Supreme Court rules against plaintiff in contract dispute, upholding Administrator's power to reject bids

The Supreme Court found the suit not maintainable due to the absence of a concluded contract, ruling that the plaintiff was not entitled to a mandatory injunction for the issuance of an allotment letter. It upheld the Administrator's competency to accept/reject bids based on delegated power and auction terms. The rejection of the bid was deemed legal and justified, supported by reports and in the interest of public revenue. The Court allowed the appeal, overturning the High Court's decision and imposing costs on the plaintiff.

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Issues Involved:
1. Maintainability of the suit in the absence of a concluded contract.
2. Competency of the Administrator to accept/reject the bid.
3. Legality of the rejection of the bid.

Detailed Analysis:

1. Maintainability of the Suit in the Absence of a Concluded Contract:
The Supreme Court examined whether the suit could be maintained for declaratory relief and mandatory injunction in the absence of a concluded contract. The Court noted that the plaintiff prayed for a declaration that the rejection of the bid was illegal, but this did not entitle the plaintiff to a mandatory injunction for the issuance of a formal allotment letter. The Court emphasized that there was no concluded contract as no allotment letter was issued. The highest bidder has no vested right to have the auction concluded in their favor, and the Government or its authority could validly retain the power to accept or reject the highest bid in the interest of public revenue. The Court cited previous judgments to support this view, concluding that the suit was not maintainable for the relief sought due to the absence of a concluded contract.

2. Competency of the Administrator to Accept/Reject the Bid:
The Court addressed the plaintiff's claim that there was no delegation of power to the Administrator. HUDA placed on record the delegation of power made to the Administrator on September 13, 1989, under Section 51 of the Haryana Urban Development Authority Act, 1977. This delegation allowed the Administrator to accept or reject auction bids for commercial/residential/industrial sites. The Court found that the plaintiff had not come to the court with clean hands and had suppressed the delegation order. The Administrator's power to reject the bid was further supported by the terms and conditions of the auction, which stated that the presiding officer reserved the right to reject any bid without assigning any reason. Thus, the Court concluded that the Administrator had the power to reject the bid.

3. Legality of the Rejection of the Bid:
The Court examined whether the rejection of the bid by the Administrator was illegal or arbitrary. It found that the rejection was based on reports and recommendations from the Auction Committee, which indicated that the prices fetched were on the lower side compared to other urban estates. The Court noted that the rejection was not limited to the plaintiff's bid but included six other bids as well. The reasons for rejection were adequately explained in the written statement filed by HUDA, and the decision was made in the interest of public revenue. The Court cited previous judgments to support the view that the highest bid does not have to be accepted and that the authority has the right to reject bids for valid reasons. The Court concluded that the rejection of the bid was proper, justified, and beyond judicial scrutiny.

Conclusion:
The Supreme Court allowed the appeal, set aside the judgment and decree passed by the High Court, and restored the judgment and decree of the first appellate court. The Court imposed costs of Rs. 5 lakhs on the plaintiff/respondent, to be deposited in the Advocates’ Welfare Fund and the Supreme Court Employees’ Welfare Fund within two months.

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