of Punjab Vs. M/S. Yoginder Sharma Onkarrai
& Co. & Ors  INSC 1147 (17 September 1996)
Uddin (J) Faizan Uddin (J) Kuldip Singh (J) Bharucha, J.
APPEAL NO. 7993/96. 7994/96)
are appeals against the judgment and order dated 8th may, 1996, of a Division
Bench of the High Court of Punjab & Haryana, Passed upon a writ petition
filed bu the first respondent, M/S. Yoginder sharma Onkar Rai & Co. The
subject matter of the writ petition was the auction of liquor vends of Group
nos. 108 to 111 in Khanna
Circle, district Ludhiana, State of Punjab for the year 1996-97. The first
appeal is by the State of Punjab. The
other appeals are by the successful bidders.
auction took place on 11th march, 1996. On 18th March, 1996, the first respondent filed an
earlier writ petition (Writ petition no. 4047/1996) before the High court
challenging the auction. Thereon the Division Beach ordered :
hearing the learned counsel for the parties and perusing the record we are of
the opinion that the points raised by the petitioners do require a
consideration by the competent authority authorized a reject the higher bid
offered and the auction held. The disputed questions of facts raised in this
litigation can also better be appreciated by such authority.
view of the facts and circumstances of the case, this petition is disposed of
with the following directions :
That Shri Y.S. Ratra Financial Commissioner, Taxation shall treat this writ
petition as representation/revision in terms of Rule 36 (18) of the rules filed
before him to determine the legality of the bids in auction held in favour of
the private respondents.
The parties shall be given an opportunity of being heard before passing the
appropriate orders." Consequential directions were also given.
Financial commissioner heard the parties as directed by the High Court and
rejected the representation/revision filed by the first respondent. He noted
various circumstances on the basis of which he came to the conclusion that the
first respondent had not given a bid of Rs. 4.21 crores for Group no. 108 or a
bid of Rs.3.50 crores for Group no. 111. The Financial commissioner found that
the possession of a receipt for entry into the auction pandal did not mean that
the first respondent had made a bid unless it was shown from the bid sheet that
its name was recorded thereon. Being a sitting licensee for the last 4 or 5
years did not give the licensee any right to get the vend again unless he bid
for it in open auction. Not much reliance could be placed on newspaper reports,
as the Supreme Court had held that newspaper reports had no evidentiary value
but were only hearsay evidence. That a bank counter had been opened in the pandal
did not bar the successful bidders from depositing the requisite amount of 15%
of the bid money in the government Treasury at Khanna in the state time. In the
pandal there were 1200-1300 persons.
were not all bidders. Being the first auction of liquor vends in the state for
the given year, licensees from other districts had come to see the trends and
make a market survey. That only 2 or 3 bidders had given bids for a particular
vend was, therefore, not noteworthy. Though the partners of S.P. Kalia and Co.
and Puneet kalia and Co. Were relations there was no reason why they should not
bid against each other. It was next to impossible that 34 drafts could have
been prepared on the day of the auction in banks at Khanna and Mandi Gobind Garh
which would reach the pandal by 11 a.m. considering the fast that the banks opened at 10 a.m. at Khanna and mandi Gobind Garh, which was
approximately 40-50 kms. from the site of the auction at Ludhiana. It was more likely that all this
would take 2 hours. This indicated that the first respondent did not have adequate
funds to deposit 15% of the bid money at the fall of the hammer and, therefore,
did not bid at all. Note was taken of the pattern of bidding. for Group no. 108
the initial bid was for Rs.3.55 crores, the next was Rs.3.65 crores, then 3.68 crores,
than Rs.3.70 and the successful bid was of Rs.3.71 crores. Thus the trend of
the rise was Rs.10 lacs in the first instance, then Rs.3 lacs, then Rs.2 lacs
and, lastly, Rs.1 lac. The case of the first respondent was that it bid Rs.4.21
crores, that is to say, there was a rise of Rs.50 lacs over the last bid.
