Patna High Court
Kundan KumarversusThe State of Bihar
- Decided
- Disposal
- DISPOSED
- Bench
- RAJIV ROY
Holding
The order dated 30.05.2025 cancelling the settlement was passed without notice and is therefore quashed, and the Executive Officer must pay compensation to the petitioner.
Summary
The petitioner, Kundan Kumar, was declared the highest bidder for the Raniganj Bus Stand, paid the bid and security amounts, and received an authority letter allowing him to collect rent from 1 April 2025. On 30 May 2025, the Urban Development and Housing Department issued a memo directing the Executive Officer of the Nagar Panchayat to cancel the settlement and a subsequent memo by the Executive Officer annulled the authority letter without any notice or hearing. The petitioner challenged the cancellation, arguing violation of natural justice, loss of income, and entitlement to compensation. The respondents contended that the petitioner was ineligible to bid because he was an employee of the Nagar Panchayat and that a fresh auction would be held. The Court held that the cancellation order was ultra vires as it was passed without notice, quashed the order, and directed the Executive Officer to pay Rs.10,000 as compensation and to refund the balance of the bid and security amounts with interest. The Court also ordered that the existing rent realization process continue until the new auction takes effect on 1 April 2026. The writ petition was consequently disposed.
Issues considered
- The validity of the order cancelling the settlement of the bus stand without notice or hearing.
- Whether the authority letter granting possession to the petitioner can be set aside on the same grounds.
- Whether the petitioner is entitled to compensation for economic and mental loss caused by the unlawful cancellation.
- Whether the execution of the auction agreement can be enforced pending a fresh bidding process.
Subjects
- auction
- settlement of Sairat
- natural justice
- quashing order
- municipal authority
- compensation
- bus stand lease
Judgment
IN THE HIGH COURT OF JUDICATURE AT PATNA
Civil Writ Jurisdiction Case No.9378 of 2025
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Kundan Kumar son of Sahdev Mukhiya, resident of Ward No. 6, Barbanna
P.O. Maryganj P.S. Raniganj, District - Araria.
... ... Petitioner/s
Versus
1. The State of Bihar through the Chief Secretary, Government of Bihar, Patna.
2. The Additional Chief Secretary, Urban Development and Housing
Department, Government of Bihar, Patna.
3. The Project Officer-cum- Additional Director, Urban Development and
Housing Department, Government of Bihar, Patna.
4. The District Magistrate, Araria, District - Araria.
5. The Nagar Panchayat, Raniganj, P.O. and P.S. Raniganj, District - Araria
through the Executive Officer.
6. The Executive Officer, Nagar Panchayat, Raniganj, P.O. and P.S. Raniganj,
District -Araria.
7. Murli Manohar Singh son of Ramchandra Singh, Resident of village-
Barbanna, P.O. Maryganj, P.S. Raniganj, District - Araria.
... ... Respondent/s
======================================================
Appearance :
For the Petitioner/s : Mr.S.B.K.Mangalam, Advocate
For the respondent no.7 : Mr. N. K. Agrawal, Sr. Advocate
Mr. Kumar Rajeep, Advocate
For the State : Mr. Prabhakar Jha, G.P.-27
For respondent nos. 5&6: Mr. Rajesh Kumar, Advocate
======================================================
CORAM: HONOURABLE MR. JUSTICE RAJIV ROY
ORAL ORDER
7 17-03-2026 Heard Mr.S.B.K.Mangalam, learned counsel for the
petitioner and Mr. N. K. Agrawal, learned Senior Counsel for
respondent no.07 as also learned G.P.-27.
2. The present petition has been preferred for the
following relief/s:
(i) for issuance of an appropriate writ in the
nature of CERTIORARI for quashing the
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order dated 30.05.2025 issued under the
signature of the Respondent no.3 and
contained in his letter no.2077 dated
30.05.2025, whereby and where under the
Respondent no.3 has been pleased to direct
the Respondent no.6 to cancel the settlement
of Sairat namely Bus Stand Raniganj in view
of enquiry report submitted by the
Respondent no.4 and for settlement of
aforesaid Sairat by holding a fresh auction
in accordance with law maintaining full
transparency etc.;
(ii) for issuance of an appropriate writ in the
nature of CERTIORARI for quashing the
order dated 30.05.2025 Issued under the
signature of the Respondent no.6 and
contained in his memo no.227 dated
30.05.2025 whereby and where under the
Respondent no.6 has been pleased to set
aside the settlement of Sairat namely
Raniganj Bus Stand in favour of the
petitioner in the auction held on 26.03.2025
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on the ground that if by virtue of an open
auction, the aforesaid Sairat was settled in
favour of the petitioner and he had already
deposited the requisite amount, the
impugned order passed by the Respondent
nos. 3 and 6 without any notice and
opportunity of hearing to the petitioner
cannot be sustained in law and is, therefore,
fit to be set aside;
(iii) for issuance of an appropriate writ in
the nature of MANDAMUS commanding and
directing the Respondent Authorities to
allow the petitioner for collection of the
Sairat namely Raniganj Bus Stand as he was
doing with effect from 1" April, 2025 after
deposit of requisite amount for which the
Sairat is settled in favour of the petitioner;
(iv) for issuance of any other appropriate
writ/writs. order/orders, direction/directions
for which the writ petitioner would be found
entitled under the facts and circumstances of
the case.
