TaxTMI 
TaxTMI 
2013 (4) TMI 815
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....n exercise of its jurisdiction. 3. The ranking of the parties is referred to in the judgment as has been assigned before the 1st Additional Civil Judge, Bareilly for the sake of convenience. 4. The first defendant (appellant herein) is a statutory body created under the Uttar Pradesh Avas Evam Vikas Parishad Adhiniyam, 1965 for development of colonies, residential plots, commercial plots and complexes in the State of Uttar Pradesh. The first defendant on 4.3.1977 published in the local newspapers for auction of nine shops and a plot earmarked for Cinema Hall measuring 3441.94 sq. meters in Izzat Nagar, Scheme No.1, Block C and D in Bareilly District specifying the date of auction and furnishing necessary information. According to the plaintiff, the reserved price of the Cinema plot was fixed at Rs. 1,80,200/- and the auction of the property was conducted on 11.3.1977 under the supervision of one Mr. Raj Kumar Singh Bisen, the then Assistant Housing Commissioner of the first defendant Board. In the auction, the plaintiff (respondent herein) offered the highest bid of Rs. 1,31,500/- and as per the terms and conditions of the auction, he had deposited Rs. 26,300/- i.e. 20% of the bi....
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....g the substantial questions of law framed by it, the High Court has held that the judgment of the first appellate court was contrary to record as the same is passed without proper application of mind. It is the case of the defendants that the High Court while passing the impugned judgment has completely ignored to consider the provisions of Section 12 of the U.P. Avas Evam Vikas Parishad Adhiniyam, 1965 (hereinafter referred to as 'the Act'). Section 12 of the Act, reads as under: "12. Delegation of powers.- (1) Subject to the provisions of this Act and the rules, the Board may by general or special order delegate, either unconditionally or subject to such conditions, including the condition of review by itself, as may be specified in the order, to any committee appointed by it or to the Housing Commissioner or any officer of the Board such of its powers and duties under this Act, as it may deem necessary. (2) Subject to the provisions of this Act and the rules, the Housing Commissioner may by general or special order delegate, either unconditionally or subject to such conditions, including the condition of review by himself, as may be specified in the order, to any offic....
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.... "delegatum non protest delegare", the statutory power must be exercised only by the body and office to whom it has been conferred and none else can discharge the function entrusted to it by law? f. Whether the Hon'ble High Court was correct in ignoring the judgment of this Hon'ble Court in the case of Pradyat Kumar vs. Chief Justice of Calcutta AIR 1956 SC 285 wherein the Supreme Court observed that "it is well recognized that the statutory functionaries exercising the power of delegation cannot be said to have delegated such functions merely by deputing responsible and competent officials to enquire and report. This is the ordinary mode of exercise of any administrative power"? 11. Mr. Rakesh Dwivedi, learned senior counsel on behalf of the defendants submitted that the High Court was not correct in ignoring the fact that the Housing Commissioner had never made any delegation of power in favour of the then Assistant Housing Commissioner of the Board, in regard to accept or reject the bid of the plaintiff, therefore, the question of producing the order of delegation of his power said to have been given by the first defendant in his favour did not arise and it was the plaintiff w....
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....ior counsel on behalf of the defendant is that the High Court has ignored the fact that Housing Commissioner of the Board was the only competent authority to accept or reject the bid of the plaintiff and in fact he had rejected the offer and there was no concluded contract of sale of the plot in favour of the plaintiff as claimed by him. No allotment letter was ever issued in his favour and in the absence of the same, the prayer of the plaintiff that the auction of the property was held in relation to the plot in question under Scheme No.1 at Bareilly in favour of the plaintiff, is final and binding and nonacceptance of the same by the third defendant-Housing Commissioner who has rejected the bid of the plaintiff and communicated the same vide its letters dated 26.5.77 and 8.7.77 by the then Assistant Housing Commissioner in relation to Cinema Hall was illegal and void and the same has no effect on the status of plaintiff as owner/allottee thereof is wholly untenable in law. Another contention urged by the learned senior counsel is that the third defendant-Housing Commissioner has no power to delegate his authority to another officer in exercise of authority under Section 12(2) of ....
