1 BEFORE THE MADURAI BENCH OF MADRAS HIGH COURT DATED: 09-11-2011 CORAM: THE HONOURABLE MR. JUSTICE V. RAMASUBRAMANIAN W.P.(MD)Nos.9295, 9296, 10314, 10336, 10337, 10364 and 10365 of 2011 And M.P.(MD) Nos.1, 2, 2, 3, 1, 2, 3, 1, 2, 1, 2, 2 and 2 of 2011 K.P.Alagarsamy .. Petitioner in WPs.9295, 9296 10364 & 10365/2011 V.Dharmaraj .. Petitioner in WP 10314/2011 K.Prithviraj .. Petitioner in WPs 10336, 10337/2011 vs. State of Tamil Nadu, Represented by its Secretary to Government, Housing and Urban Development Department, Fort St. George, Chennai-600 009. .. R-1 in WP Nos.9295, 9296, 10336, 10337, 10364 and 10365 of 2011 The Chairman and Managing Director, Tamil Nadu Housing Board, Nandanam, Chennai-600 035. .. R-2 in WP Nos.9295, 9296, 10336, 10337, 10364 and 10365 of 2011 Auction Sale Confirmation Committee, Represented by its Chairman and Managing Director, Tamil Nadu Housing Board, Nandanam, Chennai-600 035. .. R-3 in WP Nos.9295, 9296, 10336, 10337, 10364 and 10365 of 2011 The Executive Engineer and Administration Officer, Madurai Housing Unit, Tamil Nadu Housing Board, Ellis Nagar, Madurai-625 016. .. R-4 in WP Nos.9295, 9296, 10336, 10337, 10364 and 10365 of 2011 R-2 in WP No.10314/2011 The Managing Director, Sale Confirmation Committee, Tamil Nadu Housing Board, Nandhanam, Chennai-35. .. R-1 in WP No.10314/2011 https://hcservices.ecourts.gov.in/hcservices/ 2 WP Nos.9295 & 9296/2011: Writ Petitions filed under Article 226 of the Constitution of India, praying for the issue of Writs of Certiorrified Mandamus, calling for the records relating to the impugned order issued by the fourth respondent in his proceedings in Lr.Nos. in MH-24/MDU/399/11 and MH-24/MDU/401/11 respectively dated 10.6.2011 for public purpose site Nos.MDU 399 at Uchapatty and MDU 401 at Uchapatty Madurai Housing Unit of Tamil Nadu Housing Board dated 10.6.2011 and quash the same and also to pass order forbearing the respondents to conduct a fresh auction for the said site till the disposal of these writ petitions. WP No.10314/2011: Writ petition filed under Article 226 of the Constitution of India, praying for the issue of a Writ of Certiorarified Mandamus, calling for the records of the first respondent dated 3.6.2011 vide Board Proceedings No.Allot.Co-or/47073-E/10 and quash the same and consequently direct the first respondent to confirm the auction sale dated 21.1.2011 in respect of the property MDU 035. WP No.10336/2011: Writ petition filed under Article 226 of the Constitution of India, praying for the issue of a Writ of Certiorarified Mandamus, calling for the records relating to the Tender Notification made in Ve.Aa.No.173/Se.Ma.Tho./2011/Madurai/2.9.2011 on the file of the fourth respondent published in Dinamalar Daily dated 5.9.2011 in so far as the Serial No.32 is concerned and quash the same and directing the respondent to confirmation of sale of the site No.MDU 393 situate at Uchapatty Housing Scheme, Madurai Housing Unit, Madurai District to the petitioner as per the respondent's earlier tender auction dated 28.1.2011. WP No.10337/2011: Writ petition filed under Article 226 of the Constitution of India, praying for the issue of a Writ of Certiorarified Mandamus, calling for the records relating to the Tender Notification made in Ve.Aa.No.173/Se.Ma.Tho./2011/Madurai/2.9.2011 on the file of the fourth respondent published in Dinamalar Daily dated 5.9.2011 in so far as the Serial No.34 is concerned and quash the same and directing the respondent to confirmation of sale of the site No.MDU 395 situate at Uchapatty Housing Scheme, Madurai Housing Unit, Madurai District to the petitioner as per the fourth respondent's earlier tender auction dated 28.1.2011. WP No.10364/2011: Writ petition filed under Article 226 of the Constitution of India, praying for the issue of a Writ of Certiorarified Mandamus, calling for the records relating to the Tender Notification made in Ve.Aa.No.173/Se.Ma.Tho./2011/Madurai/2.9.2011 on the file of the fourth respondent published in Dinamalar Daily dated 5.9.2011 in so far as the Serial No.37 is concerned and quash the same and directing the respondent to confirmation of sale of the site No.MDU 401 situate at https://hcservices.ecourts.gov.in/hcservices/ 3 Uchapatty Housing Scheme, Madurai Housing Unit, Madurai District to the petitioner as per the respondent's earlier tender auction dated 28.1.2011. WP No.10365/2011: Writ petition filed under Article 226 of