HIGH COURT OF CHHATTISGARH AT BILASPUR DIVISION BENCH Coram : HON'BLE SHRI RAJEEV GUPTA, CJ. & HON'BLE SHRI SUNIL KUMAR SINHA. J. WRIT APPEAL No. 181 of 2008 APPELLANTS PETITIONERS 4. Bharat Kumar Prasad, S/o Shri Lalita Prasad, Aged about 35 years, R/o Qr. No.2-B/1, J.P. Colony Korba, Distt. Korba (C.G.) Pramod Kumar Sharma, S/o Naval Kishore Sharma, Aged about 40 years, R/o MIG 1/23, Pt. Ravishanker Shukla Nagar, Korba,Distt.Korba-(C.G.) Smt. Jyoti Singh, W/o Shri R.K. Singh, Aged about 31 years, R/o House No.119, Krishna Nagar, Korba, Distt. Korba (C.G.) Bina Kar, W/o Shri Ranjeet Kumar, Aged about 55 years, R/o Pt. Ravishanker Shukla Nagar, Korba,DJstt.Korba-(C.G.) RESPONDENTS VERSUS 1. The State Through : Department Administration Government Mantrataya, of Chhattisgarh, The Secretery of Urban & Development, of Chhattisgarh D.K.S. Bhawan, Raipur, Distt. Raipur - (C.G.) 2. Municipal Corporation, Through - Commissioner, Munioipa! Corporation Korba, Distt. Korba - (C.G.) WRIT APPEAL UNDER SECTION 2 (1) OF HIGH COURT OF CG(APPEALTODJVtSIOMBENCW^^^A^^ SUB RULE dOUiUb) OFTHE HIGH COURTOF CHHATTISGARH RULES. 2007 Present: Shri K.A. Ansari, learned Senior Counsel wtth Shri A.S. Ansari, learned counsel for the appellants. Shri J.K. Gilda, learned Additional Advocate General for the State/respondent No. 1 . ^SK^; JUDGMENT (19tnFebruary,2009) The following judgment of the Court was passed by Rajeev Gupta, CJ.: By allowing I.A. No.02/2009, the documents fited along with this applicatjon are taken on record. 2. Learned counsel for the parties are heard on admission. 3. The appellants have filed this writ appeal against the impugned order dated 27.06.2008, passed in W.P. (C) No.2356/2008. 4. The appellants/petitioners had filed the writ petition for the following reliefs: "(1) Calling for records from the Respondents relating to the subject matter ofthe Petition. (2) to quash/set-aside the order dated 03.12.2007: at Para 03 : under consideration : ANNEX-P/1 : to the extent of the auction relating to Plots of the Petitioners bearing nos MiG-20,22,23,26. (3) any other relief, which the Hon'ble Court considers proper, may kindly be awarded." 5. The petitioners, thus in substance, were seeking quashing of the order dated 03.1 2.2007 (Annexure - P/1 in the writ petition) whereby respondent No.1 cancelled the auction for 9 plots including 4 plots for which the appellants' bid was the highest. 6. The short facts of the case essential for decjding this writ appeal are that the respondent No. 2 issued an auction notice dated 13.01.2007 (Annexure P-6 in the writ petition) in the newspaper for sale of 29 plots by public auction (17 plots of HIG Group & 12 plots of MIG Group). The petitioners partidpated in the auction held on 31.1 .2007 and they were declared highest bidders for Plot Nos. MIG-26,20,22,23 respectively. The reserved/upset price was fixed at Rs.3,64,000/-, whereas, bids of the petitioners were at Rs.4,92,000/-, Rs.4,60,000/- Rs.4,99,000^- & Rs.4,91,000/- respectively. The Mayor-in-Council of respondent-Corporation accorded approvai to the offer of the petitioners on 19.3.2007 (Annexure P-3 in the writ petltlon), which was subsequently approved by the General Body of the Corporation on 29.03.2007 (Annexure P-4 in the writ petition) Thereafter, the matter was forwarded to respondent No.1 (Annexure P-7 in the writ petition) for its approval as reqyired under Section 80 of the C.G. Municipal Corporatlon Act, 1956 and C.G. Municipal (Transfer of Immovable Properties) Rules, 1994. However, respondent No. 1 accorded approval of the auction only for 20 plots out of 29 auctioned plots and cancelted the auction for remaining 9 plots vide order dated 03.12.2007 of Annexure P-1 on the ground that highest bid received in the auction for remaining 9 plots is less. 7. Learned Single Judge on a thorough consideration of the rival submissions of tearned counsel for the parties did not find any ground warranting interference in the matter. Learned Single Judge, therefore, dismissed the appellants' writ petition vide impugned orderdated 27.06.2008. 8. Shri K.A. Ansari, learned Senior Counsel fw the appellants vehemently argued that after the acceptance of the appellants' bid by Mayor-in-Council and the Munidpal Corporatlon, the State Government could not have legally cancelled the auction. 