HON’BLE THE CHIEF JUSTICE SRI G.S. SINGHVI AND HON’BLE SRI JUSTICE C.V. NAGARJUNA REDDY Writ Appeal No.594 of 2007 Between: A.P. Housing Board, represented by its Vice-Chairman & Housing Commissioner, Hyderabad and another. … Appellants And P. Badrinath … Respondent :: J U D G M E N T :: Counsel for the appellants : Sri J. Prabhakar Counsel for the respondent : Sri B. Purushothama Reddy 28th September, 2007 Per G.S. Singhvi, C.J. This appeal is directed against order dated 5-6-2007 passed by the learned Single Judge, whereby he allowed the writ petition filed by the respondent and directed the appellants herein to execute sale deed in his favour in respect of Plot No.82 of Phase IX of Kukatpally Housing Board Colony subject to the condition that he shall deposit the balance price within six weeks with interest at the rate of 12% per annum from 26-11-2002. In response to Notification No.15/P.IX/VI/Open Plots/Auction, dated 18-10-2002 issued by Executive Engineer (Housing), Western Division, A.P. Housing Board (appellant No.2 herein), the respondent participated in the auction conducted on 25-10-2002 for Plot Nos.79 to 82 and 154 of Phase IX at Kukatpally and gave highest bid of Rs.6,650/- per square yard on behalf of himself and his wife for Plot No.82. He deposited Rs.1,00,000/- including earnest money on the spot and paid a sum of Rs.3,61,035/- representing 1/4th of the cost on 26-10-2002. By an order dated 13-11-2002, the Vice-Chairman and Housing Commissioner, A.P. Housing Board accepted the bid of the respondent and directed him to pay the balance 3/4th cost within 30 days, but the respondent did not deposit the amount within the stipulated time. For the sake of convenient reference, Clauses 2, 3 and 10 of the Terms and Conditions of Auction embodied in notification dated 18-10-2002 and relevant portions of order dated 13-11-2002 are reproduced below: “Terms and conditions of auction: 2. The highest bidder should deposit 25% of the bid amount and 1% (one percent) auction expenses on the total bid amount soon after the auction is closed and the balance of 75% bid amount should be remitted within thirty days from the date of confirmation of auction memo by the Vice- Chairman and Housing Commissioner. The Vice-Chairman and Housing Commissioner reserves the right of confirming or rejecting the auction bid. 3. For violation of condition 2 above, 25% of bid amount and 1% (one percent) auction expenses remitted by the successful bidder will be forfeited to the A.P. Housing Board and the plot will be put to re-auction. 10. It shall be the responsibility of the auction purchaser to satisfy himself/herself about the land before he/she participates in the auction. The Housing Board would not entertain any kind of objections after the bid is knocked down in favour of the highest bidder.” “ORDER: In the auction held on 25-10-2002, Sri P. Badrinath and P. Sujatha were successful highest bidder of Plot No.82, Phase IX @ Rs.6650/- per sq.yd. measuring 266.66 sq.yds. after depositing Rs.50,000/- as EMD. They have also paid 1/4th cost and 1% auction expenses on 26-10-2002 as shown below: 1. 1/4th cost of the plot Rs.4,43,323/- 2. 1% auction expenses Rs. 17,733/- ------------------ Rs.4,61,056/- ------------------ Therefore, it is hereby ordered to confirm the auction of Plot No.82, Phase IX admeasuring 266.66 sq.yds. @ Rs.6,650/- per sq.yd. at a total cost of Rs.17,73,289/-. Therefore, Sri P. Badrinath and P. Sujatha are requested to pay the balance 3/4th cost as shown below within 30 days from the date of receipt of these orders, failing which the auction will be cancelled duly forfeiting the EMD of Rs.1,00,000/-, 1/4th cost of the plot i.e. Rs.4,43,323/- and 1% auction expenses of Rs.17,733/- without entertaining any representation from the auctioneer as per condition (3) of the auction notice dated 18-10-2002. Plot No.82 area 266.66 sq.yds. Rate 6650/- per sq.yd. Total cost Rs.17,73,289/- 1/4th cost paid Rs. 4,43,323/- 3/4th cost payable Rs. 13,29,966/- Plan charges Rs. 500/- Conveyance charges Rs. 200/- -------------------- Amount now payable – Rs.13,30,666/- ---------------------“ It is borne out from the record that after 21 days of the respondent’s participation in the auction held on 25-10-2002, appellant No.2 issued another notification dated 16-11-2002, which was published in “VAARTHA” Telugu Daily dated 18-11-2002 for holding public auction in respect of Plot Nos.77, 78, 78/A and 83 of the same scheme. The respondent challenged the same in Writ Petition No.23578 of 2002 by contending that after having induced him to quote Rs.6,650/- per square yard in respect of Plot No.82 by projecting that it was a corner plot and was having 80 feet wide road on north eastern