Supreme Court: In a batch of appeals against the judgment and order dated 13-02-2019 of Punjab & Haryana High Court, wherein the Court struck down the decision by the Haryana State Industrial and Infrastructure Development Corporation Limited (‘HSIIDC’) to conduct manual auction from the stage of end of e-auction, the division bench of Hrishikesh Roy and Pankaj Mithal, JJ. while upholding the impugned judgment and order, said that when an e-auction is opted for allotment of the industrial plots, the authority cannot depart from the notified procedure. For valuable real estate, it is likely that higher revenue will be generated in the next auction process, but that cannot by itself support the decision of the HSIIDC to abandon the e-auction process and choose another mode.
In the case at hand, an advertisement was issued by HSIIDC for the allotment of 1762 industrial plots of varying sizes in different industrial estates across the State of Haryana. E-auction was conducted for 352 of the offered plots. Meanwhile, some of the participants made complaints, alleging technical glitches in the e-auction process. Although 24 complaints were received against individual plots, since plots were grouped into nine categories, the complaints were treated to be for all 130 plots in those nine categories. In the 24 complaints received, technical glitches thwarting fair participation in the online bid process were highlighted.
For conducting the e-auction for the industrial plots, the terms and conditions were set out in a Brochure and allotments were to be made in accordance with the Enterprises Promotion Policy of the State Government and the Estate Management Procedure (EMP)/Allotment Procedure of the Corporation. Clause 3.4 (ii)(a) and (c) of the EMP specifies that the allotment shall be made through limited e-auction amongst the applicants.
On conclusion of the process of e-auction, a public notice was issued on 29-11-2018, whereby a decision was conveyed that for 130 plots, the Corporation will conduct manual auction by discarding the bids obtained during the e-auction. The reason given for abandoning the e-auction process with respect to the 130 plots and opting for manual auction was “due to some technical reasons”. In the notice, it was specified that the auction at Sl. Nos. 1 to 8 shall be resumed from the highest bid as received during the e-auction process.
Thus, those aggrieved by the decision to conduct manual auction for the 130 plots by limited abandonment of the e-auction process by accepting bid from the highest e-auction stage, moved to the High Court.
The Court said that for the impugned process, the bidding during the e-auction was conducted plot-wise. The Brochure itself would show that plots in same industrial estate had different features, such as the size of the plot, corner plots, plots facing certain directions, road width in front of the plot, etc. That is how the bidders had decided on the plots to bid for and the price that they would offer. Therefore, the Court said that the exercise of clubbing together all the plots in one category for manual auction has to be seen as an arbitrary decision, particularly when complaints that were made were addressed plot-wise only.
Further, the Court said that when a timeline is specified for the process of e-auction, each bidder has the liberty to outbid the other until the last millisecond in the e-auction process. If an auction, either electronic or manual, is conducted at a later point in time, by virtue of the usual escalation of price of real estate, higher revenue is bound to be generated. This cannot be a ground to support the decision of the HSIIDC to go for manual auction, by abandoning the transparent process of e-auction.
The Bench said that when HSIIDC as an authority has decided to allot industrial plots by laying down a particular procedure, which will ensure fairness and transparency amongst the participants, they cannot depart from the notified process particularly when there was no technical report available with the authority to confirm technical fault in the e-auction process. When such a departure from the laid down norm is made, it has to be declared to be arbitrary and unfair. Since the decision is not founded on any acceptable reasoning, it would suffer from the vice of irrationality and unreasonableness.
After taking note of Tata Cellular v. Union of India, (1994) 6 SCC 651, Jagdish Mandal v. State of Orissa, (2007) 14 SCC 517, and Union of India v. International Trading Co., (2003) 5 SCC 437, the Court said that when e-auction is opted for allotment of the industrial plots, the authority cannot depart from the notified procedure. The shift to manual auction would make the earlier process of e-auction an exercise in futility. It would also undermine the finality of the auction process where the bidding must conclude by the stipulated time and the winner is determined by the highest last bid. It would be irrational in a process like this to permit the participants to out-bid the final bid and that too without any limitation. For valuable real estate, it is likely that higher revenue will be generated in the next auction process, but that cannot by itself, support the decision of the HSIIDC to abandon the e-auction process and choose another mode.
The Court said that the complaints received only regarding few plots and yet all 130 plots were put to manual auction after abandoning the e-auction process, thus, the intervention by the High Court with the decision of the authority is correct. Thus, the Court upheld the Punjab & Haryana High Court Judgment and order dated 13-02-2019.
[Haryana State Industrial and Infrastructure Development Corporation Limited v. Ashish Jain, 2023 SCC OnLine SC 995, Order dated 01-08-2023]
Advocates who appeared in this case :
For Petitioner(s): Additional Solicitor General Aishwarya Bhati, Senior Additional Advocate General Alok Sangwan, Advocate Sumit Kumar Sharma, Advocate-On-Record Samar Vijay Singh, Advocate Rajat Sangwan, Advocate Vishnu Tallapragada, Advocate Vipul Dahiya, Advocate Apoorv Dahiya, Advocate Keshav Mittal, Advocate Sabarni Som;
For Respondent(s): Advocate-On-Record Venkateswara Rao Anumolu, Advocate-On-Record Swarnendu Chatterjee, Advocate Paromita Majumdar, Advocate Deepakshi Garg, Advocate Yashwardhan Singh, Advocate Megha Saha, Advocate Nidhesh Gupta, Advocate-On-Record Gaurav Sharma, Advocate Dhawal Mohan, Advocate Prateek Bhaita, Advocate Paranjay Tripathi, Senior Advocate Neeraj Kishan Kaul, Senior Advocate Gopal Sankaranarayanan, Senior Advocate Dama Seshadri Naidu, Advocate Rohit Sharma, Advocate Nikhil Purohit, Advocate Jatin Lalwani, Advocate Vishal Sinha, Advocate Ira Mahajan, Advocate-On-Record Kumar Dushyant Singh, Advocate-On-Record Himanshu Sharma, Advocate Ram Niwas Sharma, Advocate Aditi Sharma, Advocate Vishal Garg, Advocate Arun Kumar, Advocate Digvijay Singh Raghav, Advocate Rahul Jasoria, Advocate Nikhil Bajaj, Advocate Anshita, Advocate-On-Record Ajay Marwah, Advocate Rajan Bajaj, Advocate Karan Thakur, Advocate Akanksha Anand, Advocate Sulbha Goyal, Advocate Swaroop Mishra, Advocate Sumit Gelavat, Advocate T.S. Thakran, Advocate Rukun Vadhera, Advocate-On-Record Pai Amit, Advocate-On-Record Rabin Majumder, Advocate-On-Record Gaurav Kejriwal, Advocate-On-Record Bankey Bihari, Advocate Birendra Bikram, Advocate Shikhil Suri, Advocate Madhu Suri, Advocate Jyoti Suri, Advocate Wamika Chadha, Advocate Vidhi Kapoor, Advocate Vidushi Jain, Advocate Aphune K. Kezo, Advocate-On-Record T. R. B. Sivakumar, Advocate Anjali Chauhan, Advocate Murali Kumar Reddy, Advocate Aman Kumar Singh, Advocate Guneet Bhatia, Advocate-On-Record Abhinav S. Raghuvanshi, Advocate-On-Record Nishtha Kumar, Advocate-On-Record Sameer Shrivastava, Advocate Satvic Mathur, Advocate G.S. Gerwal, Advocate Hitesh Kumar Sharma, Advocate S.K. Rajora, Advocate Akhileshwar Jha, Advocate Ajay Mishra, Advocate Niharika Dewivedi, Advocate Yamini Sharma.