ANIL KUMAR SRIVASTAVAversusSTATE OF U.P. AND ANR.

                    ANIL KUMAR SRIVASTAVA                                  A
                                    v.
                      STATE OF U.P. AND ANR.

                           AUGUST 20, 2004

                                                                            B
              [ASHOK BHAN AND S.H. KAPADIA, JJ.]

     Constitution of India, 1950:

      Public auction-Tenders invited for construction of a commercial C
land on a plot of land-Bid quoted by one bidder accepted as his b!d was
higher than the reserve price-Validity of-Held: An invitation to tender
is not an offer-Acceptance of bids/offers is conditional-It is still open
to challenge on the ground that the property has not fetched the proper
price and that the sale be set aside-On facts, acceptance of highest bid
is valid.                                                                 D

      Public auction-Scheme floated for construction ofa commercial hub
on a plot for a shopping mall-Writ petition filed before High Court
challenging the Scheme on the ground that the reserve price was abysmally
low, throwaway price pnd, therefore, the said Scheme was arbitra1y and E
violative of Art.14-.,Held: There was no material to show that the tender
price was a low price-The reserve price was fixed taking into account the.
comparative offers/sales in adjoining sectors-Difference between circle
rate and sector rate explained-Further, there was no material to show that
the sector rate, on the basis of which the reserve price was to be fixed, was F
the rate as claimed by the petitioner-Various concession/incentives
offered in the Scheme were not arbitrarily given as largesse to the
tenderer-Moreover, when a Scheme is challenged it has to be looked at
as an entire package-There are no figures on record to show the alleged
loss to the exchequer-Valuation is a question offact-Supreme Court is
reluctunt to interfere where valuation is based on relevant materials- G
Hence, Scheme upheld.

     Words & Phrases:

      "Reserve price'; "Upset price" and "valuation"-Meaning of             H
                                    675
    676                   SUPREME COURT REPORTS (2004] SUPP. 3 S.C.R.

A        Respondent No. 2 floated Scheme for construction of a commercial
    hub on a plot ofland consisting ofa shopping mall with 2800 Estimated
    Car Spaces. Wide publicity was given to the Scheme. Several reputed
    developers bought tender documents. However, at the end of the day,
    there was only one bidder (respondent No. 3) in the field. Since
B   respondent No. 3 was the only bidder and since it had quoted the price,
    which was higher.'than the reserve price, its tender was accepted.

          The appellant, claiming to be a public-spirited citizen, filed a writ
    petition before the High Court challenging the said Scheme as arbitrary
    and violative of the norms contained in the Board resolution dated
C   10-7-2003 and the precedents with regard to size and reserve price,
    resulting in a loss to the State Exchequer. In the writ petition, it was
    alleged that the impugned Scheme awarded a certain area of prime
    commercial land, without precedents, at I/4th of the prevailing market
    price, and by fixing the reserve price at abysmally low, throw away,
D   price the said Scheme was arbitrary and violative of Article 14 of the
    Constitution.

         The High Court refused to grant the interim stay as prayed for
    by the petitioner.
E
          Hence the appeal, and the transferred case.

          The following questions arose bdore the Court:-

        (a) Whether the tender price quoted by respondent No. 3 was
F   understated?

         (b) Whether respondent No. 2's decision in accepting the bid of
    respondent No. 3 was arbitrary, unreasonable and in violation of the
    Board resolution dated 10-7-2003?
G
          Dismissing the matters, the Court

         HELD: 1.1. In a sale by auction, subject to reserve, every offer/
    bid and its acceptance is conditional. The public is informed by the fact,
H   that the sale is subject to a reserve, that the auctioneer has agreed to
                ANIL KUMAR SRIVASTAVA v. STATE                       677

sell for the amount which the bidder is prepared to give only in case A
that amount is equal to or higher than the reserve. The reserve puts
a limit on the authority of the auctioneer. He could refuse the bid,
which is below the upset price. This explains the meaning of the term
'reserve price'. It indicates the object behind fixing the reserve price
viz. to limit the authority of the auctioneer. [686-B-DI                 B

      McManus v. Fortescue, [1907] Vol. II KB, referred to.

     1.2. In the present case, the Board resolution is meant to guide
the officers of the second respondent. The resolution prescribes the       C
guidelines for fixing the reserve price. [686-El

     2. The concept of reserve price is not synonymous with 'valuation
of the property'. These two terms operate in different spheres. An
invitation to tender is not an offer. It is an attempt to ascertain whether D
an offer can be obtained with a margin. [686-E-Fl

    Pollock & Mulla: Indian Contract & Specific ReliefActs (2001) 12th
Edn. p. 50, referred to.