Substantially similar was the position in regard to Group No. 111 where there
was allegedly a rise of Rs.45 lacs. It was hard to believe that the Collector,
Who was present at the auction, would not have intervened in these
circumstances. No evidence was forthcoming that anything spectacular had
happened in the pandal. The first respondent had not approached any of the
senior officers who were in the city in connection with the auction. The mere
mention during the argument that it had approached the Excise and Taxation
Commissioner and told him its case and that be said he would look into the
matter was an after-thought. If the difference between the successful bids and
the allegedly higher bids was really of Rs.50 lacs and Rs.45 lacs respectively,
the first respondent should have put it in writing and the Excise and Taxation
Commissioner would have taken cognizance. The telegram sent by the first
respondent was 4 days after the auction. There were telegrams under different
names but they were all similarly worded and no mention was made therein of the
amounts of the allegedly higher bids, but merely that a lower bid had been
accepted despite a higher bid. Due credence had to be given to the reports of
the two independent observers nominated by the Excise and Taxation Commissioner
and the Deputy Commissioner of the District who were present at the pandal. No
mention had been made of the alleged higher bids in the observers' reports,
which stated that the auctions were fair and there was no favoritism. The
decision of the State Government not to allow S.K. Ralhan, Deputy Excise and
Taxation Commissioner, Patiala Division, to conduct auction in other districts
of Patiala Division was based on administrative grounds and the matter was
under consideration. There was no evidence that the auction had been
stage-managed. The claim of the first had been stage- managed. The claim of the
first respondent was, therefore, without any basis, an after-thought and not
based on any concrete evidence.
order of the Financial Commissioner was passed consequent upon three writ
petitions. The petitioner in one of three writ petitions did no carry the
matter to the High Court. The writ petitioner in another writ petition filed a second
writ petition challenging the order; it came up before another Division Bench
which, on 9th April,
1996, passed the
following order :
find no infirmity in the detailed order, Annexure P-9, passed by the financial
commissioner, (Taxation), Punjab.
the points raised before us have been dealt with in detail by the financial
commissioner and we concur with the findings recorded by him.
The writ petitioner in the third writ petition was the first respondent and it
filed the present writ petition (No.5007/96) impugning the Financial
commissioner's order 6th April, 1996. this writ petition was disposed of by the
judgment and order under appeal.
Division Bench noted therein the case of the first respondent that it had
offered Rs.4.21 crores for group no 108 as against the successful bid of
Rs.3.71 crores which had been wrongly accepted, thereby putting the public
exchequer to a loss of Rs.50 lacs. Similarly, for Group no.111, the first
respondent had offered Rs.3.5 crores but the bid of Rs.3.05 crores was
accepted, thus putting the exchequer to a loss of Rs.45 lacs. Though the
representatives of the first respondent were present at the time of the
auction, their presence and the bids offered by them were not recorded. It was
the said S.k Ralhan who had not accepted the higher bids offered by the first
respondent without any basis or assigning any valid reason. The first
respondent had raised a hue and cry, through its partner, Yoginder Sharma, had
approached the Excise and Taxation commissioner and brought to his notice the
arbitrary, capricious, illegal and unconstitutional action on the part of the
said S.K. Ralhan, but no action was taken. The denials of the respondents
before the High Court were noted including those of the said S.K. Ralhan. The
order on the earlier writ petition (No. 4872/96) was set out in extenso.
