IN THE HIGH COURT OF JUDICATURE OF ANDHRA PRADESH AT HYDERABAD (SPECIAL ORIGINAL JURISDICTION) TUESDAY, THE TWENTY NINTH DAY OF MARCH TWO THOUSAND AND ELEVEN THE HON'BLE SRI JUSTICE A.GOPAL REDDY and THE HON’BLE SRI JUSTICE N. RAVI SHANKAR WAMP No.239 of 2011 in WRIT APPEAL No.613 of 2007 and WRIT APPEAL No.613 of 2007 BETWEEN: The Andhra Pradesh Housing Board, rep. by its Vice-Chairman & Housing Commissioner, Gruhakalpa, M.J. Road, Hyderabad and another … APPELLANT(S) And Y. Yugandhar and others … RESPONDENT(S) THE HONOURABLE SRI JUSTICE A.GOPAL REDDY and THE HONOURABLE SRI JUSTICE N.RAVI SHANKAR WAMP No.239 of 2011 in WRIT APPEAL No.613 of 2007 and WRIT APPEAL No.613 of 2007 JUDGMENT: (Order of the Division Bench) The two appellants in this Writ appeal are the A.P. Housing Board represented by its Vice-Chairman and Housing Commissioner and the Executive Engineer, A.P. Housing Board, West Division, Hyderabad and they are respondents 1 and 2 in Writ Petition No.1549 of 2007. They preferred this appeal under Clause 15 of the Letters Patent questioning the order dated 08.06.2007 passed by a learned single Judge allowing the said writ petition directing the appellants to finalise the sale of two plots in favour of respondents herein who are the petitioners in the said Writ Petition subject to certain conditions. 2. Pending this writ appeal the writ petitioners filed WAMP No.239 of 2011 seeking a direction to the Housing Board authorities to execute registered sale deeds in respect of one plot in favour of writ petitioners 1 and 2 and the other plot in favour of writ petitioners 3 and 4. The Housing Board authorities filed counter to the said petition and that petition is also taken up for disposal along with this writ appeal. Thus the controversy pertains to the finalisation of auction sale of two plots by the Housing Board in favour of the writ petitioners. 3. Having regard to the reliefs claimed in the writ petition, the point that arises for determination in this writ appeal is whether the Vice-Chairman and Housing Commissioner of the A.P. Housing Board has got the power to cancel an auction of plots conducted by it and whether the decision of the said authority to cancel the auction in question in the circumstances of this case is proper. The other point which would arise is whether the petitioners in the writ petition are entitled to have sale deeds for the plots in question in their favour as claimed by them. Henceforth for convenience we shall refer to the parties as they are arrayed in the writ petition. 4. The second respondent i.e. the Executive Engineer, A.P. Housing Board, West Division, Hyderabad issued a notification No.17/P.IX/6/Open Plots/Auction dated 16.11.2002 proposing to conduct on 26.11.2002 auction of certain plots in phases 6 and 9 of Kukatpally Housing Board Colony, Hyderabad. In the auction conducted on that date, petitioners 1 and 2 became highest bidders for plot No.83 and petitioners 3 and 4 for plot No.78/A offering their highest bids of Rs.20,49,619/- and Rs.24,64,000/- respectively. They deposited one-fourth of their respective bid amounts plus expenses within the time as per the terms of the auction notification and they also had thirty days time from that date to deposit the balance bid amounts. 5. It transpires from the record that one Mr.Badrinath who was the purchaser of plot No.82 in phase-9 which was a neighbouring plot in an earlier auction filed W.P.No.23578 of 2002 challenging the auction of plot Nos.83 and 78/A referred to supra. His case in the said Writ Petition was that the said two plots i.e. plot No.83 and 78/A were open area abutting his plot No.82 and that area provided access to his plot to the road and therefore the said plots ought not to have been put to auction as they were also not shown in the lay out/plan. It is not necessary to go into other details but it would be sufficient to note that the said Badrinath in his writ petition was granted an interim order on 27-11-2002 by this Court staying the confirmation of the sale of auction of plots 83 and 78/A in favour of the petitioners in the present writ petition. The version of the petitioners is that they subsequently paid the balance sale consideration amounts also and were waiting for finalisation of the sale of their plots in their favour. 6. The grievance of the petitioners is that while the matters stood thus the first respondent published a paper notice dated 17.01.2007 to the effect that the petitioners have deposited the three-fourths amount of their bids suo moto and that the finalisation of the sale of plot Nos.83 and 78/A in their favour could not be taken up in view of the interim orders granted in W.P.No.23578 of 2002 and called upon them to take refund of their amounts. 7. The further plea of the petitioners was that they were not at all fault in depositing the balance amounts and that the sale in their favour of their plots could not be finalised because of the pendency of W.P.No.23578 of 2002 filed by Badrinath and the interim order granted therein and therefore the respondents should be directed to receive the amounts and finalise the sale of their plots in question without re-auctioning the said plots. With the above case the petitioners prayed for a mandamus for the said reliefs. It is seen that by the date of disposal of the petitioners’ writ petition, W.P.No.23578 of 2002 filed by Badrinath was dismissed and this has as will be presently seen weighed with the learned single judge in allowing the writ petition. 