     3. Valuation is a question of fact. This Court is reluctant to        E
interfere where ·valuation is based on relevant material. [686-Fl

      Duncans Industries Ltd. v. State of UP., [20001 I SCC f\ relied
on.
                                                                           F
     4.1. Fixation of an upset price may be an indication of the
probable price, which the land may fetch from the point of view of
intending bidders. However, notwithstanding the fixation of upset
price and notwithstanding the fact that a bidder has offered an amount
higher than the reserve/upset price, the sale is still open to challenge G
on the ground that the property has not fetched the proper price and
that the ~ale be set aside. The fixation of the reserve price does not
affect the rights of the parties. [686-H; 687-A]

      B. Susi/a v. Saraswathi Ammo/, AIR (1970) Mad. 357, approved. H
    678                  SUPREME COURT REPORTS (2004] SUPP. 3 5.C.R.

A       4.2. The expressions "value of a property" and "upset price" are
  not synonymous but have different meanings. The term "upset price"
  means lowest selling price or reserve price. Unfortunately, in many
  cases the word "value" has been used with reference to upset price. The
  sale has to commence at the higher price and in the absence of bidders,
B the price will have to be progressively brought down till it reaches the
  upset price. The upset price is fixed to facilitate the conduct of the sale.
  The fixation of upset price does not preclude the claimant from
  adducing proof that the land is sold for a low price. (687-B-CJ

C         Dr. A. U Natarajan v. Indian Bank, AIR (1981) Mad.151,approved.

        5.1. There is no material on record to show that the tender price
  quoted by respondent No. 3 is a low price. The entire edifice of the
  petition is based on the challenge to the reserve price fixed by
D respondent No. 2. No comparative sales instance, with similar
  parameters laid down by respondent No. 2 have been placed before this
  Court. No figures of cost of 2800 Estimated Car Spaces (ECS) have
  been placed before this Court as such costs would increase the reserve
  price. On the other hand, it is found that the reserve price has been
  fixed by taking into account several factors. Firstly, in the past tenders
E invited for relatively smaller plots with higher reserve price had failed.
  It is important to bear in mind that the tender process is an expensive
  exercise. To resort repeatedly to this exercise is a costly affair.
  Secondly, in the present case, the reserve price is fixed by taking into
  account the comparative offers/sales in the adjoining sectors. The
F average of such sales has been taken into account while fixing the
  reserve price in terms of clause 4(c) of the Board Resolution dated
  10-7-2003. Thirdly, the developer/tenderer is obliged to construct a
  matching car parking facility of 2800 ECS whose cost is required to
  be added to the reserve price. Lastly, in the present case, it has
G been submitted that under clause 2(e) of the Board resolution dated
  10-7-2003 reserve price had to be fixed at l 'A times the sector rate
  which according to the petitioner was a certain-rate per sq. mtr. There
  is a difference between the circle rate and the sector rate. The
  petitioner has confused the two. The circle rate is notified by the
H Government for the guidance of the Sub-Registrar. It is notified for
               ANIL KUMAR SRIVASTAVA v. STATE                       679

revenue purposes. There is nothing to show that the rate quoted by the A
petitioner was the sector rate. [6870-G; 688-B-Df

      5.2. The petitioner could have brought before the Court material,
if any, to show under valuation. In the present case, the tender price
is higher than the reserve price. There is no material to show whether B
the tender price is understated. In the circumstances, there is no merit
in the contention of the petitioner that the land is sold at an abysmally
low price. [688-F-Gf

     6. The tender invitation was given wide publicity, that although C
nine bidders bought the tender documents, only respondent No. 3
offered its bid; that the financial committee has recommended its
acceptance keeping in mind the prior experience and the terms and
conditions of the resolution dated 10-7-2003 in the matter of fixation
of sector price and reserve price. Hence, there is no merit in the
contentions of the petitioner. [688-H; 689-A-Bf                        D

     Tata Cellular v. Union of India, [1994f 6 SCC 651, relied on.

      8. There is no merit in the argument of the petitioner that certain
concessions/incentives are arbitrarily given as largesse to the tenderer. E
These concessions are a part of the terms and conditions of the Scheme,
which was kept open for all eligible bidders. Further, there are no figures
to show the alleged loss to the exchequer. Further, when a s~ 'teme is
challenged one ha~ to look at it as an entire package. The tender price,
the cost of putting up amenities like ECS, the cost-benefit ratio, the F
future projections in terms of increase in revenue, employment etc. have
all to be seen. None of these facts have been brought out in the petition.
Hence, there is no merit in the contention that the above concessions
have been given arbitrarily to the developers. [690-G-H; 691-Bf
                                                                          G
     CIVIL APPELLATE JURISDICTION : Civil Appeal No. 5402 of
2004.