division Bench then enumerated the circumstances which had led the Financial
commissioner to reject the representation or revision of the first respondent
(as set out above). The validity of the auction was challenged by the first
respondent on three grounds. the first and second grounds related to the
provisions of the Punjab Excise Act and the Punjab Liquor Licence Rules and the
terms and conditions of the auction notice. (There grounds were rejected and
need not detain us.) the third ground, which was accepted, was set out thus :
The petitioner, despite being the highest bidder, was wrongly shown to have not
participated in the bid. The learned counsel had referred to various
circumstances, which, according to him, show the bonafides of the petitioner in
bidding in the auction and having been present on the spot." The Division
bench stated that, in support of his submission that the first respondent had
offered a higher bid, its counsel had referred to various circumstances and
submitted that the cumulative effect there of proved the presence and
participation of the first respondent in the auction, which had not been taken
note of . The circumstances enumerated by the first respondent and "probabilised
to have been proved" were set out by the Division bench. The first
circumstance was the receipt for entry into the auction pandal; this, according
to the Division Bench, established that the first respondent had decided to
participate in the auction. the second circumstance was that the
representatives of the first respondent were in possession of bank drafts worth
Rs.1.90 crores besides cash in the sum of Rs.10 lacs on the date of the auction
"for the purpose of bidding in the auction". The factum of bank
drafts was not disputed. The Financial Commissioner's observations in regard to
the bank drafts were then set out and the Division Bench observed :
conclusion arrived at by the Financial Commissioner, Taxation, are based upon
conjecturers and apparently observed with pale eyes.
not improbable to obtain 34 drafts prepared from a bank at Khanna and mandi Gobindgarh
on the same day and before the time of auction. It is not uncommon that the
banks have been providing special services to their customers particularly
having huge monetary Taxation, has not referred to any special knowledge of
banking system and had arrived at the aforesaid conclusion without ascertaining
the true position from the concerned bank." According to the Division
Bench, if drafts for such a huge amount had been issued, the same demonstrated
the bona fide intention of the first respondent to participate in the auction.
Again, it was "fully established" that the first respondents'
representatives were in possession of the bank drafts on the relevant date,
which showed their intention to participate in the auction. The provisions of
Rule 36 (17).
they could not be made the basis for quashing the auction proceedings, were
relevant to show the biased treatment given to the first respondent. Whether
the first respondent had raised the plea or not, it was for the authorities to
explain the omission in not mentioning the pre-determined license fee, which
might have become the basis for accepting or rejecting the bid offered by a
particular bidder. It was intriguing and not explained as to why such an
omission was allowed in the case of Group Nos.108 and 11 only and not in the
case of any other group auctioned on the same day or thereafter. The first
respondent had taken steps for participation in the auction by obtaining an
entry slip and by procuring bank drafts, which led to the irresistible
conclusion that it was not only a spectator. The affidavits of the partners of
the first respondent showed that they were present at the time of the auction
and had participated in it, but their presence was not taken note of. Press
reports also suggested that the auction was not free from suspicion. Some
extracts of these press reports were set out. It was then said by the Division
Bench that it was true that press reports could not be made the basis for
holding the auction illegal or contrary to the law; however, "in drawing
inferences, the circumstances of the press reports cannot be completely ignored,..........".
The telegrams aforementioned also could not be completely ignored. The mere
omission of details therein could not be made the basis for rejecting them. It
was not a coincidence that immediately after the auction was concluded on 11th March, 1996, the said S.K. Ralhan had been
transferred. His transfer suggested, prima facie, the satisfaction of the
authorities that he had not been fair in holding the auction. It was worth
mentioning that the successful bidders had not denied the allegations made
against them and it was, therefore, proved that the persons and it was,
therefore, proved that the persons participating in the auction were hand in
glove with each other with the object of putting the State exchequer to loss. "The
cumulative effect". The High Court held, "of the aforesaid discussion
clearly and unequivocally leads to the conclusion that the auction with respect
to groups No. 108 and 11 held on 11th march , 1996, was neither fair, nor
proper. The petitioners were wrongly deprived of their right of participation
in the bid and the State exchequer was subjected to huge loss, which in no case
in lesser than Rs.95 lacs." As far as the Financial Commissioner was
concerned, the High Court said :
we say out Shri Ratra, better it would be. we were interested in the job of
adjudication of the rival claims of the parties, presuming him to be an
independent and impartial person, keeping in view the status of the post he is
holding. During arguments, a reference had been made to Annexure PS2, a press
report dated 12th March, 1996, which shows that Shri Ratra had gone to the
press with the claim that outcome of the auction had allegedly been better than
the expected rise of 12 to 13 per cent.
that time, it was not brought to our notice that Shri Ratra had already taken a
stand with respect to the matter in dispute and, presumably, could not have
given any other finding than the one, which is incorporated in Annexure P
Omission on the part of the parties to bring to our notice the commitments made
by Shri Ratra has resulted in the reference being made to him."
