IN THE HIGH COURT OF JUDICATURE, ANDHRA PRADESH AT HYDERABAD (Special Original Jurisdiction) FRIDAY, THE TWENTY FOURTH DAY OF OCTOBER TWO THOUSAND AND EIGHT PRESENT THE HON'BLE MR JUSTICE V.V.S.RAO WRIT PETITION No.18457 of 2004 Between: V.P. Ratnam S/o V. Zacharaiah MIG-121, APHB Colony, Nallapadu, Guntur District ..... PETITIONER AND 1 The State of A.P., rep by Principal Secretary, Housing (HB.II) Department, Secretariat Buildings, Hyderabad 2 The Vice Chairman, A.P. Housing Board, Gruhakalpa, MJ Road, Hyderabad-I 3 The Executive Engineer(Housing) A.P. Housing Board, Vijayawada-2 .....RESPONDENTS Petition under Article 226 of the constitution of India praying that in the circumstances stated in the Aﬃdavit ﬁled herein the High Court will be pleased to issue a Writ, order or direction particularly Writ of Mandamus directing the respondents to implement the G.O.Rt. No.119 Housing (HB.II) Department dt.22-4-1999 by receiving the market price in respect of 204.70 square yards of vacant land situated towards northern side adjacent to MIG 121, A.P. Housing Board Colony at Nallapadu, and execute the sale deed in favour of petitioner dispensing with public auction. Counsel for the Petitioner: MR.M.N.NARASIMHA REDDY Counsel for the Respondents: GP FOR HOUSING The Court made the following: THE HON’BLE SRI JUSTICE V.V.S.RAO WRIT PETITION No.18457 of 2004 ORDER: Petitioner was allotted a house bearing No.MIG-121 in Andhra Pradesh Housing Board (APHB) Colony at Nallapadu in Guntur in 1990. The same was handed over to him in 1996. He paid all quarterly instalments. He approached Government and APHB for allotment of vacant land admeasuring 204.70 square yards (hereafter, petition schedule property) situated on northern side of MIG-121. Government considered request favourably. They issued G.O.Rt.No.119, Housing (HB.II) Department, dated 22.4.1999, permitting APHB to sell petition schedule land to petitioner at market value dispensing with public auction. Petitioner expressed his willingness by letter dated 01.10.1999. In response thereto Executive Engineer sent a communication dated 04.11.1999 requesting petitioner to remit a sum of Rs.5,11,730/- for 204.70 square yards at Rs.2,500/- per square yard for issuing necessary sale letter. Feeling aggrieved by the cost aﬃxed by APHB, petitioner made representations to Chief Minister of Andhra Pradesh, third respondent as well as grievance cell. APHB constituted a Sub- committee, who statedly resolved to allot/sell petition schedule land to petitioner at market value of Rs.700/- per square yard. But orders were not passed. Petitioner therefore sent reminders to APHB who by communication dated 25.9.2004 (received by petitioner on 01.10.2004) informed him that APHB decided to sell petition schedule land in public auction. APHB thereafter issued auction notiﬁcation, which was published in Eenadu newspaper on 02.10.2004 proposing to auction petition schedule land adjacent to MIG-121 ﬁxing upset price of Rs.2,300/- per square yard. Petitioner therefore ﬁled instant writ petition seeking writ of Mandamus directing respondents to implement G.O.Rt.No.119, dated 22.4.1999. Petitioner mainly contends that without cancellation of Government Order and without notice to petitioner action of APHB in proposing to auction petition schedule land is illegal and arbitrary. This Court, while admitting writ petition, gave liberty to petitioner to participate in auction while observing that auction shall not be conﬁrmed. In view of this, as scheduled, APHB conducted auction on 14.10.2004. One M.Srinivasa Rao oﬀered highest bid of Rs.4,500/- per square yard and auction was knocked down in his favour. However, the same was not confirmed. He ﬁled an interlocutory application being W.P.M.P. No.17206 of 2008, which was ordered by this Court impleading him as fourth respondent. He also ﬁled counter aﬃdavit stating that pursuant to auction on 14.10.2004, he has deposited 25% of the amount on 15.10.2004 and that he is a bona fide purchaser. Respondents 2 and 3 (APHB) ﬁled counter aﬃdavit. It is stated that after orders of Government in G.O.Rt.No.119, APHB ﬁxed market value at Rs.2,500/- per square yard and oﬀered the same to petitioner. He was requested to pay Rs.5,11,730/- within one month. Petitioner did not accept oﬀer and did not remit amount and therefore oﬀer made by APHB stands cancelled. Petitioner made representation requesting for reduction of price. The Government forwarded