     From the Judgment and Order dated 12.3.2004 of the Allahabad High
Court in C.M.W.P. No. 10137 of2004.
                                                                          H
    680                    SUPREME COURT REPORTS (2004) SUPP. J S.C.R.

A       L. Nageshwar Rao, M.s Indu Malhotra, Manish Goyal and Ms. Ruchi
    Khurana for the Appellant.

         Arun Jaitley, Pallav Shishodia, Praveen Bahadur, Ms. Medhalee
    Barthakur and Rajan Narain for Respondent No. 3.
B
          Harish N. Salve and Ravindra Kumar for Respondents No. 2.

          Punit Dutt Tyagi for Respondent No. I.

          The Judgment of the Court was delivered by
c
          KAPADIA, J. : Leave granted in SLP.

        Anil Kumar Srivastava claiming to be a public spirited citizen
  residing in Sector 14, Noida, U.P. moved Allahabad High Cou11 in Civil
D Misc. Writ Petition No. 10137 of2004 [Transferred Case No. 54 of2004
  herein] challenging the Scheme bearing No. 2003-2004 (Commercial Hub)
  Sector 18 floated by New Okhla Industrial Development Authority (NOIDA)
  for construction of a commercial hub on a plot bearing no.M-3 in Sector
  18, Noida as arbitrary and violative of norms contained in the Board
E Resolution dated I0.7.2003 and the precedents with regard to size and
  reserve price, resulting in the loss to the State exchequer of Rs.340 crores.
  In the writ petition, it is alleged that the impugned Scheme awards
  54,320.18 sq. mtrs. of prime commercial land, without precedent, at I/4th
  of the prevailing market price and by fixing the reserve price at abysmally
F low, throw away, price; that the said Scheme is, therefore, arbitrary and
  violative of Article 14 of the Constitution. In the writ petition, the petitioner
  prayed for setting aside the Scheme. Pending hearing and final disposal,
  the petitioner sought interim reliefs restraining NOIDA, respondent no. 2
  herein, from giving effect to the said Scheme. By impugned order dated
  12.3.2004, the High Court refused the interim relief as prayed for.
G Aggrieved, the original petitioner came to this Court by special leave. Vi de
  order dated 28.4.2004, this Cou11 stayed the operation of the impugned
  Scheme. By order dated 9. 7.2004, the Court presided by Hon 'ble the Chief
  Justice, at the request of respondent nos.2 and 3 herein, directed Writ
  Petition no.10137. of 2004 pending in the Allahabad High Court to be
H transferred to this Court under A11icle I39A of the Constitution.
        ANIL KUMAR SRIVASTAVA v. STATE [KAPADIA, J.]                  681

       By order dated 23.7.2004, the Court presided by Hon'ble the A
Chief Justice, on the joint prayer made by all the counsel, directed the
matter to be listed for final hearing and accordingly this matter has come
for hearing.

        As stated, the impugned Scheme is for development of plot no. M- B
3 admeasuring 54,320.18 sq. mtrs. in sector 18 by constructing thereon a
commercial hub consisting of a shopping mall, multiplexes, showrooms,
retail outlets, hotels, restaurants and offices with m~tching parking facility
in order to decongest the said sector which has now become a centre for
small enterprises. That shopping habits have changed resulting in a demand
for shopping malls and entertainment centres, which require bigger plots. C
That the object of the said Scheme was integrated development of the
sector. The salient features of the Scheme were : 30% ground cover; 150
floor area ratio (FAR) and provision for 2800 estimated car spaces (ECS).
The reserve price was fixed at Rs. 27,500 per sq. mtr. The Scheme was
kept open from 18.2.2004 up to 9.3.2004. It was widely advertised in D
Times of India, Hindustan Times, Economic Times, Business Standard and
Amar Ujala. That nine reputed developers including MGF, Unitech, Sun
City, Sahara India and Omex purchased the brochures. However, on the
closing date i.e. 9.3.2004, only one tender of Mis DLF Universal Ltd.,
respondent no.3 herein, was received and evaluated by the technical E
committee on whose recommendation the financial tender was opened on
12.3.2004. Respondent no.3 quoted Rs. 31,850 per sq. mtr. in their
financial tender, which was 15.81% higher than the reserve price of Rs.
27,500 per sq. mtr. Other developers like .Unitech, Sahara India, Omex,
MGF, Sun City etc. also purchased the bid documents but they abstained F
from bidding. Since respondent no.3 was the only bidder and since it had
quoted the price which was higher than the reserve price, its tender was
accepted vide letter dated 12.4.2004 (hereinafter referred to as "the
allotment letter"). In the meantime, on I 0.3.2004, the petitioner herein
moved the Allahabad High Court as stated above.
                                                                            G
      By the allotment letter, respondent no.3 was informed that its bid
stood accepted; that the tender price was Rs.31,850.00 per square metre;
that the total premium was Rs. 173,00,97,733.00; that earnest money to be
deposited was Rs. 3 crores; that the allotment money to be deposited was
Rs. 43,25,24,433.25; that the balance allotment money to be deposited by H
    682                    SUPREME COURT REPORTS [2004] SUPP. 3 S.C.R.

