REPORTABLE
IN THE SUPREME COURT OF INDIA
CIVIL APPELLATE JURISDICTION
CIVIL APPEAL NO. 7243 OF 2019
(ARISING OUT OF SLP (CIVIL) NO. 4990 OF 2018)
THE BIHAR STATE HOUSING BOARD & ORS. .....APPELLANT(S)
VERSUS
RADHA BALLABH HEALTH CARE AND
RESEARCH INSTITUTE (P) LTD. .....RESPONDENT(S)
J U D G M E N T
HEMANT GUPTA, J.
1) Leave granted.
2) The challenge in the present appeal is to an order passed by the
Division Bench of the High Court of Judicature at Patna on
November 21, 2017, whereby, the Letters Patent Appeal against an
order passed by the learned Single Bench on September 19, 2016
was dismissed.
3) The appellant published an advertisement on May 10, 2008 inviting
applications for allotment of plot for health center in Lohia Nagar
Housing Colony, Patna measuring 43000 sq. feet at the price of
Rs.1,71,89,057/-. Rs.1,00,000/- was the earnest money. The
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respondent applied for such plot along with the amount of earnest
money. It was mentioned in the advertisement that upon receipt of
more than one application, allotment shall be made by draw of lots
and that the Chairman-cum-Managing Director of the appellant has
the power to cancel allotment without assigning any reason. The
respondent herein was the sole applicant for seeking allotment of
plot advertised for health center but no such plot was allotted to
the respondent, may be for the reason that the respondent being
the sole applicant.
4) The respondent filed writ petition before the High Court in the year
2009 challenging the action of the appellant in not accepting the
application of the respondent for the reason that it had not
submitted the documents of recognition from the State
Government. In view of the stand taken, the High Court directed
the appellant to take a decision on the application of the
respondent within a period of one month. Subsequently, contempt
petition was filed wherein; the Court was informed that the request
of the respondent for allotment of plot was not accepted. The
respondent was given liberty to challenge the decision of the
appellant by way of a fresh writ petition.
5) The respondent again filed writ petition before the High Court
contending that the respondent approached the Managing Director
of the appellant, who agreed to the proposal of allotment of
alternative plots for construction of hospital in lieu of original plot
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offered, though with much less area than the plot advertised
earlier. The respondent submitted the technical and financial
proposal also stating that the plot, which was advertised, was of an
area of 43000 sq. feet for a consideration of Rs. 1,71,89,057/-,
thus, there should be proportionate reduction of price on account
of lesser area being offered. The respondent sought allotment on
the terms and conditions of the advertisement itself. The two plots
offered as alternative to the earlier plot, were plot nos. G-5 and G6 measuring an area of 10,000 sq. feet and 14000 sq. feet
respectively situated near Rajendra Nagar Over Bridge in Patna.
However, the Board took a decision to allot the aforesaid plots on
the basis of Swiss Challenge Method. The said decision was
communicated to the respondent on December 14, 2011.
6) The said writ petition was decided on May 10, 2013 holding that
the advertisement cannot be given a go by adopting a method of
allotment other than what was described in the advertisement. As
such, Swiss Challenge Method cannot be applied in the case of the
respondent. However, change of plot was not interfered with in
view of the fact that the respondent agreed for the offered plots.
The appellant was directed to consider issuing an allotment letter
in favour of the respondent in terms of the advertisement but with
respect to plot Nos. G-5 and G-6 in place of the original plot, as
mentioned in the advertisement, on the same terms and conditions
with proportionate cost reduction on account of the area of the
plots having been reduced. The High Court passed the following
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order:
“In view of the reasons and discussions made above,
the decision of the board to allot the Plot Nos. G-5 and
G-6 in favour of the petitioner vide office order no. 160
of 2009 as contained in Memo No. 10792 dated
09.12.2011 (Annexure-16) as also the Letter No. 10871
dated 14.12.2011 (Annexure-17) on the basis of Swiss
Challenge Method is hereby quashed. The respondent –
Board is directed to consider the letter dated 3rd of
January, 2012, written by the petitioner to the
respondent-Board and on considering the same, issue
allotment letter in terms of the advertisement, as
contained in Patna High Court CWJC No.9744 of 2012
(5) 10 Annexure – 1 with respect to the plot nos. G-5
and 6 in lieu of the original plot as mentioned in the
advertisement on the same terms and conditions with
proportionate cost on account of the area of the plots
being reduced.”