representations of petitioner to APHB for enquiring into matter and for submitting detailed report. APHB sent a letter dated 26.7.2000 to Government to the eﬀect that land cost was ﬁxed at Rs.2,500/- per square yard based on development charges, location of site, high compensation to be paid to land owners in land acquisition cases pending before the Court of Subordinate Judge, Guntur. As required by Government, third respondent obtained prevailing market value from Oﬃce of Sub-Registrar. In his report while stating that land cost as per Sub-Registrar’s valuation is Rs.704/- per square yard, informed that due to higher land compensation claimed by land owners, land cost would be Rs.1,873/- per square yard. APHB therefore appointed a Sub-committee, which could not submit any report. Therefore in its meeting on 28.1.2002, APHB appointed a new Sub- committee to inspect the land and submit a report. Even before Sub-committee could submit report, APHB passed resolution on 28.02.2002 to request Government to accord permission for sale of petition schedule land to petitioner at Rs.700/- per square yard. Government sought clariﬁcation as to the basis for oﬀering land at Rs.700/- per square yard, when initially it was ﬁxed at Rs.2,500/- per square yard. Necessary report was sent by APHB whereupon Government addressed a letter dated 05.11.2003 requesting APHB to deal with matter in the light of G.O.Ms.No.38, dated 30.5.1997 and order of this Court in W.P.No.26654 of 2001 dated 14.10.2003. Having regard to G.O.Ms.No.38 and order of this Court in the said writ petition, APHB decided to sell petition schedule land by public auction and the same was informed to the Government by letter dated 25.8.2004. An auction notice dated 22.9.2004 was issued proposing public auction on 14.10.2004. In the said auction, fourth respondent gave bid for Rs.4,550/- per square yard, which is many times more than Rs.700/- at which petitioner wants the land to be sold to him. Though Government issued G.O.Rt.No.119, permitting APHB to sell land to petitioner at market value dispensing with public auction, petitioner did not accept oﬀer made by APHB at Rs.2,500/- per square yard. When petitioner requested reduction, Government did not accept request and directed APHB to deal with the matter in terms of G.O.Ms.No.37, and judgment of this Court in W.P. No.26654 of 2001. The counter also makes reference to relevant provisions of Andhra Pradesh Housing Board Act, 1956 and Andhra Pradesh Housing Board Rules, 1959. Learned Counsel for petitioner, learned Standing Counsel for APHB and learned Counsel for fourth respondent made their submissions. They also relied on an unreported decision. From these submissions and background of the case, two points would arise for consideration, namely, whether APHB can ignore orders of the Government in G.O.Rt.No.119, dispensing with public auction and permitting allotment/sale of petition schedule land in favour of petitioner at market value, and conduct public auction in accordance with Section 45 of the Act read with Rule 29(i) of the Rules. Second question is whether the Government properly cancelled G.O. in accordance with law and whether the same could have been done without issuing notice to petitioner. Government of Andhra Pradesh (Sate of Andhra Pradesh)– ﬁrst respondent; has not ﬁled counter aﬃdavit. APHB also ﬁled all the correspondence commencing from G.O.Rt.No.119. A perusal of these would show that though Government issued G.O.Rt.No.119 dispensing with public auction and permitting APHB to sell petition schedule land to petitioner at market value, the Government themselves subsequently permitted APHB to take necessary action in accordance with G.O.Ms.No.38, dated 30.5.1997. It is very clear if one recalls chronology of events as follows. (i) Considering representation of petitioner for allotment of land adjacent to his house No.MIG-121, Government issued G.O.Rt.No.119 permitting sale of land to petitioner, at market value dispensing with public auction; (ii) As per the Government Order, the Vice Chairman of APHB ﬁxed market value at Rs.2,500/- per square yard and the same was communicated by third respondent to petitioner by letter, dated 04.11.1999 requesting the latter to pay a sum of Rs.5,11,730/- within a period of one month; (iii) Petitioner did not pay the amount and he raised objections with regard to market value. According to him, the market value would be around Rs.510/- to