# 6 S.C.R. 663 ~· MEERUT DEVELOPMENT AUTHORITY v. ASSOCIATION OF MANAGEMENT STUDIES & ANR

- **Citation:** [2009] 6 S.C.R. 663
- **Court:** Supreme Court of India
- **Decided:** 2009-04-17
- **Case number:** Civil Appeal No. 2619 of 2009
- **Bench:** Lokeshwar Singh Panta, B. Sudershan + Reddy
- **Source:** https://unisonlegal.in/judgment/supreme-court-of-india/6-s-c-r-663-meerut-development-authority-v-association-of-management-studies-anr-25921
- **Pages:** 40

## Headnote

Tender - Nature of rights of a bidder participating in
tender process -Held: Bidder is not entitled as a matter of c
right to insist the Authority inviting tenders to enter into further
negotiations unless the terms and conditions of notice so
provided for such negotiations.
Tender - Decision making process - Judicial review in D
contractual matters - Scope of - Held: Court not to substitute
its own opinion for the opinion of the authority deciding the
matter - But at the same time, courts can certainly examine
whether 'decision making process' was reasonable, rational,
not arbitrary and violative of Article 14 - On facts, allotment E
of land for educational purposes - Bidder made a bid at a
rate less than the reserved price - Authority was not under
,,. ·~
any legal or constitutional obligation to entertain the bid -
Plea that allotment of land for educational purpose at
reasonable rate would subserve public interest, not tenable
as public interest parameters were taken into consideration F
by Government itself in directing the Authority to make the
lands to educational institutions at a concessional rate -
Bidder had no legal or constitutional right to make any
..
perpetual demands and dictate terms to the Authority to allot
any particular land at the chosen rate - Conduct of the bidder G
would also not entitle it to get any relief in equity - Equity -
Administrative law.
Urban development - Change of land use - Disputed
663
H
664
SUPREME COURT REPORTS
[2009] 6 S.C.R:-
A land in Master Plan was reseNed for 'Residential' purpose -
Authority earlier relaxed the use and made it for 'educational'
purpose - There is nothing unreasonable in changing the
land use and eannarking it again for 'Residential' use - Uttar
Pradesh Urban Planning and Development Act, 1973.
B
Respondent-Association of Management Studies
was indulged in managing various educational
-+
institutions imparting education such as MBA, MCA,
Engineering etc. On 12.5.2000, MDA allotted a plot of land
measuring 20,000 sq.m. situated in Ganganagar
C Residential Scheme @ Rs. 560 per sq m. to AMS for
construction of building for educational purposes. The
AMS requested to allot ~n additional land of 20,000
sq.mts. and 37,000 sq.mts. in the said Scheme for
establishment of Engineering College and other Degree
D Colleges. The MDA invited tenders for allotment of land
measuring 20,000 sq.mts. and 37,000 sq.mts. located in
the said residential scheme available to be utilized for
educational use. The reserved price was fixed at Rs. 690
per sq.m. for 20,000 sq. mts. and for the remaining extent
E of 37,000 sq.m. of land at Rs. 500 per sq. m. both being
50% of sector rate. The reserved price was fixed in terms
F
of G.O. dated 19.04.1996 which provided that plots for
-+
educational institutions/engineering colleges should be
"'
sold at 50% of the sector rate.
In response to the advertisement, AMS submitted its
tender@ Rs. 500 per sq.m. for the plot of 37,000 sq.mts.
and Rs. 560 per sq.m. for 20,000 sq.mts. The MDA
informed AMS on 3.09.2001 that the offer @ Rs. 560 per
G sq.m was less than the reserved rate of Rs. 690 per sq.m.
~
in respect of 20,000 sq.mts. of land.
AMS was put on notice to give its consent within one
week if it was desirous of getting 20,000 sq.m. of land at
Rs. 690 per sq.m. AMS in response to the said letter
H requested the Authority to allot 37,000 sq.m. of land at Rs.
-'
MEERUT DEVELOPMENT AUTH. v. ASSOCIATION 665
.,._
OF MANAGEMENT STUDIES
).
500 per sq.m. offered by them in their tender and in clear
A
terms stated that the other land of 20,000 sq.m. may be
deleted from offer as the cost of that land was not viable
for them. However, it stated that it was ready to purchase
the same at Rs. 560/- per sq.m. as quoted by it which was
the same rate at which the part of that land was already
B
purchased.
-.......
On 27 .11.2001, MDA informed AMS that only 37 ,000
+
sq.mts. of land was allotted. This was accepted by AMS
and they took allotment of only 37 ,000 sq