7) Such order was modified at the instance of the appellant on
January 9, 2014 that in view of the condition in the advertisement
that if the allotment letter is issued after May 31, 2008, the price of
the allotted plot will be on the updated rates as on the date of
allotment. The Court held as under:
“It is submitted that advertisement states that if the
allotment letter is issued after 31st May, 2008 the price
of the allotted plot would be on updated rate as on the
date of allotment as per the terms of advertisement
contained in Annexure-1 to the writ application. The
order dated 10.05.2013 passed in CWJC No. 9947 of
2012 is clarified to the above extent. After such
clarification it goes without saying that the Board upon
considering the letter dated 3rd January 2012 written by
the petitioner is to issue the allotment letter, and as
such, the same be issued within a period of two months
from today.”
8) It is thereafter on February 14, 2014, the respondent was called
upon to deposit up to date price of Rs.13,09,95,041/-. The said
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price was not deposited by the respondent, instead respondent
replied vide letter dated February 19, 2014 that the said demand is
contrary to the direction issued by the High Court and requested
the Board to calculate the updated price as per the terms and
conditions.
9) On March 13, 2014, the appellant revised price to
Rs.10,58,91,736/- and raised demand for payment of such amount
to be deposited by March 31, 2014. In response to such
communication, the respondent on March 21, 2014 communicated
its acceptance. The said communication reads as under:
“With reference to your letter No. 1902 dated 13/3/2014
directing us to deposit Rs.10,58,91,736.00 for plot no.
GC 5, GC 6, Kankarbagh Patna allotted to Radha Ballabh
Health Care & Research Institute Pvt. Ltd.
We need to inform you that the Board may measure
the exact Area of the Land to be delivered before the
Representatives of both sides and thereafter handover
the vacant possession of the land erecting boundary
wall, the cost of which shall be borne by us.
The amount (money), directed to be deposited for
the said plot is against the directions of the Hon’ble
High Court Patna. We have raised this issue of price in
our letter dt. 19/02/2014 however subject to our right
and without prejudice, we are ready to take the land (Plt
no. GC 5 & GC 6) Under protest.
We propose the following payment plan.
We will deposit a token advance of Rs. 40 lakhs at
the outset. Once we get vacant possession of the land,
with boundary wall erected (the cost of which will borne
by us) we will deposit up to 20% of the total cost
(subject to final measurement of the Land).
The remaining amount will be paid in Four Quarterly
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Installments per annum in three years. Once again we
would emphasize that if we do not get the vacant
possession of the land within two (2) months of token
advance deposit, the Housing Board shall be held
responsible and will have to bearing bank interest
levied on us by the bank/borrower.
Kindly approve our proposal at the earliest and let us
know your bank with account number, so that we can
proceed with the payment process.”
10) Again, the appellant sought the consent of the respondent on
April 1, 2014 seeking advance payment of Rs.40,00,000/- and that
the balance payment of Rs.8,47,93,330/- was payable in 12
quarterly installments in three years. The communication of the
appellant reads as under:
“Reference:- Yours letter no.-zero dated 21.03.2014.
Sir,
Review is made of your letter regarding aforesaid
subject. In course of review for the payment, following
payment list is prepared.
(a) Total price on the date 31.03.2014 – Rs. Illegible.
(b) Advance payment – Rs.40,00,000/-
(c) Earlier deposited earnest amount-Rs.1,00,000/-
(d) 20 percent of total amount-Rs.2,11,98,400/-
(e) Deducted advance payment and earnest amountRs.41,00,000/-
(f) Rest preliminary amount to be deposited prior to
deed of agreement – Rs.1,70,98,400/-
(g) Rest amount of the Price-Rs.8,47,93,330/-
(h) Amount of instalment payable in 12 quarterly
instalments in three years-
(i) Normal with interest @14% Rs.87,74,750/-
(ii) By delay with interest @18% Rs.92,98,962/-
So if you are willing for the allotment in question,
please give your consent on aforementioned schedule,
otherwise it shall be deemed that you are not willing for
the allotment.”
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11) The respondent communicated on April 2, 2014 accepting the
payment schedule under protest subject to final measurements of
the plot. Such communication reads as under:
“Ref: Housing Board’s Letter No. 2445 Dated
01/04/2014
Dear Sir,
Received the Board’s aforesaid Letter regarding the
payment schedule for plot No. GC 5 & GC 6,
Kankarbagh, Patna.
As stated earlier and in the light of our letter dt.
21/03/2014, we accept the payment schedule, under
Protest subject to the final measurement of the plots.