Rs.580/- per square yard; (iv) After receiving representation, Government started correspondence with APHB when the latter pointed out that the cost of the land as certiﬁed by the Sub Registrar is Rs.704/- per square yard and the land cost involved due to higher land compensation is Rs.1873/-; (v) APHB, therefore, appointed a sub committee based on whose recommendation APHB addressed Government for permission to allot at Rs.700/- per square yard; (vi) Government did not accept it and sought clariﬁcation regarding the disparity between the cost of Rs.2,500/- indicated earlier and Rs.700/- indicated subsequently. APHB sent clariﬁcation and sought permission to sell land at Rs.700/- per square yard; (vii) By letter, dated 05.11.2003, Government did not accept it and again sought for clarification. By a communication, dated 25.11.2003, clariﬁcation was given requesting for necessary orders in the matter. In the said letter, dated 25.11.2003, the Vice Chairman informed that though the oﬃce suggested a rate of Rs. 2,500/-, the Board recommended a rate of Rs.700/- per square yard; (viii) After receiving such communication, Government did not accept the proposal to sell at Rs.700/- per square yard and issued communication requesting the Vice Chairman of APHB to examine the proposal in the light of G.O.Ms.No.38, dated 30.05.1997, and the order of High Court in W.P.No.26653 of 2001 wherein this Court had directed to sell APHB land only by auction; (ix) After receiving said letter, petitioner was informed that APHB decided to sell land by public auction. Almost simultaneously on 25.09.2004, Government was informed that land would be sold in public auction. The above chronology of events would show that though Government permitted APHB to sell the land to petitioner dispensing with public auction, subsequently the Government desired that APHB should sell land in accordance with G.O.Ms.No.38, dated 30.05.1997. Under the said GO, Government permitted APHB to sell stray pieces of land adjacent to plots/houses of allottees to those allottees only if the stray piece of land is less than 100 square yards. If the stray piece of land is more than 100 square yards, Government directed to sell the land by public auction. In case, it cannot be sold in public auction after conducting auction thrice, it should be oﬀered to the allottee, who has a house near stray piece of land. Therefore, it is reasonable to draw an inference though the Government did not cancel the Government Order, under which APHB was permitted to sell the land to petitioner, subsequently when the Government directed Vice Chairman of APHB to sell the land as per G.O.Ms.No.38, dated 30.05.1997, they decided not to give eﬀect G.O.Rt.No.119. Therefore, petitioner cannot insist upon implementing G.O.Rt.No.119, dated 22.04.1999. In that view of the matter, it cannot be said that APHB disobeyed or flouted orders of Government. A perusal of Section 45 of the Act and Rule 29(iv) of Rules would show that by and large all properties of Housing Board should be transferred by way of sale, mortgage or lease only by public auction. However, power is vested in Government to permit APHB to sell the land otherwise than by public auction only in rare cases. Government have no power to sell Housing Board lands. They only have power to permit APHB to sell the land otherwise than by public auction. Section 45 of the Act empowers APHB to dispose of properties of Housing Board as prescribed by the Rules. Andhra Pradesh Housing Board Rules made under Section 70 of the Act form part of the Act and therefore, they cannot be ignored. As a general legal proposition, it is well settled that State owned/public owned property cannot be dealt with at absolute discretion of executive. Public interest is paramount consideration. The only method of securing public interest is to dispose of the property by public auction or by inviting tenders. When the property is disposed of by public auction or by inviting tenders, the standards and guidelines set out in the invitation to tender document must be scrupulously adhered to and the method of private negotiations is not ordinarily permissible (See Ramana Dayaram Shetty v International Airport Authority[1], Ram & Shyam Company v State of Haryana[2], Chenchu Rami Reddy v Government of Andhra Pradesh[3] and Sri Sachidanand Pande v State of West Bengal[4]). It is only in rarest of rare cases that the action of public authority to dispense with