1. This petition, under Article 226 of the Constitution of India, has been filed by the petitioner seeking quashment of the orders dated 04.08.2012 (Annexure P/8) passed by the respondent No.2 and 31.03.2018 (Annexure P/17) passed by the respondent No.1. The petitioner has also sought direction to the respondents to implement the decision taken by the Board in the meeting held on 15.06.2012 for allotment of the plot in favour of the petitioner by executing a lease deed.
2. Before deciding the issue involved in the case, certain facts are required to be mentioned. In response to an advertisement issued in the Newspapers on 01.03.2012 by the respondent-authority inviting offers for allotment of various plots including Plot No. 936-B area 4675 sq.ft. situated in Scheme No. 6, Sanjeevni Nagar, Jabalpur (hereinafter the said plot will be referred to as 'disputed plot'). The petitioner submitted his offer for the disputed plot and after completing all the required formalities, he deposited the earnest money, Rs. 3,05,932/- by way of demand draft.
As per the procedure, for allotment of plots, a proposal was placed before the Allotment Committee of the respondent-authority in the meeting held on 31.03.2012. The Allotment Committee duly considered the matter and recommended for allotment of plot to the petitioner as his offer was found to be highest amongst the three offers received in that behalf. The matter was thereafter placed before the Board of Directors of the respondent-authority in its meeting held on 15.06.2012. The Board of Directors approved the recommendation made by the Allotment Committee. As per the petitioner, despite approving his offer, when nothing was done by the respondentauthority, he approached the authority time and again and also moved an application on 28.07.2012 requesting them to issue a letter for depositing the premium amount. As per the petitioner, one of the Members of the Board namely Smt. Bindiya Ajay Adhikar raised some objection to the allotment of plot and also made a complaint to the Chairman on 25.06.2012 (Annexure P/4) stating therein that there appeared to be unholy alliance of the officers of the authority in the offers as the plot has been sold for a very low price. It is also alleged that the publication of the notices inviting offers in Nav Bharat, Desh Bandhu, Swatantra Mat was an irregularity as the publication should have been made in the newspapers having wide circulation like Dainik Bhaskar, Nai Duniya, Patrika etc. She also alleged that the authority has suffered financial loss in the sale of the disputed plot.
3. The complaint made by the said Member of the Board was entertained by the Chairman and it was referred to the Estate Officer to submit a report thereon. The Estate Officer conducted an enquiry into the matter and submitted a detailed report and as per the report, the allegations made in the complaint were found frivolous. It was also observed by the Enquiry Committee that the rates for sale of the plots were fixed in accordance with the instructions issued by the Government based on the Collector's guidelines. As per the petitioner, the report though came in his favour, but, surprisingly, when the matter was placed before the Board in its meeting held on 04.08.2012 (Annexure P/8), a decision was taken by the Board to annul its earlier decision and consequently the allotment made in favour of the petitioner was cancelled without assigning any reason. The said order dated 04.08.2012 was served upon the petitioner cancelling his allotment. Against the order of cancellation of allotment of the plot, a writ petition i.e. WP No. 15148/2012 was filed by the petitioner challenging the action of the respondents. The said petition was entertained by the High Court and an interim order, directing respondents to maintain status quo, was also passed on 12.09.2012. During the pendency of the said petition, the petitioner made a representation to the State Government. The Principal Secretary, Urban Development & Environment Department vide memo dated 03.08.2015 wrote a letter to respondent No.2 to take appropriate decision in the matter. As per the petitioner, the respondents assured him to get the allotment order restored in his favour provided the writ petition would be withdrawn. The writ petition was accordingly withdrawn on 10.05.2013 (Annexure P/12) and the petitioner was granted liberty as prayed by him. The petitioner thereafter made a representations to the authority on 09.12.2015, 05.12.2016 and 05.06.2017 for allotment of plot, but nothing was done and the matter remained pending with the authority and the respondent-authority again issued a fresh advertisement inviting offers in respect of the disputed plot and being aggrieved with the same the petitioner filed another petition before the High Court which was registered as WP No. 5095/2018, but, on the assurance given by the authority for considering the grievance of the petitioner, the said writ petition was also withdrawn vide order dated 07.03.2018 (Annexure P/15) without there being any comments on merit of the case.
The petitioner thereafter made a representation before the authority on 20.03.2018, which was rejected by order dated 31.03.2018 (Annexure P/17). As per the petitioner, no reason was assigned in the order rejecting the representation of the petitioner and even the grounds raised therein were also not dealt with. It is also contended that one Ashish Jain, whose offer in respect of Plot No.937 was rejected, also filed a petition, which was registered as W.P. No. 13198/2012 in which interim order was granted by the High Court vide order dated 29.08.2012. The said petition is still pending.
4. It is submitted by the petitioner that the subsequent decision of the authority taken in its meeting held on 04.08.2012 annulling its earlier decision dated 15.06.2012 was illegal and improper. The complainant Smt. Bindiya Adhikar was a Member in the Board and she was a willing party to the decision taken in the meeting held on 15.06.2012. She could not have made the complaint except on the ground of fraud and misrepresentation. Since the complainant has not made any allegation regarding any fraud or misrepresentation, therefore, her complaint should not have been entertained. It is also contended by the petitioner that even the Board could not have taken decision on 04.08.2012 annulling its earlier decision dated 15.06.2012 unless any fraud or misrepresentation is found in the process of allotment of plots. As per the petitioner a bald complaint was made by Smt. Bindiya Adhikar without placing any material before the Board as to why the allotment of plot made in favour of the petitioners should be cancelled. It is further stated by the petitioner that even otherwise when an enquiry was conducted and nothing was found in the said enquiry and the allegations made in the complaint were found frivolous, the Board could not have taken a decision for cancelling the allotment made in favour of the petitioner. As per the petitioner, the action of the Board was purely illegal putting up a bad precedent for future. It is stated by the petitioner that the Board should have accepted the report of the said officer, because it is the Board which has directed the said officer to conduct an enquiry to ascertain the correctness of the allegations made by Smt. Bindiya Adhikar. As per the petitioner, the decision taken by the respondent-authority is illegal and unfair. The authority has acted arbitrarily and with malafide intentions.
