Judgment:
ORDER
G. Rohini, J.
1. The 2nd respondent - Vijayawada Municipal Corporation -issued Tender-cum-Auction Notice dated 30.06.2008 inviting tenders for grant of leasehold rights in respect of vacant shops in different commercial complexes situated within the area of operation of Vijayawada Municipal Corporation. Shop No. 7/A situated in the ground floor of Jerimella Satyanarayana Complex was one among the shops included in the said Tender-cum-Auction Notice. The petitioner submitted his tender in respect of the said Shop No. 7/A duly making deposit of Rs. 5,000/-prescribed in the tender notice.
2. The auction was held on 10.7.2008 in which the petitioner offered Rs. 1,97,000/- as goodwill and Rs. 1,800/- towards rent per month. One V. Venkateswara Rao offered Rs. 1,98,000/- as goodwill and Rs. 1,500/- towards rent per month. Thereafter, the Standing Committee of the 1st respondent Corporation met on 30.7.2008 and accepted the petitioner's tender for Shop No. 7/A. The same was informed to the petitioner by the 1st respondent vide proceedings dated 2.8.2008 calling upon him to pay the goodwill amount and six months rent within seven days. The petitioner was also called upon to get the agreement registered in the office of the Sub-Registrar at his own cost and hand over the same to the office of the 1st respondent. Immediately the petitioner took demand drafts for the amounts payable by him in terms of the proceedings dated 2.8.2008. However, when the petitioner went to the office of the 1st respondent to submit the demand draft, the same was not received and he was orally informed that the issue had to be ratified by higher authorities. Thereafter, though the petitioner made several representations requesting the respondents to accept the demand drafts and to take further steps as per the proceedings dated 2.8.2008, there was no response.
3. Hence, the present writ petition seeking a declaration that the action of the respondents in not giving effect to the proceedings dated 2.8.2008 thereby depriving the petitioner the benefit conferred on him pursuant to the tender notice dated 30.06.2008 is arbitrary and illegal.
4. A counter-affidavit has been filed on behalf of the respondents 2 and 3 in which the fact that the petitioner had offered Rs. 1,97,000/- as goodwill and Rs. 1,800/- towards rent per month and that the Standing Committee in its resolution dated 30.7.2008 resolved to accept the petitioner's tender has not been disputed. However, it is stated that the other tenderer by name V. Venkateswara Rao who offered Rs. 1,98,000/- as goodwill had approached the Commissioner on 5.8.2008 offering monthly rent of Rs. 2,000/- and requested to allot Shop No. 7/A to him. In the circumstances, the Standing Committee passed a fresh resolution on 14.8.2008 to the effect that the Shop No. 7/A shall be allotted to the highest bidder after conducting negotiations. Accordingly, the resolution dated 30.7.2008 was ratified with modification and the endorsement dated 2.8.2008 was kept in abeyance. The said fact was informed to the petitioner and other tenderers asking them to attend the negotiations on 25.8.2008. However, the same could not be served on the petitioner since he was out of station and evaded service of notice. Again another notice was issued calling upon the tenderers to attend the negotiations but the petitioner rejected to receive the same. The other tenderer V. Venkateswara Rao attended the negotiations and offered Rs. 2,20,000/- as goodwill and Rs. 2,000/- per month towards rent. It is contended that the Standing Committee has the right to approve or reject or cancel the tenders and therefore the impugned action cannot be held to be arbitrary or illegal. It is further contended that in spite of the opportunity given to the petitioner, he failed to participate in the negotiations and therefore the present writ petition is not bona fide and is liable to be dismissed.
5. I have heard the learned Counsel for both the parties and perused the material on record.
6. Section 148(2) of the Hyderabad Municipal Corporations Act, 1955 (for short, 'the HMC Act') provides that the Commissioner of the Corporation may grant for any term not exceeding three years a lease of any immovable property belonging to the Corporation with the sanction of the Standing Committee. Rule 6 of the Municipal Corporation of Hyderabad (Acquisition and Disposal of Immovable Property) Rules, 1970 made under G.O.Ms. No. 408, dated 28.05.1970 further made it clear that the sanction of the Standing Committee is necessary for leasing out any immovable property belonging to the Corporation. Section 93 of the HMC Act provides for constitution of the Standing Committee and Section 97 deals with the provisions regulating the proceedings of the Standing Committee. Section 97(1)(a) provides that there shall be a meeting of the Standing Committee once a week and at such other times as shall be found necessarily. Section 97(1)(a) further provides that a minute shall be kept by the Municipal Secretary of the names of the members present and of the proceedings at each meeting of the Standing Committee in a book to be provided for the said purpose which shall be signed at and by the presiding authority of the next ensuing meeting. Section 97(2) further provides that where a subject is placed before the Committee, the Standing Committee shall take a decision thereon within a period of fifteen days from the date of placing the matter before it and if a subject is not considered by the Standing Committee within the aforesaid period the proposal contained in the subject shall be deemed to have been approved by the Standing Committee.
