Supreme Court of India· 25 November 2024

Can a High Court, hearing a writ appeal, fix the base price of the land and direct the authority to allot it to the erstwhile highest bidder?

INDORE VIKAS PRAADHIKARAN (IDA) & ANR v. SHRI HUMUD JAIN SAMAJ TRUST & ANR

SLP (Civil) No. 9940 of 2022 · SLP (Civil) No. 9940 of 2022
Coram: Bela M. Trivedi; Satish Chandra Sharma

🔖 Save this judgment 📬 Get today's judgments

View the original judgment PDFFree to read. To download it — or the LexStreak typeset copy with the headnote and Points of Law — create an account; downloads are part of the Pro plan.

Answer

No. Fixing the base price or modifying the offer and directing allotment virtually amounts to confirmation of the auction in favour of the bidder, which is not the function of the High Court. Such an order is one passed virtually sitting in appeal over the decision of the government and cannot stand.

Headnote

Judicial review of tender process — Notice Inviting Tender — Highest bidder — No vested right — Concluded contract — Cancellation of bid — Fair treatment — Freedom of contract — Judicial review of tender — Highest bidder — no vested right without allotment letter — Held: The highest bidder has no vested right to have the auction concluded in his favour; in the absence of an allotment letter and acceptance of the highest bid there is no concluded contract, and no relief could have been granted. (¶12, 14) Judicial review of tender — Annulment of tender — no interference absent mala fide exercise of power — Held further: While exercising the power of judicial review the Court does not sit as an appellate Court over the decision of the government but merely reviews the manner in which the decision was made; absent mala fide exercise of power, the Tender Committee's decision stands. (¶13) Judicial review of tender — Writ court fixing base price — beyond the function of the High Court — Held further: A writ court cannot fix the base price or modify the offer and direct allotment; that virtually amounts to confirmation of the auction in favour of the bidder, which is not the function of the High Court. (¶13, 14) Judicial review of tender — Bidder's rights — fair treatment, no further negotiation — Held further: A bidder has no right in the matter of bid except of fair treatment and cannot insist for further negotiation; where the bid was rejected for valid and cogent reasons the interference was unwarranted. Appeal allowed. (¶14, 17)

In the Court's own words

Paragraph 13This Court in the aforesaid case has held that while exercising power of judicial review, the Court does not sit as an appellate Court over the decision of the government but merely reviews the manner in which the decision was made [Tata Cellular v. Union of India, (1994) 6 SCC 651]. In the considered opinion of this Court, the Division Bench should not have interfered in the matter and could not have gone to the extent of fixing the base price/modifying the offer made by respondent and, therefore, in light of the aforesaid judgment as the High Court has virtually passed an order sitting in appeal over the decision of the government in absence of any mala fide exercise of power by the IDA, the judgment passed by the Division Bench of the High Court deserves to be set aside and is, accordingly set aside. This Court in the case of Haryana Urban Development Authority Vs. Orchid Infrastructure Developers Pvt. Ltd. (supra) again dealing with the cancellation of a bid of the highest bidder, in paragraphs 12,13,14,15, 16 and 30 has held as under:

Paragraph 14Keeping in view of the aforesaid judgments, this Court is of the considered opinion that in the absence of allotment letter and acceptance of highest bid, no relief could have been granted in favour of respondent No.1 as there was no concluded contract in the matter and the decision taken by the Tender Evaluation Committee to generate more revenues could not have been interfered with in the manner and method as has been done by the Division Bench of the High Court of Madhya Pradesh at Indore Bench. The bidder has no right in the matter of bid except of fair treatment and cannot insist for further negotiation as has been done in the present case. The terms and conditions of NIT, particularly condition No. 6, empowers the IDA to accept or reject any or all bids. In the present case, the bid was rejected for valid and cogent reasons and, therefore, the order passed by the Division Bench of the High Court of Madhya Pradesh is set aside.

One judgment a day. That's the whole habit.

Read the full text of INDORE VIKAS PRAADHIKARAN (IDA) & ANR v. SHRI HUMUD JAIN SAMAJ TRUST & ANR — and get the Supreme Court's output as a five-minute daily read, with plain-language headnotes and the questions each judgment settles.

Create my free account

Free forever plan · 30 seconds · data stays in India

Open the full judgment →

Also decided in this judgment

Does the highest bidder in a tender process acquire a vested right to have the auction concluded in his favour where no allotment letter has been issued and the bid has not been accepted?In exercising judicial review over a decision annulling a tender process, may a court sit in appeal over the government's decision where mala fide exercise of power is neither pleaded nor established?Where a Notice Inviting Tender empowers the authority to accept or reject any or all bids, can a bidder insist on further negotiation of his bid?Is the cancellation of an auction after a bidder has been declared the highest bidder manifestly arbitrary, or does it depend on the reasons for cancellation?

Plain-language answer prepared by the LexStreak Editorial Desk — verify against the judgment. Source: Supreme Court of India. Corrections