5. The respondents have submitted their return mainly taking stand therein that no letter of allotment was issued in favour of the petitioner. Merely because the decision was taken to allot the disputed plot to the petitioner that does not culminate into action and does not crystallize into any vested right in favour of the petitioner unless such a decision is communicated to him. As per the respondents, before issuing the order of allotment, two Members namely Bindiya Adhikar and Smt. Preeti Bajpai had made complaints. As per the respondents, the matter was put up before the Board in its meeting held on 01.08.2012 in which it was resolved that in view of the allegations made in the complaint, the earlier resolution dated 15.06.2012 recommending allotment of plot in favour of the petitioner be recalled and the matter may be placed before the Allotment Committee afresh. The respondents have submitted that the petitioner has not challenged the resolution dated 01.08.2012. As per the respondents though the enquiry was directed to be conducted and as per the report of the enquiry the allegations made in the complaint were found to be unsustainable, but that report is not binding on the Board of Directors. As stated by the respondents, before making allotment, the Board is free to take decision to recall its earlier resolution and to issue fresh advertisement. The stand taken by the respondents was based upon the fact that since no allotment was made in favour of the petitioner and decision of allotment was never communicated to the petitioner, no right accrued in his favour and in absence of any crystallized right in favour of the petitioner, the decision taken by the Board cannot be said to be illegal. The respondents have stated that in pursuance to the decision taken by the Board on 04.08.2012, the amount of security deposit was also returned to the petitioner. The respondents have also stated that in view of the fresh auction of plots, the offer for the disputed plot has been submitted at a much higher rate as compared to the rate offered by the petitioner. The respondents have also claimed that the petition deserves to be dismissed on the ground of delay and laches because no sufficient explanation has been given by the petitioner for filing of the petition belatedly.
6. A rejoinder has also been filed by the petitioner stating therein that the action of respondents was illegal in issuing fresh advertisement because in a petition there was an order of maintaining status quo i.e. WP No. 15148/2017 dated 12.09.2012. It is further contended that vide order dated 09.05.2018 the High Court restrained the respondents from allotting the plot in dispute and as such inviting application for allotment and acceptance of offer creating third party interest over the same is absolutely illegal. As per the petitioner, on 10.08.2018 only offer has been accepted by the respondent-authority and as such new allottees namely Poonam Soni and Kapil Soni have not been made party in the petition. No prejudice is caused to anybody as no right is accrued even in favour of Smt. Poonam Soni and Kapil Soni. It is contended that the decision taken by the Board was illegal as the Board does not have any power of review. It is also contended by the Petitioner that principle of estoppel applies in the present case as the complainant was a Member to the decision taken by the Board in favour of the petitioner. It is also contended by the petitioner that when an enquiry was conducted and the report of the same was called, the decision of the Board should have been based upon the said report, although the Board has not taken note of the enquiry report and even has not touched the same while taking decision of annulling its earlier decision. The petitioner has placed reliance in the cases of Kalabharati Advertising v. Hemant Vimalnath Narichania & others, (2010) 9 SCC 437, Sharma Transport Represented by D.P. Sharma vs. Government of A.P. & Ors, (2002) 2 SCC 188, Meerut Development Authority vs Association of Management Studies and another, (2009) 6 SCC 171. For the purpose of condoning the delay, the petitioner has also placed reliance in the cases of Hari Charan Soni vs The State Of Madhya Pradesh, (2011) 1 MPLJ 424 and Raghubir Singh Vs. Union of India & others,2003 5 MPLJ 469.
7. Learned counsel for the respondents has submitted that the principle of estoppel is not applicable in the present case unless the right is crystallized in favour of the petitioner and allotment order is issued in his favour. It is also contended that the fresh advertisement issued and the allotment made in favour of the intervenor was before granting order of status quo in favour of the petitioner. Counsel for the respondents has relied upon Rule 8 and 12 of the M.P. Nagar Tatha Gram Nivesh Vikasit Bhoomiyo, Griho, Bhavano Tatha Anya Sanrachanao Ka Vyayan Niyam, 1975 (hereinafter referred to as 'Rules of 1975') . He has also relied upon the decisions in the cases of Sethi Auto Service Station & another vs Delhi Development Authority & Ors, (2009) 1 SCC 180, Shanti Sports Club & Anr vs Union of India & Ors, (2009) 15 SCC 705 and ITC Limited vs State of Uttar Pradesh & Ors, (2011) 7 SCC 493.