the Constitution of India, praying for the issue of a Writ of Certiorarified Mandamus, calling for the records relating to the Tender Notification made in Ve.Aa.No.173/Se.Ma.Tho./2011/Madurai/2.9.2011 on the file of the fourth respondent published in Dinamalar Daily dated 5.9.2011 in so far as the Serial No.36 is concerned and quash the same and directing the respondent to confirmation of sale of the site No.MDU 399 situate at Uchapatty Housing Scheme, Madurai Housing Unit, Madurai District to the petitioner as per the fourth respondent's earlier tender auction dated 28.1.2011. For Petitioner :Mr. V.Gopalsamy in all cases except WP.10314/11 Mr.P.Muthuvijayapandian in WP.10314/11 For R1 in all the cases : Mr.K.P.Krishnadoss, Government Advocate. For R2 to R4 in WP.Nos.9295, 9296, 10336, 10337, 10364 and 10395/2011 and R1 and R2 in WP.10314/11 : Mr.S.Nagarajan, Standing Counsel. C O M M O N O R D E R The petitioners in all these writ petitions participated in the auction sale of commercial plots conducted by the Tamil Nadu Housing Board in "Rajapalayam Thiruvalluvr Nagar Scheme" and "Madurai Uchapatty Phase-III Neighbourhood Scheme". The petitioners became the successful bidders in the auction conducted in January 2011. As per the terms and conditions of auction, the petitioners had already paid 30% of the bid amount. But after dragging their feet for about 5 months, the respondents rejected the highest offers made by these petitioners and after a further period of 3 months, the respondents advertised for fresh auction of these plots. Therefore, the petitioners have come up with the above writ petitions, either challenging the orders rejecting their bids or challenging the fresh auction notifications. 2. Heard Mr.V.Gopalsamy and Mr.P.Muthuvijaya Pandian, learned counsel for the petitioners, Mr.K.P.Krishnadoss, learned Government Advocate for the State and Mr.S.Nagarajan, learned Standing Counsel for the Housing Board, 3. In order to appreciate the facts involved in all these cases, they are presented in a Tabular form as follows:- https://hcservices.ecourts.gov.in/hcservices/ 4 W.P.No. Name of the petitioner Impugned Order Plot No. Upset Price Rs. Quoted Price Rs. New Upset Price Rs. 9295/11 K.P.Alagarsam y 10.6.2011 order of rejection 401 - - - 9296/11 K.P.Alagarsam y 10.6.2011 order of rejection 399 - - - 10314/11 V.Dharmaraj 3.6.2011 order of rejection 35 34,95,000/ - 36,70,000/ - 80,03,000/ - 10336/11 Prithviraj Paper notificat ion dated 2.9.2011 for sale 393 8,02,300 /- 8,43,000 /- 21,30,000/ - 10337/11 Prithviraj Paper notificat ion dated 2.9.2011 for sale 395 5,57,100 /- 5,91,000 /- 14,91,000/ - 10364/11 K.P.Alagarsam y Paper notificat ion dated 2.9.2011 for sale 399 36,54,300/ - 38,40,000/ - 40,94,000/ - 10365/20 11 K.P.Alagarsam y Paper notificat ion dated 2.9.2011 for sale 401 26,74,000/ - 28,12,000/ - 61,04,000/ - 4. The particulars extracted in the above Tabular column would show that the Sales Confirmation Committee chose to reject the offers of the petitioners and put up the above plots for a fresh auction on the ground that the offers were not competitive. Except in the case of plot No.399, the fresh upset price fixed by the respondents for the other plots, is at least two times more than the upset price fixed earlier. When the Sales Confirmation Committee has chosen to put up the plots for fresh auction, fixing an upset price which is more than two times the highest bid offered by the petitioners, I do not think that this Court will be justified in interfering with the discretion of the Sales Confirmation Committee. 5. The learned Standing Counsel for the Board produced files of the Sales Confirmation Committee. The Committee has accepted the highest bids made by a few persons in respect of the other plots, but rejected the highest offers made by the petitioners on a uniform ground that the offers made by the petitioners were not competitive. Once the Committee has taken a decision to reject the offers and to put up the plots for https://hcservices.ecourts.gov.in/hcservices/ 5 fresh auction, there is very little that this Court can do. 6. It is contended by Mr.V.Gopalsamy, learned counsel for the petitioners that wherever the highest bid amount was at least Rs.3 to 4 lakhs more than the upset price, the respondents have accepted the same. Therefore, it is his contention that at least the respondents ought to have called the petitioners for negotiations to improve their offer, so that they could have been meted out with an equal treatment on par with others. 