decided  to  reject  the  seven  bids
mentioned therein.  The  said  letter  of  the  Administrator  is  extracted
hereunder :
 “From
            Administrator
            HUDA, Gurgaon
To
            The Estate Officer
            HUDA, Gurgaon

            Memo no. 709
            Dated: 21.9.04

Sub:  Auction of Commercial Sites-5 sites of  Shopping  Mall,  One  Site  of
Multiplex and one Site of Commercial Tower held on 24.5.2004 at Gurgaon.

Ref:  Your letter No. 11592 dated 28.6.2004 and the  comments  submitted  by
your office in the case files.

After examining the relevant aspects and reports submitted  by  your  office
as well as keeping in view the  contents  of  the  letter  No.  26559  dated
28.7.2004 received from Chief Administrator, HUDA,  Panchkula,  this  office
exercising the powers delegated by the Authority has decided to  reject  the
following bids of Commercial Sites for which auction was held on 24.5.2004:-


|Sr.|Sector|Particular|Sr. No. of|Area in|Reserve   |Highest |Remarks |
|   |      |s         |site      |Sq.    |Price (in |Bid (In |        |
|   |      |          |          |Mtr.   |rupees)   |rupees) |        |
|1. |29    |Commercial|Commercial|9.527  |106.65 Cr.|111.10  |Highest |
|   |      |Tower     |Tower     |Acre   |          |Cr.     |bid     |
|   |      |          |          |       |          |        |rejected|
|2. |29    |Shopping  |Adjoining |16500  |28.78 Cr. |30.15   |-do-    |
|   |      |Mall      |Leisure   |       |          |Cr.     |        |
|   |      |          |Valley    |       |          |        |        |
|   |      |          |Park      |       |          |        |        |
|3. |29    |-do-      |C-5A      |5865.60|10.12. Cr.|10.61   |-do-    |
|   |      |          |          |       |          |Cr.     |        |
|4. |29    |-do-      |C-9 Corner|7820.80|14.84 Cr. |15.46   |-do-    |
|   |      |          |          |       |          |Cr.     |        |
|5. |29    |-do-      |C-10      |7820.80|14.84 Cr. |15.51   |-do-    |
|   |      |          |Corner    |       |          |Cr.     |        |
|6. |55-56 |-do-      |--        |3850.00|6.72 Cr.  |7.15 Cr.|-do-    |
|7. |29    |Multiplex |--        |2700.00|4.69 Cr.  |5.07 Cr.|-do-    |

Bid sheets for the above mentioned sites as received from  your  office  are
returned herewith.

                                                                        Sd/-
                                                               Administrator

                     HUDA, Gurgaon”

19.   The Administrator had also mentioned in  his  letter  that  there  was
delegation of power to him. The letter from  the  Chief  Administrator  also
indicated that the Administrator was armed with the power. That apart,  when
we see the terms and condition No.4 of the tender notice, subject  to  which
auction was held, provided thus :
“4. The presiding officer reserves the right to withdraw any  property  from
the auction or reject any bid without assigning any reason.”

