WELCOME TO LEGAL WORLD

YOU ARE MOST WELCOMED TO MY LEGAL WORLD TO HAVE CLEAR YOUR CLOUDS OF DOUBTS AND TO HAVE A GOOD NIGHT WITH COMFORT -WAITING FOR A NEW SUNRISE WITH CONFIDENT. FOR FREE LEGAL OPINION ALSO, YOU CAN POST YOUR PROBLEMS TO THIS BLOG. IT WILL BE ANSWERED AS EARLY AS POSSIBLE.

Saturday, April 14, 2012

Tender - Nature of rights of a bidder participating in tender process - Held: Bidder is not 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. Tender - Decision making process - Judicial review in contractual matters - Scope of - Held: Court not to substitute its own opinion for the opinion of the authority deciding the matter - But at the same time, courts can certainly examine whether `decision making process' was reasonable, rational, not arbitrary and violative of Article 14 - On facts, allotment of land for educational purposes - Bidder made a bid at a rate less than the reserved price - Authority was not under any legal or constitutional obligation to entertain the bid - Plea that allotment of land for educational purpose at reasonable rate would subserve public interest, not tenable as public interest parameters were taken into consideration by Government itself in directing the Authority to make the lands to educational institutions at a concessional rate - Bidder had no legal or constitutional right to make any perpetual demands and dictate terms to the Authority to allot any particular land at the chosen rate - Conduct of the bidder would also not entitle it to get any relief in equity - Equity - Administrative law. Urban development - Change of land use - Disputed land in Master Plan was reserved for `Residential' purpose - Authority earlier relaxed the use and made it for `educational' purpose - There is nothing unreasonable in changing the land use and earmarking it again for `Residential' use - Uttar Pradesh Urban Planning and Development Act, 1973. Respondent-Association of Management Studies was indulged in managing various educational institutions imparting education such as MBA, MCA, Engineering etc. On 12.5.2000, MDA allotted a plot of land measuring 20,000 sq.m. situated in Ganganagar Residential Scheme @ Rs. 560 per sq m. to AMS for construction of building for educational purposes. The AMS requested to allot an additional land of 20,000 sq.mts. and 37,000 sq.mts. in the said Scheme for establishment of Engineering College and other Degree Colleges. The MDA invited tenders for allotment of land measuring 20,000 sq.mts. and 37,000 sq.mts. located in the said residential scheme available to be utilized for educational use. The reserved price was fixed at Rs. 690 per sq.m. for 20,000 sq. mts. and for the remaining extent of 37,000 sq.m. of land at Rs. 500 per sq. m. both being 50% of sector rate. The reserved price was fixed in terms of G.O. dated 19.04.1996 which provided that plots for educational institutions/engineering colleges should be sold at 50% of the sector rate. In response to the advertisement, AMS submitted its tender @ Rs. 500 per sq.m. for the plot of 37,000 sq.mts. and Rs. 560 per sq.m. for 20,000 sq.mts. The MDA informed AMS on 3.09.2001 that the offer @ Rs. 560 per sq.m was less than the reserved rate of Rs. 690 per sq.m. in respect of 20,000 sq.mts. of land. AMS was put on notice to give its consent within one week if it was desirous of getting 20,000 sq.m. of land at Rs. 690 per sq.m. AMS in response to the said letter requested the Authority to allot 37,000 sq.m. of land at Rs. 500 per sq.m. offered by them in their tender and in clear terms stated that the other land of 20,000 sq.m. may be deleted from offer as the cost of that land was not viable for them. However, it stated that it was ready to purchase the same at Rs. 560/- per sq.m. as quoted by it which was the same rate at which the part of that land was already purchased. On 27.11.2001, MDA informed AMS that only 37,000 sq.mts. of land was allotted. This was accepted by AMS and they took allotment of only 37,000 sq.mts. of land. However, having accepted the offer of 37,000 sq.mts. of land, AMS raised an objection stating that injustice was done by the Authority in fixing the reserved price at Rs. 690 per sq.m. even though adjoining plots were allotted at Rs. 500-560 per sq.m. MDA in its meeting held on 15.03.2002 decided that the disposal of the land would be made through open Tender-cum-Auction for residential use after giving wide publicity. The Authority considered the offer made on behalf of a Housing Society to purchase the bulk of land measuring 20,000 sq.mts at Rs. 775 per sq.m. and as well as the letter dated 4.3.2002 sent by AMS. AMS by its letter dated 27.03.2002, requested the Authority to allot the said land at Rs. 690 per sq.m. or in alternative, the topography of the land be so adjusted that both the 20,000 sq.mts. of land and 37,000 sq.mts. of land already allotted to the society may be made contiguous to each other so that the entire land could be fruitfully utilized by it for educational purposes. On 15.4.2002, MDA got issued fresh advertisement inviting applications in newspapers for allotment of the aforementioned plot of land of 20,000 sq.mts. inviting bids from Foreign Direct Investors, building developers etc. for housing purposes with the reserved price of Rs. 885 per sq.m. and earnest money of Rs. 5.50 lakhs. Aggrieved, AMS filed writ petition in the High Court. The High Court by its interim order dated 7.05.2002, permitted the MDA to allot the land in pursuance of the advertisement dated 15.04.2002, but subject to the decision of the writ petition. In the auction held, the highest bid of Rs. 1365 per sq.m. was accepted. The highest bidder deposited the earnest money of Rs. 5.50 lakhs. The balance consideration was required to be paid in instalments. But during the pendency of the writ petition, the MDA by its order dated 14.5.2007 cancelled the auction and the decision of allotment to the auction purchaser. Auction purchaser filed the writ petition challenging the order of cancellation. The High Court allowed the writ petition filed by AMS and dismissed the writ petition filed by auction purchaser. Hence these appeals. The questions which arose for consideration in these appeals were what was the nature of rights of a bidder participating in the tender process; the scope of judicial review in contractual matters; whether the decision of the Authority dated 15.03.2002 undoing its earlier decision dated 7.7.2001 and changing land use of the disputed plot from educational to housing was unreasonable and violative of Article 14 of the Constitution; whether the decision was not in public interest; whether AMS was entitled to equitable relief and whether the High Court was justified in cancelling the auction in which the highest bidder deposited the earnest money of Rs. 5.50 lakhs. Allowing the appeal of MDA and dismissing the appeal filed by the auction purchaser, the Court HELD: 1.1. A tender is an offer. It is something which invites and is communicated to notify acceptance. It must be unconditional; 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. 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. 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. [Para 17] [683-G-H; 684-A-D] 1.2. The 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. 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. [Para 18] [684-E-G] 1.3. A mere look at the tender notice makes it clear that the two plots of land admeasuring 37,000 and 20,000 sq.mts. meant for establishing engineering colleges were advertised as a single item, though the specified reserved price was different. AMS itself mentioned different and separate bids in their tender and made a bid at Rs.560 per sq.m. for 20,000 sq.mts plot which was less than that of the reserved price. The Authority was not under any legal or constitutional obligation to entertain the bid which was much below the reserved price. The plea that there was some vagueness, uncertainty and misunderstanding in the matter of depiction of rates is clearly an after thought. AMS never sought any clarification whatsoever from the Authority as regards the fixation of reserved price in respect of 20,000 sq. mts. of plot. This plea was not raised even in the Writ Petition filed by the AMS. [Para 19] [684-G-H; 685-A-D] 1.4. The MDA, though not under any obligation, provided a further opportunity to the Society and expressed its willingness to part away with the land, provided AMS agreed to pay the reserved rate of Rs.690 per sq.m. AMS did not avail this opportunity. It expressed its desire to purchase the said land @ Rs.560 per sq.m. only. It is difficult to discern as to on what basis AMS asserted its right and insisted that the Authority should part away with its valuable land at a price lesser than that of the reserved price. AMS proceeded on the assumption as if it has some unassailable right in respect of the said plot of land merely because it had earlier got allotted adjoining plot of land for the construction of its buildings. Had the Authority conceded to the request so made by AMS it would have been an unfair and arbitrary decision and the courts may have interfered with the same in exercise of judicial review power. The tender process actually stood terminated with the letter of the MDA dated 27.11.2001 allotting 37,000 sq.mts. of land alone. The rights of AMS, if any came to an end when it informed the Authority - MDA that it was not claiming any right over the land admeasuring 20,000 sq.mts. and made a further request to delete its offer in respect of the said land. [Para 20] [685-D-H; 686-A-B] 1.5. The subsequent letters sent by AMS at its own choice is of no consequence. The MDA did not make any promise that the suggestion of AMS to allot the plot at Rs.560 per sq.m. was under its consideration. Many a letters including the letter dated 03.01.2002 of the Society makes it clear that there was no confusion whatsoever with regard to reserved price fixed at Rs.690 per sq.m. Once it is clear that there was no vagueness, uncertainty or any confusion with regard to the reserved price there is no scope for any interference in the matter by this court. The terms and conditions of tender were expressly clear by which the authority as well as the bidders were bound and such conditions are not open to judicial scrutiny unless the action of the tendering authority is found to be malicious and misuse of its statutory powers. [Para 21] [686-B-E] Tata Cellular v. UOI 1994 (6) SCC 651; Air India Ltd. v. Cochin International Airport Ltd. 2000 (2) SCC 617; Directorate of Education v. Educomp Datamatic Ltd. 2004 (4) SCC 19; Association of Registration Plates vs. UOI 2005 (1) SCC 676 and Global Energy Ltd. v. Adani Exports 2005 (4) SCC 435; Purvanchal Projects Ltd. v. Hotel Venues 2007(10) SCC 33, relied on. 1.6. The bids offered by AMS received their due attention in a fair and transparent manner free from any bias at the hands of MDA. No rights of AMS have been infringed by MDA in not giving opportunity to involve itself in lengthy negotiations. The Authority was free to make its choice and to invite fresh bids after the Society relinquished its claim in respect of the disputed plot by letter dated 17.09.2001 which was accepted by MDA. The decision of the Authority was duly communicated to the AMS by letter dated 27.11.2001. The decision so taken by the MDA resolved in infringement of rights of AMS. [Para 22] [686-F; 687-A-B] 2.1. The authorities owe a duty to act fairly but it is equally well settled that in judicial review, the court is not concerned with the merits or correctness of the decision, but with the manner in which the decision is taken or the order is made. The Court cannot substitute its own opinion for the opinion of the authority deciding the matter. [Para 25] [689-E-F] 2.2. By way of judicial review, the court cannot examine the details of the terms of the contract which have been entered into by the public bodies or the State. Courts have inherent limitations on the scope of any such enquiry. If the contract has been entered into without ignoring the procedure which can be said to be basic in nature and after an objective consideration of different options available taking into account the interest of the State and the public, then the court cannot act as an appellate court by substituting its opinion in respect of selection made for entering into such contract. But at the same time the courts can certainly examine whether `decision making process' was reasonable, rational, not arbitrary and violative of Article 14. [Para 25] [689-G-H; 690-A-B] Ramana Dayaram Shetty v. International Airport Authority of India 1979 (3) SCC 489; Kasturi Lal Lakshmi Reddy v. State of J & K 1980 (4) SCC 1; Ram and Shyam Co. v. State of Haryana 1985 (3) SCC 267; Mahabir Auto Stores v. Indian Oil Corporation 1990 (3) SCC 752; Sterling Computers Ltd. v. M & N Publications 1993(1) SCC 445; A.B. International Exports v. State Corporation of India. 