7. Though the above contention based on Article 14 is attractive at first blush, it is not for this Court to interfere with the discretion of Sales Confirmation Committee. The question of arbitrariness and unfairness on the part of the respondents could have been put to test, if the highest bid is rejected and the next highest bid is accepted for some irrational object. But when the respondents seek to increase the upset price at least by two times, the petitioners cannot allege unequal treatment. 8. If the writ petitions are allowed, there is no way the stand taken by the respondents that the upset price of the properties are at least two times more than the highest bid, could be tested. On the contrary, if fresh auction take place, the stand taken by the respondents is at least be put to test. 9. The matter can be viewed from another perspective. If the writ petitions are allowed, there is a possibility for the respondents to loose a high income. On the other hand, if the writ petitions are dismissed, the petitioners will not loose anything except the opportunity cost of having paid 30% of the highest bid. But they will have their chance to participate in the fresh auction also. 10. It is well settled that merely because a person happens to be the highest bidder, he does not acquire a vested right to compel the auctioneer to accept the highest bid. The rejection of a bid and the decision to put up the property to fresh auction, is always at the discretion of the respondents. Therefore, I find no reason to interfere with the decision of the respondents not to accept the bids of the petitioners, but to put up the properties for fresh auction. 11. However, I should take note of one important fact viz., that as per the paper notification, the auction was conducted on different dates in January 2011. As per the terms and conditions of sale, the successful tenderer should deposit 15% of the bid amount at the auction spot, 35% within 3 weeks of confirmation of sale and balance 50% after adjusting the application money. Since 35% of the bid amount was to be paid within 3 weeks of receipt of confirmation of sale, the respondents ought to have taken a decision at least within those 3 weeks. After having collected 30% of the total bid amount from the petitioners, the delay on the part of the respondents in rejecting the highest bids and proceeding for fresh auction, is not fair and proper. It is only along with the orders of rejection that the respondents have sent the amount already paid by the petitioners. The orders of rejection were passed in June 2011. Therefore, the petitioners should also be compensated for the unjust enrichment on the part of the respondents in retaining the money belonging to the https://hcservices.ecourts.gov.in/hcservices/ 6 petitioners from February to June 2011 and keeping their hopes alive. Hence, while rejecting the prayers of the petitioners either for setting aside the orders of rejection or for fresh auction sale, the respondents are directed to pay interest to the petitioners for the amount retained by the respondents, at the rate of 9% per annum from 1.2.2011 till 31.5.2011. It is open to the petitioners to participate in the fresh auction. 12. The writ petitions are dismissed on the above terms. No costs. Consequently connected miscellaneous petitions are also dismissed. Sd/- Assistant Registrar (AS) /True Copy/ Sub Assistant Registrar(CS) To 1.The Secretary to Government, State of Tamil Nadu, Housing and Urban Development Department, Fort St. George, Chennai-600 009. . 2.The Chairman and Managing Director, Tamil Nadu Housing Board, Nandanam, Chennai-600 035. 3.The Chairman and Managing Director, Auction Sale Confirmation Committee, Tamil Nadu Housing Board, Nandanam, Chennai-600 035. 4.The Executive Engineer and Administration Officer, Madurai Housing Unit, Tamil Nadu Housing Board, Ellis Nagar, Madurai-625 016. 5.The Managing Director, Sale Confirmation Committee, Tamil Nadu Housing Board, Nandhanam, Chennai-35. +7ccs to Mr.S.Nagarajan, Advocate, SR.No.38845 etc., +1cc to Mr.P.Muthu Vijayapandian, Advocate, sR.No.39133 svn GH : 25.11.2011 : 6p/15c W.P.(MD)Nos.9295, 9296, 10314, 10336, 10337, 10364 and 10365 of 2011 and MP.(MD).Nos.1,2,2,3,1 2,3, 1,2,1, 1,2,2 and 2 of 2011 09-11-2011 https://hcservices.ecourts.gov.in/hcservices/