Ultimately, in the High Court's view, the substance of the circumstances in the
context of the allegations made, clearly suggested that the auction was not
fairly and properly held, with the result that the State exchequer had been
subjected to a huge loss. The High Court thereupon passed the following order,
which must be quoted in extenso :
the circumstances, the writ petition is allowed and the auction held on March 11, 1996, with respect to group Nos. 108 and
111 vide annexures P 44 and P 47 is quashed. Consequently, the auction of group
Nos. 109, 110 and protection vend of Kotla Azner (Fatehgarh Sahib) in favour of
the successful bidders of group Nos.
and 111 shall also stand quashed. This judgment would become effective from May
16, and the private respondents are allowed to continue their business until
the mid-night of May
view of the detailed discussion made above, the order of the Financial
Commissioner, Taxation, Punjab (Annexure P 66) is quashed for the
remaining period of 10 and a half months commencing with effect from 16.5.1996
the four groups, i.e., Nos. 108 to 111 and protection vend of Kotla Azner (Fatehgarh
Sahib), are directed to be re-auctioned positively before May 15, 1996, at the
cost of the petitioners, after due publicity and advertisement.
petitioners, private respondents and all others shall be permitted to
participate in the bid, which shall be strictly held in accordance with the
provisions of Rule 36 of the Punjab Liquor Licence Rules. All such persons, who
enter the venue for the purpose of bid, shall, recording their attendance and
the bid shall be supervised by an officer, not below the rank of Financial
pre-determining the licence- fee, first bid for group No. 108 shall be deemed
to be Rs.4.21 crores offered by the petitioners and for group No. 111, the
first bid shall be deemed to be of Rs.3.50 crores, offered by the petitioners.
deducting the proportionate fee for the period commencing from 1.4.1996 to
15.5.1996, the balance amount of fee, if deposited by the respondent/successful
bidders, shall be refunded to them after May 15, 1996.
petitioners shall deposit a sum of Rs. one lac within two days, out of which
the expenditure for re- holding of the auction shall be adjusted and the
balance amount paid back to them after completion of the process of auction.
new auction, Shri S.K. Ralhan Deputy Excise and Taxation Commissioner and Shri
Y.S. Ratra, Financial Commissioner, Taxation shall not be associate in any
case, the petitioners opt not to participate in the new auction bid and no
other bidder offers the bid of the amount already offered by the private
respondents-successful bidders, this petition shall be deemed to have been
dismissed with costs of rupees one lac to be paid to the private respondents.
on the completion of the fresh process of auction, the private respondents
shall be liable to pay a sum of Rs.10,000/- as costs which shall be deposited
in the State Treasury." Learned counsel for the appellants submitted that
questions of fact were involved. At the hearing of the earlier writ petition
this had been recognised by the Division Bench and the first respondent had
been referred to the Financial Commissioner treating the writ petition as a
representation or revision under the statutory provision.
order of the Financial Commissioner was reasonable in its appreciation of the
facts. The Division Bench had not found it to be perverse. The Division Bench,
therefore, was not entitled to reverse it. In any event, the judgment of the
Division Bench was based upon conjectures and the order that was passed by it
was erroneous and unworkable.
