Court affirms auction cancellation & orders fresh sale due to valid reasons. Petitioner must match highest bid.

The court upheld the cancellation of the auction sale and the decision to conduct a fresh auction of the property. It found that the authorities had valid reasons for their actions, including the higher valuation of the property and the petitioner's failure to participate in the subsequent auction despite being given the opportunity. The court concluded that the actions were not arbitrary and did not violate Article 14 of the Constitution. The petition was dismissed, and the petitioner was directed to match the highest bid from the fresh auction if desired.

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Issues:
Challenge to cancellation of auction sale and fresh auction of property.

Analysis:
The petitioner challenged the cancellation of the auction sale of a property and the subsequent fresh auction. The petitioner was the sole bidder at the initial auction held on 22nd September, 2017, offering a bid above the reserve price. However, the bid was not accepted by the authorities due to the petitioner's prior offer of a higher amount for the property. The Central Board of Direct Taxes directed a fresh valuation of the property, resulting in a fair market value of Rs. 31.07 Crores. Subsequently, a fresh auction was proposed with a reserve price of Rs. 31.10 Crores. The petitioner did not participate in this fresh auction despite being given the liberty to bid. The petitioner contended that the cancellation of the auction and the reasons provided were arbitrary and in violation of Article 14 of the Constitution of India.

The court considered the events leading to the petition and the additional affidavit filed by the respondents. The court noted that the authorities reserved the right to reject any bid without assigning a reason, as stated in the invitation to make bids. The court emphasized that the scope of judicial review in matters of awarding contracts by the state is to prevent arbitrariness, irrationality, and unfair treatment. The court cited precedents to emphasize that judicial review should not interfere if the decision is reasonable and in public interest. The court applied the test laid down by the Supreme Court to determine if the decision was arbitrary or irrational, and if public interest was affected.

The court found that the cancellation of the auction and the decision to hold a fresh auction were based on valid reasons, including the higher valuation of the property and the petitioner's failure to participate in the subsequent auction despite being given the opportunity. The court concluded that the actions of the authorities were not arbitrary and did not violate Article 14 of the Constitution. The court dismissed the petition and declined to continue the stay granted earlier. The petitioner was directed to match the highest bid made in the fresh auction if desired.

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