INDORE VIKAS PRAADHIKARAN (IDA) & ANR.versusSHRI HUMUD JAIN SAMAJ TRUST & ANR.

                    [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.
[2024] 11 S.C.R.                                                            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:
[2024] 11 S.C.R.                                                          929

                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.                                                        931

                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.                                                       933

                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
[2024] 11 S.C.R.                                                        935

                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
[2024] 11 S.C.R.                                                    937

                Indore Vikas Praadhikaran (IDA) & Anr. v.
                  Shri Humud Jain Samaj Trust & Anr.

                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.)