counsel for the first respondents drew our attention to its case that in the
auction pandal itself its partners had met the Excise and Taxation Commissioner
and told him their grievance and the Excise and Taxation Commissioner had
assured them that the matter would be looked in to. Learned counsel referred to
the press reports which stated that the Excise and Taxation Minister of Punjab
had said that while there was no report with the state Government on the
alleged irregularities during the auction of liquor vends, it had come to the
notice of the State Government that the auction of some liquor vends in Ludhiana
were conducted in a manner contrary to the interests of the revenue and that,
on the basis of a representation, the state Government had relieved the Deputy
Excise and Taxation Commissioner in charge of the Patiala Division of the
responsibility of conducting auctions for the remaining districts of the
Division. A copy of the order relieving the said S.K Ralhan was pointed out.
Learned counsel submitted that even so, the Financial Commissioner in his
report had stated that the decision of the state Government not to allow the
said S.K. Ralhan to conduct auctions in the remaining districts of Patiala
Division was based on administrative grounds. Learned counsel submitted that
there was , thus, evidence to show that the auction had not been conducted
fairly and in the prescribed manner. The Financial Commissioner in his report
had stated that it was hard to believe that the Collector would not have
intervened when bids of Rs.50 and 45 lacs respectively over the next highest
bids had been made. Learned counsel submitted that the Financial Commissioner
himself should have accepted the higher bids of the first respondent. The first
respondent was even now prepared to deposit 15/ of the required deposit for the
remaining half of the term and secure the balance.
counsel relied upon the judgment of this Court in M/s. Rajshila vs. state of
U.P. and ors. 1993 supp. (1) S.C.C. 477. This was a case where The appellant
could not participate in the auction of the exclusive right to collect tolls on
a bridge owing to a strike in Government offices.
appellant had had to run from pillar to post to fulfil the precondition of a
security deposit which in view of the involved procedure, was rendered
impossible of fulfillment.
appellant had tendered cash security of Rs.7 lacs on the date of the auction
and sought permission to particular, but the request had been turned down. Upon
this, the appellant had given Rs.86 lakhs per year as against the accepted bid
of Rs.75 lacs per year. After hearing counsel, this Court was persuaded to take
the view that the ends of justice would be met by an order directing a
re-auction subject to certain conditions, the first being that the appellant
should, with a view to establishment its readiness and willingness to stand by
the offer of Rs. 86 lacs per year, deposit a sum of Rs. 25 lacs on or before
the stated date.
sum of Rs.25 lacs was deposited, the contract in favour of the successful
bidder would stand set aside.
counsel submitted that the present was a case where the ends of justice
required that the judgment and order under appeal be maintained subject to such
conditions as this Court might deem fit to impose.
that goes to the root of these appeals is : did the first respondent make bids
at the auction of Rs.50 and Rs.45 lacs respectively over the successful bids
for Group nos. 108 and 111? This is a question of fact. It was rightly referred
to the Financial Commissioner under the statutory provision by the Division
Bench in its order on the earlier writ petition. On the order passed by the
Financial Commissioner the High Court could interfere in a writ position under
Article 226 only if it found it to be perverse, that is to say if it found its
conclusions such as could not reasonable have been arrived at upon the record.
division Bench in the order under appeal had not so held, specifically or
order of the Financial Commissioner is not perverse or unreasonable. He was
right in concluding that the fact that the first respondent had entered a bid.
His views about the drafts procured by the first respondent from the banks at Khanna
and Mandi Gobindgarh are not unreasonable, for , ordinarily, prospective bidder
would not cut it so fine. He would ordinarily obtain the required bank drafts
before the auction date and not wait to do so with only an hour or so to spare.
No extraordinary circumstances have been adverted to by the first respondent
which required it to be obtain the drafts only on the morning of the auction
from banks which were a sizeable distances form its site.
pattern of bidding referred to by the Financial Commissioner is very telling.