20.   Admittedly, the Presiding Officer was the Administrator,  HUDA.  Thus,
as per the terms of the auction  also,  the  Administrator  was  having  the
power to accept or reject the bid.  That the bid was more than  the  reserve
price and there were more than 3 bidders, is  not  disputed.  Thus,  in  our
opinion, the Administrator had the power  to  reject  the  bid  as  per  the
delegation made to him on 13.9.1989.
21.   The learned counsel representing the  plaintiff-respondent  vehemently
contended that there was no delegation of power under section 51(4)  and  it
was the State Government only who could have  delegated  the  power  of  the
Chief Administrator as found by the High Court. As delegation had been  made
by HUDA under section 51(1) of the Act of 1977, it was  incumbent  upon  the
plaintiff to question it and assail the same.  However,  the  plaintiff  had
feigned ignorance as to delegation  on  its  part  which  does  not  inspire
confidence as  the  line  of  arguments  advanced  on  its  behalf  that  no
delegation was there under section 51(4) was clearly grounded upon the  fact
that the delegation made under section 51(1) was in fact  to  the  knowledge
of the plaintiff that is why the aforesaid argument had  been  advanced  and
unfortunately learned counsel for HUDA  also  conceded  that  there  was  no
delegation of power made by the State Government under section  51(4).  This
was done by overlooking the delegation dated 13.9.1989, the  factum  whereof
has not been controverted by the learned counsel appearing on behalf of  the
respondent in any manner whatsoever. In the  absence  of  having  questioned
delegation made by HUDA under section 51(1) of the Act, plaintiff could  not
have succeeded in the suit.
22.   The plaintiff has not questioned the delegation of  power  before  the
courts below in any manner whatsoever. We decline to examine the  submission
raised by learned counsel for the plaintiff in this Court that there  is  no
delegation of  power  under  section  51(4)  and  the  power  of  the  Chief
Administrator could have been delegated only by the State Government not  by
HUDA under section 51(1) as per its order dated 13.9.1989.  In  the  absence
of challenge to legality  of  delegation  order  dated  13.9.1989,  and  the
plaintiff being guilty of suppressio veri, it is not entitled  to  urge  the
aforesaid submission so as to invalidate the statutory delegation  of  power
made by HUDA under section 51(1).
23.   In view of the aforesaid  fact-situation,  it  is  apparent  that  the
Administrator had the power to reject a bid, not only  being  the  Presiding
Officer as per terms and condition N0.4 of auction  but  otherwise  also  he
had the power, as discussed above. Thus, the decision of the High  Court  in
setting aside the auction on the aforesaid  ground  cannot  be  said  to  be
legally sustainable.
In re : Legality of rejection of bid :
24.   Coming to the question whether the Administrator had rejected the  bid
in an illegal or arbitrary manner, the learned  counsel  for  the  plaintiff
has submitted that the bid had been rejected  by  an  unreasoned  order,  as
such it was an arbitrary rejection. Learned counsel has drawn our  attention
to the communication dated 24.9.2004 which  has  been  communicated  by  the
Estate Officer to the plaintiff in which it has been mentioned that the  bid
has not been accepted, hence earnest money had been refunded. However,  this
communication of the  decision  reflects  only  the  return  of  the  cheque
pursuant to the decision of the  Administrator.  The  order  passed  by  the
Administrator is apparent from the communication of the  Administrator  made
to Estate Officer, HUDA on 21.9.2004 which has been extracted above.  It  is
apparent  from  the  rejection  order  that  the  reports   submitted   were
considered and decision was taken not to accept the  bids  with  respect  to
auction of seven properties. It was not a case of singular rejection of  the
bid made by the plaintiff alone. Six other bids were also not accepted.  The
reason for rejection  has  been  made  clear  in  para  15  of  the  written
statement filed by HUDA. The relevant portion is extracted hereunder :
“The action of not accepting the bid is very much sustainable  in  the  eyes
of law as the prices fetched by the auction was not in consonance  with  the
prices fetched in other urban  estates  like  Faridabad  and  Panchkula  for
similar kind of property.  The bid prices received for the above  said  site
was also not on the rising trend as per the prevalent market prices  of  the
similar property in Gurgaon.  The  judicial  view  had  been  taken  by  the
competent authority to safeguard the revenue interest of  HUDA.   The  price
of the site in question fetched in Gurgaon was on lower side as compared  to
the prices fetched in Panchkula, Faridabad  and  Panipat.   The  statistical
date for analysing the  trend  of  price  rising  and  revenue  fetched  was
considered by the competent authority and it was  revealed  that  the  price
fetched by the said auction was  on  lower  side.   Remaining  para  to  the
contrary is wrong and denied. x x x x x
The   competent   authority   after    going    through    the    individual
report/comments/opinion  of  the  Members   of   the   Auction   Constituted
Committee, comprising of Estate  Officer,  HUDA,  Gurgaon,  Senior  Accounts
Officer, District Town Planner and District Revenue Officer  (Representative
of the Deputy Commissioner, Gurgaon) as Members under  the  Chairmanship  of
Administrator, HUDA,  Gurgaon,  thoroughly  examined  the  observations  and
recommendations of the Member of the  Auction  Committee  regarding  not  to
accept the bid prices of big commercial site, since these  prices  being  on
apparently  lower  side  which  was  examined  by  the  Government  at   the
Headquarters level.  The entire records of the entire  auction  proceedings,
including the opinion of the Estate Officer, Gurgaon, other members  of  the
Auction Committee and Deputy Commissioner, Gurgaon’s report and  also  after
studying the reserve price and auction price trends, decision was  taken  by
the competent authority not to accept the bid  prices  vide  their  detailed
report.  Remaining  para  to  the  contrary  is  wrong  and  hence  denied.”