8. After hearing learned counsel for the parties and on perusal of the record, the first question for adjudication is as to whether the petition suffers from delay and laches. The petitioner has submitted that he filed a petition in the year 2012 challenging the order dated 04.08.2012, which was registered as WP No. 15148/2012. The said petition was entertained and the High Court was pleased to grant an interim order on 12.09.2012 directing the parties to maintain status quo in respect of the plot in question. The said writ petition was withdrawn on 10.05.2013 because the authority assured the petitioner to consider his claim if the petition is withdrawn. Thereafter petitioner filed a representation, which was pending, but nothing was done by the respondent-authority. The petitioner thereafter again approached the High Court by filing WP No. 5095/2018 and after arguing the matter and considering the agreement made between the parties, the Court was pleased to dispose of the petition directing respondent-authority to consider the representation of the petitioner if the same is preferred in detail. Thus, at that time the respondent-authority could have given assurance for considering the claim of the petitioner or could have opposed the said petition on the ground of delay, however, after giving assurance by the respondent-authority for considering the grievance of the petitioner, the said petition was disposed vide order dated 07.03.2018 (Annexure P/15). The petitioner, in pursuance to the said order, submitted a detailed representation before the respondent-authority on 20.03.2018 (Annexure P/18) and vide order dated 31.03.2018 (Annexure P/17) the representation of the petitioner has been considered and rejected by the respondent-authority. The petitioner has, therefore, submitted that in view of the facts and circumstances narrated above, there is no delay on the part of the petitioner in filing the present petition. In support of his contention, he has placed reliance in the cases of Kalabharti Advertising and M/s Sharma Transport (supra). In my opinion, there is substance in the contention raised by the petitioner because when the respondents had assured for taking appropriate decision on the representation of the petitioner, the said petition was disposed of by the Court vide order dated 07.03.2018. Now, at this juncture, the respondent-authority has no right to raise the objection that the present petition is barred by time because the cause of action was accrued in favour of the petitioner after rejection of his representation in the year 2018 and as such the present petition cannot be dismissed on the ground of delay and laches. The High Court in the case of Raghubir Singh (supra) has held as under:
"10. The question of delay in invoking the writ jurisdiction under Article 226 of the Constitution has to be considered along with inaction on the part of the authorities who had to perform the statutory duty. (Ramchand vs. Union of India, (1994) 1 SCC 44). The Supreme Court observed in Dehri Rohtas Light railway vs. District Board, (1992) 2 SCC 598 that the rule which says that the Court may not enquire into belated and stale claim is not a rule of law but a rule of practice based on sound and proper exercise of discretion. Each case must depend upon its own facts. It will all depend on what the breach of the fundamental right and the remedy claimed are and how delay arose. The principles on which the relief to the party on the ground of laches or delay is denied is that the rights which have accrued to others by reason of the delay in filing the petition should not be allowed to be disturbed unless there is a reasonable explanation for the delay. The real test to determine delay in such cases is that the petitioner should come to the writ Court before a parallel right is created and that the lapse of time is not attributable to any laches or negligence. The test is not to physical running of time. Where the circumstance justifying the conduct exists, the illegality which is manifest cannot be sustained on the sole ground of laches. In R.S. Deodhar vs. State of Maharashtra, (1974) AIR SC 259 it was observed by the Constitution Bench of the Supreme Court that it "cannot easily allow itself to be persuaded to refuse relief solely on the jejune ground of laches, delay or the like". Again it is said in S.R. Bhanrale vs. Union of India, (1997) AIR SC 27: "It ill-behoved the Union of India to plead bar of limitation against the retiral dues of the appellant". Recently in S.K. Mastan Bee vs. G.M. South Central, (2003) 1 SCC 184 the family pension was claimed through a writ petition after some delay. The Supreme Court held that the petition could not be dismissed on the ground of laches or delay as the very denial of pension violated Article 21. In the present case the detailed reasons have been given above for not dismissing the petition on the ground of delay."
Thus, in view of the above, it is clear that the present petition does not suffer from delay and laches and the objection raised by the respondents and the intervenor is hereby rejected.
9. In the present case, in response to an advertisement inviting offers for allotment of plots, the petitioner submitted his offer for the plot in question i.e. Plot No. 936-B of Scheme No. 6, Sanjeevni Nagar, Jabalpur. The offer of the petitioner was considered and the respondent-authority found that his offer at the rate of Rs.827/- per sq.ft. against the cut-off price of Rs. 818 per sq. ft. was adequate. As per Annexure P/2, the said offer was placed before the Board of Directors in the meeting dated 15.06.2012 headed by the President of the respondent-authority. In the said meeting, the offer of the petitioner was found appropriate and the same was recommended for sanction. Thus, there was no occasion for the respondent-authority for not issuing order of allotment in favour of the petitioner. Moreover, he had also deposited the security amount, as demanded by the respondent-authority. Thereafter, a complaint was made by one of the Member of the Board of Directors namely Smt. Bindiya Adhikar regarding allotment of plot to petitioner, although she was very much present in the meeting of the Board of Directors held on 15.06.2012 where the recommendation was made by the Board of Directors for allotment of plot in favour of the petitioner after considering his offer in response to the advertisement. As per the petitioner, the said Member had no right to raise any objection because she was also the part of the decision in which the offer of the petitioner was approved, but, even then her complaint was entertained and an enquiry was conducted by constituting a committee to ascertain the correctness of the allegations made by Smt. Bindiya Adhikar and a report was called to that effect in which all the allegations made by the said Member were found frivolous and nothing illegal or irregular was found by the enquiry committee in the auction proceedings held by the respondents in which the petitioner's offer for allotment of plot in question was found proper.
10. It is out of place to mention here that an enquiry committee was constituted and an enquiry was ordered to be conducted with an object that if any substance is found in the complaint made by Smt. Bindiya Adhikar then the decision for allotting the plot to the petitioner may be reviewed, but, when nothing was found in the enquiry report against the auction proceeding proceeding, it was obvious that the respondentauthority would have proceeded with their decision and allotted the plot in question to the petitioner, but, the reasons best known to them, they cancelled the said auction despite the fact that the complaint made by Smt. Bindiya Adhikar was found frivolous. As per the petitioner, the authority had no right to review its own decision specially when a frivolous complaint was made by one of the Member of the Board, who was also the part of the said decision taken by the Board of Directors. Had it been a case in which any illegality was found in the auction proceedings, the respondentauthority could have reviewed it decision. But, when nothing illegal or irregular was found in the auction proceeding, they had no option but to regard the report of the enquiry committee otherwise there was no reason for constituting the enquiry committee to enquire about the correctness of the allegations made in the complaint. As per the petitioner, the respondentauthority cannot exercise the power of review when the same was not available to them. It is also contended that the respondent-authority is estopped from overturning their own decision that too without any reason.