A 26.4.2004 was Rs. 40,25,24,433.25 whereas balance premium amounting
    to Rs.129,75,73,299.75 had to be deposited by 10.7.2004. It may be
    clarified that earnest money of Rs. 3 crores was adjustible against allotment
    money of Rs. 43,25,24,433.25. Till date, respondent no. 3 has deposited
    the earnest money of Rs.3 crores and Rs. 40,25,24,433.25 on 23.4.2004.
B   However, respondent no.3 has not deposited the balance premium payable
    on 10.7.2004 as the Scheme was stayed by this Court vide order dated
    28.4.2004.

            It is the case of the petitioner that respondent no. 2 is the statutory
C   authority under U.P. Industrial Area Development Act, 1976; that it is
    responsible for the development of the area in terms of the Master Plan
    for Noida; that it has framed Building Regulations w.e.f. I .2.1986 containing
    guidelines of occupancy, building permits and floor area ratio. According
    to the petitioner, the reserve price of Rs. 27,500 per sq. mtr. in the present
    case for a plot admeasuring 54,320.18 sq. mtrs. was abysmally low,
D   particularly in view of the fact that under the Board Resolution dated
    10.7.2003, the reserve price of plots measuring 5001 or more square metres
    had to be fixed at 1Vi times the sector price which according to the
    petitioner was Rs. 90,000 per sq. mtr. Jn this connection, the petitioner
    has relied upon earlier Schemes ofNOIDA for the year 2002 under whic;h
E   reserve price of plots admeasuring 6000 to 7000 sq. mtrs. in sector 18 was
    fixed at Rs. 40,000 to Rs. 75,000 [See: Annexure Pl]. That for plots in
    same sector-18 admeasuring 60 sq. mtrs. to 90 sq. mtrs., the reserve price
    was fixed at Rs. 1,90,600 (See: Annexure P2). It has been further a:leged
    that the tender price at the rate of Rs. 31,850 per sq. mtr. is also
F   undervalued. According to the petitioner, the said rate is !/4th of the
    prevailing market rate. That such low rates would result in unjust
    enrichment of the developer at the cost of the exchequer and consequently,
    the Scheme needs to be set aside as arbitrary and violative of Article ·14
    of the Constitution of India.

G        In reply, respondent no. 2 has pointed out that the impugned Scheme
    was given wide publicity; that the development of the plot admeasuring
    54320.18 sq. mtrs. became necessary to decongest sector-18 where car
    parking has become an acute problem; that decongestion could be achieved
    by constructing shopping malls with matching parking facility; that
H   although the area of the plot in question is 54,320.18 sq. mtrs., the FAR
         ANIL KUMAR SRIVASTAVA v. STATE [KAPADIA, J.]                    683

