Auction – Ghaziabad Development Authority (GDA)-respondent no.2 herein had advertised the allotment of various plots through an auction – On 15.03.2024, an open auction was conducted in which the reserve price of the subject plot was fixed at Rs.25,600/- per sq. mtr. – The appellant submitted a bid of Rs.29,500/- per sq. mtr., which was the highest, and was thus declared the highest bidder – However, later respondent found that the GDA–respondent no.2 had cancelled the allotment – Thereafter, on 22.05.2024, the GDA-respondent no.2 officially notified the appellant that they had cancelled their financial bid and announced that a fresh auction would take place for the plot – Since it noticed that “similar properties” in the same scheme had received substantially higher prices than offered by the appellant – Writ petition filed by the appellant before the High Court was dismissed – The High Court held that the appellant cannot claim an “indefeasible right” to insist upon the execution of a sale deed in its favour – Later, appellant filed another writ petition, which was also dismissed – Correctness: Held: An auction process has a sanctity attached to it and only for valid reasons that the highest bid can be discarded in an auction which is otherwise held in accordance with law – If a valid bid has been made which is above the reserve price, there should be a rationale or reason for not accepting it – Therefore, the decision to discard the highest bid must have a nexus to the rationale or the reason – Merely because the authority conducting the auction expected a higher bid than what the highest bidder had bid cannot be a reason to discard the highest bid – In the instant case, no other party had placed a bid higher than the appellant herein – There was no infirmity in the conduct of the auction – No other party had complained about the process of auction conducted by the GDA-respondent no.2 – The bid offered by the appellant herein was the highest and above the reserve price – In the circumstances, the said bid ought to have been accepted by GDArespondent no.2 rather than cancelling the same without notice to the appellant herein – Hence, the cancellation of the bid submitted by the appellant herein is quashed – The impugned orders of the High Court dated 24.05.2024 and 15.07.2024 passed in the respective writ petitions are set-aside – The appellant is directed to re-deposit the earnest money – After the re-deposit of the earnest money, the GDA-respondent no.2 shall make an order of allotment of the subject plot in favour of the appellant herein and take all consequential steps for concluding the auction process in favour of the appellant herein. [Para 33]
As published in the Supreme Court Reports, Supreme Court of India. Headnotes prepared by: Ankit Gyan. Text from the Indian Supreme Court Judgments open data set (Dattam Labs), CC BY 4.0.
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