INDORE VIKAS PRAADHIKARAN (IDA) & ANR. versus SHRI HUMUD JAIN SAMAJ TRUST & ANR.
[2024] 11 S.C.R. 925, Supreme Court of India, 2024
Outcome: Appeal(s) allowed (Granted)
Segment: Issues
[2024] 11 S.C.R. 925 : 2024 INSC 904
Indore Vikas Praadhikaran (IDA) & Anr. 
v. 
Shri Humud Jain Samaj Trust & Anr. 
(Civil Appeal No. 13089 of 2024)
25 November 2024
[Bela M. Trivedi and Satish Chandra Sharma,* JJ.]
Issue for Consideration
Appellant issued an advertisement inviting bids for leasing out 
land. Respondent’s bid was found to be the highest. The Tender 
Committee while finalizing the bids noticed that a property tax 
demand was outstanding in respect of the land in question, 
which was not taken into account while fixing the base price and 
decided not to accept any of the bids. Respondent No.1 preferred 
a writ petition, inter alia, challenging resolution rejecting the bid 
and the issuance of fresh NIT. Single Judge concluded that the 
Respondent is not entitled to any relief. In writ appeal, Division 
Bench set aside the order of the Single Judge and held that in 
case the respondent is willing to pay the amount at the rate of Rs. 
26,000/- per square meter, the land in question should be allotted 
to the respondent No.1. Whether Division Bench of High Court 
was justified in allowing the writ appeal and directing allotment of 
land to the Respondent No.1.
Headnotes†
Tender Process – Extent of Judicial Review:
Held: Merely by offering highest bid, the respondent No.1 did not 
acquire any vested right for the execution of the contract in its 
favour – This Court in the case of CWE-SOMA Consortium has 
held that while exercising power of judicial review, the
Court does 
not sit as an appellate Court over the decision of the government – 
The Division Bench should not have interfered in the matter and 
could not have gone to the extent of fixing the base price/modifying 
the offer made by respondent especially when the respondent 
No.1 did not even participate in the fresh NIT – High Court has 
virtually passed an order sitting in appeal over the decision of 
the government in absence of any mala fide exercise of power 
*Author
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by the Petitioner, the judgment passed by the Division Bench of 
the High Court deserves to be set aside and is, accordingly set 
aside. [Paras 12, 13, 15]
Right of Bidder in Tender Process:
Held: In the absence of allotment letter and acceptance of highest 
bid, no relief could have been granted in favour of respondent No.1 
as there was no concluded contract and the decision taken by the 
Tender Evaluation Committee to generate more revenues could 
not have been interfered with by the High Court – The bidder has 
no right in the matter of bid except of fair treatment and cannot 
insist for further negotiation. [Paras 13, 14]
Cancellation of auction – Powers of Auctioning Authority:
Held: While we agree with the principle that the auctioning authority 
must adhere to the rule of law, the facts of the present case are 
entirely distinguishable from Eva Agro – The Appellants were well 
within their rights to cancel the auction – Appellant is directed to 
issue a fresh NIT for disposal of the land in question enabling 
it to generate more revenues in respect of the land in question. 
[Paras 15, 16]
Case Law Cited
State of Jharkhand and others v. CWE-SOMA Consortium [2016] 
4 SCR 157 : (2016) 4 SCC 172; Haryana Urban Development 
Authority and others v. Orchid Infrastructure Developers Private 
Limited [2017] 1 SCR 847 : (2017) 4 SC 243; Tata Cellular v. Union 
of India [1994] Supp. 2 SCR 122 : (1994) 6 SCC 651 – relied on.
Eva Agro Feeds Private Limited v. Punjab National Bank and Anr. 
[2023] 13 SCR 861 : 2023 INSC 809 – distinguished.
List of Acts
Constitution of India.
List of Keywords
Tender; Auction; Advertisement inviting bids; Highest bid; 
Cancellation of auction; Fresh tender; Vested right; Judicial review; 
Allotment letter; Concluded contract; Terms and conditions of NIT; 
Auctioning authority; Right to cancel the auction.