is restricted to 150 and ground cover is restricted to 30% unlike the A
instances of plots submitted by the petitioner where for a smaller plots of
6000 to 7000 sq. mtrs., the FAR is 150 and for still smaller pl9ts of 600
sq. mtrs, the FAR is 250 (See: Annexure Pl). That by offering the said
plot admeasuring 54,320.18 sq. mtrs, the Authority is saving on internal
development for amenities, parking etc. That in the past, respondent no.2 B
invited bids for plots admeasuring 7000 sq. mtrs. with 30% ground cover
and FAR of 150 with reserve price of Rs. 40,000 per sq. mtr., which failed.
It is further pointed out, that, the reserve price is not understated as alleged.
In this connection, it is pointed out that the developer has tendered the rate
of Rs. 31,850 per sq. mtr. which is the rate higher than the rate of Rs.
27,500 per sq. mtr. That in addition to the reserve price, the tenderer has C
to provide for 2800 cars parking space (minimum) in the basement level.
That if the cost of 2800 cars parking space is taken into account, it cannot
be said that reserve price is understated. Ti.at in the jlllSt, higher reserve
price(s) for comparatively smaller plots did not attract the developers. That
the petitioner has confused the sector rate with circle rate. The circle rate D
is the notified rate. It is fixed by the Government for the guidance of the
Sub-Registrar. The circle rates are not fixed by respondent no. 2. That
under the Board Resolution dated 10.7.2003, the reserve price of commercial
plots measuring 5001 sq. mtrs. and above is to be fixed at one and half
times the sector rates. That under the resolution, the reserve price for E
commercial plot measuring 5001 sq. mtrs. and above should be fixed on
the basis of average rate of adjoining sectors. In this connection, it is
pointed out that sector 18 abuts sectors 17 and 27 (residential) and sector
 16A (institutional); that average rate in these sectors is Rs. 12000 per sq.
mtr. and on the basis of 1Yi times the average rate of these sectors, the F
 reserve price came to Rs. 18000. That even on the basis of the Highest
 Rate in sector-] 7, ~eing Rs. 15, 700 per sq. mtr., the reserve price comes
to Rs. 23,050 per sq. mtr. In the circumstances, respondent no.2 has
submitted that while fixing the reserve price in the present case at Rs.
27,500 per sq. mtr., it has complied with the principles embodied in the
Board Resolution dated 10.7.2003. It is further pointed out that relatively G
smaller commercial plots in sector- I 8 sold in last six years indicate the
prevailing price of Rs. 22,500 per sq. mtr. (including escalation of 15%
per annum). Lastly, it has been pointed out that the impugned Scheme was
 kept open from I 8.2.2004 to 9.3.2004; that it was widely advertised; that
 on the closing date, only one tender was received; that respondent no.3 H
    684                   SUPREME COURT REPORTS [2004] SUPP. 3 S.C.R.

A quoted Rs. 31,850 per sq. mtr. in its financial tender which was 15.81 %
    higher than the reserve price of Rs. 27,500 and in the circumstances, its
    tender was accepted. In the circumstarict:s, respondent no. 2 submitted that
    the reserve price was not tmderstated and that the rate offered by the
    tenderer at Rs. 31850 per sq. mtr. cannot be said to be under valued as
B   alleged. According to the petitioner, the current notified rat~ in sector 18
    was Rs. 90,000 per sq. mtr. and consequently, the rate offered by the
    tenderer and accepted by respondent no.2 at Rs. 31,850 per sq. mtr. was
    abysmally low. In the counter, respondent no.2 has pointed out that there
    is no factual basis on which the petitioner has alleged that the prevailing
C   market rate is Rs. 90,000 per sq. mtr. It is submitted that the petitioner
    has confused the sector rate with the circle rate. That in the absence of sale
    instances and valuation report, it cannot be alleged that the rate offered by
    respondent no.3 is understated/undervalued. In the circumstances, it is
    submitted that the petition has no merit.

D          In its counter, respondent no.3 - the developer has pointed out that
    urban population today prefer shopping malls which are self contained in
    a closed building vis-a-vis traditional markets; that the planning Authorities
    encourage the construction of these malls as the administration is freed
    from maintaining and servicing traditional market places for which it incurs
E   huge expenditure. As far as the impugned Scheme is concerned, it has been
    pointed that the developer is put under obligation to construct a shopping
    mall with matching car parking facilities in the basement and around the
    mall; that the cost of providing this facility has to be added to the r~serve
    price; that under the impugned Scheme, NOIDA gets Rs. 174 crores
F   (approx.) within 90 days; that the reserve price of smaller plots with
    different FARs and ground cover cannot be relied upon for determining
    the reserve price under the impugned Scheme, which applies to the plot
    measuring 54,320.18 sq. mtrs. with 30% ground cover and FAR of 150.
    That in the earlier instances of sales of plots bearing nos.M-30, M-13, K-
    IA and K-IB, auctions had failed in the past. That on the contrary, in case
G   of auction of two plots, LI and L2 in sector-18, the reserve price was Rs.
    22,500 per sq. mtr. based on actual sales of adjoining plots in last six years.
    That such reserve price of Rs. 22,500 per sq. mtr. was lower than the
    impugned reserve price of Rs. 27,500 per sq. mtr. in the present Scheme.
    In the circumstances, it has been urged in the counter filed on behalf of
H   respondent no.3 that the reserve price of Rs. 27,500 per sq. mtr. has been
         ANIL KUMAR SRIVASTAVA v. STATE [KAPADIA, J.]                     685

fixed taking into account the previous experiences and the prices prevailing A
in the adjoining sectors.