11. The petitioner, in support of his contention, has placed reliance in the case of Ms. Sharma Transport (supra). The Apex Court, while dealing with the principle of doctrine of estoppel, has observed as under:-
"14. Doctrine of "promissory estoppel" has been evolved by the courts, on the principles of equity, to avoid injustice.
15. "Estoppel" in Black's Law Dictionary, is indicated to mean that a party is prevented by his own acts from claiming a right to the detriment of the other party who was entitled to rely on such conduct and has acted accordingly. Section 115 of the Indian Evidence Act is also, more or less, couched in a language which conveys the same expression.
16. "Promissory estoppel" is defined in Black's Law Dictionary as 'an estoppel
"which arises when there is a promise which promisor should reasonably expect to induce action or forbearance of a definite and substantial character on part of promisee, and which does induce such action or forbearance, and such promise is binding if injustice can be avoided only by enforcement of promise".
17. These definitions in Black's Law Dictionary which are based on decided cases, indicate that before the Rule of "promissory estoppel" can be invoked, it has to be shown that there was a declaration or promise made which induced the party to whom the promise was made to alter its position to its disadvantage.
18. In this backdrop, let us travel a little distance into the past to understand the evolution of the doctrine of "promissory estoppel".
19. Dixon, J. an Australian jurist, in Grundt v. Great Boulder Gold Mines Proprietary Ltd,1939 59 CLR 641, laid down as under:
"It is often said simply that the party asserting the estoppel must have been induced to act to his detriment. Although substantially such a statement is correct and leads to no misunderstanding, it does not bring out clearly the basal purpose of the doctrine. That purpose is to avoid or prevent a detriment to the party asserting the estoppel by compelling the opposite party to adhere to the assumption upon which the former acted or abstained from acting. This means that the real detriment or harm from which the law seeks to give protection is that which would flow from the change of position if the assumption were deserted that led to it."
20. The principle, set out above, was reiterated by Lord Denning in Central London Property Trust Ltd. v. High Trees House Ltd. when he stated as under: (All ER p. 259E)
"A promise intended to be binding, intended to be acted upon, and in fact acted upon is binding...."
21. Lord Denning approved the decision of Dixon, J. (supra) in Central Newbury Car Auctions Ltd. v. Unity Finance Ltd, (1956) 3 AllER 905. Apart from propounding the above principle on judicial side, Lord Denning wrote out an article, a classic in legal literature, on "Recent Developments in the Doctrine of Consideration", Modern Law Review, Vol.15, in which he expressed as under :
"A man should keep his word. All the more so when the promise is not a bare promise but is made with the intention that the other party should act upon it. Just a contract is different from tort and from estoppel, so also in the sphere now under discussion promises may give rise to a different equity from other conduct.
The difference may, lie in the necessity of showing 'detriment'. Where one party deliberately promises to waive, modify or discharge his strict legal rights, intending the other party to act on the faith of promise, and the other party actually does act on it, then it is contrary, not only to equity but also to good faith, to allow the promisor to go back on his promise. It should not be necessary for the other party to show that he acted to his detriment in reliance on the promise. It should be sufficient that he acted on it."
This principle has been evolved by equity to avoid injustice. It is neither in the realm of contract nor in the realm of estoppel. Its object is to interpose equity shorn of its form to mitigate the rigour of strict law. In Union of India & Ors. Vs. M/s Anglo Afgan Agencies etc, (1968) AIR SC 718, it was inter alia observed as follows: (AIR p. 723, para 10)
"We are unable to accede to the contention that the executive necessity releases the Government from honouring its solemn promises relying on which citizens have acted to their detriment. Under our constitutional set-up, no person may be deprived of his right or liberty except in due course of and by authority of law: if a member of the Executive seeks to deprive a citizen of his right or liberty otherwise than in exercise of power derived from the law - common or statute - the Courts will be competent to and indeed would be bound to, protect the rights of the aggrieved citizens." It was further held in its summing up thus: (AIR p. 728, para 23) :
"23. Under our jurisprudence the Government is not exempt from liability to carry out the representation made by it as to its future conduct and it cannot on some undefined and undisclosed ground of necessity or expediency fail to carry out the promise solemnly made by it, not claim to be the Judge of its own obligation to the citizen on an ex parte appraisement of the circumstances in which the obligation has arisen."
22. In Century Spg. and Mfg. Co. Ltd. v. Ulhasnagar Municipal Council,1979 1 SCC 582, this doctrine of promissory estoppel against public authorities was extended thus:
"This Court refused to make distinction between a private individual and a public body so far as the doctrine of promissory estoppel is concerned."
23. In Motilal Padampat Sugar Mills Co. (P) Ltd. Vs. State of U.P., (1979) 2 SCC 409 the doctrine of promissory estoppel was applied to the executive action of the State Government and also denied to the State the doctrine of executive necessity as a valid defence. It was held that in a republic governed by the rule of law, no one high or low, is above the law. Every one is subject to the law as fully and completely as any other and the Government is no exception. The Government cannot claim immunity from the doctrine of promissory estoppel. Equity will, in a given case where justice and fairness demands, prevent a person from exercising strict legal rights even where they arise not in contract, but on his own title deed or in statute. It is not necessary that there should be some pre-existing contractual relationship between the parties. The parties need not be in any kind of legal relationship before the transaction from which the promissory estoppel takes its origin. The doctrine would apply even where there is no pre-existing legal relationship between the parties, but the promise is intended to create legal relations and effect a legal relationship which will arise in future. It was further held that it is indeed pride of constitutional democracy and rule of law that the Government stands on the same footing as a private individual so far as the obligation of the law is concerned. The former is equally bound as the latter. Therefore, the Government cannot claim any immunity from the doctrine of promissory estoppel and it cannot say that it is under no obligation to act in a manner, i.e., fair and just or that it is not bound by the considerations of honesty and good faith. In fact, the Government should be held to high standard of rectangular rectitude while dealing with citizens. Since the doctrine of promissory estoppel is an equitable doctrine, it must yield where the equity so requires. If it can be shown by the Government that having regard to the facts as they have transpired, it would be inequitable to hold the Government or public authority to the promise or representation made by it, the Court would not raise an equity in favour of the promisee and enforce the promise against the Government. The doctrine of promissory estoppel would be displaced in such a case, because on the facts, equity would not require that the Government should be held bound by the promise made by it. But the Govt. must be able to show that in view of the fact as has been transpired, public interest would not be prejudiced. Where the Govt. is required to carry out the promise the Court would have to balance the public interest in the Government's carrying out the promise made to the citizens, which helps citizens to act upon and alter their position and the public interest likely to suffer if the promises were required to be carried out by the Government and determine which way the equity lies. It would not be enough just to say that the public interest requires that the Govt. would not be compelled to carry out the promise or that the public interest would suffer if the Govt. were required to honour it. In order to resist its liability the Govt. would disclose to the Court the various events insisting its claim to be exempt from liability and it would be for the Court to decide whether those events are such as to render it inequitable to enforce the liability against the Govt."