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927
Indore Vikas Praadhikaran (IDA) & Anr. v. 
Shri Humud Jain Samaj Trust & Anr. 
Case Arising From
CIVIL APPELLATE JURISDICTION: Civil Appeal No. 13089 of 2024
From the Judgment and Order dated 08.02.2022 of the High Court 
of Madhya Pradesh at Indore in WA No.5 of 2022
Appearances for Parties
Balbir Singh, Sr. Adv., Ms. Vanshaja Shukla, Adv. for the Appellants.
Rakesh Dahiya, Pashupathi Nath Razdan, Advs. for the 
Respondents.
Judgment / Order of the Supreme Court
Judgment
Satish Chandra Sharma, J. 
1.	
Leave granted.
2.	
This present petition is arising out of order dated 08.02.2022 passed 
in Writ Appeal No. 5/2022, titled as, “Shri Humad Jain Samaj Trust 
Vs. The State of Madhya Pradesh & Ors.”, passed by the High Court 
of Madhya Pradesh at Indore. The Division Bench of the High Court 
has set aside the order dated 17.12.2021, passed by the learned 
Single Judge in Writ Petition No. 26040/2021. 
3.	
The facts of the case reveal that the appellant Indore Vikas 
Praadhikaran (IDA), hereinafter referred to as “IDA” issued an 
advertisement inviting bids for leasing out land admeasuring 3382 
sq. meters situated at Scheme No. 74-C, Sector C, Indore, on 
17.07.2020 and the terms and conditions were specified in the Notice 
Inviting Tender (NIT). The reserve price was fixed at Rs. 21,120/- 
per square meter. The IDA pursuant to the NIT dated 17.07.2020 
received three bids and the bid of respondent No. 1-Shri Humud 
Jain Samaj Trust was the highest as a
bid of Rs. 25,671.90/- per 
square meter was offered in the matter. The bids were opened on 
09.09.2020. The Tender Committee while it was finalizing the bids 
noticed that in respect of the land in question, a property tax demand 
to the tune of Rs. 1.25 crores was outstanding and the same was 
not taken into account while fixing the base price and, therefore, 
the Tender Committee arrived at a conclusion not to accept any
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of the bids and to issue a fresh tender with a reserve price of Rs. 
26,000/- per square meter. The matter was placed before the Board 
of IDA and on 27.07.2021, the Board accepted the recommendation 
of the Tender Committee. The bid of respondent No. 1 was rejected 
and it was resolved to issue a fresh NIT in the matter. Respondent 
No. 1 was informed on 23.08.2021 about the rejection of bid of 
respondent No.1 and on 01.10.2021, the earnest money was also 
refunded. On 18.10.2021, the IDA passed a resolution for issuance 
of a fresh NIT with a reserve price of Rs. 26,000/- per square meter 
and thereafter, a fresh NIT was issued on 17.11.2021. Respondent 
No. 1 after issuance of the fresh NIT preferred a writ petition on 
24.11.2021 before the High Court of Madhya Pradesh, inter alia, 
challenging resolution dated 27.07.2021 rejecting the bid as well 
as being aggrieved by the issuance of fresh NIT dated 17.11.2021. 
4.	
It is pertinent to note that respondent No.1 did not participate in the 
subsequent NIT issued on 17.11.2021. Respondent No. 1 before the 
High Court stated that by no stretch of imagination, his bid could 
have been cancelled as he was the highest bidder. It was further 
stated by respondent No.1 before the learned Single Judge that he 
is ready to negotiate in the matter and the bid has been cancelled 
without assigning any reason. 
5.	
The IDA did file a detailed and exhaustive reply before the learned
Single Judge and reliance was placed upon the terms and conditions 
of the NIT. Heavy reliance was placed upon Condition No. 6 which 
empowered the IDA to accept or reject any or all bids. Learned Single 
Judge after hearing the parties at length arrived at the conclusion 
that the petitioner Trust is not entitled to any relief as no contract was 
executed at any point of time nor any letter of allotment was issued 
in its favour. Learned Single Judge also held that the highest bidder 
does not acquire any vested right to have the auction concluded in 
his favour and the IDA was justified in issuing fresh NIT in the matter. 