2000 (3) SCC 553 and Administrative Law, 9th Edition, H.W.R. Wade & C.F. Forsyth, relied on. Chief Constable of North Wales Police v. Evans (1982) 3 ALLER 141; R. v. Independent Television Commission, ex. P. TSW Broadcasting Limited (1996) JR 185; Nottinghamshire Country Council v. Secretary of State for the Environment (1986) 1 AllER 199 and Lochner v. New York 198 US 45, 76 (1995), referred to. 3.1. There is nothing on record to suggest that impugned decision was taken only for making higher financial gain and profit. However, there is nothing wrong even if any such effort was made by MDA to augment its financial resources. The effort, if any, made by MDA to augment its financial resources and revenue itself cannot be said to be unreasonable decision. It is well said that the struggle to get for the State the full value of its resources is particularly pronounced in the sale of State owned natural assets to the private sector. Whenever the Government or the authorities get less than the full value of the asset, the country is being cheated; there is a simple transfer of wealth from the citizens as a whole to whoever gets the assets `at a discount'. Most of the times the wealth of a State goes to the individuals within the country rather than to multi- national corporations; still, wealth slips away that ought to belong to the nation as a whole. The impugned action of the authority in the present case did not suffer from absence of jurisdiction nor was vitiated and ultra vires. Financial gain was not at the cost of any social welfare. [Paras 27 and 28] [693-A-D; 694-B] Bangalore Medical Trust v. B.S. Muddappa (1991) 4 SCC 54 and Padma v. Hiralal Motilal Desarda & Ors. (2002) 7 SCC 564, referred to. 3.2. The MDA having considered the representation made by an individual to allot the land for residential purpose at the rate of Rs. 775/- per sq.m. and as well as a proposal/request of AMS to allot the land @ Rs. 690/- per sq. m. rejected both the suggestions and invited tenders after giving wide publicity. The decision of MDA could not be characterised as an unreasonable one. That was the only course left open to the Authority. The money to be realized by the sale of public auction is required to be applied towards meeting the expenses incurred by the Authority in the administration of the Act which mainly includes securing the development of the development area. [Para 29] [695-A-D] 3.3. In refusing to accept the tender of the AMS on the ground that the offer made by it was lower than that of the reserved price is legal, valid and by no stretch of imagination can be characterized as an illegal one. In fact, there was no option available to the MDA but to reject the tender of the AMS as the offer made was much below than the reserved price. [Para 30] [695-E-G] 4. The disputed land in the Master Plan was reserved for `Residential' purpose. The residential category of use is a category in contrast with industrial, agricultural, commercial, recreational, green belt, or institutional category in use. It does not mean exclusive use for housing on every inch of the land. The expression residential use in the Master Plan means that the land can be used for housing, various other kinds of uses such as institutional, commercial etc. The MDA had earlier relaxed the use and made it for `educational' purpose though it is earmarked for residential use in the Master Plan. There is nothing unreasonable in changing the land use and earmarking it again for `Residential' use. Once it is clear that the land in the Master Plan was reserved for residential use where educational institutions could also be permitted within that area, it cannot be said that there has been a change of land use as such. [Para 31] [696-B-F] 5.1. AMS may have established Engineering Colleges to impart education and may have a role to play in providing education in engineering courses; but it cannot insist the MDA to provide land at the rate chosen by it for itself. The object of the Uttar Pradesh Urban Planning and Development Act, 1973 under which MDA is constituted was to provide for development of certain areas according to plan and for matters ancillary thereto. It is mainly concerned with an orderly development of the areas and balanced use of the available land within the development area. The Authority in law is not entitled to gift or freely make available any land or at a rate lesser than that of reserved price. [Para 32] [697-B-D] Unni Krishnan J.P. v. State of A.P. (1993) 1 SCC 645 and TMA Pai Foundation v. State of Karnataka (2002) 8 SCC 481, referred to. 5.2. The MDA in terms of the directions of the Government vide G.O. dated 19.04.1996 has already decided to make the lands available to the institutions imparting education in engineering at a concessional rate i.e. to say 50% of the sector rate and accordingly fixed reserve price @ Rs. 690 per sq. meter. The public interest parameters have been duly taken into consideration by the Government itself in directing MDA to make the lands available to educational institutions at a concessional rate. It is difficult to appreciate as to what more the AMS expects from the Authority. The Society in fact availed that assistance from MDA on an earlier occasion but failed to avail the facility this time for which the AMS has to blame itself. The AMS having failed to offer at least the reserved price cannot be permitted to turn round and ask for a mandamus to allot the land in its favour based on self-serving representations. The AMS indulged to say the least in speculative litigation. The State had already made effective provision for securing right to education by resolving to make the land available at concessional rate to educational institutions imparting education in engineering courses. Obviously, such a decision was taken only with the view to give effect to the Directive Principles of State Policy enshrined under Article 41 of the Constitution of India. The AMS has no legal or constitutional right to make any perpetual demands and dictate terms to the MDA to allot any particular land at the chosen rate. [Para 32] [697-E-H; 698-A-D] 6. The expression `public interest' if it is employed in a given statute is to be understood and interpreted in the light of the entire scheme, purpose and object of the enactment but in the absence of the same it cannot be pressed into service to confer any right upon a person who otherwise does not possess any such right in law. The High Court virtually converted the judicial review proceedings into an inquisitorial one. The way proceedings went on before the High court suggest as if the High Court was virtually making an inquiry into the conduct and affairs of the MDA in a case where the court was merely concerned with the decision making process of the MDA in not accepting the offer/tender of the AMS in respect of the disputed plot on the ground that the offer so made was less than that of the reserved price fixed by the MDA. The High Court went to the extent of holding that there was a concluded contract between MDA and AMS. [Para 33] [697-E-H; 698-A-D] 7. The AMS expressed its willingness to pay such reasonable price as may be fixed by this Court. The prices of the land in the vicinity of are have gone up many times and as at present prevailing rates are very high. Equity is not a one way street. The conduct of the AMS does not entitle it to get any such relief in equity. [Para 34] [700-A-C] 8. The cancellation of the auction was not tenable. But the fact remains the appellant, the auction purchaser deposited only an amount of Rs. 5,50,000/- towards earnest money out of huge amount of total consideration. Having regard to the totality of the facts and circumstances, interference with the order of cancellation passed by MDA on 14.5.2007 in exercise of jurisdiction under Article 136 of the Constitution of India is not called for. [Para 38] [701-E-F] 9. The MDA shall be at liberty to call for fresh tenders in accordance with law but duly notifying the land use for both `educational' and `residential' and invite bids accordingly. It shall permit AMS and other educational institutions intending to participate in the auction. In view of the undertaking given by MDA to this Court it shall not raise any objection for the use of the land for educational purposes in case if any educational institution is found to be the successful bidder. The bids shall obviously be invited from the intending bidders duly notifying the `residential' and `educational' use. [Para 39] [701-G-H; 702-A] Case Law Reference 1994 (6) SCC 651 relied on Para 21 2000 (2) SCC 617 relied on Para 21 2004 (4) SCC 19 relied on Para 21 2005 (1) SCC 676 relied on Para 21 2005 (4) SCC 435 relied on Para 21 2007(10) SCC 33 relied on Para 21 1979 (3) SCC 489 relied on Para 25 1980 (4) SCC 1 relied on Para 25 1985 (3) SCC 267 relied on Para 25 1990 (3) SCC 752 relied on Para 25 1993(1) SCC 445 relied on Para 25 2000 (3) SCC 553 relied on Para 25 (1982) 3 ALLER 141 referred to Para 23 (1996) JR 185 referred to Para 25 (1986) 1 AllER 199 referred to Para 26 198 US 45, 76 (1995) referred to Para 26 (1991) 4 SCC 54 referred to Para 28 (2002) 7 SCC 564 referred to Para 29 (1993) 1 SCC 645 referred to Para 32 (2002) 8 SCC 481 referred to Para 32 CIVIL APPELLATE JURISDICTION : Civil Appeal No. 2619 of 2009. From the Judgment & Order dated 16.11.2007 of the High Court of Judicature at Allahabad in Civil Misc. Writ Petition No. 18578 of 2002. WITH C.A. Nos. 2620-2621 of 2009. P.S. Patwalia, Rakesh Dwivedi Sunil Gupta, J.S. Attri, Shiva Kumar Sinha, Kavin Gulati, Rashmi Singh, T. Mahipal, Vinay Garg, Ajay Kumar, Deepam Grag, Jyoti Sharma and Avnish Pandey for the appearing parties.