## Text

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---
[2009) 6 S.C.R. 663
~·
MEERUT DEVELOPMENT AUTHORITY
A
v.
ASSOCIATION OF MANAGEMENT STUDIES & ANR.
(Civil Appeal No. 2619 of 2009)
APRIL 17, 2009
B
\.. -
[LOKESHWAR SINGH PANTA AND B. SUDERSHAN
+
REDDY JJ.]
Tender - Nature of rights of a bidder participating in
tender process -Held: Bidder is not entitled as a matter of c
right to insist the Authority inviting tenders to enter into further
negotiations unless the terms and conditions of notice so
provided for such negotiations.
Tender - Decision making process - Judicial review in D
contractual matters - Scope of - Held: Court not to substitute
its own opinion for the opinion of the authority deciding the
matter - But at the same time, courts can certainly examine
whether 'decision making process' was reasonable, rational,
not arbitrary and violative of Article 14 - On facts, allotment E
of land for educational purposes - Bidder made a bid at a
rate less than the reserved price - Authority was not under
,,. ·~
any legal or constitutional obligation to entertain the bid -
Plea that allotment of land for educational purpose at
reasonable rate would subserve public interest, not tenable
as public interest parameters were taken into consideration F
by Government itself in directing the Authority to make the
lands to educational institutions at a concessional rate -
Bidder had no legal or constitutional right to make any
..
perpetual demands and dictate terms to the Authority to allot
any particular land at the chosen rate - Conduct of the bidder G
would also not entitle it to get any relief in equity - Equity -
Administrative law.
Urban development - Change of land use - Disputed
663
H
664
SUPREME COURT REPORTS
[2009] 6 S.C.R:-
A land in Master Plan was reseNed for 'Residential' purpose -
Authority earlier relaxed the use and made it for 'educational'
purpose - There is nothing unreasonable in changing the
land use and eannarking it again for 'Residential' use - Uttar
Pradesh Urban Planning and Development Act, 1973.
B
Respondent-Association of Management Studies
was indulged in managing various educational
-+
institutions imparting education such as MBA, MCA,
Engineering etc. On 12.5.2000, MDA allotted a plot of land
measuring 20,000 sq.m. situated in Ganganagar
C Residential Scheme @ Rs. 560 per sq m. to AMS for
construction of building for educational purposes. The
AMS requested to allot ~n additional land of 20,000
sq.mts. and 37,000 sq.mts. in the said Scheme for
establishment of Engineering College and other Degree
D Colleges. The MDA invited tenders for allotment of land
measuring 20,000 sq.mts. and 37,000 sq.mts. located in
the said residential scheme available to be utilized for
educational use. The reserved price was fixed at Rs. 690
per sq.m. for 20,000 sq. mts. and for the remaining extent
E of 37,000 sq.m. of land at Rs. 500 per sq. m. both being
50% of sector rate. The reserved price was fixed in terms
F
of G.O. dated 19.04.1996 which provided that plots for
-+
educational institutions/engineering colleges should be
"'
sold at 50% of the sector rate.
In response to the advertisement, AMS submitted its
tender@ Rs. 500 per sq.m. for the plot of 37,000 sq.mts.
and Rs. 560 per sq.m. for 20,000 sq.mts. The MDA
informed AMS on 3.09.2001 that the offer @ Rs. 560 per
G sq.m was less than the reserved rate of Rs. 690 per sq.m.
~
in respect of 20,000 sq.mts. of land.
AMS was put on notice to give its consent within one
week if it was desirous of getting 20,000 sq.m. of land at
Rs. 690 per sq.m. AMS in response to the said letter
H requested the Authority to allot 37,000 sq.m. of land at Rs.
-'
MEERUT DEVELOPMENT AUTH. v. ASSOCIATION 665
.,._
OF MANAGEMENT STUDIES
).
500 per sq.m. offered by them in their tender and in clear
A
terms stated that the other land of 20,000 sq.m. may be
deleted from offer as the cost of that land was not viable
for them. However, it stated that it was ready to purchase
the same at Rs. 560/- per sq.m. as quoted by it which was
the same rate at which the part of that land was already
B
purchased.
-.......
On 27 .11.2001, MDA informed AMS that only 37 ,000
+
sq.mts. of land was allotted. This was accepted by AMS
and they took allotment of only 37 ,000 sq.mts. of land. c
However, having accepted the offer of 37,000 sq.mts. of
land, AMS raised an objection stating that injustice was
d~ne by the Authority in fixing the reserved pric~ at Rs.
690 per sq.m. even though adjoining plots were allotted
at Rs. 500-560 per sq.m. MDA in its meeting held on
D
-'¥
15.03.2002 decided that the disposal of the land would be
made through open Tender-cum-Auction for residential
use after giving wide publicity. The Authority considered