side and 33 feet wide road on southern side, the non- petitioners cannot carve out new plot and auction the same. The learned Single Judge admitted the writ petition on 26-11-2002 and passed an interim order in WPMP.No.29587 of 2002, whereby he directed the non-petitioners not to finalise the bids in respect of Plot Nos.78/A and 83. During the pendency of Writ Petition No.23578 of 2002, the Vice-Chairman and Housing Commissioner of the Board issued order dated 25-8-2005, whereby he cancelled the auction held in respect of Plot No.82 and forfeited Rs.4,43,323/- deposited by the respondent towards EMD and 1/4th cost and Rs.17,733/- towards 1% of auction expenses. The relevant portions of that order are extracted hereunder: “ORDER: In the auction held on 25-10-2002, Sri P. Badrinath was the successful highest bidder of open Plot No.82, Phase IX, KPHB Colony measuring 266.66 sq. yds @ Rs.6650/- at the total cost of Rs.17,73,289/-. He has deposited Rs.1,00,000-00 on 25-10-2002 towards EMD. As per condition (2) of the auction terms and conditions, the purchaser has paid 1/4th cost of the plot amounting to Rs.4,43,323-00 including EMD and also 1% auction expenses of Rs.17,733/- on 26-10-2002 and as such the auction of open plot No.82, Phase IX was confirmed in his favour vide proceedings 1st cited, as per which the purchaser has to pay 3/4th cost of the plot amounting to Rs.13,29,966/- by 20-12-2002, as per condition (2) of the auction terms and conditions. But, Sri P. Badrinath, purchaser of open Plot No.82, Phase IX has failed to pay 3/4th cost of the plot amounting to Rs.13,29,966/- within the stipulated time i.e. within 30 days from the date of receipt of the confirmation orders by him and as such, under condition (3) of the auction terms and conditions, the auction of open Plot No.82, Phase IX, KPHB Colony made in favour of Sri P. Badrinath is hereby cancelled and the amount of Rs.4,43,323/- towards EMD and 1/4th cost and 1% auction expenses of Rs.17,733/- is forfeited to the Board.” The respondent challenged the cancellation of the auction in Writ Petition No.25966 of 2005. In the affidavit filed by him, the respondent averred that the highest bids for Plot Nos.79, 80 and 81 were Rs.4,000/-, Rs.4,550/- and Rs.5,600/- per square yard respectively against the reserved price of Rs.3,000/-, whereas he gave highest bid of Rs.6,650/- for Plot No.82 because in the layout exhibited at the site, it was shown as corner plot having three roads junction as item No.14 with 80 feet wide road on north eastern side and 33 feet wide road on southern side and vacant space on northern side. According to the respondent, he was attracted to give higher bid because of the location of the plot. He then averred that immediately after conclusion of the auction, non-petitioner No.2 issued fresh notification dated 16-11-2002 for auction of Plot Nos.77, 78, 78/A and 83, the last two of which were newly carved out plots and were not shown in the layout exhibited at the time of public auction conducted on 25-10-2002. He pleaded that the action of the non-petitioners to carve out two new plots is wholly arbitrary besides being colourable exercise of power. He further pleaded that despite repeated representations made on 8-4-2003, 28-4-2003, 23-12-2003, 6-10-2004 and 19-7-2005, the non-petitioners did not take remedial action and the bid given by him was cancelled vide order dated 25-8-2005 without complying with the rules of natural justice. The stand taken by the appellants herein is reflected in paragraphs 5 and 6 of the counter affidavit filed by Sri B. Ramakrishna, the then Executive Engineer (Housing), Western Division, A.P. Housing Board in Writ Petition No.25966 of 2005. These two paragraphs are reproduced below: “5. I submit that the petitioner in the present writ petition as also in Writ Petition No.23578 of 2002 is contending that the Housing Board sold only Plot No.82 which was covered by three roads on three sides i.e. to the North, East and South. As a matter of fact, it is not as though Plot Nos.81, 82 and other plots were carved out at a different point of time. All these open plots were carved out at the same time and Plot Nos.83 and 78/A were also carved out at the same time. It is also relevant to note that there is no room for confusion on the part of the petitioner inasmuch as if the land to the North of Plot No.82 is taken into consideration, this small bit alone admeasures about 83 sq. yards and the land between Plot No.82 and the road on the eastern side (which is Plot No.83) admeasures 286.66 sq. yards. As a matter of fact, the entire plot which is now put to auction by the A.P. Housing Board which lies to the south of Plot Nos.81 and 82 (Plot No.78/A) admeasures 