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....her, the learned senior counsel placed reliance on the law laid down by this Court in Rajasthan Housing Board vs. G.S. Investments & Anr 2007 (1) SCC 477 in support of his submissions that bidder has no vested interest in relation to the auctioned property unless the bid is accepted, even though the auction is concluded in his favour and the auction proceedings can always be cancelled by the competent authority of the first defendant. 19. Further the learned senior counsel placed reliance upon the judgment of this Court in Laxmikant vs. Satyawan 1996 (4) SCC 208 in support of his legal contention that this Court has repeatedly pointed out that 'State' or the authority which can be held to be 'State' within the meaning of Article 12 of the Constitution is not bound to accept the highest tender or bid and the Government authority could validly retain its power either to accept or reject the highest bid in the interest of public revenue. In support of this legal contention, learned senior counsel placed reliance upon another decision of this Court in State of Orissa v. Harinarayan Jaiswal 1972 (2) SCC 36 (para 13) and submitted that the High Court could have noticed that the trial c....
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....t the auction officer carried with him the authority to conclude the contract, whether such entrustment of authority was by an oral order or in writing. There is no pleading in the plaint regarding the same and therefore, the plaintiff should have been directed to prove the same and the evidence of DW1 could not have been accepted by the trial court to prove the negative fact that no such order was made in writing in favour of the then Assistant Housing Commissioner either by the Board or third defendant as provided under Section 12(1) of the Act. Further, the High Court has noted in its remand order the term of condition No.5 which enunciated that the power of final approval by an authority other than the auction officer and issuance of the allotment order in favour of the plaintiff was a condition precedent to the contract. The trial court has neither adverted to the aforesaid aspect of the case nor has referred to the conditions in its judgment. It is contended by the learned senior counsel while answering the contentious issue that the aforesaid observations made by the High Court in the earlier remand order by allowing the first appeal of the defendants which was binding on th....
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....r in favour of the then Assistant Housing Commissioner for conducting auction and accepting the bid in favour of the plaintiff and rightly adverse inference was drawn against it under Section 114 of the Evidence Act by not accepting the explanation given by the first defendant through its officer that the file was misplaced in transit from Bareilly to Lucknow stating that it is untenable. The burden of proof is on the first defendant by producing record to show that the then Assistant Housing Commissioner was only deputed to supervise and conduct auction of the plot as ministerial officer and did not have any authority to accept the bid. Further, it is stated by the learned senior counsel that three other shops, auction of which was held by the Assistant Housing Commissioner on 11.3.1977, were allotted in favour of the highest bidders by accepting their offer and executing necessary documents. It would clearly go to show that the findings recorded by the trial court accepted by the High Court in exercise of its second appellate jurisdiction and answering the substantial questions of law in favour of the plaintiff in the impugned judgment is based on the pleadings and the legal evid....
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....g the following reasons:- It is an undisputed fact that public auction was held in relation to the property of the first defendant vide public notice dated 4.3.1977 published in the local newspapers by the Parishad for auction of nine shops and the plot earmarked for cinema hall measuring 3441 sq. meters. The auction was supervised and conducted on 11.3.1977 by one Mr. Ram Kumar Singh Bisen the then Assistant Housing Commissioner. It was also an admitted fact that the plaintiff was the highest bidder as he had quoted Rs. 1,31,500/- in relation to the plot and he has deposited a sum of Rs. 26,500/- that is 20% of the amount of bid plus Rs. 500/- as earnest money. 26. It is also an undisputed fact that the offer of the plaintiff is highest as per the terms and conditions of the sale of plot in question by public auction are concerned, 20% of the bid amount deposited by him that by itself does not amount to accepting his bid by the competent authority for grant of lease hold rights of plot in his favour. 27. This Court in the case of Meerut Development Authority case (supra) has laid down the legal principle that the bidder who has participated in tender process have no other right....