6.	
Respondent aggrieved by the orders passed by the learned Single 
Judge preferred a writ appeal and the Division Bench of the High 
Court of Madhya Pradesh at Indore Bench allowed the writ appeal 
directing the IDA to allot the plot to respondent in case he is ready 
to pay the price of the land in question at Rs. 26,000/- per square 
meter. Para 6, 7 and 8 of the order passed by the Division Bench 
of the High Court reads as under:
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Indore Vikas Praadhikaran (IDA) & Anr. v. 
Shri Humud Jain Samaj Trust & Anr. 
“6. The dates and events of the case are not in dispute. In 
the first NIT, the base price of the land was Rs.21,000/- per 
sq. meter as fixed by the Indore Development Authority. 
Out of three bidders, the petitioner offered the highest bid. 
Rs.25671.90/-. The property tax on land to the Municipal 
Corporation is payable by IDA. The resolution has been 
passed with the hope that the IDA might fetch higher 
prices than the price received in the first round of NIT. 
Unfortunately in the second round not, a single bidder had 
participated and the tender proceedings have resulted in 
an unsuccessful attempt. In all bona fide, the petitioner 
has submitted that the petitioner is still ready to match the 
base price fixed by the Indore Development Authority in 
the second tender by paying the amount of Rs.26,000/- 
per sq. meter.
7. Had the Indore Development Authority received an 
offer in the second NIT more than Rs.26,000/- per sq. 
meter certainly the petitioner would not have any case 
before this court. But in the second round of NIT, the 
Indore Development Authority has failed to receive any bid 
hence the right of the petitioner is still survived to claim 
the allotment being a successful bidder. The petitioner 
had approached this court by way of the writ petition 
before issuance of the second NIT and immediately after 
dismissal of the writ petition the writ appeal
has been filed 
therefore, the cause for the petitioner is still survived. The 
Indore Development Authority has wasted public money 
by cancelling the first NIT and going for the second NIT. 
Learned counsel or the Indore Development Authority 
submitted that has the petitioner /appellant participated in 
the subsequent tented process the allotment would have 
been done on quoting the price of Rs 26000/- it means 
the Indore Development Authority has no issue in giving 
the land to the petitioner/appellant but same will not be 
given through the court as it is beyond judicial review. For 
this approach of the Indore Development Authority, a cost 
is liable to be imposed.
8. Accordingly, the writ appeal is allowed, and the order 
passed by the writ court is set aside. If the petitioner
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is ready to pay the price of the in question land @
Rs.26,000/- per sq. meter the land in question be allotted 
to the appellant.”
7.	
Hon’ble Division Bench while allowing the writ appeal has held 
that the respondent was the highest bidder as in the first round of 
the tendering process, the base price of the land was fixed at Rs. 
21,120/- per square meter and the respondent No. 1 offered a bid of 
Rs. 25,671.90/- per square meter. In the second round while issuing 
fresh NIT, the IDA has fixed the base price at Rs. 26,000/- per square 
meter and no offer was received by the IDA in the second round of 
more than Rs. 26,000/- per square meter and, therefore, the Division 
Bench held that in case the respondent is willing to pay the amount 
at the rate of Rs. 26,000/- per square meter, the land in question 
should be allotted to the respondent No.1. 
8.	
The IDA being aggrieved by the order passed by the Division Bench 
of the High Court of Madhya Pradesh at Indore, dated 08.02.2022, 
has preferred the present appeal and it has been vehemently argued 
by Mr. Balbir Singh, learned Senior Counsel for the appellant that 
the order passed by the Division Bench of the High Court deserves 
to be set aside as the High Court has in fact decided a suit for 
specific performance of contract while deciding the Writ Appeal. He 
has vehemently argued before this Court that in the light of Condition 
No. 6 of the NIT, dated 17.07.2020,
the IDA was having a right to 
accept or reject any or all the bids. It was also brought to the notice 
of this Court that the bid of respondent No.1 was cancelled only after 
it came to the notice of the Tender Committee in its meeting dated 
25.09.2020, that there is an outstanding property tax in respect of the 
land in question amounting to Rs. 1,25,82,262/- and considering the 
location of the plot and after payment of property tax to the Municipal 
Corporation and further keeping in view the fact that more revenue is 
likely to be generated in future by disposing of the property through 
the tendering process, the bid of the respondent No. 1 was rejected. 