320 sq. yards. Thus, there could not have been any confusion or mistake on the part of the petitioner at the time of participating in the auction in respect of Plot No.82. I submit that we never showed the layout showing the roads adjacent to Plot No.82. A detailed sketch is already filed in the material papers in Writ Petition No.23578 of 2002. However, for better clarity and easy identification, I am herewith filing the layout showing the open Plot Nos.78/A, 81, 82 and 83 in Phase IX at Kukatpally and also the part layout for better clarity. It is also clarified that Plot Nos.78/A to 83 were formed at one time. All these plots are part of the layout originally envisaged. As a matter of fact, if Plot Nos.82, 83 and part of Plot No.78/A as claimed by the petitioner are to be considered as one bit as claimed by the petitioner, it would admeasure 633.32 sq. yards. Therefore, the very claim of the petitioner is absolutely false and untenable. 6. As regards the allegations made in para 2 of the affidavit, it is true that the respondents conducted public auction of various plots in Sy.No.1009 at Kukatpally Village under Phase IX programme on 25-10-2002. However, the allegation that Plot No.82 is shown in the layout and exhibited at the site of auction as a corner plot having three roads junction as item No.14 is absolutely incorrect and hence denied. It is also incorrect to state that on the northern side of the plot, 80 ft. road is shown and on the southern side of the plot, 33 ft. wide road is shown, whereas on the northern side a vacant space of about 78 sq. yds. is shown. It is submitted that the sketch as alleged in the writ petition was never shown at the time of conducting public auction. The allegation that the petitioner decided to purchase the said plot and has been attracted by the said layout is also incorrect. As regards the comparative value given by the petitioner in the affidavit in respect of other plots, it is submitted that each plot has its own value for various reasons including location, vasthu, site condition, condition of the plot as such, existence of boulders, hillock on the plot, construction on other sides of the plot etc. As Plot No.82 was strategically located, it was sold at Rs.6650/- per sq.yd. Moreover, it is submitted that Plot No.82 fetched higher amount for its own reasons and the same cannot be equated with other plots. Many a time, it also depends on the specific requirements of the purchaser for a particular plot, and a purchaser is prepared to give a higher price for a particular plot for reasons of his liking towards a particular plot or affinity towards a particular plot or reasons like vasthu etc. Therefore, no two plots in the same locality fetch equal amount at the time of auction. It all depends on various factors depending on the particulars of that particular plot. It is incorrect to state that Plot No.82 is situated on the corner facing three roads. This allegation is totally incorrect. As a matter of fact, the layout plan displayed duly showing Plot No.83 on eastern side of Plot No.82 and open land on rear side i.e. on northern side of Plot Nos.81 and 82 it is Plot No.78/A. As seen from the extent of Plot No.83, it is 286.66 sq. yds. Hence, Plot No.82 is well beyond the roads on the north, south and east. It is further submitted that as per the terms and conditions of the auction, particularly condition No.10, it is the responsibility of the auction purchaser to satisfy himself about the land before he participates in the auction.” In paragraph 8 of his affidavit, Sri B. Ramakrishna disclosed that in the auction held on 26-11-2002, bids of Rs.7,700/- per square yard were given for Plot Nos.78/A and 83. He reiterated the denial that Plot No.78/A or Plot No.83 were not shown in the layout exhibited at the time of auction held on 25-10-2002 and that the bidders were made to believe that Plot No.82 is a corner plot. In paragraph 11, he averred that Plot No.83 is not earmarked as road or that the underground of Plot No.78/A is covered by Manjira water pipeline. According to Sri B. Ramakrishna, the Manjira water pipeline is below 80 feet wide road on north of Plot Nos.78 and 78/A. The pleadings of Writ Petition No.23578 of 2002 were on similar lines except that the respondent filed reply affidavit dated 30- 11-2005 in that petition and reiterated the allegation that Plot Nos.78/A and 83 were carved out after holding auction on 25-10-2002 and that the same were not reflected in the layout, which was available at the spot on 25-10-2002. Another peculiar feature of that case is that Y. Yugandhar and three others, who participated in the auction held on 26-11-2002 got themselves impleaded as parties by filing WPMP.No.29256 of 2005 and then filed reply in the form of affidavit dated 16-10-2005 through first impleaded respondent namely, Y. Yugandhar, who claimed that by having failed to pay the balance price of Plot No.82, the writ petitioner (the respondent herein) has forfeited his right to challenge the auction held on 16-11-2002. On the pleadings of the two cases, the learned Single Judge formulated the following two issues: 1) Whether the respondents are entitled to sell Plot Nos.78/A and 83 of Phase IX of Kukatpally Housing Board Colony? 