Judgment:
CWP No.15111 of 2012 -1- IN THE HIGH COURT OF PUNJAB & HARYANA AT CHANDIGARH CWP No.15111 of 2012 (O&M) Date of decision:
29. 1.2013 Sqn. Ldr. Gurdial Singh (Retd.) and others ..... Petitioners Versus State of Punjab and others ..... Respondents CORAM: HON'BLE MR. JUSTICE SURYA KANT HON'BLE MR.JUSTICE R.P. NAGRATH PRESENT: Mr. Sunil Chadha, Advocate for the petitioners. Mr. T.N. Sarup, Addl. AG, Punjab. Mr. Sandeep Khunger, Advocate for respondent No.3. SURYA KANT, J.(ORAL) The petitioners seek quashing of the letter-cum-order dated 18.7.2012 (Annexure P-20) issued by the Ropar Improvement Trust, reiterating its previous decision to cancel the auction held on 24.1.1986, for the sale of a restaurant site situated at Ropar.
2. The case has a chequered history with the following brief facts. Ropar Improvement Trust, Ropar (in short 'the Trust') issued an auction notice dated 22.1.1986 (Annexure P-1) (apparently not published in any newspaper) putting a restaurant site to public auction on 24.1.1986, at the reserved price of ` 500/- per sq. yard. The petitioners CWP No.15111 of 2012 -2- were declared the highest bidders who offerred the rate of ` 515/- per sq. yard. The auction was supervised by Sh. Surjit Singh Dhillon, the then Executive Magistrate, Ropar who is said to have sent a report on 24.1.1986 itself pointing out that “the bidders have pooled themselves, therefore, the auction of the site be cancelled----”.. The Trust, however, still passed a resolution on 12.3.1986, accepting the bid and sought approval of the Competent Authority, namely, the State Government.
3. The Directorate of Local Government, Punjab, vide its memo dated 21.4.1986 (Annexure R-3/1), however, informed the Executive Officer of the Trust as follows:-
“2. On examination of the proceedings of the meeting of the Improvement Trust, Ropar held on 12.3.1986, the following Resolutions of the Trust have been found to be objectionable:- 1) XX XX XX XX 2.Resolution No.2 In Scheme No.1, Restaurant Site was got auctioned. The highest bid was Rs.515/- per Sq. yard. Shri Surjit Singh Dhillon, Executive Magistrate who was supervising the above auction made a report on 24.1.1986 that the bidders have pooled themselves, therefore the auction of the said sit be cancelled but the Trust vide above resolution has decided to approve this auction which is not in the interest of the Trust. They stay is imposed on this CWP No.15111 of 2012 -3- resolution of the Trust till further orders by this Department. A detailed report in this respect be sent to this Department.”
. (emphasis applied) 4. There was some correspondence between the State Government and the Trust whereafter the State Government passed the order dated 21.10.1988/2.11.1988 (Annexure P-6) in exercise of its statutory powers vested under Section 72 (B) of the Punjab Town Improvement Trust Act, 1922 and annulled the Resolution No.9 dated 12.3.1986 of the Trust.
5. The aggrieved petitioners approached this Court in CWP No.8823 of 1990, challenging the afore-stated annulment of the Trust's resolution and sought a direction for confirmation of the auction in their favour.
6. A learned Single Judge of this Court took notice of the settled legal principles that the 'public interest' must override 'private interest' or legitimate expectations of an individual and that the availability of the best price is an essential component of public interest “and the absence of competitive bids and optimum price is evidence of damage to public interest”., nonetheless, the learned Single Judge having found that the petitioners were not heard before the passing or the annulment of the Trust resolution, concluded as follows:-
“3. The cancellation of auction could not have been done, as rightly contended by the petitioner, without adequately giving an opportunity to the affected party CWP No.15111 of 2012 -4- to explain the grounds which were taken as a basis for cancellation of the auction. Even absence of notice before cancellation of auction may not at all times be necessary. I had an occasion to consider such a situation in Col. Prithi Pal Singh Gill vs. Municipal Corporation, Chandigarh through its Commissioner, 2010 PLR (3) 338. That was in the context of sale being held under times when the marked was damp due to certain situations and the sale was subject to confirmation by a higher official and the bidder knew that the sale could be confirmed or rejected for appropriate reasons. In the same judgment I have observed, “If the auction had been set aside attributing any practice of fraud or collusion against any of the petitioners, they would be justified in stating that decision (to cancel) without putting them on notice of such decision was illegal”. (para 15). If the grounds mentioned in the impugned order are true, there definitely existed a valid justification for its cancellation. The impugned order is purported to have been passed on a report given by the Executive Magistrate. A reliance on a report behind the back of the petitioner without putting the petitioner on notice of which the Government was relying on, was certainly bad in law and the auction could not have CWP No.15111 of 2012 -5- been cancelled without notice to the petitioner. I am informed that the property is still remaining vacant and it is appropriate that the decision is taken only after giving notice to the petitioner and calling upon him to show cause against such cancellation.”