12. In the present case, admittedly, no reason was assigned by the respondent-authority as to what compelled them to review its decision for not accepting the offer of the petitioner and the recommendation made in the meeting of the Board of Directors was overturn. The petitioner has also contended that the respondent-authority has no power to review its own decision and and in support of his contention, he has placed reliance in the case of Kalabharti Advertising (supra) in which the Supreme Court has observed as under:-
"12. It is settled legal proposition that unless the statue/rules so permit, the review application is not maintainable in case of judicial/quasi-judicial orders. In the absence of any provision in the Act granting an express power of review, it is manifest that a review could not be made and the order in review, if passed, is ultra vires, illegal and without jurisdiction. (Vide Patel Chunibhai Dajibha v. Narayanrao Khanderao Jambekar, (1965) AIR SC 1457 and Harbhajan Singh v. Karam Singh,1966 AIR SC 64.)
14. Therefore, in view of the above, the law on the point can be summarised to the effect that in the absence of any statutory provision providing for review, entertaining an application for review or under the garb of clarification/ modification/ correction is not permissible."
13. Learned counsel for the petitioner, however, has submitted that this contention of the petitioner has no substance because the respondent-authority has not exercised any statutory power of review and the analogy which is relied upon by the petitioner is applicable only when the statutory function is exercised. Here in this case, as per the respondents, it was only an administrative action, which was reviewed and that does not require any power of review to the authority because the authority is free to review its own decision, which is taken on administrative side.
14. I find force in the contention raised by the learned counsel for the respondents. The respondent-authority has not exercised the statutory power of review. It was purely an administrative action, which can be reviewed by them even without having any power of review.
15. Learned counsel for the respondents has also contended that in view of the provision of Rule 12 and 13 of the Rules of 1975, it gives power to the Chairman to cancel the bid. For the sake of convenience, Rule 12 and 13 are quoted below:
"12. The Chairman may for reason to be recorded in writing accept such lower bid as he deems fit in the interest of the Authority and the land shall be transferred accordingly. The Chairman may for reason to be recorded in writing withdraw the land from auction of the day if he finds that no fair bid is forthcoming and put it up for auction on a future date to be announced later.
13. When the plot of land is put to auction the highest bid shall be taken as accepted. If in the opinion of the Chairman the last bid is not fair or is lower than the upset price the Chairman reject the bid and order for a fresh auction to be held on a future date to be announced later where the highest bid is accepted by the Chairmen the bidder shall deposit 30 per cent of the bid money forthwith and all the sum deposited by other bidders shall be returned. After acceptance by the Chairman of the highest bid in case of auction, the balance of auction bid shall be deposited in the office of the Authority within fifteen days of the communication of such acceptance. The land so auctioned shall be transferred to be highest bidder subject among other things, to the condition, of payment of ground rent at two percent of premium annually.
In view of the above, learned counsel for the respondent-authority has submitted that the power of cancellation is vested with the respondent-authority and, therefore, no illegality has been committed, if the decision has been taken by the respondent-authority to cancel the highest bid of the petitioner.
16. However, as per the facts and circumstances of the case, the conduct of the respondent-authority does not appear to be fair and transparent and also free from any arbitrariness, because, when an advertisement was issued inviting applications from the open market allowing persons to participate in the auction and submit their offers and after accepting the appropriate offers same were placed before the competent authority and that authority approved the appropriate offers and recommended for allotment of plots. Later on the said decision could not be changed by the authority, specially when there was no sufficient and good reason was available for them to do so. Though respondent-authority has power of not accepting the highest bid, but, for doing so there must be good and sufficient reason. The authority cannot be allowed to act arbitrarily and perform their obligation as per their own whims and moods. The Supreme Court in the case of Meerut Devt. Authority (supra), while dealing with the issue of tender proceeding, observed as under:-
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 above stated ground, the reason being the terms of the invitation to tender are in the realm of the contract. No bidder is entitled as a matter of right to insist the Authority inviting tenders to enter into further negotiations unless the terms and conditions of notice so provided for such negotiations.
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.
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 favoritism."
17. As per the basic contention of the petitioner, being aggrieved with the action of the respondent-authority whereby his highest bid has been rejected by the authority without assigning any reason, has assailed the said action saying that the same cannot be done and the highest bid of the petitioner had to be accepted by the authority. Thus, it is appropriate to deal with the issue raised by the petitioner in his petition as to whether the said action of the authority was proper or not and can be the subject matter of judicial review of this Court under Article 226 of the Constitution of India.
