I. Sundarraj and Others vs The Commissioner, Sattur Municipality and Others

B. Rajendran, J.

In view of the issue involved in all the writ petitions is one and the same, all the writ petitions were taken up together and disposed of by a common order.

Heard all the parties concerned.

The short point for consideration in all these writ petitions is that in respect of the auction conducted on 11.02.2015 one of the participants/tenderers had increased his bid giving 25% more than the highest amount within 24 hours as per Clause 8(E) of the conditions stipulated in the tender notification. Therefore, he would contend that his bid being the highest bid, there can be an auction between him and the person who offered the highest amount.

On a careful consideration of the pleadings as well as a perusal of the documents produced before this Court, two things are very clear. It is a tender-cum-auction notification and in respect of Item No. 1, one Kumaravel had offered Rs. 16,02,000/- in the tender and for the very same item No. 1 one G. Vikraman who is a person impleaded had offered Rs. 16,00,000/- in the auction. It is pertinent to point out here that first auction was conducted and thereafter, tender was opened. Subsequently, one of the participants had increased the bid amount upto 25% and deposited the entire amount viz., Rs. 20,02,500/- in the treasury. For the second item in the auction, the highest amount was Rs. 10,60,000/- and when the tender was opened it was Rs. 10,80,000/-. Subsequently, one of the tenderers vis., second respondent in W.P. (MD) No. 2389 of 2015 had raised it from Rs. 10,80,000/- to Rs. 13,50,000/- and also deposited the amount. Now, the petitioner in W.P.(MD) No. 2388 of 2015 in item No. 1 who is the highest tenderer viz. Rs. 16,02,000/- wound contend that he being the highest bidder, Clause 8(E) will not apply as the other persons have participated. Therefore, the auction has to be given to him. Clause 8(E) of the tender notification is extracted as under:

When we go through Clause 8(E) of the tender notification, absolute power is given to the Commissioner and whenever he finds that a person offers highest amount he can once again call for the tender fixing the highest amount offered as the base amount. That is why, the clause has been given specifically stating that the entire amount has to be deposited to thwart the wayfarers/third parties unnecessarily coming into the auction. When he is bonafidely paying the entire amount, that shows he is interested in the tender and the money has already been deposited into the Government. In that case, the authority has no other go but to cancel and seek a fresh auction with that as the base price. Even otherwise, the very same clause clearly states that the Commissioner has got absolute power even without assigning any reason to cancel the auction and call for fresh auction. In this case, when the bona fide persons have deposited the entire amount viz., 25% higher than the highest amount of the bid, definitely the authority has to give only a reauction. The contention of the petitioner in W.P.(MD) No. 2388 of 2015 that the other person who has participated cannot invoke clause 18(e) cannot be accepted for the simple reason even without assigning any reason the Commissioner can cancel and the Commissioner feels more money is coming that has to be taken into consideration rather than the individuals rights.

Lastly, as rightly pointed out a peculiar thing has happened in this case viz., in a tender-cum-auction notice, normally, tender should be opened first and thereafter only auction should be conducted. As per the decision of the Division Bench of this Court such a process should not be permitted. Therefore, in this case tender was not opened and auction was conducted and therefore, it is clear that all the persons who participated in the auction had come to a particular amount viz., in respect of the first item Rs. 16,00,000/- but when tender was opened it was Rs. 15,80,000/-. How did a person know exactly what would be the amount in the auction. Had it been otherwise Rs. 16,00,000/- would be the higher amount on opening of the tender, thereafter with that as the base price the auction should have taken place. Therefore also the tender process itself is wrong and hence, rightly it has been cancelled. Therefore, the respondent is directed to conduct a fresh auction with a base price at Rs. 16,02,000/- and Rs. 20,02,500/- respectively for the items. It is made clear that all the parties who have now participated are also entitled to participate in the auction. It is also made clear that proper publication is made calling only for a public auction. It is further made clear that first the tender will be opened and thereafter the auction will be done with the highest amount of the tender as the base price.

With the above observation, all the Writ Petitions are disposed of. No costs. Consequently, the connected miscellaneous petitions are closed.