IN THE HIGH COURT OF JUDICATURE, ANDHRA PRADESH AT HYDERABAD (Special Original Jurisdiction) PRESENT THE HON’BLE SRI JUSTICE C.V. NAGARJUNA REDDY WRIT PETITION NO.8266 OF 2004 Dt.31.12.2009 Between: M/s. Vijayanagar Hatcheries (Pvt.) Ltd., Having its Head Office at Visakhapatnam and a Branch Office at Vizianagaram Rep. by its Branch Manager, V. Durga Prasad … Petitioner And A.P. Industrial Infrastructure Corporation Limited, Zonal Office, Industrial Estate, Visakhapatnam Rep. by its Zonal Manager and others … Respondents THE HON’BLE SRI JUSTICE C.V. NAGARJUNA REDDY WRIT PETITION NO.8266 OF 2004 ORDER: This Writ Petition is filed for a Mandamus to declare the action of respondent Nos.1 and 2 in not permitting the petitioner to participate in the open auction held on 15.4.2004, for sale of industrial shed bearing No.D6 situated at Industrial Development Area, Nellimarla, Vizianagaram District, as illegal, arbitrary and unconstitutional. The petitioner sought for setting aside the auction held on 15.4.2004 in respect of the said shed. Heard Sri N. Sridhar Reddy, learned Counsel for the petitioner, and Sri P. Roy Reddy, learned Standing Counsel for respondent Nos.1 and 2. There is no appearance for respondent No.3, though notice was served on him. An auction notification was issued on behalf of respondent No.1, which was published in the newspapers, wherein one of the items for sale by auction was notified as structure bearing No.D-6 situated at Industrial Development Area, Nellimarla, Vizianagaram District. A sum of Rs.3,15,475/- was shown as upset price and Rs.15,780/- was prescribed as earnest money deposit (EMD) payable for participating in the auction. The petitioner, through the Branch Manager of Vizianagaram Branch, approached respondent No.2, who conducted auction, with an application form for participation in auction along with the demand draft for payment of EMD. Evidently, the Branch Manager of the petitioner also filed a copy of authorization, authorizing him to represent the petitioner company in the auction. Respondent No.2 while permitting respondent No.3 to participate in the auction, refused the petitioner’s application with an endorsement made thereon that as the proper person on behalf of the petitioner company has not furnished authorization letter in favour of the Branch Manager, the said application was rejected. In the counter affidavit filed on behalf of respondent Nos.1 and 2 it is stated inter alia that on behalf of the petitioner and respondent No.3, applications were filed before respondent No.2 for participating in the auction, and that on behalf of the petitioner, Sri V. Durga Prasad has furnished an authorization letter, wherein the said Durga Prasad himself has signed “for Managing Director” of the petitioner company. It is further stated that as the Managing Director or any other authorized Director of the company had not signed the letter authorizing Sri V. Durga Prasad to participate in the auction, the petitioner’s application was rejected. It is further stated that as respondent No.3 alone has participated in the auction and offered Rs.3,17,000/-, his bid was accepted. This Court by order dt.30.4.2004 granted stay of all further proceedings in pursuance of acceptance of the bid of respondent No.3. The said order was made absolute on 07.07.2005. W.V.M.P. No.190 of 2007, filed on behalf of respondent Nos.1 and 2, was dismissed by this Court by order dt.22.6.2007. In pursuance of these orders, evidently, the acceptance of bid of respondent No.3, by respondent Nos.1 and 2, has not been given effect to. The contention that has been advanced by Sri N. Sridhar Reddy, learned Counsel for the petitioner, is that respondent No.2 has acted arbitrarily in rejecting the petitioner’s application for participation in the auction on a totally unsustainable ground that there was no proper authorization. He has submitted that the auction notification does not stipulate any requirement of furnishing such authorizations. Sri P. Roy Reddy, learned Standing Counsel for respondent Nos.1 and 2, submitted that as the authorization submitted on behalf of the petitioner was not signed by the authorized representative of the petitioner, which happens to be a company, the petitioner was rightly not permitted to participate in the auction. A perusal of the auction notice published on behalf of respondent No.1 – Corporation does not show that in cases of applicants, who are not natural persons, such as companies and firms, authorizations are required to be filed on their behalf. It is not the case of respondent Nos.1 and 2 that any objection was raised either by respondent No.3 or any other person, as to the entitlement of Sri V. Durga Prasad to represent the petitioner’s company. The said Durga Prasad being the Branch Manager, appeared to have produced the authorization signed by himself obviously thinking that without such authorization he may not be permitted to represent the petitioner’s company. In the absence of any specific stipulation that the petitioner should send authorization letter through its Managing Director or any other Director, I do not find any rationale in the action of respondent No.2 in rejecting the petitioner’s application on the purported ground of absence of authorization from proper person. The very purpose of putting the property to public auction is to ensure that the property fetches the maximum price. This object is frustrated by preventing one of the competitors from participating in the auction on the wholly unsustainable ground of absence of proper authorization. As rightly pointed out by the learned Counsel for the petitioner that while upset price was fixed at Rs.3,15,475/-, respondent No.3 has offered only a sum of Rs.3,17,000/-, which is marginally above the upset price. Had the petitioner been allowed to participate in the auction, respondent Nos.1 and 2 would have obviously got higher price on account of the competition. As respondent No.3 was left in the field as the sole participant, respondents 1 and 2 left themselves with no option, other than to accept whatever offer that was made by respondent No.3. These facts clearly indicate that on account of undue rejection of the petitioner’s application, respondent Nos.1 and 2 failed to ensure that they would get the best market price, which was detrimental to the interests of respondent No.1 – Corporation. Having considered the facts in their entirety, I am of the view that rejection of the petitioner’s application for participation in the public auction was wholly illegal and arbitrary and the said action has affected the interests of respondent No.1 – Corporation, which in turn affected public interest. For the above mentioned reasons, the Writ Petition is allowed and the action of respondent Nos.1 and 2, in confirming the auction in favour of respondent No.3, is declared as illegal. The auction sale is accordingly set aside. Respondent Nos.1 and 2 are directed to initiate fresh proceedings for conducting public auction by fixing revised upset price reflecting the current market price of the property. They shall complete the whole process within a period of three months from today. ______________________ C.V. NAGARJUNA REDDY, J 31.12.2009 bnr