It is unlikely that when the bid is rising by Rs.10 lacs, Rs.3 lacs, Rs.2 lacs
and Rs.1 lacs it should suddenly rise by Rs.50 lacs and Rs. 45 lacs
respectively. The Financial Commissioner was justified in rejecting the case of
the first respondent that ut had approached the Excise and Taxation
Commissioner and spoken to his about what had happened for this was mentioned
only in the course of the argument before him. It also germane for the
Financial Commissioner to observe that no higher revenue officials had been
approached by the first respondents, as also to point out that the observers'
reports did not speak of any irregularity. They would certainly have done so
had a bid which was Rs.50 lacs more than the successful bid been ignored; there
would have been a commotion in the auction pandal and this would have been
mentioned in the reports. The Financial Commissioner pointed out, and rightly,
that the telegram sent by the first respondent was four days after the auction.
There were other telegrams, similarly worded but under different names. In all
the telegrams no mention had been made of the quantum of the higher bid but
merely that a lower bid had been accepted against a higher bid. The Financial
Commissioner noted that two partnerships had bid against each other but
commented, with some justification, that the mere fact that their partners were
relations did not make for a rigged auction.
Division Bench castigated the Financial Commissioner for his report and stated
that his conclusions were "based upon conjectures and apparently observed
with pale eyes". It said that "it is not improbable" to obtain
34 drafts prepared from a bank at Khanna and Mandi Gobindgarh on the same day
and before the time of auction.
"not uncomman : that banks provide special services to their customers
particularly if they have huge monetary dealings. The Financial Commissioner
had not referred to any special knowledge of the banking system and had arrived
at his conclusions without ascertaining the true position from the concerned
bank. The Division Bench did not state its authority for its statements about
Division Bench found that "it was fully established" that the first
respondent's representatives were in possession of the bank drafts," which
showed petitioner's intention of participation in the auction".
Division Bench took the view that the revenue authorities were obliged to
explain why the pre-determined license fee had not been mentioned and that it
was intriguing "why such an omission was allowed in case of Groups no. 108
and 111 only and not with respect to any other group auction on the same day or
thereafter". In fact, it appears that this omission took place not only
with regard to Group nos. 108 and 111 but with regard to all auctions in Ludhiana-I.
The fact that the first respondent had taken steps for participation in the
auction by obtaining an entry slip and by procuring bank drafts led the
Division Bench "to the irresistible conclusion that they were not only
spectators". The affidavits of the partners of the first respondent also
showed that they were present at the time or the auction and had participated
in it but their presence had not been taken note of. Extracts of press report
were set out in the judgment and the Division Bench noted that while hey could bot
be made a basis for holding an auction illegal or contrary to the law," in
drawing inferences "the press reports could not be ignore. The mere
omission of giving details in the telegrams was not a reason to reject them. It
was not a coincidence that the said S.K.
had been transferred after the auction on 11th March ,1996, was concluded and
it suggested, prima facie, that the authorities had been satisfied that he had
not been fair in holding the auction. The Division Bench found that the
successful bidders had not specifically denied the allegations of relationship
between their partners and their inter-action in the auction; it was,
therefore, proved that they "were hands in glove with each other with the
object of putting the State exchequer to loss". As a matter of fact, the
allegations are denied by the successful bidders in their affidavits. The
cumulative effect clearly and unequivocally led the Division Bench to the
conclusion that the auction with respect to Group nos. 108 and 111 was neither fair
nor proper. the first respondent had been wrongly deprived of its right of
participation therein and the state exchequer had been subjected to a loss of
not less than RS. 95 lacs.
constrained to observe that the judgement of the Division Bench is based upon
conjectures and inferences more tenuous than those it found the Financial
Commissioner guilty of. Such conjectures and inferences are impermissible in a
judgment upon a writ petition under Article 226 where the fact-finding
authority had arrived at a conclusion which is not perverse or so unreasonable
that, upon the record, it could not have been reached.