18. The Supreme Court in the case of Ram and Shyam Company vs. State of Haryana and others, (1985) 3 SCC 267 has already considered this aspect that it is a right of the Government not to accept the highest bid, but, it cannot act arbitrarily or without reason and if it does so, its action shall be liable to be invalidated. The Supreme Court has observed as under:-
"The Government has the right not to accept the highest bid and even to prefer a tenderer other than the highest bidder, if there exists good and sufficient reasons, such as, the highest bid not representing the market price or need to give the concession to a weaker section of the society who could not outbid the highest bidder. In the present case there was no grievance relating to rejection of the highest bid on irrelevant or extraneous grounds. But after rejecting the offer, it is obligatory upon the Government to act fairly and at any rate it cannot act arbitrarily." The Supreme Court has further observed as under:-
"Government must act in public interest, it cannot act arbitrarily or without reason and if it does so, its action would be liable to be invalidated. It was further observed that the object of holding the auction is generally to raise the highest revenue. The Government is entitled to reject the highest bid if it thought that the price offered was inadequate. But, after rejecting the offer, it is obligatory upon the Government to act fairly and at any rate it cannot act arbitrarily."
19. The Division Bench of this Court also in the case of Mangal Amusement Park Pvt. Ltd. (M/s) v. State of M.P. And other,1994 JabLJ 571 has very categorically laid down as under:-
"22. Even in absence of such a Rule, the Respondent was under a legal obligation to record reason for rejecting Petitioner's tender for it cannot act in an arbitrary manner. The Supreme Court has by now in several cases (to name only one Ramana Dayaram Shetty v. The International Airport Authority of India and Ors, (1979) AIR SC 1628 - MANU/SC/0048/1979 held that it is not open to public bodies/statutory bodies to reject a qualified tender in an arbitrary manner.
23. While agreeing with the views expressed by Mathew. J. (as he then was) V. Punnan Thomas v. State of Kerala, (1969) AIR Kerala 81 the Supreme Court in Ramana Shetty's case held as follows:
"It must, therefore, be taken to be the law that where the Government is dealing with the public, whether by way of giving jobs or entering into contracts or issuing quotas or licences or granting other forms of largess, the Government cannot act arbitrarily at its sweet will and, like a private individual, deal with any person it pleases, but its action must be in conformity with standard or norm which is not arbitrary, irrational or irrelevant. The power or discretion of the Government in the matter of grant of largess including award of jobs, contracts quotas, licences etc., must be confined and structured by rational, relevant and non-discriminatory standard or norm and if the government departs from such standard or norm in any particular case or cases, the action of the Government would be liable to be struck down, unless it can be shown by the Government that the departure was not arbitrary, but was based on some valid principle which in itself was irrational, unreasonable or discriminatory."
24. One of its very recent judgment the Supreme Court in Food Corporation of India v. Kamdhenu Cattle Feed Industries, (1993) 1 SCC 71 MANU/SC/0257/1993, has held-
"From the above, it is clear that even though the highest tenderer can claim no right to have his tender accepted, there being a power while inviting tenders to reject all the tenders, yet the power to reject all the tenders cannot be exercised arbitrarily and must depend for its validity on the existence of cogent reasons for such action.
25. It may be noted here itself that the resolution Anx. R. 2L dtd. 28.2.92 rejecting all tenders, contains no reason whatsoever much less a cogent reason.
The Division Bench has very categorically laid down that the highest tender cannot be rejected without assigning any reason. If that is done then such rejection is arbitrary and liable to be reviewed by the Court. It is also observed that the statutory body, if acted in breach of its statutory duty, it has also violated the Article 14 of the Constitution by acting in a most arbitrary manner in rejecting the tender without assigning any reason and the Court has every right to direct the authority to consider the petitioner's case in accordance with law. Here in the present case, similar situation exists. The respondent-authority without assigning any reason rejected the highest bid of the petitioner. Even assuming that the said power is vested with the authority and for which they have relied upon Rules 12 and 13 of the Rules of 1975, as has been quoted hereinabove, it is further made clear that even the said provision very categorically provides obligation upon the authority to record reason for withdrawing the highest bid and as such if the same is not done, no reason is assigned, then it is deemed that the authority has violated the said provision and has misused the power provided by the Statute. Accordingly, the action of the authority, which has been assailed by the petitioner in this petition, cannot be said to be proper and is not sustainable in the eyes of law. However, the stand of the respondent-authority that no legal right accrues in favour of the petitioner because no order of allotment was issued in his favoaur and the internal decision of the authority cannot give any right to the petitioner to claim that the plot in question should be allotted to him.
20. The respondent-authority, in the present case, has come with the solitary stand that petitioner has no right to challenge the decision of the respondents because no allotment order was issued in his favour. They have submitted that the internal decision of an authority making certain notes on a file does not give any right to a person to claim equity unless his right is crystallized and such departmental communication is culminated into final order, which reaches to such a person. The respondents have placed reliance upon a decision in the case of Shanti Sports Club (supra) in which the Supreme Court has observed as under:
"43. A noting recorded in the file is merely a noting simpliciter and nothing more. It merely represents expression of opinion by the particular individual. By no stretch of imagination, such noting can be treated as a decision of the Government. Even if the competent authority records its opinion in the file on the merits of the matter under consideration, the same cannot be termed as a decision of the Government unless it is sanctified and acted upon by issuing an order in accordance with Article 77(1) and (2) or Article 166(1) and (2). The noting in the file or even a decision gets culminated into an order affecting right of the parties only when it is expressed in the name of the President or the Governor, as the case may be, and authenticated in the manner provided in Article 77(2) or Article 166(2). A noting or even a decision recorded in the file can always be reviewed/reversed/overruled or overturned and the court cannot take cognizance of the earlier noting or decision for exercise of the power of judicial review.