9.	
Learned Senior Counsel has placed heavy reliance upon the 
judgments delivered in the case of State of Jharkhand and others 
Vs. CWE-SOMA Consortium (2016) 4 Supreme Court Cases 172 
and Haryana Urban Development Authority and others Vs. Orchid 
Infrastructure Developers Private Limited (2017) 4 Supreme 
Court Cases 243.
[2024] 11 S.C.R. 
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Indore Vikas Praadhikaran (IDA) & Anr. v. 
Shri Humud Jain Samaj Trust & Anr. 
10.	 Learned counsel appearing on behalf of respondent No. 1-Trust has 
vehemently argued before this Court that respondent No. 1 was 
the highest bidder in respect of NIT dated 17.07.2020 and merely 
because the respondent No. 1 has not participated the second 
NIT issued on 17.11.2021, the question of setting aside the order 
passed by the Division Bench does not arise. It has been vehemently 
argued by the learned counsel for respondent No. 1-Trust that once 
the respondent No. 1 was declared as the highest bidder amongst 
the three bids received in respect of the land in question, his bid of 
Rs. 25,671.90/- per square meter should have been accepted and 
respondent No.1 should have been declared the successful bidder 
and, thence, no case for interference is made out in the present 
case. Reliance has been placed on Eva Agro Feeds Private Limited 
Vs. Punjab National Bank and Anr., 2023 INSC 809 decided on 
06.09.2023 in Civil Appeal No. 7906 of 2021. 
11.	 Heard learned Senior Counsel for the appellant as well as learned 
counsel for the respondents at length and perused the entire 
documents placed on record in the matter. 
12.	 In the present case, the undisputed facts reveal that first NIT was 
issued on 17.07.2020 and respondent No. 1 was certainly the highest 
bidder by offering a bid of Rs. 25,671.90/- per square meter. The 
Tender Evaluation Committee after
examining the bid arrived at 
a conclusion to cancel the tender as it came to its notice that an 
outstanding property tax demand amounting to Rs. 1,25,82,262/- was 
not taken into account while fixing the base price. It was resolved 
to issue a fresh NIT and, therefore, a fresh NIT was issued on 
17.11.2021 and for the reasons best known to the respondent No. 1, 
it did not participate in the second NIT and instead preferred a writ 
petition on 24.11.2021 before the High Court of Madhya Pradesh. 
Learned Single Judge was justified in dismissing the writ petition on 
the ground that merely by offering highest bid, the respondent No.1 
did not acquire any vested right for the execution of the contract in its 
favour. The Division Bench of the High Court, however, allowed the 
writ appeal and has gone to the extent in directing the IDA to accept 
the offer of respondent No. 1 which was made before the Court for 
an amount of Rs. 26,000/- per square meter in respect of the land 
in question, and further directing IDA to allot the land in question to 
respondent No.1. This Court in the case of State of Jharkhand and 
others Vs. CWE-SOMA Consortium (supra) while dealing with the
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similar issue of annulment of tender process, in paras 21, 22 and 
23 has held as under: 
“21 Observing that while exercising power of judicial review, 
the Court does not sit as appellate court over the decision 
of the Government but merely reviews the manner in which 
the decision was made, in Tata Cellular v. Union of India 
[Tata Cellular v. Union of India (1994) 6 SCC 651], SCC 
in para 70 it was held as under: (SCC p. 675)
“70. It cannot be denied that the principles of 
judicial review would apply to the exercise of 
contractual powers by government bodies in 
order to prevent arbitrariness or favouritism. 
