Patna High Court
Jaiprakash YadavversusThe State of Bihar
- Decided
- Disposal
- DISPOSED
- Bench
- RAJIV ROY
Holding
The Court quashed the order dated 30.05.2025 issued without notice, held it ultra vires, and ordered the Executive Officer to pay Rs.10,000 compensation and to allow rent collection until 31.03.2026.
Summary
The petitioner, Jaiprakash Yadav, who was the highest bidder for the Barbanna Hat and had paid the bid and security amounts, was issued an authority letter allowing him to collect rent from 1 April 2025. On 30 May 2025, the Urban Development and Housing Department directed the Executive Officer of Nagar Panchayat to cancel the settlement and a memo was issued the same day annulling the authority letter without any notice or hearing. The petitioner claimed this violated natural justice and caused economic loss, seeking certiorari to quash the orders, mandamus to allow collection, and compensation. The respondents argued the cancellation was justified due to a competing bidder’s criminal antecedents and that fresh bidding would occur. The Court held that the Executive Officer, being the signatory, was required to serve notice before cancelling and therefore quashed the memo dated 30 May 2025, ordered payment of Rs.10,000 compensation, and directed that collection continue until 31 March 2026 while new bidding proceeds for the next period.
Issues considered
- Whether the cancellation of the settlement of the Barbanna Hat without notice violates principles of natural justice.
- Whether the Executive Officer had jurisdiction to set aside the settlement order issued to the petitioner.
- Whether the petitioner is entitled to compensation for economic and mental loss caused by the unlawful cancellation.
- Whether a writ of mandamus can be issued directing the authorities to allow the petitioner to collect rent for the remaining period.
- Whether the orders dated 30.05.2025 should be quashed.
Subjects
- certiorari
- mandamus
- natural justice
- auction
- settlement
- municipal authority
- compensation
- public procurement
- Bihar
- High Court
Judgment
IN THE HIGH COURT OF JUDICATURE AT PATNA
Civil Writ Jurisdiction Case No.9407 of 2025
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Jaiprakash Yadav son of Surya Narayan Yadav, resident of village and P.O.
Kuskapur, 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. M.N.H. Khan, SC-1
Mrs. Babita Kumari, AC to SC-1
For respondent nos. 5&6: Mr. Rajesh Kumar, Advocate
======================================================
CORAM: HONOURABLE MR. JUSTICE RAJIV ROY
ORAL ORDER
6 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 Mr. M.N.H. Khan, learned counsel for
the State.
2. The present petition has been preferred for the
following relief/s:
(i) for issuance of an appropriate writ in the
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nature of CERTIORARI for quashing the
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 Barbanna Hatt 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
Barbanna Hatt in favour of the petitioner in
the auction held on 26.03.2025 on the
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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 Barbanna Hatt 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.
3. The matter relates to settlement of the Barbanna
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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 Barbanna Hat, after making payment of
the bid amount of Rs. 52,00,000/- and Rs.12,40,000/- as
security deposit amount and the execution agreement, the letter
no. 150 dated 29.03.2025 was issued by the Executive Officer,
Nagar Panchayat, Raniganj allowing him to realize the rent
between 01.04.2025 to 31.03.2026.
5. The submissions is that thereafter, 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 and 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. Further, one Murli Manohar Singh (respondent no.7) was
having criminal antecedent and as such the S.P., Araria
withdrew his character certificate. In that background, he was
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debarred from participating in the bid. Peeved by that, the
respondent no.07 made complaint which led to the order in
question. The submission is that when a valid agreement took
place following the petitioner being highest bidder and after the
payment of amount, the annulment of the authority letter within
a period of two months without any notice not only led to huge
economic loss to the petitioner, it also lowered his image.
7. 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 application of amongst
others the present petitioner whereas he too was having criminal
antecedent being an accused in Raniganj P.S. Case and thus was
ineligible for participation.
8. Learned Senior Counsel, Mr. N.K.Agrawal,
representing the respondent no.7 submits that the agreement
period was 01.04. 2025 to 31.3.2026 which is already coming to
an end and fresh bidding will be taking place for the period
01.04.2025 to 31.3.2026. The petitioner will have ample
opportunity to participate in it.
9. Having heard the parties, this Court is of the
opinion that once the petitioner was declared highest bidder,
payments made, agreement executed which followed authority
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letter issued for the period 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) was to serve a proper notice/show cause before passing
the order in question. Merely because, the department sent a
letter, without issuance of notice and/or providing opportunity to
the petitioner to show cause his case, passing of the order on
the same day definitely is in the teeth of the law of land.
10. Further, 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 pay for it.
11. The order vide memo no. 227 dated 30.05.2025
issued by the Executive Officer, Nagar Panchayat, Raniganj
which was issued without 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 the petitioner has suffered both mentally
and economically.
12. However, as the period 31.03.2026 is coming to
an end, the present process of collection may not be disturbed
and shall continue till 31.03.2026. It has been informed that new
bidding is taking place for 01.04.2026 to 31.03.2027.
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13. It has been submitted by the learned counsel for
the petitioner that he is entitled to the bid amount as also
security amount deposited for twelve months but enjoyed the
fruits only for limited period.
14. Learned counsel for Raniganj Panchayat submits
that the petitioner was granted stay by a coordinate bench on
19.06.2025 till the filing of the counter affidavit which was
filed on July, 2025.
15. In that background, the Executive Officer, Nagar
Panchayat, Raniganj shall check the realization of amount by
the petitioner and shall be returning the rest over amount. In
case, there is any lacunae and/or the the Executive Officer,
Nagar Parishad, Raniganj have different reports so far as the
realization of the amount for rest of the period is concerned, he
shall be passing a reasoned order. The entire process shall be
completed within four weeks from the date, the copy of the
order is received in his office.
16. The writ petition is disposed of with the aforesaid
observation.
17. 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.
(Rajiv Roy, J)
Ravi/-
U
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