We are enclosing herewith two Banker’s cheques of
Rs.40,00,000/- (Rs. Forty Lacs),
1. Banker’s Cheque no. 021879 for Rs.20,00,000/-
(Rs.Twenty Lacs) and
2. Banker Cheque No. 021880 of Rs.20,00,000/-
(Rs.Twenty Lacs) Drawn at Patna dated 02/04/2014
as advance payment.
Please ensure the possession of Plot/Land, with
boundary wall erected (at our cost) at its earliest.”
12) It is thereafter, a formal letter of allotment was issued on
December 11, 2014 acknowledging that Rs.41 lakh stand deposited
and that 20% of the interim price of the land amounting to
Rs.2,11,98,400/- be paid within thirty days. Such amount was paid
by the respondent. It is thereafter, an Agreement was executed on
March 12, 2015 between the appellant and the respondent. Thus,
a concluded contract came into existence with deposit of the
amount demanded by the appellant and paid by the respondent.
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13) After accepting the allotment on the price as per the
communication referred to above, the respondent filed a writ
petition disputing the allotment price. The learned Single Bench
allowed the writ petition on the basis that proportionate price of
the plot advertised in Lohia Nagar alone can be claimed by the
appellant.
14) The High Court has sought the basis of fixation of price of the plot
during the proceedings before it. The proportionate price claimed
by the appellant was found to be arbitrary. The High Court, vide
order dated September 19, 2016, issued the following directions:
“In my considered view, only that procedure could have
been followed for updation of price of allotment. Thus,
it is held that the Board has acted in arbitrary manner
in fixing the price of the plots concerned due to which
the petitioner has been fastened with a liability to pay a
price several times higher than which could have been
charged. It has also to be kept in mind that due to the
delay caused by the Board, the allotment could not be
finalized on the date fixed. Accordingly, this writ
petition is allowed. The price fixed by the Board is
quashed and set aside. The Board is directed to recalculate the cost of the plots of the petitioner in
accordance with the procedure adopted under
Annexure H appended with the counter affidavit within
a period of three months from the date of
receipt/production of a copy of this order and return the
excess amount, if any, having been paid by the
petitioner in terms of the calculation done by the Board.
If the same is not done within the aforesaid period of
three months, the petitioner would be entitled for
interest @14% per annum on the said amount to be
calculated from the date of expiry of the aforesaid
period of three months till Patna High Court CWJC
No.17694 of 2015 dt.19-09-2016 20/20 the date of final
payment.”
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15) In terms of the directions of the High Court, the appellant has paid
back a sum of Rs.3,31,94,435.53.
16) It is the said order of the learned Single Judge, which was affirmed
in the Letters Patent Appeal, on the ground that the Board could
only claim up to date rate and not the market rate as claimed in
the letter of allotment.
17) The respondent in the counter affidavit in the present appeal has
referred to the decision taken by the appellant in its 193rd Meeting
dated February 10, 2000 on the basis of which office order was
issued on March 2, 2001 to fix reserve price for the purpose of
auction of the Plots/Houses/Flats. The decision is as under:
“(i) The auction price of such Plots/Houses/Flats, having
taken within one last preceding year.
(ii) The updated price of the Commercial rate fixed by
the Board.
(iii) The rate prescribed by the Collector for the
purpose of Registration.
In addition to this the Managing Director of the Bihar
State Housing Board was authorized to have discretion
keeping the place, time and circumstances.”
18) It is also pointed out that on June 13, 2013, the market value was
determined for calculation of premium for the Financial Year 2013-
2014 and that on the basis of such calculation, the price of the plot
allotted has been fixed.
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19) Mr. Ranjit Kumar, learned senior counsel for the appellant, argued
that the decision of the Appellant is based upon rational basis in
terms of the decision of the Board taken earlier. It is argued that
after accepting the offer of allotment and paying initial amount, the
respondent is estopped to dispute the allotment price.
20) The argument of Mr. Neeraj Kishan Kaul, learned senior counsel
appearing for the respondent, is that the advertisement inviting
applications for allotment of plot contemplated charging of up to
date cost/price which is not the same as market price, therefore,
the appellant cannot charge market price of the plot. It was argued
that the decision of June 13, 2013 is in respect of sale of the plot by
the allottee to third person so as to pay 50% of the market value to
the appellant. Therefore, such decision has rightly not been
accepted by the High Court. It is also argued that office order
dated March 2, 2001 deals with fixation of reserve price in the
event of decision of the Board to auction the plot. Therefore, the
High Court has rightly fixed price of the plot on the basis of
calculations given by the appellant alone. Thus, the order of the
High Court does not warrant any interference in an appeal under
Article 136 of the Constitution of India.