        Mr. L. Nageshwar Rao, learned senior counsel appearing on behalf
of the petitioner submitted that the reserve price fixed by respondent no.2
at the rate of Rs. 27,500- per sq. mtr. is contrary to clause 2 (e) of the Board B
Resolution dated 10.7.2003; that under the said clause, the reserve rate
of commercial plots admeasuring 5001 sq. mtrs. or more was one and half
times the sector rate; that the sector rate was Rs. 90,000 per sq. mtr.; that
the reserve price of Rs. 27,500 per sq. mtr. for the plot admeasuring
54,320.18 sq. mtrs., without sub-division, was abysmally low and C
understated. That in the past, respondent no.2 had never invited tenders
for such a large sized plot with such low reserve price. It was further urged
that the impugned reserve price was not only contrary to the Board
Resolution, it was also contrary to the past precedents, both in terms of
area/size of the plot and the reserve price. In this connection, reliance was
placed on annexures 'Pl' and 'P2' to show that for plots admeasuring D
600017000 sq. mtrs., the reserve price fixed was in the range of Rs. 40,000
/Rs. 75,000 per sq. mtr. It was submitted that transfer of the said plot
admeasuring 54,320. 18 sq. mtrs. at such a iow reserve price of Rs. 27,500
per sq. mtr. would result in causing huge loss of Rs. 340 crores to the State
exchequer. It was next contended that even the tender price of Rs. 31 ,850 E
per sq. mtr. at which the offer of respondent no.3 has been accepted is
ridiculously low particularly when the notified rate prevailing in sector 18
is Rs. 90,000 pr sq. mtr. to Rs. 1,00,000 per sq. mtr. Hence, it was
submitted, that the reserve price has been fixed arbitrarily and in breach
of clause 2(e) of the resolution dated 10.7.2003 as also in contravention F
of the precedents in relation to the area of the plot and the reserve price.
It was submitted that the fixation of the impugned reserve price was
arbitrary, unreasonable and violative of Article 14 of the Constitution.

     On the above submissions, the central point which arises for
determination is : whether the tender price of Rs. 31 ,850 per sq. mtr. is G
understated. In the present case, respondent no.2 invited offers for the plot
admeasuring 54,320.18 sq. mtrs. for the shopping mall with 2800 ECS in
order to decongest sector 18. Wide publicity was given. Several reputed
developers bought tender documents. However, at the end of the day, there
was only one bidder (respondent no.3) in the field. In the present case, H
    686                   SUPREME COURT REPORTS (2004] SUPP. 3 S.C.R.

A malafides have been alleged, but not pressed.       Therefore, the question
    before us is : whether respondent no.2' s decision in accepting the bid of
    respondent no.3 was arbitrary, unreasonable and in violation of the Board
    Resolution dated l 0.7 .2003.

B         Before coming to the above challenge, we would like to examine
  the concepts of 'valuation' and 'upset/reserve price'. In the case of
  McManus v. Fortescue & Another reported in [1907] Vol.II K.B. page I,
  it has been held by Court of Appeal that in a sale by auction, subject to
  reserve, every offer/bid and its acceptance is conditional. That the public
  is informed by the fact, that the sale is subject to a reserve, that the
C auctioneer has agreed to sell for the amount which the bidder is prepared
  to give only in case that amount is equal to or higher than the reserve. That
  the reserve puts a limit on the authority of the auctioneer. He cannot accept
  a price below the upset/reserve price. That he could refuse the bid which
  is below the upset price.
D
          The aforestated ruling explains the meaning of the term 'reserve
    price'. It indicates the object behind fixing the reserve price viz. to limit
    the authority of the auctioneer. In the present case, the board resolution
    is meant to guide the officers of the second respondent. The resolution
E   prescribes the guidelines for fixir.g the reserve price. The concept of
    reserve price is not synonymous with 'valuation of the property'. These
    two terms operate in different spheres. An invitation to tender is not an
    offer. It is an attempt to ascertain whether an offer can be obtained with
    a margin. [See: Pollock & Mu/la on Indian Contract & Specific ReliefActs
F   (200 I) 12th Edition. Page 50].