44. In State of Punjab v. Sodhi Sukhdev Singh,1961 SC 493, this Court considered the question whether a provisional decision taken by the Council of Ministers to reinstate an employee could be made basis for filing an action for issue of a mandamus for reinstatement and held: (AIR p. 512, para 42)
"42......... We are unable to understand this argument. Even if the Council of Ministers had provisionally decided to reinstate the respondent that would not prevent the Council from reconsidering the matter and coming to a contrary conclusion later on, until a final decision is reached by them and is communicated to the Rajpramukh in the form of advice and acted upon by him by issuing an order in that behalf to the respondent."
45. A somewhat similar question was considered by the Constitution Bench in Bachhittar Singh v. The State of Punjab, (1963) AIR SC 395, in the backdrop of the argument that once the Revenue Minister of PEPSU had recorded a note in the file that the punishment imposed on the respondent be reduced from dismissal to that of reversion, the same could not be changed/reviewed/overruled by the Chief Minister. This Court proceeded on the assumption that the note recorded by the Revenue Minister of PEPSU in the file was an order, referred to the provisions of Article 166 of the Constitution and held: (AIR p. 398, paras 9-11)
"9.....Merely writing something on the file does not amount to an order. Before something amounts to an order of the State Government two things are necessary. The order has to be expressed in the name of the Governor as required by clause (1) of Art.166 and then it has to be communicated. As already indicated, no formal order modifying the decision of the Revenue Secretary was ever made. Until such an order is drawn up the State Government cannot, in our opinion, be regarded as bound by what was stated in the file. As along as the matter rested with him the Revenue Minister could well score out his remarks or minutes on the file and write fresh ones.
10. The business of State is a complicated one and has necessarily to be conducted through the agency of a large number of officials and authorities. The constitution, therefore, requires and so did the Rules of Business framed by the Rajpramukh of PEPSU provide, that the action must be taken by the authority concerned in the name of the Rajpramukh. It is not till this formality is observed that the action can be regarded as that of the State or here, by the Rajpramukh. We may further observe that, constitutionally speaking, the Minister is no more than an adviser and that the head of the State, the Governor or Rajpramukh (Till the abolition of that office by the Amendment of the Constitution in 1956), is to act with the aid and advice of his Council of Ministers. Therefore, until such advice is accepted by the Governor whatever the Minister or the Council of Ministers may say in regard to a particular matter does not become the action of the State until the advice of the Council of Ministers is accepted or deemed to be accepted by the Head of the State. Indeed, it is possible that after expressing one opinion about a particular matter at a particular stage a Minister or the Council of Ministers may express quite a different opinion, one which may be completely opposed to the earlier opinion. Which of them can be regarded as the 'order' of the State Government ? Therefore to make the opinion amount to a decision of the Government it must be communicated to the person concerned. In this connection we may quote the following from the judgment of this Court in the State of Punjab v. Sodhi Sukhdev Singh: (AIR p. 512, para 42).
'42...Mr. Gopal Singh attempted to argue that before the final order was passed the Council of Ministers had decided to accept the respondent's representation and to reinstate him, and that, according to him, the respondent seeks to prove by calling the two original orders. We are unable to understand this argument. Even if the Council of Ministers had provisionally decided to reinstate the respondent that would not prevent the Council from reconsidering the matter and coming to a contrary conclusion later on, until a final decision is reached by them and is communicated to the Rajpramukh in the form of advice and acted upon by him by issuing an order in that behalf to the respondent.'
Thus it is of the essence that the order has to be communicated to the person who would be affected by that order before the State and that person can be bound by that order. For, until the order is communicated to the person affected by it, it would be open to the Council of Ministers to consider the matter over and over again and, therefore, till its communication the order cannot be regarded as anything more than provisional in character.
11. We are, therefore, of the opinion that the remarks or the order of the Revenue Minister, PEPSU are of no avail to the appellant."
52. As a result of the above discussion, we hold that the notings recorded in the official files by the officers of the Government at different levels and even the Ministers do not become decision of the Government unless the same is sanctified and acted upon by issuing an order in the name of the President or Governor, as the case may be, authenticated in the manner provided in Articles 77(2) and 166(2) and is communicated to the affected persons. The notings and/or decisions recorded in the file do not confer any right or adversely affect the right of any person and the same can neither be challenged in a court nor made basis for seeking relief. Even if the competent authority records noting in the file, which indicates that some decision has been taken by the concerned authority, the same can always be reviewed by the same authority or reversed or over-turned or overruled by higher functionary/authority in the Government.
The respondent-authority further relied upon a decision of the Supreme Court in the case of M/s Sethi Auto Service Station (supra) in which the Supreme Court has observed as under:-
14. It is trite to state that notings in a departmental file do not have the sanction of law to be an effective order. A noting by an officer is an expression of his viewpoint on the subject. It is no more than an opinion by an officer for internal use and consideration of the other officials of the department and for the benefit of the final decision-making authority. Needless to add that internal notings are not meant for outside exposure. Notings in the file culminate into an executable order, affecting the rights of the parties, only when it reaches the final decisionmaking authority in the department, gets his approval and the final order is communicated to the person concerned.
15. In Bachhittar Singh Vs. The State of Punjab, (1963) AIR SC 395, a Constitution Bench of this Court had the occasion to consider the effect of an order passed by a Minister on a file, which order was not communicated to the person concerned. Referring to the Article 166(1) of the Constitution, the Court held that order of the Minister could not amount to an order by the State Government unless it was expressed in the name of the Rajpramukh, as required by the said Article and was then communicated to the party concerned. The Court observed that business of State is a complicated one and has necessarily to be conducted through the agency of a large number of officials and authorities. Before an action is taken by the authority concerned in the name of the Rajpramukh, which formality is a constitutional necessity, nothing done would amount to an order creating rights or casting liabilities to third parties. It is possible, observed the Court, that after expressing one opinion about a particular matter at a particular stage a Minister or the Council of Ministers may express quite a different opinion which may be opposed to the earlier opinion. In such cases, which of the two opinions can be regarded as the "order" of the State Government? It was held that opinion becomes a decision of the Government only when it is communicated to the person concerned.