21) We find that the entire approach of the High Court is erroneous and
not sustainable. Plot Nos. G-5 and G-6 located in Rajinder Nagar
Over Bridge were never advertised. The allotment of the
alternative plots was made by the appellant in lieu of the plot
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advertised in Lohia Nagar, Kankarbagh, Patna measuring 43000 sq.
feet. The location and the size of the alternative plots are different.
22) Firstly, we need to examine as to whether, the appellant could allot
plots without advertisement. This Court in a judgment in Akhil
Bhartiya Upbhokta Congress v. State of Madhya Pradesh &
Ors.
1
deprecated the practice of allotment of plots dehors an
invitation or advertisement by the State or its instrumentalities.
The Court held as under:
“66. We may add that there cannot be any policy,
much less, a rational policy of allotting land on the basis
of applications made by individuals, bodies,
organisations or institutions dehors an invitation or
advertisement by the State or its
agency/instrumentality. By entertaining applications
made by individuals, organisations or institutions for
allotment of land or for grant of any other type of
largesse the State cannot exclude other eligible persons
from lodging competing claim. Any allotment of land or
grant of other form of largesse by the State or its
agencies/instrumentalities by treating the exercise as a
private venture is liable to be treated as arbitrary,
discriminatory and an act of favouritism and/or
nepotism violating the soul of the equality clause
embodied in Article 14 of the Constitution.
67. This, however, does not mean that the State can
never allot land to the institutions/organisations
engaged in educational, cultural, social or philanthropic
activities or are rendering service to the society except
by way of auction. Nevertheless, it is necessary to
observe that once a piece of land is earmarked or
identified for allotment to institutions/organisations
engaged in any such activity, the actual exercise of
allotment must be done in a manner consistent with the
doctrine of equality. The competent authority should, as
a matter of course, issue an advertisement
1 (2011) 5 SCC 29
11
incorporating therein the conditions of eligibility so as
to enable all similarly situated eligible persons,
institutions/organisations to participate in the process of
allotment, whether by way of auction or otherwise. In a
given case the Government may allot land at a fixed
price but in that case also allotment must be preceded
by a wholesome exercise consistent with Article 14 of
the Constitution.”
23) In another judgment in Institute of Law, Chandigarh & Ors. v.
Neeraj Sharma & Ors.
2
, this Court upheld the order of the High
Court setting aside allotment of land in favour of the appellant
institute without giving any public notice and in the absence of a
transparent policy and any objective criteria.
24) Further, in Meerut Development Authority v. Association of
Management Studies & Anr.
3
, this Court held that a tender is an
offer. It is an invitation to seek communication to convey
acceptance. This Court held as under:
“26. A tender is an offer. It is something which invites
and is communicated to notify acceptance. Broadly
stated it must be unconditional; must be in the proper
form, the person by whom tender is made must be able
to and willing to perform his obligations. The terms of
the invitation to tender cannot be open to judicial
scrutiny because the invitation to tender is in the realm
of contract. However, a limited judicial review may be
available in cases where it is established that the terms
of the invitation to tender were so tailor-made to suit
the convenience of any particular person with a view to
eliminate all others from participating in the bidding
process.
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
2 (2015) 1 SCC 720
3 (2009) 6 SCC 171
12
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.
28. It is so well settled in law and needs no
restatement at our hands that disposal of the public
property by the State or its instrumentalities partakes
the character of a trust. The methods to be adopted for
disposal of public property must be fair and transparent
providing an opportunity to all the interested persons to
participate in the process.”
25) Therefore, the respondent does not get any right of allotment of a
plot merely because it has applied for allotment earlier. The
response to an advertisement does not lead to any obligation on
the appellant to allot any plot. Admittedly, there was no allotment
in pursuance of the offer submitted by the respondent. Mere fact
that the respondent had applied for allotment of a plot does not
confer any legal or equitable right to seek allotment of any plot.
26) The appellant was more than indulgent in allotting two plots of
24000 sq. feet without any advertisement advertising such plots
merely on the basis of the fact that the respondent had applied for
allotment at an earlier stage in respect of another plot. The public
property could not be disposed of without any advertisement and
without giving opportunity to eligible persons to apply and seek
consideration of allotment of public property in a transparent and
non-discriminatory manner.
13
27) Therefore, the very allotment of two plots, on the basis of direction
given by the High Court to consider the claim of the respondent, is
against the public interest. However, the fact remains that after
allotment, the respondent has constructed hospital which is
operational therefore; it is too late in the day to cancel the
allotment of the plot allotted to the respondent.