9. The appellants' entire claim is based on the plea that the appellants' bid in the auction was the highest. The Apex Court in the case of Rajasthan Housing Board and another v. G.S. Investments and another, reported in (2007) I SCC 477 observed in paras 9,10 & 11: "9. This being the settled legal position, the respondent acquired no right to claim that the auction be concluded in 'rts favour and the High Court ctearly erred in entertaining the writ petition and in not only issuing a direction for consideration of the representation but also issuing a further direction to the appellant to issue a demand note of the balance amount. The direction relating to issuance of the demand note for balance amount virtually amounted to confirmatjon of the auction in favour of the respondent which was not the function of the High Court. 10. The other question which requires consideration is what are the contours of power which the High Court would exercise in a writ petition filed under Article 226 of the Constitution where the challenge is to cancellation of an auction held by a public body where the prime consideration is fairness and generation of public revenue. This question has been examined in a catena of decisions of this Court. In a recent decision rendered in Master Marine Services (P) Ltd. v. Metcalfe & Hodgkinson (P) Ltd. reportedin (2005) 6 SCC 138 where after consideration ofseveral earlier decisions, the Bench to which one of us was a party, summarized the legal principle as under in paras 11 to 15 ofthe said Report : (SCC pp. 147-48) <^s^ !-^M \ ^s '^ "^g "1't. The principles which have to be applied in judicial review of administrative decisions, especially those relating to acceptance of tender and awardof contract, have been considered in great detail by a three-Judge Bench in Tata Cellular v. Union of india, reported in (1994) 6 SCC 651 : AIR 1996 SC 11. It was observed that the princjples of judicial review would apply to the exercise of contractual powers by government bodies in order to prevent arbitrariness or favouritism. However, it must be clearly stated that there are inherent timitations in exercise of that power of judicial review. Government is the guardian of the finances of the State. It is expected to protect the financial interest of the State. The right to refuse the lowest or any othertender is always available to the Government. But, the principles laid down in Articte 14 of the Constitution have to be kept in view while accepting or refusing a tender. There can be no question of infringement of Article 14 if the Govemment tries to get the best person or the best quotation. The right to choose cannot be consideredto be an arbitrary power. Of course, if the said power Is exercised for any collateral purpose the exercise of that power will be struck down. (See para 85 of the Report, SCC para 70.) 12. After an exhaustive consideration of a large number of decisions and standard books on administrative law, the Court enunciated the principle that the modem trend points to judicial restraint in administrative action. The court does not sit as a oourt of appealbut merely reviews the manner in whtoh the decision was made. The Court does not have the expertise to correct the administratjve decision. If a review ofthe administrative decisfon is permitted it wlll be substituting its own decision, without the necessary expertise, which itself may be fallible. The Government must have freedom of contract. In other words, fair play in the joints is a necessary concomitant for an administrative body functioning in an administrative sphere or quasi-administrative sphere. However, the decision must not only be tested by the application of Wednesbury prtnciples of reasonableness but also must be free from arbitrariness not affected by blas or actuated by mala fides. !t was also pointed out that quashing of decisions may impose heavy administratjve burden on the admjnistration and lead to increased and unbudgeted expenditure. (See para 113 ofthe Report, SCC para 94) 13. In Sterfing Computers Ltd. v. M & N PuMcations Ltd. reported in (1993) 1 SCC 445 : AIR 1996 SC 51 it was held as under: (SCC p. 45Q, paras 18-19) ' 18. While exercising the power of judicial review, in respect of contracts entered into on behalf of the State, the court is concerned primarily as to whether there has been any infirmity in the "decision-making process". .... 