TaxTMI 
TaxTMI 
2016 (6) TMI 204
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....e that one Mr. Raghbir Singh, a resident of Model Town, Ludhiana, decided to acquire a residential property in Delhi on ownership basis. He approached Smt. Vidyawati and her sons for that purpose. Smt. Vidyawati owned the property in question having acquired it under a registered Gift Deed in October, 1950. Initially Mr. Raghbir Singh negotiated to purchase the right, title and interest in the whole of the terrace floor with mumty over the ground floor together with 50% undivided share in the plot of land at a total consideration of Rs. 3. 25 lakh. 3. Accordingly, an Agreement to Sell was entered into on 11th July, 1992 between Mr. Raghbir Singh on the one hand and Smt. Vidyawati and her sons on the other. There was some delay in Smt. Vidyawati discharging her obligations. Further negotiations between the parties aimed at selling the entire property to Mr Raghbir Singh were not successful. Instead Smt Vidyawati offered the rear portion to Mr. Raghbir Singh for a total consideration of Rs. 7.50 lakh and in acceptance thereof he had paid Rs. 3 lakh to Smt. Vidyawati. 4. However with Smt. Vidyawati again defaulting in performing her obligation to sell the rear portion, Mr. Ra....
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.... the declared consideration by 30.48%, the conditions of Section 269 UD were held to be satisfied. Accordingly Respondent No.4 passed an order for purchase of the property in question for an amount equal to the sale consideration stated in the document. 8. Mr. Raghbir Singh then filed an application before Respondent No. 4 for recall of the above order. Another application was filed for correcting certain errors in the determination of the value of the property. After hearing Mr. Raghbir Singh on 6th October 1994, Respondent No.4 passed an order on 19th December, 1994 rejecting the applications. The property in question thus vested in the Central Government and was put to public auction by a notice dated 9th February, 1995. The original purchaser's writ petition 9. Before the auction could be held on 15th February 1995, Mr. Raghbir Singh filed WP (C) No. 524/1995 in this Court challenging the auction notice. An order was passed by the Division Bench in the said writ petition on 14th February, 1995 directing inter alia that "the sale shall not be confirmed and possession shall not be handed over without further orders from this Court." 10. The Petitioners herein parti....
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....hi and more particularly in the prime and upmarket Bengali Market area. So far as the adjustment for FAR is concerned, this is a factor which every purchaser of property would take into consideration for the purpose of assessing the potential of the property. Even while fixing the sale price, it is not uncommon for the sellers of immoveable properties in metropolitan cities to fix the reserve price in such a manner that it takes into account the FAR potential. Land is scarce and is limited in supply. In metropolitan cities such as Delhi; the pressure on land is very high. No willing buyer or willing seller of vacant land or land with existing building thereon would ignore the FAR potential of the land. Prices are fixed accordingly and this home-truth cannot be ignored while estimating the fair market value of the properties. In any case, what CWI at best be said against the adjustments made by the appropriate authority for the time gap of 14 months and for FAR is that they are too high or unrealistic, but it can never be said that such adjustments cannot at all be made; Therefore, even if there is some excessiveness in making such adjustments which may merit some moderation/reducti....
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....th September 2013, the following order was passed: "During the course of hearing, learned counsel for the respondent Nos. 2 to 4 states that the competent authority is yet to take a decision whether or not to accept the bid. The said decision should be taken by the competent authority within a period of four weeks without being influenced by the counter affidavit or the pendency of the present writ petition. It is, however, open to the Petitioners to make a representation within a period of one week why his bid should be accepted. Re-list on 18th November, 2013." Counter affidavit of the Department 17. Meanwhile a counter affidavit was filed by Respondent Nos. 2, 3 & 4 in which inter alia it was contended that by the letter dated 11th October, 2004, the Petitioners had sought refund of the earnest money and, therefore, had foregone, the claim over the property in question. The said letter was annexed as Annexure P-1. In the said letter, the Petitioners pointed out that despite a lapse of more than 9 years the sale deed in respect of the property in question had not been executed in their favour. They had also been deprived of their money for all this period. The ....