25.   Thus, it is apparent  that  the  report  and  recommendations  of  the
Auction  Committee consisting of 5 members, was not to accept  the  bids  of
big commercial sites as the prices fetched were  on  lower  side  which  was
examined by the  Government  at  the  Headquarters  level.  Considering  the
auction trends and also taking into consideration the higher prices  fetched
at Panipat, Panchkula and Faridabad, it was  decided  to  reject  the  seven
bids. Thus, there was due application of mind.
26.   In our opinion when it is apparent from  the  communication  that  the
reports were considered and what was contained in the report was  very  much
pleaded in the written statement, mere non-production of report was  not  of
any significance in the instant case. We are satisfied  that  the  rejection
of the bid by the Administrator was absolutely proper and justified and  was
beyond the pale of judicial scrutiny. The Administrator  had  the  right  to
reject  the  bids  and  he  had  rejected  it  on  sufficient  ground,  duly
considering the materials on record as is apparent  from  the  communication
dated 21.9.2004. In the interest of the public, revenue of the State and  in
the interest of HUDA the huge property was saved from being plundered.
27.   This Court in the case of State of  Uttar  Pradesh  &  Ors.  v.  Vijay
Bahadur Singh & Ors. (1982) 2 SCC  365  has  laid  down  that  there  is  no
obligation to accept the highest bid. The Government  is  entitled  even  to
change its policy from time to time according to the demands  of  the  time.
It was observed thus :
      “3. It appears to us that  the  High  Court  had  clearly  misdirected
itself.  The  Conditions  of  Auction  made  it  perfectly  clear  that  the
Government was under no obligation to accept the highest  bid  and  that  no
rights accrued to the bidder merely because  his  bid  happened  to  be  the
highest. Under Condition 10 it was expressly provided  that  the  acceptance
of bid at the time of auction was entirely provisional and  was  subject  to
ratification by the  competent  authority,  namely,  the  State  Government.
Therefore, the Government had the right, for good and sufficient reason,  we
may say, not to accept the highest bid but even to prefer a  tenderer  other
than the highest bidder. The High Court was  clearly  in  error  in  holding
that the Government could not refuse to accept the  highest  bid  except  on
the ground of inadequacy of the bid. Condition 10 does not so  restrict  the
power of the Government not to accept the bid. There is no  reason  why  the
power vested in the Government to refuse to accept the  highest  bid  should
be confined to inadequacy of bid only. There may be a variety  of  good  and
sufficient reasons, apart from inadequacy  of  bids,  which  may  impel  the
Government not to accept the highest bid. In fact,  to  give  an  antithetic
illustration, the very enormity of a bid may make it suspect.  It  may  lead
the Government to realise that no bona  fide  bidder  could  possibly  offer
such a bid if he meant to do  honest  business.  Again  the  Government  may
change or refuse its policy from time to time  and  we  see  no  reason  why
change of policy by the Government, subsequent to  the  auction  but  before
its confirmation, may not be a sufficient justification for the  refusal  to
accept the highest bid. It cannot be disputed that the  Government  has  the
right to change its policy from time to time, according to  the  demands  of
the time and situation and in the public interest.  If  the  Government  has
the power to accept or not to accept the highest bid and if  the  Government
has also the power to change its policy from time to time,  it  must  follow
that  a  change  or  revision  of  policy  subsequent  to  the   provisional
acceptance of the bid but before its final  acceptance  is  a  sound  enough
reason for the  Government’s  refusal  to  accept  the  highest  bid  at  an
auction…”


28.   In Laxmikant & Ors. v. Satyawan & Ors. (1996) 4 SCC  208,  this  Court
has laid down that in the absence of  completed  contract  when  the  public
auction had not culminated to its logical end  before  confirmation  of  the
bid, no right accrued to the highest bidder. This Court  has  laid  down  as
under :