8. The second respondent Executive Engineer filed counter for himself and also the first respondent. Their stand is that in view of the interim orders granted in W.P.23578 of 2002 of Badrinath, the auction of the plots for which petitioners have submitted their bids could not be finalised as by efflux of time there was a wide increase in the market price and the auction price earlier bid by the petitioners and therefore the Housing Board took a decision not to confirm the bid and refund the earnest money deposits and 1/4th amount paid by the petitioners together with interest and to re- auction the plots by cancelling the earlier auction held on 26.11.2002. Their further version is that the Housing Board by its letters dated 18.11.2005 and 15.10.2005 sought to refund the 1/4th amount paid by the petitioners 1 and 2 and also the 1/4th amount paid by the petitioners 3 and 4 to them but the letters were returned unserved. Their version is that the petitioners without there being any demand upon them and having come to know about the proposal of the Housing Board to re-auction the plots have sent the balance amounts on their own and that act on their part cannot give them any right to have the sale finalised in their favour for the plots in question. 9. They then pleaded that according to the terms of the auction notification dated 16.11.2002 the Vice Chairman and the Housing Commissioner is the final authority either to accept or to reject any or all the bids and he has got the right to cancel the auction without assigning any reasons for such cancellation. Their version is that from 26.11.2002 till the dismissal of the writ petition filed by Badrinath, a delay of more than five years has occurred for finalisation of the auction and in the meanwhile the prices of the plots have gone up and consequently the Housing Board has decided to cancel the earlier auction in exercise of the power given to the Vice-Chairman of the Housing Board in terms of Clause 16 of the auction notification and petitioners therefore cannot get any right to the plots. Their stand is that in the interests of the properties of the Housing Board which are public properties and to generate more revenue in larger public interest the decision to cancel the auction of the plots in question has been taken in the above circumstances and therefore petitioners cannot claim any right. 10. After considering the respective cases and contentions of the parties the learned single Judge observed that the petitioners were not at fault for finalisation of the auction in their favour and the whole process got stalled because of the W.P.No.23578 of 2002 filed by a third party i.e. Badrinath who was the purchaser of plot No.82 which was dismissed ultimately and therefore petitioners cannot be denied their rights to have the auction of the two plots in question finalised in their favour. Holding so, the learned single judge directed the petitioners to deposit the 3/4th of the balance sale consideration amount with simple interest at 12% p.a. from 26.12.2002 till the date of validation of the demand drafts or cheques given by the petitioners for that amount and directed the respondents to finalise the sale of the plots in question in favour of the petitioners. The learned single judge granted the above interest amount on the ground that since the respondents could not utilise the 3/4th of the amount of the balance sale consideration offered by the petitioners they should be held entitled to the above rate of interest on the said amount. 11. Challenging the above order of the learned single judge, the respondents have come up with this appeal. Sri J.Prabhakar, the learned Standing Counsel for the Housing Board argued that according to condition or Clause No.16 of the terms and conditions of the auction notification dated 16.11.2002, the final word regarding the finalisation of the auction or sale of plots is that of the Vice Chairman of the Housing Board and that he could cancel the auction without assigning any reasons and therefore the order in the writ petition cannot be sustained. He also argued that the Housing Board which is a public authority has to keep in mind the interest of the public property and public funds with which it deals and the learned single judge ignored this aspect. In support of his contention he also placed reliance upon a decision of the Supreme Court given in RAJASTHAN HOUSING BOARD vs. G.S. INVESTMENTS[1] which deals with the power of a Housing Board of the State to cancel an auction of the properties held by it. 12. On the other hand Sri D.Prakash Reddy the learned Senior Counsel appearing on behalf of the writ petitioners supported the impugned order. His contention is that there was no fault on the part of the petitioners since the auction of the plots in their favour could not be finalised because of the pendency of W.P.No.23578 of 2002 and the interim order granted therein, the learned single Judge was right in directing the finalisation of the sale of the plots in question in favour of the petitioners after the dismissal of that writ petition. He also pointed out that in the circumstances of this case the decision of the Housing Board to re-auction the plots cannot be sustained and that the above decision of the Supreme Court does not advance the case of the Housing Board in a situation like this. The points are now taken up in the light of the above contentions. 