            IN THE SUPREME COURT OF INDIA
             CIVIL APPELLATE JURISDICTION

        CIVIL APPEAL No. 2619             OF 2009
         (Arising out of SLP (C) No.3215 of 2008)

Meerut Development Authority              ...Appellant

                          Versus

Association of Management Studies
& Anr.                                     ...Respondents
                            WITH
  CIVIL APPEAL Nos.             2620-2621       OF 2009
       (Arising out of SLP (C) No.1602-1603 of 2008)

Pawan Kumar Agarwal                       ...Appellant

                          Versus

Meerut Development Authority
& Anr.                                     ...Respondents


                     JUDGMENT


B.SUDERSHAN REDDY, J.


    Leave granted.
                           2


2.   Both these appeals can be dealt with under a common

judgment since one and the same issue requires to be

decided.    The brief facts relevant for the purposes of

disposing of these appeals may be stated.



3.   Association of Management Studies (for short `AMS') is

a Society registered under the provisions of the Societies

Registration Act, 1860. It is stated to be managing various

educational institutions imparting education such as MBA,

MCA, Engineering etc., the details of which are not required

to be noted.



4.   Meerut Development Authority     (for short `MDA') has

been constituted as an Authority called as the Development

Authority by the U.P. State Government under Section 3 of

the Uttar Pardesh Urban Planning and Development Act,

1973.      The said Act, has been enacted to provide for

development of certain areas of Uttar Pardesh according to

plan and for matters ancillary thereto. The main object and
                           3


reasons for the enactment was to tackle resolutely the

problems of town planning and urban development in the

State of Uttar Pardesh.



FACTUAL MATTERS :



5.   On   12.05.2000,     MDA   allotted   a   plot   of   land

admeasuring   20,000 sq.mts. situated in Pocket `O' Ganga

Nagar Residential Scheme at the rate of Rs.560/- per sq.m.

to AMS for construction of buildings meant to be utilised for

educational purposes. The reserved price has been fixed in

terms of G.O. dated 19.04.1996 which provides that plots

for educational institutions/engineering colleges shall be

sold at 50% of the sector rate. The AMS has requested to

allot an additional land of 20,000 sq mts. and 37,000 sq.

mts. in Ganga Nagar Residential Scheme for establishment

of engineering college and other degree colleges, e.g.

masters' course such as    MBA, MCA etc. It is noteworthy

that the land use of the above mentioned land in the Meerut
                            4


Master Plan 2001 has been shown as `Residential medium

Density'. The MDA having considered the request and other

relevant factors resolved to invite tenders from interested

persons to allot the land admeasuring 20,000 sq.mts. and

another extent of land admeasuring 37,000 sq. mts. located

in the said residential scheme available to be utilised for

educational use.     The reserved price has been fixed at

Rs.690/- per sq.m. for 20,000 sq.mts. and for the remaining

extent of 37,000 sq. mts. of land at Rs.500/- per sq.m.;

both being 50% of sector rate.



6.   MDA issued advertisement inviting tenders in respect

of several plots meant for educational institutions within

various residential schemes including the aforesaid two plots

in Ganga Nagar. The tenders were required to be submitted

on 18.08.2001.     In response to the advertisement inviting

tenders AMS submitted its tender @ Rs.500/- for the plot of

land admeasuring 37,000 sq. mts. and Rs.560/- for the plot

admeasuring 20,000 sq. mts.      The MDA having considered
                             5


the tenders so submitted informed AMS vide letter dated 3rd

September, 2001 that the commercial offer @ Rs.560/- per

sq. m. was less than that of the reserved rate of Rs.690/-

per sq. m. in respect of 20,000 sq. mts. of land, out of the

reserved 57,000 sq mts. of land meant for the engineering

colleges. AMS was put on notice to give its consent within

one week if it was desirous of getting 20,000 sq.m. of land

@ Rs.690/- per sq.m.       MDA was willing to consider the

allotment of entire land admeasuring 57,000 sq.mts. for the

establishment of engineering colleges provided the institute

was willing to pay the reserved price @ 690/- per sq.m. in

respect of 20,000 sq.m. of land.      AMS in response to the

said letter requested the Authority to allot 37,000 sq.m. of

land @ Rs.500/- per sq.m. offered by them in their tender.