However, it must be clearly stated that there are 
inherent limitations in exercise of that power of 
judicial review. Government is the guardian of 
the finances of the State. It is expected to protect 
the financial interest of the State. The right to 
refuse the lowest or any other tender is always 
available to the Government. But, the principles 
laid down in Article 14 of the Constitution have 
to be kept in view while accepting or refusing a 
tender. There can be no question of infringement 
of Article 14 if the Government tries to get the 
best person or the best quotation. The right to 
choose cannot be considered to be an arbitrary 
power. Of course, if the said power is exercised 
for any collateral purpose the exercise of that 
power will be struck down.”
22 The Government must have freedom of
contract. In 
Master Marine Services (P) Ltd. v. Metcalfe & Hodgkinson 
(P) Ltd. [Master Marine Services (P) Ltd. v. Metcalfe & 
Hodgkinson (P) Ltd. (2005) 6 SCC 138], SCC in para 12 
this Court held as under: (SCC p. 147)
“12. After an exhaustive consideration of a 
large number of decisions and standard books 
on administrative law, the Court enunciated 
the principle that the modern trend points 
to judicial restraint in administrative action.
[2024] 11 S.C.R. 
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Indore Vikas Praadhikaran (IDA) & Anr. v. 
Shri Humud Jain Samaj Trust & Anr. 
The court does not sit as a court of appeal 
but merely reviews the manner in which the 
decision was made. The court does not have 
the expertise to correct the administrative 
decision. If a review of the administrative 
decision is permitted it will be substituting its 
own decision, without the necessary expertise, 
which itself may be fallible. The Government 
must have freedom of contract. In other words, 
fair play in the joints is a necessary concomitant 
for an administrative body functioning in an 
administrative sphere or quasi-administrative 
sphere. However, the decision must not only 
be tested by the application of Wednesbury 
principles of reasonableness but also must be 
free from arbitrariness not affected by bias or 
actuated by mala fides. It was also pointed out 
that quashing decisions may impose heavy 
administrative burden on the administration and 
lead to increased and unbudgeted expenditure. 
(See para 113 of the Report, SCC para 94.)”
The Court does not have the expertise to correct the 
administrative decision as held in Laxmikant v. Satyawan 
[Laxmikant v. Satyawan (1996) 4 SCC 208], the Government 
must have freedom of contract.
23 The right to refuse the lowest or any other tender is 
always available to the Government. In the case in hand, 
the respondent has neither pleaded nor established mala 
fide exercise of power by the appellant. While
so, the 
decision of the Tender Committee ought not to have been 
interfered with by the High Court. In our considered view, 
the High Court erred in sitting in appeal over the decision 
of the appellant to cancel the tender and float a fresh 
tender. Equally, the High Court was not right in going into 
the financial implication of a fresh tender.”
13.	 This Court in the aforesaid case has held that while exercising power 
of judicial review, the Court does not sit as an appellate Court over 
the decision of the government but merely reviews the manner in
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which the decision was made [Tata Cellular v. Union of India (1994) 
6 SCC 651]. In the considered opinion of this Court, the Division 
Bench should not have interfered in the matter and could not have 
gone to the extent of fixing the base price/modifying the offer made 
by respondent and, therefore, in light of the aforesaid judgment as 
the High Court has virtually passed an order sitting in appeal over 
the decision of the government in absence of any mala fide exercise 
of power by the IDA, the judgment passed by the Division Bench 
of the High Court deserves to be set aside and is, accordingly set 
aside. This Court in the case of Haryana Urban Development 
Authority Vs. Orchid Infrastructure Developers Pvt. Ltd. (supra) 
again dealing with the cancellation of a bid of the highest bidder, in 
paragraphs 12,13,14,15, 16 and 30 has held as under: 
“12. Firstly, we examine the question whether there being 
no concluded contract in the absence of acceptance of 
bid and issuance of allotment letter, the suit could be 
said to be maintainable for the declaratory relief and 
mandatory injunction sought by the plaintiff. The plaintiff 
has prayed for a declaration that rejection of the bid was 
illegal. Merely by that, the plaintiff could not have become 
entitled for consequential mandatory injunction for issuance 
of formal letter of allotment. The court while exercising 
judicial review could not have accepted the bid. The
bid 
had never been accepted by the authorities concerned. It 
was not a case of cancellation of bid after being accepted. 