13. It may be noted that it is true that the finalisation of the sale of the plots in question in favour of the writ petitioners got stalled by reason of the W.P.No.23578 of 2002 filed by a third party, Badrinath and the interim order granted therein on 26.11.2002. The said writ petition ultimately came to be dismissed on 05.06.2007. May be the petitioners may not be at fault for the delay in finalisation of the auction. It may however be noted that the Housing Board cannot also be said to be at fault for the delay in finalisation of the auction. The whole process got stalled because of an interim order granted by this Court in the writ petition of a third party and to repeat the Housing Board cannot be said to be at fault at all. By the time W.P.No.23578 of 2002 was dismissed on 05.06.2007 about five years have elapsed from 27.11.2002 on which date the auction for the two plots in question in this writ appeal was held. 14. The plea of the Housing Board is that because of the delay of five years, the prices of the plots in question have increased manifold and therefore the Housing Board decided to cancel the auction and re-auction the plots. Explaining this aspect and the power of the Housing Board to cancel the auction, its counsel has relied upon condition No.16 of the auction notification dated 16.11.2002 which says that just because a person has become a highest bidder in an auction that does not ipso facto give him a right to have the property knocked down in his favour and that still the Vice-Chairman of the Housing Board would have the power to cancel the auction and the final word in this behalf would be that of him. Further explaining the reasons for cancelling the auction, the Housing Board took the plea that the prices of the plots have gone up and therefore in the interest of the Housing Board’s properties which are public properties and to generate more revenue the Vice-Chairman has decided to cancel the auction and re-auction the plots. The validity of this contention has to be now determined. 15. Before going into the above aspect it should be noted that this not a case where the Housing Board has finalised the auction in favour of the petitioners for the plots in question by accepting the balance amounts of sale consideration. The record would admittedly show that the writ petitioners themselves in their over anxiety made an attempt to deposit the balance sale considerations without there being any demand for it from the Housing Board. The Housing Board has already stated that it tried to send the amounts paid by the petitioners to them along with interest through its letters dated 18.11.2005 and 15.10.2005 but they managed to return the said letters and they on their own sent the balance sale consideration amounts though the auction was not finalised. There is no dispute on this aspect. 16. In Rajasthan Housing Board’s case referred to supra their lordships were dealing with the power of the said Housing Board to cancel an auction notification pursuant to the discovery of certain irregularities or defects noticed in the auction of the properties. In the said case it was noticed that the highest bids were offered at a disproportionately low market price than what was ruling then and having discovered the same the Rajasthan State Government issued directions to the Housing Board to cancel the auction and accordingly it was cancelled. The High Court of Rajasthan intervened and directed the authorities to confirm the sale in favour of the highest bidder. Reversing that decision of the High Court, it was held in the aforesaid decision that the power of the Housing Board to cancel the auction can be exercised where confirming the auction was not justified. It was further held that a highest bidder would not acquire any right to have the sale confirmed in his favour and that it was always open for the Housing Board to cancel the auction. It was also held that the transaction between the Housing Board owned or established by the State Government and the bidder was purely a commercial transaction and that the Housing Board being a public authority would keeping in view the larger public interest and the interest of public properties and its revenue which would be a public revenue could always cancel an auction. 17. It is true in the aforesaid Rajasthan Housing Board’s case there was mischief in conducting the auction as the price fetched was much below the ruling market price for the property in question in the said case. There is no such mischief alleged in the present case. It is also true that the whole process of auction sale in favour of the petitioners was got bogged down because of an interim order granted by this Court in a writ petition filed by a third party and the writ petitioners were not at fault. It should however be noted that equally it can be said that the Housing Board was also not at fault. The plea of the Housing Board is that as the market prices have increased manifold from the date of grant of stay order in Badrinath’s writ petition which was granted on 26-11-2002 and the date of dismissal of that writ petition which is 05.06.2007 more than five years have elapsed and during this period the market prices of the plots in question have gone up and therefore in the larger interest of the public and the properties of the Housing Board which are public properties it has decided to cancel the auction and go for a re-auction of the plots. It should also be noted here that the auction sale in favour of the petitioners was not confirmed. Unless auction in favour of the petitioners is confirmed no right accrues to them to deposit balance three- fourths of auction amount. Thus in view of the above circumstances, the proposition laid down in the aforesaid Rajasthan Housing Board’s case which was laid down after considering the previous case law on the point can be equally extended to this case also with regard to the power of the Housing Board to cancel the auction. 