It is noteworthy that AMS in clear and categorical terms

stated that the other land of 20,000 sq.m; `may be deleted

from ---- offer as the cost of that land is not viable for ----.

However, we are ready to purchase the same @ Rs.560/-
                           6


per sq.m. as quoted by us which is the same rate as we

have already purchased the part of that land.'



7.     MDA having considered the response of AMS vide its

letter dated 27.11.2001 informed AMS that only 37,000

sq.m. of land has been allotted for the establishment of

engineering college with the condition that the construction

of the engineering college is made in accordance with the

norms of the A.I.C.T.I.; and deposit of required amounts

within the stipulated time. This was accepted by AMS and

they took the allotment of only 37,000 sq.mts. of land. In

all fairness the matter should have ended there. But it did

not.



8.     AMS having accepted the offer of 37,000 sq.mts. of

land, raised an objection stating injustice has been done by

the Authority in fixing the reserved price @ Rs.690/- per

sq.m. even though adjoining plots were allotted @ Rs.500/-

and Rs.560/- per sq.m.       MDA in its meeting held on
                               7


 15.03.2002 has decided that the disposal of the land be

 made through Open Tender-cum-Auction for residential use

 after giving wide publicity.       The Authority considered the

 offer stated to have been made on behalf of the officer's

 Class Housing Society of the Canal Colony to purchase the

 bulk of land admeasuring 20,000 sq.m. @ Rs.775/- per

 sq.m. and as well as the letter dated 04.03.2002 sent by

 AMS.   Since this letter reflects the attitude and conduct of

 AMS, it is required to be noted in its entirety:



     "The Chairman,                        Dated 04.3.2002
     Meerut Developmetn Authority,
     MEERUT.

     Subject :- ALLOTMENT OF LAND AT GANGA NAGAR.

     Hon'ble Sir,


          Following   facts   are     submitted     for   your
     honour's kind consideration:-
1.   That M.D.A. on 19.9.2001 floated a tender for
     allotment of two pieces of land measuring 37,000
     and 20,000 sqm bulk scale for Technical Institute
     after getting the approval of rates from Board viz
     Rs.500/- and 690/- respectively.
                               8


2.    We deposited 25% of a sum as first installment for
      37000 sqm of land as demanded on 27.11.2001.

3.    That due to paucity funds, we could not deposit the
      25% of amount for 20,000 sqm land on
      27.11.2001.

4.    That now we are ready to deposit the demanded
      amount and kindly condone the delay and oblige.


        With Regards,

                                Yours faithfully,

                                     (YOGESH MOHAN)
                                         Chairman."



 9.    AMS vide its letter dated 27.03.2002 requested the

 Authority to allot the said land @ Rs.690/- per sq.m. or in

 the alternative, the topography of the land be so adjusted

 that both the 20,000 sq.m. of land and 37,000 sq.m. of land

 already allotted to the Society may be made contiguous to

 each other so that the entire land can be fruitfully utilised by

 it for educational purposes.
                           9


10. On 15.04.2002, MDA got issued fresh advertisement

inviting applications in newspapers for allotment of the

aforementioned plot of land of 20,000 sq. m. inviting bids

from foreign direct investors, building developers etc. for

housing purposes with the reserved price of Rs.885/- per

sq.m. and earnest money of Rs.5.50 lakhs.         AMS filed

C.M.W.P.No.18578/02 in the High Court of judicature at

Allahabad on 01.05.2002 with the following prayers:

    (i)       to issue a Writ Order or direction in the
              nature      of    certiorari   quashing     the
              advertisement dated 15.4.2002 issued in the
              newspaper Amar Ujala of the said date.
    (ii)      To issue a Writ, Order or direction in the
              nature    of     mandamus     restraining   the
              respondent from changing the use of the plot
              of land in question from being used for
              Engineering college to residential purpose.
    (iii)     To issue a Writ, Order or direction in the
              nature     of     mandamus      directing   the
              respondent to allot the said plot of land to
              the petitioner society at the reserved price
              fixed by it i.e. Rs.690/- per sq.metre and the
              interest till the payment of the amount by
              the petitioner or in the alternative direct the
              respondent to consolidate the two plots of
              land already demised in favour of the
              petitioner society into one.
    (iv)      To issue any other suitable writ, order or
              direction which the Hon'ble Court may deem
                              10


                fit and proper in the circumstances of the
                case.
     (v)        To award cost of this petition to the
                petitioner.



11. The      High    Court   vide   its   interim    order   dated

07.05.2002, permitted MDA to allot the land in pursuance of

the advertisement dated 15.04.2002 "but the allotment shall

be subject to the decision of this Writ Petition. It shall also

be mentioned in the allotment order, if issued by MDA to the

allottee."



12. In the auction      Pawan Kumar Aggarwal, the appellant

in C.A.Nos. 2620-2621/09            arising out of SLP ( C ) No.

1602-03/2008        became the highest bidder @ Rs.1365/- per

sq.m. and the bid was accepted. He has deposited only the

earnest money of Rs.5.50 lakhs. The balance consideration

was required to be paid in installments.            But during the

pendency of the Writ Petition, the MDA vide its order dated

14.05.2007, cancelled the auction and the decision of

allotment to Pawan Kumar Aggarwal.            He filed the Writ
                             11


Petition   No.3007   of   2007     challenging   the   order   of

cancellation.    The High Court by the impugned order

allowed the Writ Petition filed by AMS and dismissed the

Writ Petition filed by Pawan Kumar Aggarwal. Hence these

appeals.



SUMMARY OF SUBMISSIONS :



13. We have heard the learned senior counsel Shri P.S.

Patwalia for the appellant - MDA,        Shri Rakesh Dwivedi

appearing on behalf of the appellant - Shri Pawan Kumar

Aggarwal    and Shri Sunil Gupta, learned senior counsel

appearing for AMS.     Elaborate submissions were made by

the counsel for the respective parties. The following is the

summary of contentions urged by respective senior counsel

which are critical and crucial to decide the case.



14. The principal objection of MDA is that the High Court

was not justified in scrutinising its action and the tendering
                            12


process in such great detail as if it was hearing an appeal

against its decision in the matter. The High Court virtually

acted as more than the appellate court and went into the

merits in evaluating the decision making process of the

MDA.    It was submitted that the High Court practically

converted itself into an Enquiry Commission and heard the

Writ Petition in such a way as if it was making an enquiry

into the affairs of the MDA which is impermissible in law. It

was submitted MDA was left with no option except to invite

fresh bids after rejecting the offer made by AMS which was

less than that of the reserved price.    Shri Rakesh Dewedi,

learned senior counsel appearing for appellant - Pawan

Kumar Aggarwal submitted that MDA acted fairly and it did

not commit any error in not accepting the tender of AMS.

The decision making process according to him does not

suffer from any vice of illegality or unconstitutionality. He,

however submitted that the MDA was not justified in

cancelling the auction and its decision to allot land in favour

of appellant - Pawan Kumar Aggrwal.         Shri Sunil Gupta,
                             13


learned senior counsel for the respondent - AMS submitted

that the decision of MDA in not allotting the land was

unreasonable, whimsical, capricious and violative of Article

14 of the Constitution. The decision is not in public interest.

MDA committed mistakes in the matter of depiction of rates

in the notice inviting tenders as is evident from their

supplementary counter affidavit filed in the High Court.