          Valuation is a question of fact. This Court is reluctant to interfere
    where valuation is based on relevant material. [See: Duncans Industries
    Ltd. v. State of UP. & Others reported in (2000] 1 SCC 633. The difference
    between valuation and upset price has been explained in the case of B.
G   Susi/a & Another v. Saraswathi Ammal & Others reported in AIR (1970)
    Madras 357 in which it has been held that fixation of an upset price may
    be an indication of the probable price which the land may fetch from the
    point of view of intending bidders. However, notwithstanding the fixation
    of upset price and notwithstanding the fact that a bidder has offered an
H   amount higher than the reserve/upset price, the sale is still open to
             ANIL KUMAR SRIVASTAVA v. STATE [KAPADIA, J.]                      687

    challenge on tlie ground that the property has not fetched the proper price A
    and that the sale be set aside. That the fixation of the reserve price does
    not affect the rights of the parties. Similarly, in the case Dr. A. U
    Natarajan & Another v. Indian Bank, Madras reported in AIR (1981)
    Madras I 5 I it has been held that the expressions "value of a property" and
    "upset price" are not synonymous but have different meanings. That the B
    term "upset price" means lowest selling price or reserve price. That
    unfo1tunately in many cases the word "value" has been used with reference
    to upset price. That the sale has to commence at the higher price and in
    the absence of bidders, the price will have to be progressively brought
    down till it reaches the upset price. That the upset price is fixed to facilitate C
    the conduct of the sale. That fixation of upset price does not preclude the
    claimant from adducing proof that the land is sold for a low price.

            Applying the above tests to the facts of this case, we find that there
    is no material on record to show that the tender price of Rs. 3 I ,850 per


-   sq. mtr. is a low price. The entire edifice of the petition is based on the D
    challenge to the reserve price of Rs. 27,500 per sq. mtr. As stated above,
    fixation of the reserve price is to facilitate the conduct of the sale. It was
    open to the petitioner to challenge the tender price of Rs. 3 I ,850 per sq.
    mtr. as understated, notwithstanding the fixation of the reserve price. No
    comparative sales instances, with similar parameters of ground cover of E
    30% and I50 FAR, have been placed before us. No figures of cost of2800
    ECS have been placed before us as such costs would increase the reserve
    price. On the other hand, we find that the reserve price has been fixed
    by taking into several factors. Firstly, in the past tenders invited for
    relatively smaller plots with higher reserve price had failed. It is important F
    to bear in mind that tender process is an expensive exercise. To resort
    repeatedly to this exercise is a costly affair. Secondly, in the present case,
    the reserve price is fixed by taking into account the comparative offers/
    sales in the adjoining sectors. That the average of such sales has been taken
    into account while fixing the reserve price in terms of clause 4(c) of the
    Resolution dated I0.7.2003, which reads as under:                              G

             "4(C) In developed sectors where tenders have been received
             earlier, fixation of rates is proposed to be on the basis of
             average price arrived at prior to the scheme of fixation of reserve
             price, on the basis of rate arrived on the above principle, H
    688                   SUPREME COURT REPORTS [2004) SUPP. 3 S.C.R.

A            whichever is more. In such a situation average rate is proposed
             to be fixed as per the category and user mentioned in the
             preceding paragraph."

    Thirdly, the developer/tenderer is obliged to construct a matching car
B   parking facility of 2800 ECS whose cost is required to be added to the
    reserve price of Rs. 27,500 per sq. mtr. Lastly, in the present case it has
    been submitted that under clause 2( e), reserve price had to be fixed at I Y2
    times the sector rate which according to the petitioner was Rs. 90,000 per
    sq. mtr. Clause 2(e) reads as under:--

C "2(e) Commercial Plots measuring             One and a half times
          500 I sq. metres or more             of sector rates"

          Reading of the said clause indicates that the figure of Rs. 90,000 is
    not mentioned. It is a figure alleged by the petitioner. As stated above,
D   there is a difference between the circle rate and the sector rate. The
    petitioner has confused the two. The circle rate is notified by the
    Government for the guidance of the sub-registrar. They are notified for
    revenue purposes. There is nothing to show that Rs. 90,000 per sq. mtr.
    was the sector rate. In the pre5ent case, we are concerned with a larger
E   plot of 54,320.18 sq. mtrs. with different variables of 30% ground cover
    and 150 FAR. Keeping in mind all these factors, the Authority has fixed
    the reserve price. In the present case, undue importance has been given
    to the fixation of the reserve price. As stated above, notwithstanding the
    reserve price, the petitioner could have brought before the Court material,
F   if any, to show undervaluation. In the present case, the tender price is Rs.
    31,850 per sq. mtr. It is higher than the reserve price. There is no material
    to show whether the tender price is understated. In the circumstances, there
     is no merit in the contention of the petitioner that the land is sold at
    abysmally low price.