Thus, even assuming as per the plaintiff’s case that the 
Administrator was not equipped with the power and the 
Chief Administrator had the power to accept or refuse the 
bid, there had been no decision by the Chief Administrator. 
Thus, merely by declaration that rejection of the bid by 
the Administrator was illegal, the plaintiff could not have 
become entitled to consequential relief of issuance of 
allotment letter. Thus the suit, in the form it was filed, 
was not maintainable for relief sought in view of the fact 
that there was no concluded contract in the absence of 
allotment letter being issued to the plaintiff, which was a 
sine qua non for filing the civil suit.
13. It is a settled law that the highest bidder has no vested 
right to have the auction concluded in his favour. The
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Indore Vikas Praadhikaran (IDA) & Anr. v. 
Shri Humud Jain Samaj Trust & Anr. 
Government or its authority could validly retain power to 
accept or reject the highest bid in the interest of public 
revenue. We are of the considered opinion that there was 
no right acquired and no vested right accrued in favour of 
the plaintiff merely because his bid amount was highest and 
had deposited 10% of the bid amount. As per Regulation 
6(2) of the 1978 Regulations, allotment letter has to be 
issued on acceptance of the bid by the Chief Administrator 
and within 30 days thereof, the successful bidder has to 
deposit another 15% of the bid amount. In the instant case, 
allotment letter has never been issued to the petitioner as 
per Regulation 6(2) in view of non-acceptance of the bid. 
Thus, there was no concluded contract. Regulation 6 of 
the 1978 Regulations is extracted hereunder:
“6. Sale of lease of land or building by 
auction.—(1) In the case of sale or lease by 
auction, the price/premium to be charged shall 
be such reserve price/premium as may be 
determined taking into consideration the various 
factors as indicated in sub-regulation (1) of 
Regulation 4 or any higher amount determined 
as a result of bidding in open auction.
(2) 10 per cent of the highest bid shall be paid 
on the spot by the highest bidder in cash or 
by means of a demand draft in the manner 
specified in sub-regulation (2) of Regulation 5. 
The successful bidder shall be issued
allotment 
letter in Form CC or C-II by registered post and 
another 15 per cent of the bid accepted shall be 
payable by the successful bidder, in the manner 
indicated, within thirty days of the date of allotment 
letter conveying acceptance of the bid by the 
Chief Administrator; failing which the 10 per cent 
amount already deposited shall stand forfeited 
to the authority and the successful bidder shall 
have no claim to the land or building auctioned.
(3) The payment of balance of the price/
premium, rate of interest chargeable and the
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recovery of interest shall be in the same manner 
as provided in sub-regulations (6) and (7) of 
Regulation 5.
(4) The general terms and conditions of the 
auction shall be such as may be framed by 
the Chief Administrator from time to time and 
announced to the public before auction on the 
spot.”
14. We are fortified in our view by a decision of this Court 
in U.P. Avas Evam Vikas Parishad v. Om Prakash Sharma 
[U.P. Avas Evam Vikas Parishad v. Om Prakash Sharma 
(2013) 5 SCC 182 : (2013) 2 SCC (Civ) 737], wherein 
the questions arose for its consideration that : whether 
there is any vested right upon the plaintiff bidder until the 
bid is accepted by the competent authority in relation to 
the property in question? Merely because the plaintiff is 
the highest bidder by depositing 20% of the bid amount 
without there being approval of the same by the competent 
authority and it amounts to a concluded contract in relation 
to the plot in question; and whether the plaintiff could 
have maintained the suit in the absence of a concluded 
contract? Considering the aforesaid questions, this Court 
has discussed the matter thus : (SCC pp. 195-97, paras 
30-31)
“30. In support of the said proposition, the 
learned Senior Counsel for the defendant, Mr 
Rakesh Dwivedi has also placed reliance upon 
another decision of this Court in State of U.P. 
v. Vijay Bahadur Singh [State of U.P. v. Vijay 
Bahadur Singh (1982) 2 SCC 365]. The
learned 
Senior Counsel has rightly placed reliance upon 
the judgment of this Court in Rajasthan Housing 
Board case [Rajasthan Housing Board v. G.S. 