There was some confusion as regards reserved price in

respect of disputed plot of land which led AMS to offer bid at

a lesser rate than the reserved price.         It was further

submitted that MDA's decision to put the disputed plot of

land to reauction in spite of willingness on the part of AMS

to pay the reserved price is unsustainable in law.          The

decision to reauction the land by changing the land use from

that of `educational' to `residential' is motivated and inspired

by extraneous considerations.        Public interest requires

allotment of the said land in favour of AMS which is catering

the needs of public at large in imparting education in

engineering courses.
                              14




       These contentions are culled out from the storms of

submissions made during the course of hearing of these

appeals.



ISSUES REQUIRING RESOLUTION :



15.    Shorn of all the details and embellishments and

notwithstanding the display of forensic skills by the senior

counsel, the substantial question that really arises for our

consideration in these appeals is whether the decision of

MDA dated 15.03.2002 resolving to invite fresh tenders and

making the land available for residential use suffers from

any legal or constitutional infirmities ?



16. Having regard to the above submissions, we propose to

deal with the matter from the following four aspects:


      a)   what   is   the   nature   of    rights   of   a   bidder

           participating in the tender process?
                              15


     b)   the   scope   of    judicial   review   in   contractual

          matters;


     c)   whether the decision of the Authority is vitiated by

          any arbitrariness and therefore hit by Article 14 of

          the Constitution of India? and


     d) whether the decision is not in public interest?


WHAT IS THE NATURE OF RIGHTS OF A BIDDER
PARTICIPATING IN THE TENDER PROCESS?




17. 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
                            16


person with a view to eliminate all others from participating

in the biding process.     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.


18. 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.          The
                                  17


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.


WHETHER    ANY              RIGHT        OF     AMS     HAS     BEEN
INFRINGED ?




19. A mere look at the tender notice in the present case

makes it abundantly clear that the two plots of land

admeasuring        37,000    and     20,000     sq.mts.    meant      for

establishing engineering           colleges were advertised as a

single   item, though the specified             reserved price        was

different.     The reserved price of 20,000 sq. mts. was

expressly and clearly mentioned at Rs.690/- per sq.m.

There is no ambiguity nor any confusion in this regard. AMS

itself mentioned different and separate bids in their tender
                               18


and made a bid at Rs.560/- per sq.m. for 20,000 sq.mts plot

which was less than that of the reserved price.                   The

Authority   was   not   under        any   legal   or   constitutional

obligation to entertain the bid which was much below the

reserved price.   The plea that there was some vagueness,

uncertainity and misunderstanding in the matter of depiction

of rates is clearly an after thought. AMS never sought any

clarification whatsoever from the Authority as regards the

fixation of reserved price in respect of 20,000 sq. mts. of

plot. This plea is   not raised even in the Writ Petition filed

by the AMS.


20. Be that as it may, the MDA though not under any

obligation, provided a further opportunity to the Society and

expressed its willingness to part away with the land

provided AMS agreed to pay the reserved rate of Rs.690/-

per sq.m. AMS did not avail this opportunity. Even at this

stage AMS did not say that it was under some confusion as

regards the specified reserved price.          No objections were

raised whatsoever in this regard. Instead it made a request
                                19


that the two plots be segregated and 37,000 sq.mts. be

allotted to it while the other plot of 20,000 sq.mts "may be

deleted from ..........offer as the cost of that land is not

viable........"    It expressed its desire to purchase the said

land @ Rs.560/- per sq.m. only. It is difficult to discern as

to on what basis AMS asserted its right and insisted that the

Authority should part away with its valuable land at a price

lesser than that of the reserved price.      AMS proceeded on

the assumption as if it has some unassailable right in

respect of the said plot of land merely because it had earlier

got allotted adjoining plot of land for the construction of its

buildings.        Had the Authority conceded to the request so

made by AMS it would have been an unfair and arbitrary

decision and the courts may have interfered with the same

in exercise of judicial review power. The tender process

actually stood terminated with the letter of the MDA dated

27.11.2001 allotting 37,000 sq.mts. of land alone.         The

rights of AMS, if any came to an end when it informed the

Authority - MDA that it was not claiming any right over the
                             20


land admeasuring 20,000 sq.mts. and made a further

request to delete its offer in respect of the said land.


21.   The subsequent letters sent by AMS at its own choice

is of no consequence. The MDA did not make any promise

that the suggestion of AMS to allot the plot at Rs.560/- per

sq.m. was under its consideration. Many a letters including

the letter dated 03.01.2002 of the Society makes it clear

that there was no confusion whatsoever with regard to

reserved price fixed at Rs.690/- per sq.m. Once it is clear

that there was no vagueness, uncertainty or any confusion

with regard to the reserved price there is no scope for any

interference in the matter by this court.       The terms and

conditions of tender were expressly clear by which the

authority as well as the bidders were bound and such

conditions are not open to judicial scrutiny unless the action

of the tendering authority is found to be malicious and

misuse of its statutory powers.
                                 21


[See: Tata Cellular vs. UOI1, Air India Ltd. vs. Cochin
International Airport Ltd.2, Directorate of Education
vs.   Educomp     Datamatic    Ltd.3,  Association   of
Registration Plates vs. UOI , Global Energy Ltd. vs.
                            4

Adani Exports5, and Purvanchal Projects Ltd. vs. Hotel
Venues6.]




22. The bids offered by AMS received their due attention in

a fair and transparent manner free from any bias at the

hands of MDA.            No rights of AMS have been infringed by

MDA in not giving opportunity to involve itself in lengthy

negotiations. The Authority was free to make its choice and

to invite fresh bids after the Society relinquished its claim in

respect of the disputed plot vide letter dated 17.09.2001

which was accepted by MDA. The decision of the Authority

was duly communicated to the AMS by MDA vide its letter

dated 27.11.2001.           The decision so taken by the MDA

resolved in infringement of rights of AMS.

1
  [1994 (6) SCC 651],
2
  [2000 (2) SCC 617],
3
  [ 2004 (4) SCC 19],
4
  [2005 (1) SCC 676]
5
  [2005(4) SCC 435]

6
    [2007(10) SCC 33].
                              22



SCOPE OF            JUDICIAL   REVIEW   IN    CONTRACTUAL
MATTERS:



23.       In Tata Cellular (supra) this Court observed that

"Judicial quest in administrative matters is to strike the just

balance between the administrative discretion to decide

matters as per government policy, and the need of fairness.

Any unfair action must be set right by judicial review."



24. In Chief Constable of North Wales Police Vs.

Evans7, Lord Hailsham stated: "The underlying object of

judicial review is to ensure that the authority does not abuse

its power and the individual receives just and fair treatment

and not to ensure that the authority reaches a conclusion

which is correct in the eyes of the court."



25. Large numbers of authorities have been cited before us

in support of the submission that even in contractual

matters the State or "other authorities" are bound to act

7
    [(1982) 3 AIIER 141],
                                 23


within the legal limits and their actions are required to be

free from arbitrariness and favourtism. The proposition that

a decision even in the matter of awarding or refusing            a

contract must be arrived at after taking into account all

relevant        considerations,        eschewing   all   irrelevant

considerations cannot for a moment be doubted. The powers

of the State and other authorities are essentially different

from those of private persons.



        The action or the procedure adopted by the authorities

which can be held to be State within the meaning of Article

12, while awarding contracts in respect of properties

belonging to the State, can be judged and tested in the light

of Article 14. Once the State decides to grant any right or

privilege to others, then there is no escape from the rigour

of Article 14. These principles are settled by the judgments

of this Court in the cases of Ramana Dayaram Shetty vs.

International Airport Authority of India8, Kasturi Lal


8
    [1979 (3) SCC 489],
                            24


Lakshmi Reddy vs. State of J & K9, Ram and Shyam Co.

vs. State of Haryana10, Mahabir Auto Stores vs. Indian

Oil Corporation11, Sterling Computers Ltd. vs. M & N

Publications12 and A.B. International Exports vs. State

Corporation of India.13       Executive does not have an

absolute discretion, certain principles have to be followed,

the public interest being the paramount consideration.