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. Court have inherent limitations on the scope of any such enquiry. But at the same time ... the courts can certainly examine whether :decision-making process" was reasonable, rational, not arbltrary and violative of Article 14 of the Constitution. 19. Ifthe contract hasbeen entered into without ignoring the procedure which can be said to be basic in nature and after an objeetive consideration of different options available ^' ''^^'^-^-^ '^N^ taking into account the interest of the State and the publte, then courtcannot act as an Appellate Authority by substituting its opinion in respect of selection made for entering into such contract.' 14. In Raunaq Intemational Ltd. v. I.V.R. Construction Ltd. reported in f1993) 1 SCC 445: AIR 1996 SC 51 it was observed ttiat the award of a contract, whether jt is by a private party or by a public body or the State, is essentially a commerciat transaction. In arriving at a commerelal decisicm, considerations which are of paramount importance are commercial considerations, which would include, inter alia, the price at which the party is witling to work, whether the goods or services offered are of the requisite specifications and whether the person tendering is of the ability to deliver the goods or services as per specifications. 15. The law relating to award of contract by the State and public sector corporations was reviewed in Air India Ltd. v. Cochin Intemational Afrport Ltd. reported in (2000) 2 SCC 617 and it was held that the award of a contract, whether by a private party or by a State, is essentially a commercial transaction.It can choose its own method to arrive at a decision and it js free to grant any relaxation for bona fide reasons, jf the tender conditions permit such a relaxation. It was further held that the State, jts corporatlons, instmmentalities and agencies have ie publte duty to be fair to all concerned. Even when some defect is found in the decision-making process, the court must exercise its discretionary powers under Article 226 with great caution and should exercise it only in furtherance of public interest and not merely on the rnaking out ofa polnt. The courtshould ahways /(' -"^^ '^, keepJhe larger public interest in mind in order to ciedde whether its interventlon js called for or not. Only when it comes to a conclusion that overwhelming public interest requires interference, the court should interfere." 11. The sale of plots by the Rajasthan Houshig Board by means of an auction is essentlatly a commercial transaction. Even if some defect was found in the ultimate decision resulting in cancellation of the auction, the Court should exercise jts discretionary power under Article 226 of the Constitution which great care and caution and should exercise it only in furtherance of publte interest. The Court should always keep the larger public interest in mind in order to decide whether it should interfere with the decision of the authority. In the present case, there was enough material before the State Government to show that in the past plots in the area had fetehed a price of Rs.10,000 per square metre and the highest bid made by the respondent in the present case was neariy half i.e. Rs.5750 per square meter, which cleariy indicated that the auction had not been conducted in a fair manner. If in such a case the State Government took a decision to disapprove the auetion held and issued a dlrection for holding of a fresh auction, obviously the said decision was taken in larger publte interest. In these circumstances there was absolutely no occasion for the High Court to entertain the writ petition and issue any direction in favour of the contesting respondent. The orders passed by the learned Singte Judge on 4.8.2004 and the order passed by the Division Bench of the High Court on 23.9.2004 are clearly erroneous in law and are liable to be set aside." 10. Thus, the appellants' bid being highest in the auction wili not, by itself, create any right Sn favour of the appellants/petitioners. 11. We, therefore, do not find any infirmity in the impugned order which may warrant interference in this writ appeal. 12. The writ appeal, therefore, is liable to be dismissed and is hereby dismissed summarily. subbu Sd/- Chief Justice Sd/- Sunil Kumar Sinha Judge