28) The question raised before the High Court was whether the
appellant is entitled to updated price or the market price. We find
that such discussion by the High Court is totally irrelevant
inasmuch as the respondent has accepted the price on three
occasions; firstly on March 21, 2014, then on April 2, 2014
whereby, the respondent remitted a sum of Rs.40 lakhs by two
cheques as well. The respondent has accepted the payment
schedule but subject to final measurements of plots. It is
thereafter the letter of allotment was issued on December 11,
2014. Thirdly, the respondent remitted another sum of
Rs.1,71,00,000/- vide three separate cheques in January, 2015 so
as to complete 20% of the interim price of letter of allotment dated
December 11, 2014. It is thereafter an agreement was executed
on March 12, 2015 unequivocally and categorically accepting the
offer of the appellant. It was not open to the respondent to dispute
the price of allotment offered by the appellant. The respondent is
estopped to dispute the allotment price in these circumstances.
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29) Recently, in a judgment of this Court in Uttar Pradesh Housing
and Development Board v. Ramesh Chandra Agarwal
4
, the
appeal was allowed against an order passed by the National
Consumer Disputes Redressal Commission for allotment of a plot
for the reason that the complainant has applied for allotment of a
plot way back in 1982. It was held that there was no contractual
entitlement for allotment of a flat at a specified price. The Court
held as under:
“13. The appellant is governed by the terms and
conditions advertised in its Registration Booklet and by
the 1979 Rules. Clause 5 of the Registration Booklet
indicates that mere registration does not confer a right
for allotment. Rule 15 makes a provision to the effect
that the Board is not bound to allot a house or plot to
every registered holder. Rule 30 indicates that after the
Board advertises the availability of a scheme in the
newspaper, every registered applicant is at liberty to
submit a consent letter for participation in the draw of
lots. Mere registration does not oblige the authority to
include every registered applicant in the draw of lots.
The applicant must show readiness and willingness to
participate in a draw of lots in respect of a specified
scheme. This is evident from Rule 30(2). A set of
priorities is provided in Rule 30(5). In view of the clear
position in the brochure and the 1979 Rules, the
respondent had no vested right to seek an allotment. As
a registered applicant, the respondent was at liberty to
seek to participate in the draw of lots by indicating his
consent to the appellant. After paying an initial sum of
Rs 500 in 1982 and a further sum of Rs 500 in 1985, the
respondent did not pursue any remedies until 1993
when he moved the District Forum. The order of the
District Forum gave liberty to the respondent to seek
allotment at the current market value under any of the
schemes of the appellant. NCDRC was manifestly in
error in issuing a direction to the appellant to make an
allotment to the respondent for a total sum of Rs
2,50,000 in any of the flats available in the Mandola
4 (2019) 6 SCC 554
15
Vihar Yojna, Ghaziabad. There is no rational basis or
justification for the amount of Rs 2,50,000 which has
been fixed by NCDRC. This direction proceeds purely on
the basis of the ipse dixit of the forum. The appellant,
as a public authority, could not have been compelled to
enter into a contract with the respondent. There was no
contractual entitlement of the respondent to the
allotment of a flat much less for an allotment at a
specified price. In its effort to render justice, NCDRC has
adopted a view which is contrary to the basic principles
of contract governing the law on the subject.”
(emphasis supplied)
30) The appellant as a State is required to act fairly in fixation of price
for allotment of a plot. The order of the High Court to direct the
appellant to charge the price proportionate to the price advertised
earlier has no legal basis. It is a commercial decision taken by the
appellant fixing the price of the plot. In the matter of fixation of
price, the Board has a right to fix such price, more so, when such
price was accepted by the respondent on three different occasions
as mentioned above.
31) The action of the respondent to dispute the allotment price after
accepting the price is neither fair nor reasonable and cannot be
accepted.
32) In terms of judgment of this Court in Style (Dress Land) v. Union
Territory, Chandigarh & Anr.
5
, the appellant is entitled to the
allotment price along with interest on the delayed payment even if
there is stay by the Court. But, keeping in view the cause of
allotment of plot i.e. hospital, we order, in exercise of our
5 (1999) 7 SCC 89
16
jurisdiction under Article 142 of the Constitution, that the interest
for the period from the date of filing of the writ petition before the
High Court till the date of order of this Court shall not be charged
from the respondent provided respondent pays the entire balance
sale consideration in terms of the condition of allotment within six
months from today.
33) In view of the above, we find that the order of the High Court is not
sustainable in law, thus, the order is set aside. The appeal is
accordingly allowed.
.............................................J.
(L. NAGESWARA RAO)
.............................................J.
(HEMANT GUPTA)
NEW DELHI;
SEPTEMBER 13, 2019.
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