18. In the present case unlike the case of Rajasthan Housing Board, there were no directions issued by the Government to the Housing Board to cancel the auction. Nevertheless, the Vice- Chairman and Housing Commissioner has got the power under the terms and conditions of the auction notification dated 16-11-2002 and the stand of the Housing Board is that it decided to go for re- auction of the plots because of the increase in the market prices in the gap of five years from the date of auction here. It cannot be said that this decision of the Housing Board or its Vice-Chairman is arbitrary or irrational. 19. Then dealing with the power of a High Court under Article 226 and the limitations thereon to intervene in matters like this, it has been observed by the Supreme Court in the above decision that the transaction between the Housing Board and its auction purchaser is purely a commercial transaction and the public body must have full freedom to take its own administrative decision even though the matter may be in the realm of contract and the Court cannot substitute its opinion for that of the public body unless it is totally arbitrary and does not stand to reason at all. In the present case, the decision of the Housing Board on the pleas taken by it and also having regard to the fact that it was not also at fault for the delay in the matter, it can be said that this Court should not interfere under Article 226 and direct confirmation of sale of the plots. 20. In this connection, it should be noted that the third party Mr.Badrinath apart from filing W.P.23578 of 2002 referred to supra also filed W.P.No.25966 of 2005 questioning the cancellation of the confirmation of the auction of his plot i.e. plot No.82 for certain reasons mentioned therein. That writ petition was also allowed on 05-06-2007 wherein a direction was given to the appellants to execute the sale deed in his favour in respect of his plot i.e. plot No.82. Questioning that order the appellants filed W.A.594 of 2007. That writ appeal was allowed on 28-09-2007 holding that in the circumstances this Court has no power to give a direction to the appellants for execution of sale deed in favour of Mr.Badrinath. In the said writ appeal the direction given to the extent of execution of sale deed was set aside by a Division Bench presided over by the Hon’ble Chief Justice but the competent authority of the Housing Board was directed to issue an action oriented notice to Mr.Badrinath and then decide about his representation for execution of a sale deed. This decision is also an authority for the proposition that this Court cannot substitute its opinion in the matter for that of the Housing Board. 21. Thus to sum up in the light of the above facts and the decisions, we are faced here with a situation where the petitioners are not at fault for stalling of the auction proceedings and equally the Housing Board is also not at fault. The question now is among the petitioners and the Housing Board whose case should be upheld. It is now well settled that in such a situation the maxim necessitas publica major est quam privata applies which means that public interest must always prevail over private interest. In view of this and having regard to the terms and conditions of the auction notification and in the above circumstances as the sale in favour of petitioners is not confirmed, it follows that the case of the Housing Board to cancel the auction of the plots in question and go for a re-auction of the plots must be upheld as this decision of the Housing Board does not suffer any arbitrariness and stands to reason having regard to the public interest as it deals with public properties. The first point is accordingly decided in favour of the Housing Board authorities. 22. Then coming to the second point, it may be noted that in view of the upholding of the case of the Housing Board it follows that petitioners plea for registration of sale deeds in their favour for the two plots in question cannot be upheld and this point is also accordingly decided against them. 23. Then turning to WAMP.239 of 2011 and the relief claimed therein for registration of plots in favour of the petitioners, in view of the decision on the above two points, it follows that the same has to be dismissed and it is accordingly dismissed. 24. Sri D. Prakash Reddy the learned counsel for the writ petitioners as a last resort submitted that a direction may be given to the Housing Board authorities to consider the case of the petitioners as was done in the case of Mr.Badrinath in the other writ appeal mentioned supra stating that they stand in a better position than Badrinath. We are unable to accede to this request. It may be noted that in the case of Badrinath a decision to confirm the auction in his favour was taken but that it is not the case here. The situation here is entirely different and there is every justification for the Housing Board having regard to its plea to go for a re-auction. Hence the said request is rejected. 25. Accordingly for the aforesaid reasons this Writ Appeal is allowed and the W.P.No.1549 of 2007 is dismissed. ____________________ A.GOPAL REDDY, J _____________________ N.RAVI SHANKAR, J 29th March 2011 CVRK [1] (2007) 1 SCC 477