2) Whether the proceedings dated 25-8-2005 cancelling the auction in favour of the petitioner can be sustained in law? The learned Single Judge then referred to the assertions contained in the counter affidavit and observed that no justification has been offered for conducting separate auction and that dimensions of Plot Nos.78/A and 83 adds strength to the petitioner’s plea that the same were carved out at a subsequent stage, one of which cannot even be put to any effective use. He further observed that the non- petitioners mislead the participants in the auction held on 25-10-2002 in believing that Plot No.82 was a corner plot. He, however, declined to invalidate the auction of Plot Nos.78 and 83 by observing that the same do not adversely affect the area of the plot for which bid was given by the petitioner. This is evinced from the following portion of the order under challenge: “Notwithstanding the serious doubts that exist, as to the circumstances under which Plot Nos.78/A and 83 were carved out, the sale of those two plots cannot be held to be illegal. If the respondents had contravened provisions of any enactment or bye-law, totally different things would have ensued. As long as the petitioner was ensured a particular plot with its notified extent, he cannot have any valuable right, to prevent the sale of the land around it. If the respondents possess valid title to the land and right to sell it, the inconvenience caused to the petitioner would be of no consequence. Therefore, the first issue is answered against the petitioner, and in favour of the respondents.” The learned Single Judge then considered the issue relating to cancellation of the auction of Plot No.82 and held that before cancelling the auction, the non-petitioners should have put him to notice and directed the respondents in the writ petition to execute sale deed in favour of the writ petitioner on the condition that he deposits the balance price within six weeks with interest at the rate of 12% per annum from 26-11-2002. Sri J. Prabhakar criticised the ominous observations made by the learned Single Judge about the possibility of carving out of Plot Nos.78 and 83 at a subsequent stage by arguing that the same are contrary to the pleadings of the parties and are based on pure conjectures. Learned counsel invited our attention to the layout of Phase IX, Kukatpally Housing Board Colony and sketch plan showing the location of the plots including Plot Nos.78/A and 83 to emphasise that the layout prepared by the Board clearly indicated the situation of all the plots including Plot Nos.78/A and 83. He then argued that if the respondent had any doubt about the situation of Plot No.82, he could have sought clarification from the concerned officer before taking part in the auction. Learned counsel submitted that in view of the clear stipulation contained in Clause 10 of the terms and conditions of auction, it was the duty of the auction purchaser to satisfy himself/herself about the land before taking part in the auction and argued that after having taken part in the auction held on 25-10-2002 on the basis of the layout prepared by the Board, which clearly depicted the existence of Plot Nos.78/A and 83, the respondent is estopped from questioning the subsequent auction. Sri Prabhakar submitted that the size of Plot No.78/A is 320 square yards and that of Plot No.83 is 286.66 square yards and the same could not have been carved out subsequently. He emphasised that if the dimensions given by the respondent are accepted and Plot Nos.82 and 83 and part of Plot No.78 are treated as one, then the total size of the area would be 633.32 square yards, whereas the respondent gave bid for a plot of 266.66 square yards only. He further argued that failure of the respondent to deposit the balance price in accordance with Clauses 2 and 3 of the terms and conditions of auction and order dated 13-11- 2002 constituted valid ground for cancellation of the auction of Plot No.82 and forfeiture of EMD along with 1/4th cost and 1% auction expenses and the learned Single Judge committed a serious error by directing the appellants to execute sale deed in his favour on the condition of deposit