J&K HC | “Even after completion of public auction the highest bidder has no indefeasible right till the confirmation letter is issued”; HC states

Jammu and Kashmir High Court: Javed Iqbal Wani, J., had heard the instant petition challenging inaction on the part of respondent regarding allotment of auctioned property. The Bench stated,

“The right to refuse the lowest or any other tender is always available to the government and even if a public auction had been completed and a person found to be highest bidder, no right accrued to the highest bidder till the confirmation letter is issued to him.”

 The petitioner had submitted his bid along with relevant documents including registration fee in response to notification for allotment of a shop No. 5, in Sector No. 1, at Housing Colony Channi Himmat, Jammu issued by the respondent, J&K Housing Board. The petitioner contended that he had submitted a bid for the shop in question for an amount of Rs. 5,00,500 as against minimum reserved bid of Rs 4,75,000. A demand draft of Rs 72,000 i.e., 15% of the total bid amount was also stated to had been pledged in the name of the Financial Advisor of the Board.

The grievance of the petitioner was that, despite being the lone highest bidder, as such was required to had been allotted the shop in question by the respondent-Board which, however, was not have been done by the respondent-Board. As the petitioner alleged that the respondent intended to allot the shop in question to his blue eyed person and urged that the failure of the respondents was bad in law and violative of Article 14 of the Constitution, besides being arbitrarily and tainted with malice.

Contrary to that the respondent submitted that the petitioner was the lone bidder necessitating recalling the process of bidding, in that as per the norms for such kind of bid at least three tenderers/bidders must participate in the process of bidding. It was being stated in the objections that the respondent –Board was a public organization and for auctioning of public property was governed by the principle based on public policy.

Reliance was placed by the Court on Rishi Kiran Logistics Pvt. Ltd. v. Board of Trustees of Kandla Port Trust, (2015) 13 SCC 233 wherein the Supreme Court had held that, “The right to refuse the lowest or any other tenderer 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.”

The Bench opined that the method to be adopted for disposal of public property must be fair and transparent as also to protect the financial interest of the State as the government being the guardian of the finances of the State. But, “The right to refuse the lowest or any other tender is always available to the government and even if a public auction had been completed and a person found to be highest bidder no right accrued to the highest bidder till the confirmation letter is issued to him.” The Bench further expressed, the respondents seemingly had found it reasonable and fair not to proceed with the process of bidding with only one responsive bid. The said process manifestly, had been followed in order to generate healthy competition and ultimately good revenue for the respondent-organization. Hence, the petition was dismissed as no indefeasible right qua the shop in question had be said to have occurred to the petitioner.[Ashu Deep Kohli v. State of J&K, 2021 SCC OnLine J&K 90, decided on 22- 02-2021]


Kamini Sharma, Editorial Assistant has put this story together

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