      It has been stated by this Court in Kasturi Lal's case

(supra):

      "It must follow as a necessary corollary from this
      proposition that the Government cannot act in a
      manner which would benefit a private party at the
      cost of the State, such an action would be both
      unreasonable and contrary to pubic interest. The
      government, therefore, cannot, for example, give
      a contract or sale or lease out its property for a
      consideration less than the highest that can be
      obtained from it, unless of course, there are other
      considerations which render it reasonable and in
      public interest to do so."




9
   [1980 (4) SCC 1],
10
   [1985 (3) SCC 267],
11
   [1990 (3) SCC 752],
12
   [1993(1) SCC 445]
13
   [2000(3) SCC 553].
                                    25


          The law has been succinctly stated by Wade in his

treatise, Administrative Law:

     "The powers of public authorities are therefore
     essentially different from those of private
     persons. A man making his will may, subject to
     any rights of his dependants, dispose of his
     property just as he may wish. He may act out of
     malice or a spirit of revenge, but in law this does
     not affect his exercise of his power. In the same
     way a private person has an absolute power to
     allow whom he likes to use his land, to release a
     debtor, or, where the law permits, to evict a
     tenant, regardless of his motives.          This is
     unfettered discretion. But a public authority may
     do none of these things unless it acts reasonably
     and in good faith and upon lawful and relevant
     grounds of public interest. So a city council
     acted unlawfully when it refused unreasonably to
     let a local rugby football club use the city's
     sports ground, though a private owner could of
     course have refused with impunity. Nor may a
     local authority arbitrarily release debtors, and if
     it evicts tenants, even though in accordance with
     a contract, it must act reasonably and `within the
     limits of fair dealing'. The whole conception of
     unfettered discretion is inappropriate to a public
     authority, which possesses powers solely in
     order that it may use them for the public
     good."14




     14
          Administrative Law, 9th Edition,H.W.R.Wade & C.F.Forsyth
                            26


     There is no difficulty to hold that the authorities owe a

duty to act fairly but it is equally well settled in judicial

review, the court is not concerned with the merits or

correctness of the decision, but with the manner in which

the decision is taken or the order is made.        The Court

cannot substitute its own opinion for the opinion of the

authority deciding the matter.      The distinction between

appellate power and a judicial review is well known but

needs reiteration.



     By way of judicial review, the court cannot examine the

details of the terms of the contract which have been entered

into by the public bodies or the State. Courts have inherent

limitations on the scope of any such enquiry. If the contract

has been entered into without ignoring the procedure which

can be said to be basic in nature and after an objective

consideration of different options available taking into

account the interest of the State and the public, then the

court cannot act as an appellate court by substituting its
                                      27


opinion in respect of selection made for entering into such

contract.       But at the same time the courts can certainly

examine whether `decision making process' was reasonable,

rational, not arbitrary and violative of Article 14. [See:

Sterling Computers Ltd. (supra)].



         It may be worthwhile to notice the leading judicial

review case in relation to grant of licences, by competitive

tender       reported    in   R.   vs.      Independent   Television

Commission, ex p. TSW Broadcasting Limited.15 The

leading speeches in the House of Lords were delivered by

Lord Templeman and Lord Goff. Lord Templeman stated:


         "Where Parliament has not provided for an appeal
         from a decision maker the courts must not invent
         an appeal machinery.         In the present case
         Parliament has conferred powers and discretions
         and imposed duties on the ITC. Parliament has
         not provided any appeal machinery. Even if the
         ITC make mistakes of fact or mistakes of law,
         there is no appeal from their decision. The courts
         have invented the remedies of judicial review not
         to provide the appeal machinery but to ensure
         that the decision maker does not exceed or abuse
         his powers... But the rules of natural justice do not
15
     [1996 JR 185 and 1996 EMLR 291]
                                   28


         render a decision invalid because the decision
         maker or his advisers make a mistake of fact or a
         mistake of law. Only if the reasons given by the
         ITC for the decision to reject the application...
         disclosed illegality, irrationality or procedural
         impropriety.. could the decision be open to judicial
         review."



In the concluding section of his speech, he added:

         "Of course in judicial review proceedings, as in
         any other proceedings, everything depends on the
         facts. But judicial review should not be allowed to
         run riot.     The practice of delving through
         documents and conversations and extracting a
         few sentences which enable a skilled advocate to
         produce doubt and confusion where none exists
         should not be repeated."



          One has to bear in mind the caution administered by

Lord Scarman in Nottinghamshire Country Council Vs.

Secretary of State for the Environment16 that: " `Judicial

review' is a great weapon in the hands of the judges; but

the judges must observe the constitutional limits set by our

parliamentary system upon the exercise of this beneficial

power."        It   is   equally   necessary   that   the   following

16
     [ (1986) 1 AIIER 199]
                                    29


observations of Benjamin Cardozo, should always be kept in

mind:

         "The Judge, even when he is free, is still not
         wholly free. He is not to innovate at pleasure. He
         is not a knight-errant roaming at will in pursuit of
         his own ideal of beauty or of goodness. He is to
         draw his inspiration from consecrated principles.
         He is not to yield to spasmodic sentiment, to
         vague and unregulated benevolence. He is to
         exercise a discretion informed by tradition,
         methodized by analogy, disciplined by system,
         and subordinated to `the primodical necessity of
         order in the social life'. Wide enough in all
         conscience is the field of discretion that remains."
         [The Nature of Judicial Process, P. 141].



26. There cannot be any disagreement that unjustified

discriminations violate the Constitution and unreasonable

decisions are susceptible to be interfered with and corrected

in judicial review proceedings. But general propositions do

not decide concrete cases as has been famously put by

Justice Oliver Wendell Holmes             in Lochner        Vs.   New

York.17        It   remains     to   be   decided   which     acts   of

discrimination are justified and which are not. It is for the

court to decide in the given facts and circumstances whether
17
     [198 U.S. 45,76 (1995)].
                            30


the action complained of is unreasonable? How to do that is

always a complex and complicated one. It would be

unnecessary to burden this judgment of ours with various

precedents and super-precedents cited at the bar in support

of the general propositions that the authority's action must

be free from arbitrariness. It always depends upon the

contextual facts.   In law, context is everything. We shall

bear these parameters in mind and proceed to determine

the question whether the decision of the Authority is vitiated

by any abuse of power.


WHETHER THE DECISION OF THE AUTHORITY IS
VITIATED BY ANY ARBITRARINESS AND THEREFORE
HIT BY ARTICLE 14 OF THE CONSTITUTION OF
INDIA :



27. It was submitted on behalf of AMS that the decision of

MDA dated 15.3.2002 undoing its earlier decision dated

7.7.2002 and changing land use of the disputed plot from

`educational' to `housing' is unreasonable, unprincipled and

capricious   and violative of Article 14 of the Constitution.
                            31


This was done for making higher financial gain and profit

and that too, at the instance of an alleged unverified

extraneous person overlooking the demands of public

interest as well as law and order problems that may arise on

account of peculiar location of the plot in the midst of

existing higher education campuses belonging to AMS. We

find no merit in this submission. The claim of AMS, in our

considered opinion came to an end on 17.9.2001 when it

had intimated the MDA to delete its offer in respect of the

disputed plot on the ground that the cost of that land as

stipulated is not a viable one. This was followed by its letter

dated 3.1.2002, once again stating that it was injustice to

fix Rs. 690/- per sq. meter for the disputed land while

adjoining plots were allotted     for Rs. 500/- per sq. meter

and Rs. 560/- per sq. meter respectively. There were no

further negotiations and any response from MDA to the said

letter dated 3.1.2002. The letter dated 4.3.2002 from AMS

to MDA indicating the acceptance of Rs. 690/- per sq. meter

only after one Harpal Singh Chowdhary on behalf of the
                             32


Officer's Class Housing Society had mentioned a higher price

of Rs. 775/- per sq. meter in his representation.       There is

nothing on record to suggest that impugned decision has

been taken only for making higher financial gain and profit.