      “4. Apart from that  the  High  Court  overlooked  the  conditions  of
auction which had been notified and on basis of which the  aforesaid  public
auction was held. Condition No. 3 clearly said that  after  the  auction  of
the plot was over, the highest bidder had to remit 1/10  of  the  amount  of
the highest bid and the balance of the premium amount was to be remitted  to
the trust office within thirty days “from the date of the  letter  informing
confirmation of the auction bid  in  the  name  of  the  person  concerned”.
Admittedly, no such  confirmation  letter  was  issued  to  the  respondent.
Conditions Nos. 5, 6 and 7 are relevant:
“5. The acceptance  of  the  highest  bid  shall  depend  on  the  Board  of
Trustees.
6. The Trust shall reserve to itself the right to reject the highest or  any
bid.
7. The person making the highest bid shall have no right to  take  back  his
bid. The decision of  the  Chairman  of  the  Board  of  Trustees  regarding
acceptance or rejection of the bid shall be  binding  on  the  said  person.
Before  taking  the  decision  as  above  and  informing  the  same  to  the
individual concerned, if the said individual takes back his bid, the  entire
amount remitted as deposit towards the amount of bid shall be  forfeited  by
the Trust.”
From a bare reference to  the  aforesaid  conditions,  it  is  apparent  and
explicit that even  if  the  public  auction  had  been  completed  and  the
respondent was the highest bidder, no right had  accrued  to  him  till  the
confirmation letter had been issued to him. The conditions  of  the  auction
clearly conceived and contemplated that the acceptance of  the  highest  bid
by the Board of Trustees was a must and the  Trust  reserved  the  right  to
itself to reject the highest or any bid. This Court has examined  the  right
of the highest bidder at public auctions in the cases  of  Trilochan  Mishra
v. State of Orissa (1971) 3 SCC 153, State of Orissa v. Harinarayan  Jaiswal
(1972) 2 SCC 36, Union of India v. Bhim Sen Walaiti Ram  (1969)  3  SCC  146
and State of U.P. v. Vijay Bahadur Singh (1982)  2  SCC  365.  It  has  been
repeatedly pointed out that State or the authority which can be held  to  be
State within the meaning of Article 12 of the Constitution is not  bound  to
accept the highest tender or bid. The  acceptance  of  the  highest  bid  is
subject to the conditions of holding the public auction  and  the  right  of
the highest bidder  has  to  be  examined  in  context  with  the  different
conditions under which such auction has been held. In the  present  case  no
right had accrued to the respondent either on the  basis  of  the  statutory
provision under Rule 4(3) or under the conditions  of  the  sale  which  had
been notified before the public auction was held.”


29.   In Meerut Development Authority v. Association of  Management  Studies
& Anr. (2009) 6 SCC 171, 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 :
“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 free from  hidden  agenda.  One
cannot challenge the terms and  conditions  of  the  tender  except  on  the
abovestated 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.
                                  x x x x x
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.”

30.   Reliance has been placed on behalf of the respondent on a decision  of
this  Court  in  M/s.  Star  Enterprises  &  Ors.  v.  City  and  Industrial
Development Corporation of Maharashtra Ltd. & Ors. (1990)  3  SCC  280.  The
relied upon portion is extracted hereunder :

     “10. In recent times, judicial  review  of  administrative  action  has
become  expansive  and  is  becoming  wider  day  by  day.  The  traditional
limitations have been vanishing and  the  sphere  of  judicial  scrutiny  is
being expanded. State activity too is becoming fast pervasive. As the  State
has  descended  into  the  commercial  field   and   giant   public   sector
undertakings have grown up, the stake of the public exchequer is also  large
justifying larger social audit, judicial control and review  by  opening  of
the public gaze;  these  necessitate  recording  of  reasons  for  executive
actions including cases of rejection of  highest  offers.  That  very  often
involves large stakes and availability of reasons for actions on the  record
assures credibility to the action; disciplines public conduct  and  improves
the culture of accountability.  Looking  for  reasons  in  support  of  such
action provides an opportunity for an objective review in appropriate  cases
both by the  administrative  superior  and  by  the  judicial  process.  The
submission of Mr Dwivedi, therefore,  commends  itself  to  our  acceptance,
namely, that when highest offers  of  the  type  in  question  are  rejected
reasons sufficient to  indicate  the  stand  of  the  appropriate  authority
should be made available and ordinarily the same should be  communicated  to
the concerned parties unless there be any specific justification not  to  do
so.”


      No doubt about it that there have to be some reasons for rejection  of
the bid which are adequately  present  in  the  instant  case  as  discussed
hereinabove. The decision is  of  no  help  to  espouse  the  cause  of  the
plaintiff.

31.   Reliance has also been placed on a decision of this Court in Kalu  Ram
Ahuja & Anr. v. Delhi Development Authority & Anr.  (2008)  10  SCC  696  in
which this Court has laid down that the highest  bid  was  rejected  without
assigning any reason and there was no record showing that the  decision  was
based on rational and tangible reasons and was in public  interest.  In  the
instant case  we  are  satisfied  from  the  order  that  the  reports  were
considered and what were the reports, has  been  made  clear  in  the  reply
filed by the respondents which has not been  controverted.  In  the  instant
case merely the bid being above the reserve price, was not a  safe  criteria
to accept the same.