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....uld be accepted. Re-list on 18th November, 2013." 21. Pursuant thereto the Petitioners made a representation on 13th September, 2013. On 4th October 2013, the CCIT passed an order stating that the confirmation of the sale of the property in question in favour of the Petitioners will severely harm the interests of the Department and further that a re-auction was required to discover the correct market price and protect the interests of the Department. A reference was also made to Clause 11 of the terms & conditions of the sale by auction whereunder the CCIT had the right to cancel the auction at any time or the rights to reject any bid including the highest bid without assigning any reason. It was noted that the bid of the bidders were never accepted by the Department and hence payment of 25% of the bid amount "was neither insisted by the Department nor paid by the bidders." Accordingly the bid of the Petitioners was rejected and it was directed that the earnest money of Rs. 16.25 lakh deposited should be refunded to them in terms of Clause 11 of the terms and conditions of sale by auction. 22. With a view to challenging the aforementioned order dated 4th October, 2013, the Petiti....
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....nt determined by the CCIT in the order dated 4th October, 2013 being the current value of the balance amount due. They were also willing to pay interest @ 12% per annum on the said sum to make good any loss that may have been suffered by the ITD on account of the pendency of the present writ petition. Submissions of counsel for the Revenue 27. Countering the above submissions, Mr. Shivpuri, learned Senior Standing Counsel for the Revenue pointed out that there was no vested right in the Petitioners to demand that the property should be transferred in their favour since there was no formal acceptance of their bid. He placed reliance on the decision in U.P. Avas Evam Vikas Parishad v. Om Prakash Sharma 2013 (6) SCALE 202 and the decision of this Court in Gulmarg Restaurant v. Delhi Development Authority 119 (2005) DLT 648 (DB). Mr. Shivpuri submitted that the current market value of the property in question was such that it would be unconscionable to allow the sale to be confirmed in favour of the Petitioners on the basis of the bid offered by them more than 21 years ago. Analysis and reasons 28. Some of the undisputed facts are that the Petitioners were the successful bi....
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....tender are in the realm of the contract. No bidder is entitled as a matter of right to insist the authority inviting tenders to enter into further negotiations unless the terms and conditions of notice so provided for such negotiations. ....... ..... ..... 29. The Authority has the right not to accept the highest bid and even to prefer a tender other than the highest bidder, if there exist good and sufficient reasons, such as, the highest bid not representing the market price but there cannot be any doubt that the Authority's action in accepting or refusing the bid must be free from arbitrariness or favouritism." 29.3 The Supreme Court in U.P. Avas Evam Vikas Parishad & Ors. (supra) also referred to the decision in Rajasthan Housing Board v. G.S. Investments (2007) 1 SCC 477, in which the Supreme Court disapproved an order of the High Court which had issued a direction which virtually amounted to confirmation of the auction, which according to the Supreme Court "was not the function of the High Court." 29.4 The Supreme Court in U.P. Avas Evam Vikas Parishad (supra) held that in the absence of acceptance of the bid, there was no concluded contract in respect of the ....
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....hat a re-auction is required to discover the current market price. Lastly a reference is made to the terms and conditions in terms of which the CCIT has a right to reject any bid. Reference is also made to Clause 15 of the terms and conditions of the auction under which a bidder is required to pay 25% of the bid amount, i.e. Rs. 35 lakh, within thirty days, i.e. by 16th March, 1995. The CCIT concludes that the earnest money ought to be refunded to the Petitioners in terms of Clause 11 of the terms and conditions of the auction. 32. Clauses 11 to 15 of the terms and conditions of the auction read as under: "11. The Chief Commissioner of Income-Tax-Il, New Delhi, reserves the right to cancel or postpone the auction at any time. He also reserves the right to reject any bid, including the highest bid without assigning any reason. In such an event, the money already paid will be refunded to the intending purchaser without any Interest, unless the same is forfeited because of the reasons mentioned in para 9 above. 12. The successful bidder shall submit a duly filled In application in the attached form Immediately after the close of the auction of the property in question. 13. The s....