But what is wrong even if any such effort was made by MDA

to augment its financial resources. We are, however, of the

opinion that   the effort, if any, made by MDA to augment its

financial resources and revenue itself cannot be said to be

unreasonable decision.     It is well said that the struggle to

get for the State the full value of its resources is particularly

pronounced in the sale of State owned natural assets to the

private sector. Whenever the Government or the authorities

get less than the full value of the asset, the country is being

cheated; there is a simple transfer        of wealth from the

citizens as a whole to whoever gets the assets `at a

discount'. Most of the times the wealth of a State goes to

the individuals within the country rather than to multi-

national corporations; still, wealth slips away that ought to

belong to the nation as a whole.
                                   33




         Society's       repeated   representations   are   of   no

consequence and the MDA was not under any legal

obligation to reopen the tender process which otherwise

stood terminated.              The MDA, in its meeting dated

15.3.2002 considered the request of the Society as well as

the alternative offer but neither of them was accepted.          The

MDA after careful deliberation decided to dispose of the land

through fresh tender-cum-auction for residential use after

giving wide publicity.



28. The learned senior counsel relied upon the decision in

Bangalore Medical Trust Vs. B.S. Muddappa18 in which

this Court observed: "Financial gain by a local authority at

the cost of public welfare has never been considered as

legitimate purpose even if the objective is laudable. Sadly

the law was thrown to winds for a private purpose." The

observations were made in the context where this Court

found the entire proceedings before the State Government
18
     [(1991) 4 SCC 54]
                            34


suffered from absence of jurisdiction. Even the exercise of

powers was vitiated and ultra vires.       The orders of the

Government to convert the site reserved for public park to

civic amenity and to allot it for private nursing home was

null, void and without jurisdiction and when the same was

sought to be justified on the ground of financial gain; the

court made the observations in that context. The impugned

action of the authority in the present case did not suffer

from absence of jurisdiction nor was vitiated and ultra vires.

Financial gain was not at the cost of any social welfare.



29. In Padma Vs. Hiralal Motilal Desarda & Ors.,19 this

Court found that CIDCO's decision to part with the chunk of

developable land was obviously in departure from the policy

of serving on "no-profit-no-loss" basis to such people as

were craving for a roof over their heads. It is in that context

the Court observed; the land acquired and entrusted to

CIDCO cannot just be permitted to be parted with guided by

the sole consideration of money making. CIDCO is not a
19
     [(2002) 7 SCC 564]
                            35


commercial concern whose performance is to be assessed

by the amount it earns. Its performance would be better

assessed by finding out the number of needy persons who

have been able to secure shelter through CIDCO and by the

beauty of the township and the quality of life for the people

achieved   by   CIDCO   through   its   planned   development

schemes. It was in that context the court observed; there

should have been no hurry on the part of CIDCO in

disposing of the balance land and that too guided by the

sole consideration of earning more money. The allotment of

the land in favour of various organizations and individuals

was found to be without following any procedure and almost

in secrecy. The court further observed even that object of

raising revenue has not been achieved since at the end it

has parted with land at a price less than Rs.1500/- per

sq.m. - the reserved price. "Even if a sale of left over land

was felt necessity it should satisfy at least two conditions:

(i) a well considered decision at the highest level; and (ii) a

sale by public auction or by tenders after giving more wide
                           36


publicity than what was done so as to attract a larger

number of bidders". The observations so made in those

given circumstances cannot be torned out of context to be

applied to the fact situation in hand. On the other hand, the

ratio of judgment fully supports the decision taken by the

MDA in the present case.    The MDA having considered the

representation made by an individual to allot the land for

residential purpose at the rate of Rs.775/- per sq.m. and as

well as a proposal/request of AMS to allot the land @

Rs.690/- per sq.m. rejected both the suggestions and

invited tenders after giving wide publicity.     We fail to

appreciate as to how the decision of MDA could be

characterized as an unreasonable one. In our considered

opinion that was the only course left open to the Authority.

The money    to be realised by the sale of public auction is

required to be applied towards meeting the expenses

incurred by the Authority in the administration of the Act

which mainly includes securing the development of the

development area.
                              37




30.    The    expression     `arbitrary   and   capricious'    etc.

employed by the learned senior counsel for the AMS to

characterise the decision of the MDA does not carry any

special significance. The real question is whether the

decision   measures     up     to   the    legal    standard    of

reasonableness? The meaning of all such expressions as

arbitrary and capricious, frivolous or vexatious is necessarily

the same, since the true question must always be whether

the statutory powers have been abused?             In refusing to

accept the tender of the AMS on the ground that the offer

made by it was lower than that of the reserved price is

legal, valid and by no stretch of imagination can be

characterised as an illegal one. In fact, there was no option

available to the MDA but to reject the tender of the AMS as

the offer made was much below than the reserved price. In

fairness, the matter should have rested at that but for the

unwarranted repeated representations by the AMS without

any lawful claim; the MDA if at all committed an error it was
                               38


by entertaining such representations and entering into

avoidable correspondence with the AMS.



CHANGE OF LAND USE :

31. Now, we proceed to deal with the question whether the

decision to change the land use is unreasonable? It was

submitted that the decision of the MDA on 15.3.2002 to

upturn the decision of 7.7.2001 and change the land use of

the disputed plot from educational to housing and not to

allot   the   same   to   AMS        is    ex   facie     arbitrary   and

unreasonable. We find no merit in this submission.                    The

disputed land in the Master Plan is reserved for `Residential'

purpose. The residential category of use is a category in

contrast      with   industrial,          agricultural,     commercial,

recreational, green belt, or institutional category in use. It

does not mean exclusive use for housing on every inch of

the land. The expression residential use in the Master Plan

means that the land can be used for housing, various other

kinds of uses such as institutional, commercial etc. At any
                            39


rate this argument need not detain us any further since a

categorical statement is made during the course of the

hearing of this appeal on behalf of the MDA that the land

shall still be made available for educational use and as well

as residential.    The MDA had earlier relaxed the use and

made it for `educational' purpose though it is earmarked for

residential use in the Master Plan.       There is nothing

unreasonable in changing the land use and earmarking it

again for `Residential' use. It was submitted that MDA never

gave any reason for change of land use in its resolution

dated 15.3.2002 nor any reasons were communicated. Once

it is clear that the land in the Master Plan was reserved for

residential use where educational institutions could also be

permitted within that area, it cannot be said that there has

been a change of land use as such. At any rate in view of

the statement made there is no further controversy that the

land in question can be put to both residential and

educational use.
                              40


PUBLIC INTEREST:



32. The learned senior counsel relied on the decisions of

this Court in Unni Krishnan, J.P. Vs. State of A.P.20 and

TMA Pai foundation Vs. State of Karnataka21                 to

highlight the importance of private educational institutions

and their entitlement to get assistance from the State or

other authorities in the form of various concessions.      The

allotment of land at a reasonable rate according to the

learned senior counsel subserves public interest. We find no

relevance of those judgments to decide the case on hand.

AMS may have established Engineering Colleges to impart

education and may have a role to play in providing

education in engineering courses; but it cannot insist the

MDA to provide land at the rate chosen by it for itself.



         The object of the Act under which MDA is constituted

was to provide for development of certain areas according to

20
     [(1993) 1 SCC 645]
21
     [ (2002) 8 SCC 481]
                             41


plan and for matters ancillary thereto.          It is mainly

concerned with an orderly development of the areas and

balanced use of the available land within the development

area.    The Authority in law is not entitled to gift or freely

make available any land or at a rate lesser than that of

reserved price.



