Government or State instrumentalities can validly retain power to accept or reject highest bid in interest of public revenue, reiterates P&H HC

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Read Order: Inderpreet Kaur v. State of Punjab & another


Tulip Kanth

Chandigarh, October 6, 2021: While considering a case wherein the petitioner had participated in an e-auction process conducted by the Town Improvement Trust, Ludhiana, the Punjab and Haryana High Court has opined that merely for the fact that the petitioner had put in the highest bid and which was over and above the reserve price, no vested right had accrued in her for the bid to be accepted. 

The petitioner had filed the instant petition being aggrieved of the action of the respondent/Trust in not having accepted the bid submitted by the petitioner for a residential plot. Apparently, auction pertaining to the plot in question had been cancelled due to lower rates as compare to other similar properties.

The counsel for the petitioner stated that since bid of the petitioner was the highest and over and above the reserve price, the same ought to have been accepted and the petitioner is vested with a right for issuance of a letter of allotment.

It was also prayed that a writ of mandamus be issued for directing the respondent/Trust to accept the highest bid of the petitioner for plot and allotment letter be issued.

The Division Bench of Justice Tejinder Singh Dhindsa and Justice Vivek Puri observed that it is by now well settled that the auction constitutes only an invitation to offer and unless the same is accepted, even if a person is the highest bidder no right for enforcing such a bid would be maintainable. 

Furthermore, the Government or the State instrumentalities can always validly retain power to accept or reject the highest bid in the interest of the public revenue. A reference in this regard was made to the judgment of the Apex Court in Haryana Urban Development Authority and others Vs. Orchid Infrastructure Developers Private Limited.

“In the light of such settled position in law, merely for the fact that the petitioner herein had put in the highest bid and which was over and above the reserve price, no vested right had accrued in her for the bid to be accepted. In the facts of the present case, no concluded contract came to being”, added the Division Bench.

Herein, the petitioner was questioning the reasoning adopted by the respondent/ Trust for cancellation of the auction in respect of the plot. As per an annexure, auction had been cancelled due to lower rates as compared to other similar properties. 

The case projected on behalf of the petitioner was that the adjoining plots were advantageously located and as such there was no comparison possible with the plot for which the petitioner had submitted her bid. The Court opined that the even on such ground, no interference was warranted.

The Bench concluded that the petitioner was not alleging any mala fide or motive against the officials of the Improvement Trust in relation to the auction process. In the absence of the same, the Court was not inclined to review a decision taken by the competent authority while cancelling the auction of a site on the ground that it had fetched a lower price compared to other sites.

Thus, the Division Bench did not find any merit in the instant writ petition and the same was dismissed.

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