7. The Trust thereafter, served the petitioners with a show- cause notice dated 26.7.2011 (Annexure P-8) to which they responded vide reply dated 4.8.2011 (Annexure P-9). This time too there was an exchange of letters between the Trust and the State Government (Annexure P-10 to P-13). The petitioners also submitted their supplementary reply-cum-objection and on consideration of the entire material, that the following impugned decision dated 18.7.2012 (Annexure P-20), has been conveyed:- “On the aforesaid subject you are being informed that keeping in view the order dated 28.4.2011 passed by the Hon'ble Punjab and Haryana High Court Chandigarh in Civil Writ Petition No.8823 of 1990 Squadron Leader Gurdial Singh Vs. Punjab Government etc., you had been issued show cause notice. The aforesaid order passed by the Hon'ble Punjab and Haryana High Court, show cause notice issued to you and the letter mentioned in the reference sent by you, were considered in the meeting of the Trust, which was held on 26.3.2012. In the said meeting, the Trust also considered the auction of this CWP No.15111 of 2012 -6- restaurant, which was held on 24.1.1986 and the decision dated 20.10.88 taken by the Government in this regard. After taking into consideration all the facts, the Trust has expressed its agreement with the decision dated 20.10.88 of the Government. The auction held on 24.1.1986 has been cancelled. Therefore you have no right over this restaurant site and the Trust has the right to auction this restaurant site afresh.”
8. The aggrieved petitioners have again approached this Court.
9. When this matter came up for preliminary hearing on August 8, 2012, we passed the following order:- “Respondent No.2 is directed to produce the original record including letter dated 24.1.1986, sent by the then Executive Magistrate, Ropar (Surjit Singh Dhillon) as well as the letter bearing not AS2-DLG- 86/14555 dated 21.4.1986 and the report bearing memo not RIT/201 dated 8.5.1986. We make it clear that respondents No.1 and 2 need not to file any reply at this stage but the aforementioned record must be produced on the next date of hearing.”
10. The State counsel, however, informed on December 13, 2012, that the record referred to in the above reproduced order was not readily traceable and sought some more time for its production. Learned CWP No.15111 of 2012 -7- State counsel today informs that the subject record being 26 years old could not be traced out despite their best efforts and meanwhile the records were shifted from one building to the other.
11. The Trust has, however, filed a short-affidavit and has placed on record the Directorate's letter dated 21.4.1986 (Annexure R-3/1) as also the copy of its despatch register regarding receipt and despatch of the correspondence for the months of March/April 1986.
12. We have heard learned counsel for the parties and gone through the record referred to above.
13. It stands settled in a catena of decisions, some of which are cited by the learned Single Judge in his order dated 28.4.2011 also (Annexure P-7) , that in a public auction it is essential to secure the best price which is an integral part of the 'public interest' and in the event of a conflict between the 'public interest' and an 'individual's expectations', the later must yield before the former.
14. The public auction must always be held in a transparent and fair manner giving reasonable opportunity to the interested parties to participate effectively. Similarly, neither the bid process can be an empty exercise not the Authorities can afford to be the moot spectators to the pre-meditated business plan of a cartel. Wherever it is found that the public property has not been able to fetch the estimated market price or is sold for a song, it is imperative upon the Competent Authority to dis- approve the auction intending to cause loss to the State Exchequer or damage the 'public interest'.
15. Keeping these principles in view, let us examine the facts of CWP No.15111 of 2012 -8- the case in hand. Firstly, there was hardly any notice given to the expected bidders as the alleged public notice was issued on 22.1.1986 and the auction was held on 24.1.1986. Secondly, the offer given by the petitioner who offered the highest bid of ` 515/- per sq. yard against the reserved priced of ` 500/- per sq. yard was ex facie unrealistic. Thirdly, even according to the petitioners, there were only two more bidders whereas the subject-site is a restaurant site in a newly developed Urban Estate of Ropar. Fourthly, the Executive Magistrate, Ropar who supervised the auction, sent his dis-agreement towards the auction on the very same day. He categorically mentioned that the bidders had pooled together and there was no competitive auction. Fifthly, the highest bid, per-se, does not entitle the highest bidder to seek confirmation of auction as a matter of right. Sixthly, the paramount interest kept in view by the Authorities while disapproving the subject auction is the lesser price of the site, hence, such a decision is essentially 'in public interest'.
16. It is true that the grievance of the petitioners before this Court in the previous case or in this 2nd round is against the report of the Executive Magistrate, Ropar, alleging pooling by the bidders, especially when a copy of it has not been supplied or seen the light of the day. However, the contents of the said report are duly reflected in the Government's letter dated 21.4.1986 (Annexure R-3/1) placed on record by the Trust.
17. The petitioners' contention that the State of Punjab was in the grip of terrorism in the year 1986, and there was hardly any taker of public bid and, therefore, the petitioner's offer cannot be said to be CWP No.15111 of 2012 -9- inadequate, also does not impress us. We say so, for the reason that the State Government was fully alive of the fact situation and once in its estimation the offer given by the petitioners was wholly inadequate, we cannot substitute such an opinion. The approval of auction held in January, 1986, at this stage after more than 27 years, would amount to an unjust enrichment of the petitioners at the cost of public interest and State Exchequer.
18. Taking into consideration the totality of the circumstances, we are satisfied that the auction held on 24.1.1986, was farce and rightly disapproved by the Competent Authority. Consequently, we do not find any error of law or facts in the afresh decision taken by the Trust. Dismissed. ( SURYA KANT ) JUDGE January 29, 2013 ( R.P. NAGRATH ) rishu JUDGE