basic question which cannot be lost sight of is : did the first respondent make
bids at the auction of Rs.50 and Rs.45 lacs respectively over the successful
bids for Group nos. 108 and 111? Securing Group nos. 108 and 111 was so
important for the first respondent, it would have us believe that it raised the
bids by the staggering sums of Rs.50 and Rs.45 lakhs respectively. If it did,
the previous rises having been of the order of Rs.10 lacs, Rs. 3 lacs, Rs.2 lacs
and Rs.1 lacs, it would have attracted the attention of some, if not most, of
the twelve to thirteen hundred persons in the auction pandal. It would be a
brave auctioneer indeed who would, in the circumstances, ignore such bids. The
partners of the first respondent would not in the ordinary course of human
conduct have let it pass without stout, long and loud protests. They would had
attracted notice, and support. But according to the oral submissions of the
first respondent's counsel before the Financial Commissioner, the first
respondent's partners were satisfied with an oral complaint to the Excise and
Taxation Commissioner and his assurance that he would look in to the matter. In
the ordinary course of events, one would have expected a bidder making such
large bids which are ignored to shoot off notices in all directions. All we
have are telegrams sent four days after the auction which do not mention the
enormous difference between the bids. Of the twelve to thirteen hundred persons
present in the pandal, not one independent observer had stated on affidavit
that the first respondent had m far larger than the successful bids but they
had been ignored. To our ears the first respondent's story does not ring true.
have already held the Financial Commissioner's conclusion in his report were
reasonable. The remarks made by the Division Bench about him were not
justified. As Financial Commissioner, he spoke to the press about the outcome
of the auctions generally. This was in the performance of his duties. In any
event, we do not see in his order anything that indicates that he was in any
Division Bench was, in the circumstances, in error in reaching the conclusion
that the auction was not fairly and properly held with the result that the
State exchequer had ben subjected to a huge loss. In any event, loss to the
exchequer is a factor which may be taken in to account in genuine cases, as it
was in the case of M/s. Rajshila cited by learned counsel for the first
respondent. At the same time, the finality of auctions must also be recognised
to be in the interests of the exchequer. If auctions are set aside and
re-auctions ordered in less than satisfactory material, the loss of the
exchequer would be far greater.
brings us to the form of the order that the Division Bench passed. We have
quoted it above in extenso.
quashes the auction. It directs re-auction for the balance of the term. It
directs that for Group no. 108 the first bid "shall be deemed to be
Rs.4.21 crores" as offered by the first respondent, and for Group no. 111
the first bid "shall be deemed to be Rs.3.50 crores" as offered by
it. The order then directs that in case the first respondent opts not to participate
in the fresh auction and no other bidder offers a bid of the amount equivalent
to the earlier successful bid, "this petition shall be to have been
a very difficult order to appreciate. If at the fresh auction the first
respondent does not bid and no other bidder offers a bid equivalent to the
earlier successful bid and the writ petition is to stand dismissed, what is the
State Government's authority for holding the fresh auction? Whether or not the
first respondent bids or somebody else bids an amount equivalent to the earlier
successful bid can be known only after the fresh auction is held. If at that
stage the petition is to stand dismissed, there is no authority for holding the
fresh auction. Secondly, if at the fresh auction the first respondent does not
bid and no other bidder offers a bid equivalent to the earlier successful bid,
it must mean that the earlier successful bidder is no longer interested; but,
by reason of the dismissal of the writ petition, he remains bound by his
earlier bid. This not a workable or well thought out order.
cases where there is real need to set aside an auction, he who challenges it
mist be required to prove his bona fides before the auction is set aside by
depositing a substantial portion of what he says he will bid. It is only if the
deposit is made that the auction should be set aside and a re-auction ordered.
Division Bench would have done well to follow the order (quoted above) already
passed by another Division Bench upon a writ petition impugning the same order
of the Financial Commissioner.
appeals are allowed. judgment and order under a is set aside. The writ petition
filed by the first respondent is dismissed. The first respondent shall pay to
the appellant in each of the three appeals the costs of the appeal, quantified
in the sum of Rs.25,000/-.
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