THE HARYANA STATE AGRICULTURAL MARKETING BOARD AND ORS. versus SADHU RAM

Citation: [2008] 6 S.C.R. 43 · Decided: 08-04-2008 · Supreme Court of India · Bench: TARUN CHATTERJEE · Disposal: Appeal(s) allowed

Judgment (excerpt)

(2008] 6 S. C.R. 43 
} 
THE HARYANA STATE AGRICULTURAL 
A 
MARKETING BOARD AND ORS. 
\I. 
SADHU RAM 
(Civil Appeal No. 2549 of 2008) 
APRIL 8, 2008 
B 
+· 
(TARUN CHATTERJEE & HARJIT SINGH BEDI, JJ.) 
__.,.. 
Punjab Agricultural Produce Markets Act, 1961; S.181 
Constitution of India, 1950; Article 226: 
c 
Auction of plots - Cancellation by authority ordering 
second auction - Challenged on ground of non-disclosure of 
reserved price in second auction - Allowed by High Court -
Correctness of - Held: Incorrect - The Chief Administrator, 
the final authority did not approve the auction bids in first D 
auction - A highest bidder in an auction did not acquire any 
right to have auction concluded in his favour - Second auction 
was ordered by the authority as earlier auction could not fetch 
the expected amount -
Moreover, in the facts and 
circumstances of the case, the action of the Chief Administrator E 
directing second auction of plots was fair and not arbitrary and 
not a colourable exercise of power - Though reserved price 
was not known to respondents, but that could not permit the 
High Court to direct allotment of alternative plots to highest 
bidder in firs.t auction in exercise of its power u!Article 226 of F 
the Constitution - Judicial Review - Scope of 
In connection with allotment of commercia·I plots, viz., 
shop plots and Booth plots in open auction, a public 
notice was issued by appellant No.2. Respondents were 
declared to be highest bidders for the plots, and they had G 
deposited requisite amount of the bid money. Later, the 
~ 
Chief Administrator conveyed its approval for the bids 
given in respect of one plot and three booths and rejected 
the auction held in respect of all other plots, directed to 
43 
H 
44 
SUPREME COURT REPORTS 
[2008] 6 S.C.R. 
A refund the amount deposited by the respondents and 
ordering second aution in respect of remaining plots. 
Accordingly, second auction took place. Respondents 
challenged the order of the Chief Administrator by filing a 
writ petition. High Court held that the respondents were 
B entitled to be allotted alternative plots. Hence the present 
appeals. 
Appellant-authorities submitted that declaration of 
the auction in favour of the respondents was subject to 
final approval of the Chief Administrator of the Board and 
C since the Chief Administrator had rejected the auction in 
their favour, the action of the appellants directing second 
auction of the properties in question was wholly justified; 
that the bids offered by the respondents were lower than 
the reserve price, which resulted in the rejection of the 
D bids by the Chief Administrator who under Section 18 of 
the Act had the prerogative to accept or to reject the bids 
without assigning any reason; that in the subsequent 
auction, a higher price was fetched in respect of the same 
plots; that the High Court was not justified in invalidating 
E the action of the appellants on the ground of non-
disclosure of the reserve price and even if the non-
disclosure of the reserve price at the time of auction was 
to be treated as an irregularity/illegality, the High Court 
could at the most quash the entire auction but could not 
F confirm the auction in favour of the respondents; and that 
in fact, the respondents had already received back the 
amount deposited by them towards bid money and, 
therefore, had no subsisting right qua their claim. 
Respondents submitted that since the reserve price 
G was not disclosed either in the Public notice or at the time 
of the auction to the persons participating in the same, 
the offers made by the respondents in the auction could 
not be rejected by the Chief Administrator of the Board as 
such the rejection must be treated as unfair, unreasonable 
H and illegal; and that the respondents were not informed 
; 
y 
THE HARYANA STATE AGRI. MARKETING BOARD & 
45 
ORS. v. SADHU RAM 
the reason for rejection of their bids even in the letter dated A 
17th of December, 2004 and that the bids offered by them 
were rejected by the appellants after 6 months without 
affording them any opportunity of being heard. 
Allowing the appeals, the Court 
B 
~ 
HELD: 1. It is true that the reserve price was neither 
known to the respondents nor was it advertised for the 
purpose of allotting the plots to the respondents but that 
could not permit the High Court to direct allotment of 
alternative plots to the respondents. (Para - 9) [53-C, D] c 
2.1 In terms of provisions u/s.

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