RAJASTHAN HOUSING BOARD AND ANR. versus G.S. INVESTMENTS AND ANR.

Citation: [2006] SUPP. 7 S.C.R. 868 · Decided: 31-10-2006 · Supreme Court of India · Bench: G.P. MATHUR · Disposal: Appeal(s) allowed

Judgment (excerpt)

A 
RAJASTHAN HOUSING BOARD AND ANR. 
!r 
\( 
G.S. INVESTMENTS AND ANR. 
OCTOBER 31, 2006 
B 
[G.P. MATHUR AND A.K. MATHUR, JJ.] 
Rajas than Housing Board Act, 1970-Section 60-Auction of plots by 
Housing Board-Cancellation of auction by State Government since auction 
' 
c 
not fairly conducted-Order passed to hold fresh auction-Challenge to, by 
highest bidder-Held: Highest bidder did not acquire any vested right to 
have auction concluded in his favour since the Chairman of Housing Board 
having final authority regarding acceptance of the bid did not pass order 
to that effect-Auction proceedings could always be cancelled-State -
Government was fully empowered to cancel the auction, direction being 
D issued in public interest, thus interference by High Court not called for-
Order of High Court set aside-Constitution of India, 1950-Artic/e 226. 
Appellant No. I-State Housing Board carried out auction of commercial 
plots. Respondent no. I was the highest bidder. Thereafter, news report was 
published regarding bungling done in the auction. State Government 
E summoned the records and stayed all the further proceedings relating to 
auction. Disciplinary proceedings were initiated against the concerned officers 
and they were placed uni!er suspension. Direction was issued that no auction 
would be conducted through any agency. State Government considered the 
. report of the Financial Commissioner which showed that in the past, plots in 
F the said area had fetched the price almost double of the price offered by the 
respondent no 1 and thereafter, passed an order disapproving the auction and 
directed issuance of fresh auction. Appellant communicated respondent No. 
1 that the auction was cancelled and it could seek refund of the deposit amount. 
Respondent No. 1 filed writ petition. The order cancelling the auction was 
quashed and appellant was directed to consider representation of respondent 
G and issue demand note of balance amount. Appellant filed appeal which was 
dismissed. Hence the present appeal. 
Allowing the appeal, the Court 
HELD: 1.1. Section 60 of the Rajasthan Housing Board Act, 1970 is 
H 
868 
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RAJASTHAN HOUSING BOARD r G.S. INVESTMENTS 
869 
couched in very wide and clear language. It empowers the State Government A 
to give directions to the Housing Board as in its opinion are necessary or 
expedient for carrying out the purposes of the Act. The section further enjoins 
that it shall be the duty of the Board to comply with such directions. Therefore, 
the State Government was fully empowered to issue the directions whereby it 
disapproved the auction held and no exception can be taken to such a course 
of action. The directions having been issued in the interest of the Housing 
Board to generate revenue and to augment its finances, it cannot be faulted 
with on any ground.1874-A-BI 
B 
t.2. The auction notices contained a condition to the effect that the 
Chairman of the Housing Board shall have the final authority regarding C 
acceptance of the bid. In view of this condition in auction notice, it is obvious 
that a person who had made the highest bid in the auction did not acquire any 
right to have the auction concluded in his favour until the Chairman of the 
Housing Board had passed an order to that effect. The Chairman could not 
exercise his power in an arbitrary manner but so long as an order regarding 
final acceptance of the bid had not been passed by the Chairman, the highest D 
bidder acquired no vested right to have the auction concluded in his favour 
and the auction proceedings could always be cancelled. 1874-B-EJ 
laxmikant v. Satyawan, 11996) 4 SCC 208, relied on. 
2. The sale of plots by the State Housing Board by means of an auction E 
is essentially a commercial transaction. Even if some defect was found in the 
ultimate decision resulting in cancellation of the auction, the court should 
exercise its discretionary power under Article 226 of the Constitution with 
great care and caution and should exercise it only in.furtherance of public 
interest. The court should always keep the larger public interest in mind in F 
order to decide whether it should interfere with the decision of the authority. 
In the instant case, there was enough material before the State Government 
to show that in the past plots in the area had fetched a price ofRs.10, 000/-
per square meter and the highest bid made by the respondent in the instant 
case was nearly half, i.e., Rs. 5750/- per 

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