7. In the instant case, the tender-cum-auction notice was admittedly issued by the Commissioner of the Corporation in exercise of the powers conferred under Section 148 of the HMC Act and the tender-cum-open auction was conducted on 10.07.2008. Thereafter the matter was placed before the Standing Committee for necessary sanction and by Resolution No. 142 dated 30.07.2008 it was resolved by the Standing Committee to accept the petitioner's offer i.e., Rs. 1,97,000/- as goodwill (nonrefundable) and Rs. 1,800/-per month towards rent. The same was also acted upon and accordingly the petitioner was informed by proceedings dated 2.8.2008 to remit the amounts towards goodwill and six months rent apart from getting the agreement registered.
8. It is clear from the counter-affidavit filed on behalf of the Corporation that one of the bidders came forward on 5.8.2008 offering monthly rent of Rs. 2,000/- and goodwill of Rs. 1,98,000/-.
9. The said offer was considered by the Staiding Committee on 14.08.2008 and vide Resolution No. 160 it was resolved that the shop in question be allotted to the highest bidder after conducting negotiations. Pursuant thereto, the otier bidder by name V. Venkateswara Rao had participated in the negotiations and raised his offer of goodwill from Rs. 1,98,000/- to Rs. 2,20,000/- and monthly rent from Rs. 1,500/- to Rs. 2,000/-.
10. It is the contention of the Corporation that the offer made by the other tenderer (V. Venkateswara Rao) during negotiations being much higher, it is in the interest of the Corporation to accept the same since it would fetch additional revenue of Rs. 23,000/-towards goodwill and Rs. 200/- towards rent per month.
11. The question that arises for consideration is having accepted the petitioner's offer with the sanction of the Standing Committee, whether the Corporation is justified in conducting negotiations and proposing to accept the higher offer made in the negotiations merely on the ground that it would fetch additional revenue to the Corporation.
12. The learned Standing Counsel appearing for the Corporation sought to justify the impugned action contending that the resolution passed by the Standing Committee on 30.07.2008 was ratified only in the next meeting held on 14.08.2008 and therefore the writ petitioner cannot be said to have acquired any legal right for grant of lease in respect of the shop in question. For the said purpose, the learned Counsel relied upon Section 97(1)(k)of the Act.
13. As per Section 97(1)(k) a minute shall be kept by the Municipal Secretary of the proceedings at each meeting of the Standing Committee in a book and the same shall be signed by the presiding authority of the next ensuing meeting. However, there is nothing in the Act or the Rules made thereunder to show that unless it is so signed in the next meeting, the proceedings of the Standing Committee cannot be acted upon. What all is required under Section 148 of the Act is the sanction of the Standing Committee and the same was granted by the Standing Committee vide its Resolution No. 142 dated 30.07.2008 resolving to accept the tender of the writ petitioner. Thus it was conclusive and the fact that the same was communicated to the petitioner on 2.8.2008 and he was called upon to make the necessary payments further made it clear that the sanction as required under Section 148 was already granted by the Standing Committee. In the circumstances, the action of the respondents in conducting negotiations on a subsequent request made by a bidder whose offer was initially not accepted and affording him an opportunity to raise his offer is undoubtedly contrary to the very object of issuing tender-cum-public auction notice. Merely because a little bit higher revenue can be earned by the Corporation, that cannot be a ground for not enforcing the sanction already granted by the Standing Committee.
14. As noticed above, the sanction granted by the Standing Committee in its meeting dated 30.07.2008 was conclusive for grant of the lease in favour of the petitioner, the same was communicated to the petitioner and he had also taken the demand drafts on 11.8.2008 towards the deposits to be made. Thus except the execution of a formal document of agreement all other conditions were already satisfied much prior to the subsequent resolution of the Standing Committee dated 14.08.2008. It is the specific case of the petitioner that though he was ready for getting the agreement registered the same could not be materialized since the respondents did not accept the demand drafts.
15. In the totality of the facts and circumstances, I am of the opinion that the contract in favour of the petitioner stood concluded and therefore it was not open to the respondents to modify the resolution dated 30.07.2008. Since the sanction of the Standing Committee dated 30.07.2008 was already acted upon and there was a concluded contract in favour of the petitioner, the respondents are bound to implement the proceedings dated 2.8.2008.
16. For the aforesaid reasons, the Writ Petition is allowed as prayed for. The petitioner is granted time till 15.07.2009 to comply with the requirements specified in the proceedings dated 2.8.2008 in which event the respondents shall accept the same and take the necessary further steps in accordance with law.
17. No costs.