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3. The matter relates to Barbanna Hat and Raniganj
Bus Stand pursuant to the notice/advertisement issued by
Nagar Panchayat, Raniganj, Araria dated 03.03.2025.
4. It is the case of the petitioner that he being the
highest bidder for the Raniganj Bus Stand, after making
payment of Rs. 12,84, 484/- and Rs.2,57,457/- as security
deposit amount and the execution of the agreement, the letter
no. 151 dated 29.03.2025 was issued by the Executive Officer,
Nagar Panchayat, Raniganj allowing the petitioner to realize the
rent between 01.04.2025 to 31.03.2026.
5. The submissions is that later, in came a letter from
the Urban Development and Housing Department, Bihar,
Patna vide memo no. 2077 dated 30.05.2025 issued by the
Additional Director (Annexure-P/9 to the writ petition) and
immediately thereafter, without issuance of any notice/show
cause, on the same day, (30.05.2024) vide memo no. 227 dated
30.05.2025, the Executive Officer, Nagar Parishad, Raniganj,
annulled the said authority letter issued on 29.03.2025.
6. The contention is that admittedly, he participated in
a bid, one Murli Manohar Singh (respondent no.7) was having
criminal antecedent, Araria withdrew his character certificate
and as such he was debarred from participating in the bid.
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Peeved by that, he made complaint which led to order in
question.
7. The submission is that when a valid agreement
took place following the petitioner highest bidder and payment
of amount without issuance of notice which led to annulment of
the authority letter within a period of two months , definitely not
only led to huge economic loss to the petitioner it lowered his
image in the society.
8. Counter affidavit has come on behalf of the
respondents and the contention is that Murli Manohar Singh was
ousted from the auction in the light of applications of amongst
others the present petitioner who actually was found to be
working in the office of Raniganj Nagar Panchayat as I.T. boy
and thus was ineligible to participate in the auction.
9. Learned counsel for the petitioner submits that his
submission be recorded that the petitioner, Kundan Kumar
is/was not serving in the office of the Nagar Panchayat,
Raniganj.
10. Learned Senior Counsel, Mr. N.K.Agrawal,
representing the respondent no.7 submits that the period was
01.04. 2025 to 31.3.2026, it is already coming to an end and
fresh bidding will be taking place for 01.04.2025 to 31.3.2026.
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Thus, the petitioner will have ample opportunity to participate
in it, (if his contention is that he has never been an employee of
the Nagar Panchayat, Raniganj is correct).
11. Having heard the parties, this Court is of the
opinion that once the petitioner was declared the highest bidder,
payment made, agreement executed, authority letter issued for
01.04.2026 to 31.03.2026, the least that was expected from the
Executive Officer, Nagar Panchayat, Raniganj (who was
signatory to the said agreement/authority letter) to serve a
proper notice/show cause before passing the order in question.
Merely because the department sent a letter, without the
issuance of notice and/or providing opportunity to the petitioner,
passing of the order definitely is in the teeth of the law of land.
12. Since the Executive Officer, Nagar Panchayat,
Raniganj is the signatory to the said letter/memo no. 227 dated
30.05.2025, he will have to face the music.
13. The order vide memo no. 227 dated 30.05.2025
issued by the Executive Officer, Nagar Panchayat, Raniganj
which was released without the service of notice to the
petitioner stands quashed. Further, the Executive Officer, Nagar
Panchayat, Raniganj shall be paying Rs.10,000/- to the
petitioner for the loss, he has suffered both mentally and
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economically. However, the existing process of realization of
amount from the Bus Stand shall continue till 31.03.2026 as it
has been informed that new bidding is taking place. Those who
will be successful will be taking charge from 01.04.2026.
14. Learned counsel for the petitioner submits that
the bid amount and the security amount are pending before the
Nagar Panchayat, Raniganj and he had the fruits of the said
agreement/authority letter only for two months between
01.04.2025 to 30.05.2025.
15. In that background, the Executive Officer, Nagar
Panchayat, Raniganj shall be returning the rest over the amount
for the ten months, the petitioner claims to have been debarred
from realizing. The petitioner shall be providing the details to
the Executive Officer, Nagar Parishad, Raniganj to support his
contention. The Executive Officer, Nagar Parishad, Raniganj
shall be verifying the documents to be submitted by the
petitioner and the report so presented before him/her so that the
decision on the return of the bid amount/security amount for 10
months takes place in next four weeks.
16. It is made clear that the admitted amount has to
be paid within a period of four weeks failing which the
petitioner shall be entitled to 6% interest on the amount till the
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actual payment is made and that that has to be paid from the
pocket of the Executive Officer, Nagar Panchayat, Raniganj.
17. With the aforesaid, the writ petition is disposed
of.
(Rajiv Roy, J)
Ravi/-
U
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