Investments (2007) 1 SCC 477] which reads as 
under : (SCC p. 483, para 9)
‘9. This being the settled legal position, the 
respondent acquired no right to claim that the 
auction be concluded in its favour and the
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Indore Vikas Praadhikaran (IDA) & Anr. v. 
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High Court clearly erred in entertaining the writ 
petition and in not only issuing a direction for 
consideration of the representation but also 
issuing a further direction to the appellant to 
issue a demand note of the balance amount. 
The direction relating to issuance of the demand 
note for balance amount virtually amounted 
to confirmation of the auction in favour of the 
respondent which was not the function of the 
High Court.’
In State of Orissa v. Harinarayan Jaiswal [State 
of Orissa v. Harinarayan Jaiswal (1972) 2 SCC 
36] case, relevant paragraph of which reads as 
under : (SCC pp. 44-45, para 13)
‘13. … There is no concluded contract till the 
bid is accepted. Before there was a concluded 
contract, it was open to the bidders to withdraw 
their bids (see Union of India v. Bhim Sen Walaiti 
Ram [Union of India v. Bhim Sen Walaiti Ram 
(1969) 3 SCC 146] ). [Ed.: The matter between 
two asterisks has been emphasised in Avam 
Evam Vikas Parishad case (2013) 5 SCC 182.] By 
merely giving bids, the bidders had not acquired 
any vested rights [Ed.: The matter between two 
asterisks has been emphasised in Avam Evam 
Vikas Parishad case (2013) 5 SCC 182.]’.
31. In view of the law laid down by this Court 
in the aforesaid decisions, the learned Senior 
Counsel Mr Rakesh Dwivedi has rightly placed 
reliance upon the same in support of the case 
of the first defendant,
which would clearly go 
to show that the plaintiff had not acquired any 
right and no vested right has been accrued in his 
favour in respect of the plot in question merely 
because his bid amount is highest and he had 
deposited 20% of the highest bid amount along 
with the earnest money with the Board. In the 
absence of acceptance of bid offered by the
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plaintiff to the competent authority of the first 
defendant, there is no concluded contract in 
respect of the plot in question, which is evident 
from letters dated 26-5-1977 and 8-7-1977 
wherein the third defendant had rejected the 
bid amount deposited by the plaintiff and the 
same was refunded to him by way of demand 
draft, which is an undisputed fact and it is also 
not his case that the then Assistant Housing 
Commissioner who has conducted the public 
auction had accepted the bid of the plaintiff.”
15. This Court in Om Prakash Sharma case [U.P. Avas 
Evam Vikas Parishad v. Om Prakash Sharma (2013) 5 
SCC 182 : (2013) 2 SCC (Civ) 737] has held that in the 
absence of a concluded contract which takes place by 
issuance of allotment letter, suit could not be said to be 
maintainable as there is no vested right in the plaintiff 
without approval of the bid by the competent authority. 
Thus, in the wake of the aforesaid decision, in the absence 
of a concluded contract, the suit could not have been 
decreed for mandatory injunction. It amounted to enforcing 
of contract in the absence thereof.
16. In the light of the aforesaid discussion, it is evident 
that in the absence of a concluded contract i.e. in the 
absence of allotment letter and acceptance of highest 
bid, the suit filed by the plaintiff was wholly misconceived. 
Even if non-acceptance of the bid was by an incompetent 
authority, the court had no power to
accept the bid and to 
direct the allotment letter to be issued. Merely on granting 
the declaration which was sought that rejection was illegal 
and arbitrary and by incompetent authority, further relief 
of mandatory injunction could not have been granted, 
on the basis of findings recorded, to issue the allotment 
letter, as it would then become necessary to forward the 
bid to competent authority—Chief Administrator—for its 
acceptance, if at all it was required.
30. In Meerut Development Authority v. Assn. of 
Management Studies [Meerut Development Authority v. 
Assn. of Management Studies (2009) 6 SCC 171 : (2009)
[2024] 11 S.C.R. 