G         In the case of Tata Cellular v. Union of India reported in [ 1994) 6
    sec 651, it has been held, while discussing the scope of judicial review,
    that Courts do not sit in appeal; that the Courts merely review the manner
    in which the administrative decision was made; that the Court cannot
    substitute its own decision as it has no expertise to correct the decision_.
H   Applying the above test to the facts of this case, we find that tender
         ANIL KUMAR SRIVASTAVA v. STATE [KAPADIA, J.]                     689

invitation was given wide publicity; that although nine bidders bought the A
tender documents, only respondent no. 3 offered its bid; that the financial
committee has recommended its acceptance keeping in mind the prior
experience and the terms and conditions of the Resolution dated 10.7.2003
in the matter of fixation of sector price and reserve price. Hence, there
is no merit in the above contentions.                                       B
       Mr. L. Nageshwar Rao, learned senior counsel for the petitioner
submitted that under the impugned Scheme, two concessions have been
given arbitrarily to benefit the developer at the cost of the State exchequer.
In this connection, reliance is placed on clause 1O(A)&(B) and clause 15 C
of the tenns and conditions of the Scheme. For the sake of convenience,
we quote herein below the aforestated clauses:

         "10. GROUND RENT/LEASE RENT:

              In addition to tendered amount, the allottee/lessee shall have D
         to pay yearly ground rent/lease rent in the manner indicated
         below:

               (A) The ground rent/lease rent shall be charged @ 2.5%
                    p.a. of the total premium of the plot for the first I 0 E
                    years from the stipulated date of execution of lease
                    deed. However, the ground rent/lease rent shall be
                    charged @ Rs. I per sq. mtr. per year for the first three
                    years from the stipulated date of execution of lease
                    deed.                                                     F

               (B) The ground rent/lease rent shall be enhanced after
                   expiry of I 0 years from the stipulated date of execution
                   of lease deed. The enhancement will be 50% of le·ase
                     rent/ground rent last thus fixed.                           G
                                             OR

                    The allottee has the option to pay 11 years lease rent
               @ 2.5% p.a. of the total premium as one time lease rent H
    690                   SUPREME COURT REPORTS [2004] SUPP. 3 S.C.R.

A                 within first I 0 years of allotment. Thereafter, 11 times of
                  the prevailing rate shall be payable as one time lease rent.
                  In such case, the allottee has to clear outstanding oflease rent
                  and interest first


B            15. TRANSFER:

             The lessee can transfer the built-up premises over the plot with
             prior permission of the Authority subject to the rules and regulacions
             for transfer and on payment of transfer charges prevailing at the
             time of such transfer. No transfer charges shall be applicable in
c            case of transfer of built up commercial space during the first 2
             years from the date of completion. Thereafter, transfer charges
             shall be payable on pro-rata basis as applicable. However, the
             purchaser shall be required to pay pro-rata lease rent as applicable.
             The sub-lessee shall be required to make the built up space
D            functional with in one year from the date of sub-lease and submit
             the prescribed documents to the Authority in proof thereof.
             Thereafter, extension charges shall be payable, as applicable.

                  All the terms and conditions of the brochure/allotment/
E            permission for grant of transfer and lease deed shall be applicable
             on the allottee/lessee/transferee."

        As can be seen from the above two clauses, in addition to the tendered
  amount, the allottee is obliged to pay ground rent; that the ground rent is
F payable at 2.5% of the total premiur11 of Rs. 173 crores (approximately)
  during the first I0 years from the date of the lease. However, for first three
  years, concession is given in payment of rent to enable the developer to
  attract entrepreneurs to put up hotels, restaurants, multiplexes etc. So also
  for the first two years, transfer charges are not payable in cases of transfer
G of built up commercial spaces. We do not find any merit in the argument
  of the petitioner that these concessions/incentives are arbitrarily given as
  largesse to the tenderer. The~e concessions are a part of terms and
  conditions of the Scheme, which was kept open for all eligible bidders.
  Further, we do not have any figures to show the alleged loss to the
H exchequer. J:'u11her, when a Scheme is challenged, we have to look at it
         ANIL KUMAR SRIVASTAVA v. STATE [KAPADIA, J.]                 691

as an entire package. We have to see the tender price, the cost of putting A
up amenities like ECS, the cost-benefit ratio, the future projections in terms
of increase in revenue, employment etc. None of these facts have been
brought out in the petition. Hence, there is no merit in the contention that
the above concessions have been given arbitrarily to the developers.
                                                                            B
        For the foregoing reasons, we do not find any merit in the Civil
Appeal No. 5402 of2004, arising out ofSLP (C) No.7790 of2004, as well
as in the Transferred Case No. 54 of2004 (Writ Petition No. 10137 of2004
of Allahabad High Court] and the same are accordingly dismissed, with
no order as to costs. We direct respondent no.3 to pay respondent no.2 C
the balance 75% of the premium in terms of Item 12 of letter of allotment
dated 12.4.2004 within one week from the date of pronouncement of this
judgment.

v.s.s.                                         Appeal/Petition dismissed.