public auction in selling the property can be justiﬁed. In this context, a reference may be made to law reiterated in Sri Sachidanand Pande (supra). State-owned or public-owned property is not to be dealt with at the absolute discretion of the executive. Certain precepts and principles have to be observed. Public interest is the paramount consideration. One of the methods of securing the public interest, when it is considered necessary to dispose of a property, is to sell the property by public auction or by inviting tenders. Though that is the ordinary rule, it is not an invariable rule. There may be situations where there are compelling reasons necessitating departure from the rule but then the reasons for the departure must be rational and should not be suggestive of discrimination. Appearance of public justice is as important as doing justice. Nothing should be done which gives an appearance of bias, jobbery or nepotism. In the present case, there are no such exceptional circumstances, and therefore, Government of Andhra Pradesh and APHB were justiﬁed in deciding not to give eﬀect to G.O.Rt.No.119, dated 22.04.1999. Under the provisions of the Act or the Rules, the power to dispose of property is given to Housing Board. The Government has nothing to do with transfer of land either by way of sale, mortgage or lease. The limited power given to Government under the Rules is to accord concurrence to the proposal of APHB when they want to dispose of their property otherwise than by public auction. When G.O.Rt.No.119 was issued by Government permitting APHB to sell the land to petitioner dispensing with public auction, Government exercised such power. But, subsequently, the Government themselves directed APHB to take necessary action in accordance with G.O.Ms.No.38, the concurrence given had no eﬀect and it is always open to APHB to dispose of the property by public auction. Such action is in accordance with law laid down by Supreme Court referred to hereinabove. Till the sale of land either by public auction or otherwise dispensing the public auction is conﬁrmed by Vice Chairman and Housing Commissioner, no person can be said to have any right or legitimate expectation and therefore, issue of notice is not necessary. Further more, as rightly pointed out by respondents, in deference to Government orders in G.O.Rt.No.119, APHB oﬀered the land at Rs.2,500/- per square yard and requested petitioner to pay the amount of Rs.5,11,730/- within a period of one month from the date of receipt of letter, dated 04.11.1999 sent by third respondent. The petitioner did not accept the oﬀer and therefore, he is deemed to have waived his right, if any. The submission that rules of natural justice have been violated is wholly misconceived. The matter can be examined from yet another angle. As noticed hereinabove, in the absence of any extraordinary and exceptional circumstances, APHB is bound to dispose of property by public auction. If at this point of time, the action of APHB in auctioning the property on 14.10.2004, even if it suffers from curable defect like issue of notice, the same cannot be invalidated for the reason that the effect of such invalidation would be validating an illegal act, namely, permitting the transfer of land otherwise than by public auction. It is well settled that a writ of mandamus cannot be issued if an order has an eﬀect of reviving an invalid order or action (See Venkateswara Rao v Government of Andhra Pradesh[5], Chandigarh Administration v Jagjit Singh[6] and Maharaja Chintamani Saran Nath Shahdeo v State of Bihar[7]). Therefore, this Court is not inclined to countenance the submission made on behalf of petitioner. In the result, for the above reasons, the writ petition is dismissed as devoid of any merits, without any order as to costs. ____________ (V.V.S.RAO,J) .10.2008 YS/PLN To 1 The State of A.P., rep by Principal Secretary, Housing (HB.II) Department, Secretariat Buildings, Hyderabad 2 The Vice Chairman, A.P. Housing Board, Gruhakalpa, MJ Road, Hyderabad-I 3 The Executive Engineer(Housing) A.P. Housing Board, Vijayawada-2 4 Two CCs to Government Pleader for Housing, High Court Buildings, Hyderabad. 5 Two C.D. Copies. [1] (1979) 3 SCC 489 = AIR 1979 SC 1628 [2] (1985) 3 SCC 267 = AIR 1985 SC 1147 [3] (1986) 3 SCC 391 = AIR 1986 SC 1158 [4] (1987) 2 SCC 295 = AIR 1987 SC 1109 [5] AIR 1966 SC 828 [6] (1995) 1 SCC 745 = AIR 1995 SC 705 [7] (1999) 8 SCC 16 = AIR 1999 SC 3609