939
Indore Vikas Praadhikaran (IDA) & Anr. v. 
Shri Humud Jain Samaj Trust & Anr. 
2 SCC (Civ) 803], this Court has laid down that a bidder 
has no right in the matter of bid except of fair treatment 
in the matter and cannot insist for further negotiation. The 
authority has a right to reject the highest bid. This Court 
has laid down thus : (SCC p. 182, paras 27 & 29)
“27. The bidders participating in the tender 
process have no other right except the right 
to equality and fair treatment in the matter 
of evaluation of competitive bids offered by 
interested persons in response to notice inviting 
tenders in a transparent manner and free from 
hidden agenda. One cannot challenge the terms 
and conditions of the tender except on the above 
stated ground, the reason being the terms of 
the invitation to tender are in the realm of the 
contract. No bidder is entitled as a matter of 
right to insist the authority inviting tenders to 
enter into further negotiations unless the terms 
and conditions of notice so provided for such 
negotiations.
29. The Authority has the right not to accept the 
highest bid and even to prefer a tender other 
than the highest bidder, if there exist good and 
sufficient reasons, such as, the highest bid not 
representing the market price but there cannot 
be any doubt that the Authority’s action in 
accepting or refusing the bid must be free from 
arbitrariness or favouritism.”
14.	 Keeping in view of the aforesaid judgments,
this Court is of the 
considered opinion that in the absence of allotment letter and 
acceptance of highest bid, no relief could have been granted in 
favour of respondent No.1 as there was no concluded contract in the 
matter and the decision taken by the Tender Evaluation Committee 
to generate more revenues could not have been interfered with in 
the manner and method as has been done by the Division Bench of 
the High Court of Madhya Pradesh at Indore Bench. The bidder has 
no right in the matter of bid except of fair treatment and cannot insist 
for further negotiation as has been done in the present case. The 
terms and conditions of NIT, particularly condition No. 6, empowers
940
[2024] 11 S.C.R.
Digital Supreme Court Reports
the IDA to accept or reject any or all bids. In the present case, the 
bid was rejected for valid and cogent reasons and, therefore, the 
order passed by the Division Bench of the High Court of Madhya 
Pradesh is set aside. 
15.	 Learned Counsels for respondent No. 1 placed heavy reliance on 
Eva Agro (supra) stating that the Appellant does not have absolute or 
unfettered discretion to cancel the auction. While we agree with the 
principle that the auctioning authority must adhere to the rule of law, 
the facts of the present case are entirely distinguishable from Eva 
Agro (supra). In that case, after the Appellant therein was declared 
the highest bidder, the auction was cancelled without providing any 
reason. This decision was found to be manifestly arbitrary by this 
Court and therefore, the appeal was allowed. However, in the present 
case, the decision to cancel the auction was not unfounded, it was 
undertaken to remedy the erroneous minimum rate provided in the 
NIT dated 07.07.2020, as noted in the report of the Div. Commissioner 
of the IDA. Therefore, the Appellants were well within their rights to 
cancel the auction. More importantly, in the present case, pursuant 
to the cancellation of the first NIT, a second NIT was issued wherein 
the respondent No. 1 did not participate. Despite this fact, the 
Division Bench of the High Court effectively usurped the powers of 
the auctioning authority and fixed the
price at Rs. 26,000/- per square 
meter. Hence, being entirely distinguishable on facts, the reliance 
placed is of no assistance to respondent No. 1. 
16.	 Resultantly, the IDA is directed to issue a fresh NIT for disposal of 
the land in question enabling the IDA to generate more revenues in 
respect of the land in question. The appellant shall certainly be free 
to participate in the fresh NIT as and when issued by the IDA. It is 
made clear that the IDA shall not dispose of the land in question 
except by way of public auction/by issuing NIT in future. 
17.	 With the aforesaid, the appeal stands allowed.
Result of the case: Appeal allowed.
†Headnotes prepared by: Adeeba Mujahid, Hony. Associate Editor 
(Verified by: Abhinav Mukerji, Sr. Adv.)