of the balance price with interest at the rate of 12%. Sri B. Purushotham Reddy, learned counsel for the respondent supported the order under challenge and argued that the second auction conducted by the appellants was tainted by mala fides and the learned Single Judge should have quashed the proceedings of auction held on 26-11-2002. Sri Reddy submitted that his client had repeatedly represented to the appellants against the arbitrary carving out of Plot Nos.78/A and 83, but without considering his grievance, the Vice- Chairman and Housing Commissioner of the Board arbitrarily cancelled the auction held in respect of Plot No.82 and forfeited the amount deposited by his client without giving him notice and opportunity of hearing. We have considered the respective submissions and scrutinised the record of both the writ petitions, which were decided by the learned Single Judge. In our opinion, the direction given by the learned Single Judge for execution of sale deed in respect of Plot No.82 in favour of the respondent is legally unsustainable and is liable to be set aside. If the learned Single Judge felt convinced that the writ petitioner (respondent herein) had legitimate grievance against carving out Plot Nos.78/A and 83 after finalisation of the bids given in the auction held on 25-10-2002, then in all fairness, he should have quashed the proceedings of auction held on 18-11-2002 and directed the Board to hold fresh auction in respect of Plot Nos.78/A, 82 and 83. However, as we have noted above, the learned Single Judge categorically held that the sale of Plot Nos.78-A and 83 does not suffer from any legal infirmity and the inconvenience, if any caused to the writ petitioner is of no consequence. Therefore, the learned Single Judge was not justified in issuing a mandamus to the appellants herein to execute sale deed in favour of the respondent only on the ground that the concerned officer failed to take action for a period of three years ignoring the fact that the respondent did not deposit the balance 3/4th cost of the plot in terms of Clause 2 of the terms and conditions of auction and order dated 13-11-2002. Clause 3 of the terms and conditions of auction read with order dated 13-11-2002 contained a clear stipulation that if the successful bidder (the respondent herein) fails to deposit the balance cost within 30 days, the auction will be cancelled and EMD of Rs.1,00,000/-, one-fourth of the cost of the plot i.e. Rs.4,43,323/- and 1% of auction expenses i.e. Rs.17,733/- will be forfeited without entertaining any representation. Therefore, the so- called readiness on the respondent’s part to pay the balance cost was not sufficient for relieving him of the contractual obligation to pay the amount. In any case, if the learned Single Judge felt that before cancelling the auction and forfeiting the amount deposited by the respondent, the competent authority of the Board should have given him opportunity to make representation, then, instead of issuing mandamus for execution of sale-deed in favour of the respondent, he should have directed the competent authority to pass appropriate order after giving him notice and opportunity of hearing. In view of the above, we may have set aside the order of the learned Single Judge in its entirety and left it open to the appellants to re-auction Plot No.82, but keeping in view the fact that the concerned authority has been extremely lax and did not respond to the representations made by the respondent on 8-4-2003, 28-4-2003, 23-12-2003, 6-10-2004 and 19-7-2005, we feel that ends of justice would be met by directing that fresh order may be passed in terms of Clause 3 of the terms and conditions of auction and the stipulation contained in order dated 13-11-2002 after giving action-oriented notice and opportunity to the respondent to represent against the proposed auction. In the result, the appeal is partly allowed. The order passed by the learned Single Judge in Writ Petition No.25966 of 2005 is set aside to the extent it contains a direction for execution of sale deed in favour of the respondent. However, the competent authority of the Board is directed to issue action-oriented notice to the respondent, consider his reply/ explanation and then pass fresh order in the light of Clause 3 of the terms and conditions of auction and order dated 13-11- 2002. Since the matter has remained pending for the last over almost five years, we direct the concerned authority of the Board to undertake and complete this exercise within six weeks from today. As a sequel to disposal of the appeal in the manner indicated above, WAMP.No.1193 of 2007 filed by the appellants for interim relief is disposed of as infructuous. G.S. SINGHVI, C.J.