32.   In Mohinder Singh Gill & Anr. v. The Chief Election Commissioner,  New
Delhi & Ors. (1978) 1 SCC  405,  this  Court  has  laid  down  that  when  a
statutory functionary makes an order, its validity must  be  judged  by  the
reasons so mentioned and cannot be supplemented  by  fresh  reasons  in  the
shape of affidavit or otherwise. This Court has held thus :

      “8.  The second equally relevant  matter  is  that  when  a  statutory
functionary makes an order based on certain grounds, its  validity  must  be
judged by the reasons so mentioned  and  cannot  be  supplemented  by  fresh
reasons in the shape of affidavit or otherwise. Otherwise, an order  bad  in
the beginning may, by the time it comes to court on account of a  challenge,
get validated by additional grounds later brought  out.  We  may  here  draw
attention to the observations of Bose, J. in Gordhandas Bhanji AIR  1952  SC
16 :

     “Public orders, publicly made, in exercise  of  a  statutory  authority
cannot be construed in the light of explanations subsequently given  by  the
officer making the order of what he meant, or of what was in  his  mind,  or
what he intended to do. Public orders made by public authorities  are  meant
to have public effect and are intended to affect the actings and conduct  of
those to whom they are addressed and  must  be  construed  objectively  with
reference to the language used in the order itself.   Orders  are  not  like
old wine becoming better as they grow older.”

      There is no dispute from the aforesaid proposition.  However,  in  the
instant case reasons have been mentioned in  the  rejection  order  and  the
nature of reports has also been sufficiently explained. Thus  the  rejection
of seven  different  bids  in  the  auction  reflects  that  there  was  due
application of mind by the concerned authority and rejection  could  not  be
said to be illegal, arbitrary or sans of reason.

33.   We are constrained to observe in the instant case  that  with  respect
to reserve price also, there was a hitch to fix and approve  it  right  from
the word go. It was a case of auction of big commercial tower having a  huge
area of 9.527 acres. Only the reserve price of the same  was  forwarded  for
fixation to the Chief Administrator, whereas the  reserve  prices  of  other
properties were fixed by the Administrator. When  the  bids  were  received,
the Administrator  considering  the  huge  stakes  involved,  forwarded  the
matter to the Chief Administrator. However, the Chief  Administrator  washed
off his hands and did not  decide  it  and  sent  the  matter  back  to  the
Administrator, clearly indicating that the Administrator was delegated  with
the power to decide the bids. Thus, under compelling circumstances and  duly
considering the reports, the Administrator had taken the decision to  reject
the bids not only of the plaintiff but also six others. For the  first  time
in the history of State of Haryana, such big properties were put  to  hammer
on the prices  indicated.  The  hitch  in  fixing  the  reserve  price  also
indicates that the reserve price was not determined in a fair manner in  the
instant case. Not only the  plaintiff  but  HUDA  also  did  not  place  the
delegation of power on record of the courts below. None of the officials  of
HUDA had been examined. Only an Assistant –  a  junior  ranking  person  had
been examined who was not posted there when the auction was  held  and  came
only in 2008. As the property was a commercial tower in Sector 29,  Gurgaon,
with huge commercial  complex,  the  first  appellate  court  was  right  in
dismissing the suit.
34.   Plaintiff came to the court for mandatory injunction, for issuance  of
allotment letter without payment of court fee also. It  was  incumbent  upon
the plaintiff to pay  the  ad  valorem  court  fee  as  prevailing  and  the
valuation of the suit should not have been  less  than  the  bid  amount  of
Rs.111.75 crores,  as  rightly  held  by  the  first  appellate  court.  The
plaintiff is directed to pay the ad valorem court fee not  only  before  the
trial court but also  before  the  High  Court.  Plaintiff  is  directed  to
deposit the court fee within two months from today, as payable.
35.   Resultantly, the appeal is allowed. The judgment and decree passed  by
the High Court is set aside  and  that  of  the  first  appellate  court  is
restored. In the facts and circumstances of the case,  we  impose  costs  of
Rs.5 lakhs on the plaintiff/respondent to be deposited as : Rs.2.5 lakhs  in
the  Advocates’  Welfare  Fund  and  Rs.2.5  lakhs  in  the  Supreme   Court
Employees’ Welfare Fund within a period of two months from today.

                                             …………………………….J.
                                             (Arun Mishra)



New Delhi;                                   …………………………..J.
January    27,    2017.                                    (Amitava     Roy)