        The MDA in terms of the directions of the Government

vide G.O. dated 19.04.1996 has already decided to make

the lands available to the institutions imparting education in

engineering at a concessional rate i.e. to say 50% of the

sector rate and accordingly fixed reserve price @ Rs. 690/-

per sq. meter. The public interest parameters have been

duly taken into consideration by the Government itself in

directing MDA to make the lands available to educational

institutions at a concessional rate.        It is difficult to

appreciate as to what more the AMS expects from the

Authority. The Society in fact availed that assistance from

MDA on an earlier occasion but failed to avail the facility this
                            42


time for which the AMS has to blame itself. The AMS having

failed to offer at least the reserved price cannot be

permitted to turn round and ask for a mandamus to allot the

land in its favour based on self-serving representations. The

AMS indulged to say the least in speculative litigation. We

accordingly find no merit in the submission of the AMS

placing reliance upon the Directive Principles of State Policy

and more particularly, Article 41 of the Constitution of India

which says that the State shall, within the limits of its

economic    capacity   and   development,    make    effective

provision for securing the right to work, to education and

public assistance in cases of unemployment, old age,

sickness and disablement and in other cases of undeserved

want. The State had already made effective provision for

securing right to education by resolving to make the land

available at concessional rate to educational institutions

imparting education in engineering courses. Obviously, such

a decision was taken only with the view to give effect to the

Directive Principles of State Policy enshrined under Article
                           43


41 of the Constitution of India. The AMS has no legal or

constitutional right to make any perpetual demands and

dictate terms to the MDA to allot any particular land at the

chosen rate.



33. It was lastly contended on behalf of the AMS the relief

in the present case needs to be moulded with two aspects in

mind: (a) Public interest & (b) Equity.   Reliance has been

placed by the learned senior counsel for the AMS on the

findings of the High Court in this regard. The High Court

recorded the findings including that AMS is performing

public   service   by   providing   higher   education,   has

established different technical institutes by constructing

huge buildings on adjoining plots in which Engineering,

Computer Science, Business Administration are already

running; as 6,000 students are studying; facilities for

students   such as hostel, library, parking, open space etc.

are required; the sandwiched location of the plot between

pre-existing educational campuses would make housing use
                            44


of the plot detrimental to the interest of the students as well

as the prospective residents.     The High Court also found

that MDA has not pleaded or proved such surplusage of

educational need or such acute shortage of accommodation

in Meerut that even the disputed plot cannot be spared.



      The expression `public interest' if it is employed in a

given statute is to be understood and interpreted in the light

of the entire scheme, purpose and object of the enactment

but   in the absence of the same it cannot be pressed into

service to confer any right upon a person who otherwise

does not possess any such right in law. In what manner this

Court has to arrive at any conclusion that MDA's decision in

calling for fresh tender from the interested persons for

making the land available for residential use is not in public

interest?   Repeated attempts were made before us to say

that providing the land in question for educational use will

be more appropriate and sub-serve public interest than

making it available for residential use. Public interest floats
                           45


in a vast, deep-ocean of ideas, and "imagined experiences".

It would seem to us wise for the courts not to venture into

this unchartered minefield. We are not exercising our will.

We cannot impose our own values on society. Any such

effort would mean to make value judgments.



     The impugned judgment illustrates "the danger of

judges wrongly though unconsciously substituting their own

views for the views of the decision maker who alone is

charged and authorized by law to exercise discretion." With

respect, we find that the High Court virtually converted the

judicial review proceedings into an inquisitorial one.   The

way proceedings went on before the High court suggest as if

the High Court was virtually making an inquiry into the

conduct and affairs of the MDA in a case where the court

was merely concerned with the decision making process of

the MDA in not accepting the offer/tender of the AMS in

respect of the disputed plot on the ground that the offer so

made was less than that of the reserve price fixed by the
                              46


MDA.   We express our reservation in the manner in which

the High Court dealt with the matter. The High Court went

to the extent of holding that there was a concluded contract

between MDA and AMS. Of course, learned senior counsel

Shri Sunil Gupta, did not support the findings so recorded

by the High Court.



34. Finally, it was submitted that equity requires the

allotment of land to AMS as the disputed land can be put to

most beneficial use and for a public purpose for imparting

education in engineering courses.        The AMS expressed its

willingness to pay such reasonable price as may be fixed by

this Court. It is brought to our notice that the prices of the

land in the vicinity of area have gone up many times and as

at   present prevailing rates are very high. We do not

propose to indulge in any guess work and direct allotment of

land to the AMS by fixing           the land price by ourselves.

Equity is not a one way street. The conduct of the AMS does

not entitle it to get any such relief in equity.
                            47




35. For all the aforesaid reasons, we find it difficult to

sustain the impugned judgment.


36.      Civil Appeal Nos. 2620-2621/09 arising out of
SLP (c) Nos. 1602-1603 of 2008 preferred by Pawan
Kumar Agarwal :



     On 15.4.2002, MDA got fresh advertisement issued

inviting bids to acquire the land for housing purposes at the

reserve price Rs. 885/- per sq. meter. The auction was held

on 2.8.2002.     Pawan Kumar's bid of Rs. 1365/- per sq.

meter was the highest. He deposited a sum of Rs.

5,50,000/- towards earnest money.       The highest bid was

approved by the MDA by its letter dated 17.8.2002.

However, further amounts were not accepted as the matter

was pending in the High Court. Be it noted, the High Court

never issued any orders restraining MDA from accepting the

bid amount. The only restraint was that the auction would

be subject to further orders to be passed in the writ petition.

The fact remains there was no demand from MDA requiring
                               48


the appellant to pay any amount nor did the appellant on his

own deposited any amount towards installments except

requesting the MDA to initiate proceedings for transferring

the land.    The MDA informed the appellant that it was

making efforts to get the writ petition decided and the letter

of allotment would be issued only after the disposal of the

writ petition.



37. AMS challenged the fresh advertisement in which the

appellant was the highest bidder but without impleading the

appellant. Number of affidavits and supplementary affidavits

were exchanged between the parties in the High Court. On

2.4.2007, the High Court allowed impleadment application

of the appellant-Pawan Kumar Agarwal. During the course of

hearing, the High Court on 8.5.2007 directed the Vice-

Chairman,    MDA   to    file   additional       affidavit   inter   alia

explaining as to why allotment in favour of appellant-Pawan

Kumar Agarwal was not cancelled when it has deposited

only   earnest   money     and       not   the     balance    of     total
                              49


consideration and whether the earnest money could be

forfeited by MDA? MDA, obviously was reeling under the

pressure and took decision to cancel the auction of the plot

by its order dated 14.5.2007 on the grounds stated therein.

Thereafter, MDA filed supplementary affidavit mentioning

about cancellation of auction. The appellant-Pawan Kumar

Agarwal filed Writ Petition No. 30074 of 2007 challenging

the cancellation of auction.    The High Court vide common

impugned judgment dismissed the appellant-Pawan Kumar

Agarwal's writ petition.



38. We find some merit in the submission made by learned

senior counsel Shri Rakesh Dwivedi that the cancellation of

the auction was not tenable.        But the fact remains the

appellant deposited only an amount of Rs. 5,50,000/-

towards earnest money out of huge amount of total

consideration. Having regard to the totality of the facts and

circumstances,   we    are   not    inclined   to   exercise   our

jurisdiction under Article 136 of the Constitution of India and
                             50


interfere with the order of cancellation passed by MDA on

14.5.2007.



RESULT



39. It is needless to observe that the MDA shall be at

liberty to call for fresh tenders in accordance with law but

duly notifying the land use for both `educational' and

`residential' and invite bids accordingly. It shall permit AMS

and other educational institutions intending to participate in

the auction. In view of the     undertaking given by MDA to

this Court it shall not raise any objection for the use of the

land for educational purposes      in case if   any educational

institution is found to be the successful bidder. The bids

shall obviously be invited from the intending bidders duly

notifying the `residential' and `educational' use.
                            51


40. In the result, Civil         Appeal No. 2619/09                  arising

out of SLP (c) No. 3215 of 2008 preferred by MDA is allowed

with costs. Advocate's fee quantified at Rs. 50,000/-.



     Civil   Appeal Nos.         2620-2621/09           arising out of

SLP (c) Nos. 1602-1603/08 shall stand dismissed but

without any order as to costs.


                                     ..........................................J.
                                     (Lokeshwar Singh Panta)



                                     ..........................................J.
                                           (B. Sudershan Reddy)

New Delhi;
April 17, 2009

No comments:

Post a Comment

Note: Only a member of this blog may post a comment.