17. In view of the above legal position and in the light of the factual scenario as highlighted in the order of the learned Single Judge, we find it difficult to hold that the recommendation of the Technical Committee of DDA fructified into an order conferring legal right upon the appellants."
21. I find substance in the contention raised by the learned counsel for the respondent-authority that the petitioner has no right to claim that the decision taken by the Board of Directors in its meeting held on 15.06.2012 and should be implemented and the plot in question should be allotted to him for which no writ can be issued against the respondents unless the right of the petitioner is crystallized finally. But, here in this case, the petitioner is mainly aggrieved by the action of the respondents whereby they have cancelled the auction proceedings without any reason and not only this they have issued a fresh tender despite the fact that the matter was pending for consideration before this Court.
22. As per the contention of the petitioner, merely because a frivolous complaint was made by one of the Members of the Board, the respondent-authority cancelled the entire tender proceeding in which the petitioner's bid was found highest. The enquiry report was also in favour of the petitioner. Therefore, there was no reason and occasion available with the respondent-authority to change its decision to deprive the petitioner from getting the order of allotment of plot for which his offer was found highest. As per the petitioner, it is not a case in which the authority has committed any irregularity and also suffered loss. Therefore, it shows the complete arbitrariness on the part of the respondent-authority and the said practi
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ce has been deprecated by the Supreme Court in the case of Meerut Devt. Authority and Ram and Shyam Company (supra) in the view expressed and quoted hereinabove. The Supreme Court in the said case has very categorically observed that the authority has a right not to accept the highest bid and even to prefer a tender other than the highest bidder, but, this can be done only when there exists good and sufficient reason, such as, the highest bid not representing the market price or any irregularity committed in tender proceeding, but there cannot be any doubt that the Authority's action in accepting or refusing the bid must be free from arbitrariness or favoritism. As quoted hereinabove, the offer made by the petitioner was higher than the cut-off price and even in the meeting of Board of Directors it was not pointed out that the authority if accepts the offer of the petitioner it would suffer from monetary loss. No sufficient reason has been assigned even during the course of arguments by the learned counsel for the respondents as to why the the recommendation of the Board to allot the plot in question in favour of the petitioner cannot be implemented. The Division Bench of this Court in case of Mangal Amusement Park Pvt. Ltd (supra) has very clearly laid down that the highest bid cannot be refused without any sufficient reason. Provision of Rule 12 and 13 of the Rules of 1975 also provides that the power of rejecting the highest bid is vested with the Chairman, but after assigning the reasons the same can be done, therefore, I am of the opinion that in the present case the decision for not accepting the highest bid of the petitioner is not free from arbitrariness. Once for allotting the public property an auction is conducted in a transparent and fair manner inviting application from open market then the authority, without having a good and sufficient reason, cannot refuse to accept the highest bid, otherwise it will result in loosing confidence of the public over the Government and its instrumentality. 23. Considering the above, it is clear that the authority can overturn its decision or refuse to accept the highest bid if it is found that any irregularity is committed by the officers/authority involved in the tender proceeding. Just to show the fairness and to maintain the transparency, when a committee was constituted to ascertain the allegations made in the complaint then there was no reason for the respondent-authority to discard the enquiry report. The respondent-authority could cancel the bid of the petitioner if the enquiry committee had observed that the allegations made in the complaint had some substance, but, here in this case, the situation is otherwise. When the report had come in favour of the petitioner holding that there was no irregularity or illegality in the auction proceeding then the authority should have honoured the report and should have rejected the complaint made by one of the Member of the Board, who was also the part of the decision and present in the meeting of the Board of Directors held on 15.06.2012. Undoubtedly, the bidders participating in the tender process have no other right except the right of equality and fair treatment in the matter of evaluation of competitive bid offered by the interested persons in response to the notice inviting tender in a transparent manner and free from hidden agenda. Here in this case, such a right of the petitioner has been frustrated by the arbitrary conduct of the respondentauthority by not accepting his highest bid without there being any good and sufficient reason. 24. Learned counsel for the intervenor has accepted the arguments advanced by the learned counsel for the respondents and has not added anything in addition to the said arguments. 25. This petition is, therefore, allowed setting aside the decision taken by the respondent-authority on 31.03.2018 and the decision dated 04.08.2012. So far as the allotment made in favour of the intervenor is concerned, the same can also be set aside considering the fact that the action of the respondent-authority has already held illegal by this Court for not accepting the highest bid of the petitioner and withdrawal of their resolution for not accepting the bid since set aside in this petition, therefore, all subsequent actions including the action under which the allotment of plot made in favour of the petitioner has been cancelled would also go. It is further made clear that the possession of the land has not been given to the intervenor as the order of status quo in the present petition has been passed by this Court on 09.05.2018 and, as per the respondent-authority, after coming to know about the order of status quo, they have not delivered the possession of the plot to the intervenor, although they have accepted the security amount from the intervenor, that too after the order of status quo was passed by this Court, therefore, acceptance of amount although is contemptuous on the part of the authority, but, without dealing with the said aspect, the authority may consider to return the said amount to the intervenor with interest at the rate of 6% from the date of depositing the amount till the date of payment and may also consider to pass appropriate order in respect of the intervenor including the cancellation of the allotment of plot, because this Court had protected the right of the petitioner and despite that respondent-authority had proceeded in the matter. It is further pertinent to mention here that in the present case also the interim order has been granted by this Court on 09.05.2018 restraining the respondent-authority from allotting the plot in question to any third party. Resultantly, the allotment order of the plot in question shall be made in favour of the petitioner and possession of the said plot be also handed over to him after completing all requisite formalities and also taking difference amount from him as per the rate quoted by him at the time of submitting his offer. 26. The petition is accordingly allowed and disposed of with the above terms. However, parties shall bear their own cost.