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....ing final acceptance of the bid had not been passed by the Chairman of the Housing Board, the highest bidder acquire no vested right to have the auction concluded in his favour and the auction proceedings could always be cancelled. Further, he has placed reliance on another decision of this Court in the case of Laxmikant referred to supra . In support of the proposition of law this Court has rightly pointed out that the 'State' or the Authority, which can be held to be a 'State' within the meaning of Article 12 of the Constitution, is not bound to accept the highest tender/offer or bid and the Government could validly retain its power to accept or reject the highest bid in the interest of public revenue. In support of this contention, he has placed reliance on the State of Orissa vs. Harinarayan Jaiswal case (supra), relevant paragraph of which reads as under: "13. Even apart from the power conferred on the Government under Sections 22 and 29, we fail to see how the power retained by the Government under clause (6) of its order, dated January 6, 1971, can be considered as unconstitutional. As held by this Court in Cooverjee B. Bharucha case, one of the important purpose of selling....
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....an excise revenue does not change the nature of the right. The sale in question is but a mode of raising revenue. Assuming that the question of arbitrary or unguided power can arise in a case of this nature, it should not be forgotten that the power to accept or reject the highest bid is given to the highest authority in the State i.e. the Government which is expected to safeguard the finances of the State. Such a power cannot be considered as an arbitrary power. If that power is exercised for any collateral purposes, the exercise of the power will be struck down. It may also be remembered that herein we are not dealing with a delegated power but with a power conferred by the Legislature. The High Court erroneously thought that the Government was bound to satisfy the Court that there was collusion between the bidders. The High Court was not sitting on appeal against the order made by the Government. The inference of the Government that there was a collusion among the bidders may be right or wrong. But that was not open to judicial review so long as it is not proved that it was a makebelieve one. The real opinion formed by the Government was that the price fetched was not adequat....
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....a that after the remand order the said plea was taken belatedly by the first defendant, therefore, it has waived its right, is erroneous finding recorded by the trial court. The said finding of the trial court, which has been accepted by the second appellate court, also suffers from error in law. The maintainability of the suit on the ground of non issuance of a statutory notice to the first defendant prior to institution of the suit is a legal ground, which can be raised at any point of time, even in the second appeal; this is well established principle of law. This aspect of the matter has not been considered by the trial court while answering the relevant contentious issue Nos. 5 and 6. The second appellate court too did not consider this important legal aspect of the case. Therefore, we have to answer the said point against the plaintiff holding that the plaintiff has no right to institute a suit in absence of the notice under Section 88(2) of the Act, which is mandatory in law. Answer to Point (f): 32. The declaratory relief sought by the plaintiff in the original suit is not maintainable in law as the plaintiff did not acquire legal right in respect of the plot in qu....
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....r passed by the second appellate court is wholly unsustainable in law and is liable to be set aside. 34. It is an undisputed fact that Section 16 of the Act confers power upon the Board to dispose of its property as per Rule 3 of the U.P. Avas Avam Vikas Parishad (Delegation of Powers by the Board and the Housing Commissioner) Rules, 1968. The Board has power under Section 12(1) of the Act to delegate its power either to a Committee or the Housing Commissioner or any other officer in exercise of its power to discharge its functions. It is the case of the defendants that the Assistant Housing Commissioner was not delegated this power by the Board. In this regard, there is no pleading of the plaintiff except the averments made at para 5 of the plaint, the relevant para is noted in the submissions made by the learned senior counsel on behalf of the defendants. Further there is no communication by the first defendant regarding acceptance of the proposal of the highest bid of the plaintiff as required under Section 3 of the Contract Act, 1872. This principle of law is well settled as per the decision of the Queen's Bench in Pharmaceutical Society of Great Britain v. Boots Cash Chemists....
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.... and the plaintiff cannot claim any legal right and question of enforcement of the said right as provided under Section 34 of the Specific Relief Act seeking declaratory relief by the plaintiff the same did not arise in the case in hand. The above important factual and legal aspects have not been examined in proper and constructive manner either by the trial court or by the second appellate court. Therefore, the impugned judgment, order and decree are liable to be set aside. Answer to point (g) 37. The substantial questions framed by the court in the second appeal did not arise for its consideration. The High Court ought to have noticed that the legal right claimed by the plaintiff seeking relief under Section 34 of the Specific Relief Act on the basis of the pleadings is wholly untenable in law. In view of the fact that no legal right accrued in his favour in the absence of a concluded contract which was said to have existed by mere offering of highest bid in relation to the property in question to obtain the property on lease for a period of 90 years amounting to disposal of the property of the first defendant being an authority under Article 12 of the Constitution, no right w....