the offer made on behalf of a Housing Society to
purchase the bulk of land measuring 20,000 sq.mts at Rs.
775 per sq.m. and as well as the letter dated 4.3.2002 sent
E
by AMS.
AMS by its letter dated 27.03.2002, requested the
>-,.
Authority to allot the said land at Rs. 690 per sq.m. or in
alternative, the topography,of the land be so adjusted
.F
that both the 20,000 sq.mts. of land and 37,000 sq.mts.
of land already allotted to the society may be made
contiguous to each other so that the entire land could be
fruitfully utilized by it for educational purposes.
On 15.4.2002, MDA got issued fresh advertisement G
J.
inviting applications in newspapers for allotment of the
aforementioned plot of land of 20,000 sq.mts. inviting
bids from Foreign Direct Investors, building developers
etc. for housing purposes with the reserved price of Rs.
885 per sq.m. and earnest money of Rs. 5.50 lakhs.
H
666
SUPREME COURT REPORTS
[2009] 6 S.C.R.
A Aggrieved, AMS filed writ petition in the High Court.
The High Court by its interim order dated 7.05.2002,
permitted the MDA to allot the land in pursuance of the
advertisement dated 15.04.2002, but subject to the
8 decision of the writ petition.
In the auction held, the highest bid of Rs. 1365 per
sq.m. was accepted. The highest bidder deposited the
earnest money of Rs. 5.50 lakhs. The balance
consideration was required to be paid in instalments. But
C during the pendency of the writ petition, the MDA by its
order dated 14.5.2007 cancelled the auction and the
decision of allotment to the auction purchaser. Auction
purchaser filed the writ petition challenging the order of
cancellation. The High Court allowed the writ petition filed
D by AMS and dismissed the writ petition filed by auction
purchaser. Hence these appeals.
The questions which arose for consideration in these
appeals were what was the nature of rights of a bidder
E participating in the tender process; the scope of judicial
review in contractual matters; whether the decision of the
Authority dated 15.03.2002 undoing its earlier decision
dated 7.7.2001 and changing land use of the disputed
plot from educational to housing was unreasonable and
F violative of Article 14 of the Constitution; whether the
decision was not in public interest; whether AMS was
entitled to equitable relief and whether the High Court was
justified in cancelling the auction in which the highest
bidder deposited the earnest money of Rs. 5.50 lakhs.
G
Allowing the appeal of MDA and dismissing the
appeal filed by the auction purchaser, the Court
HELD: 1.1. A tender is an offer. It is something which
invites and is communicated to notify acceptance. It
H must be unconditional; in the proper form, the person by
--
..
.I
MEERUT DEVELOPMENT AUTH. v. ASSOCIATION 667
·-
OF MANAGEMENT STUDIES
}
whom tender is made must be able to and willing to
A
perform his obligations. The terms of the invitation to
tender cannot be open to judicial scrutiny because the
invitation to tender is in the realm of contract. However,
a limited judicial review may be available in cases where
it is established that the terms of the invitation to tender
B
were so tailor made to suit the convenience of any
particular person with a view to eliminate all others from
..
participating in the bidding process. The bidders
participating in the tender process have no other right
except the right to equality and fair treatment in the matter c
of evaluation of competitive bids offered by interested
persons in response to notice inviting tenders in a
transparent manner and free from hidden agenda. No
bidder is entitled as a matter of right to insist the Authority
inviting tenders to enter into further negotiations unless D
.,,,,
the terms and conditions of notice so provided for such
negotiations. [Para 17] [683-G-H; 684-A-D]
1.2. The disposal of the public property by the State
or its instrumentalities partakes the character of a trust.
The methods to be adopted for disposal of public
E
property must be fair and transparent providing an
opportunity to all the interested persons to participate in
~-
the process. 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,
F
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 favoritism. [Para 18] [684-E-G]
1.3. A mere look at the tender notice makes it clear G
-~-
Jo
that the two plots of land admeasuring 37,000 and 20,000
sq.mts. meant for establishing engineering colleges were
advertised as a single item, though the specified reserved
price was different. AMS itself mentioned different and
H
668
SUPREME COURT REPORTS
[2009) 6 S.C.R.
A separate bids in their tender and made a bid at Rs.560 per
sq.m. for 20,000 sq.mts plot which was less than that of
the reserved price. The Authority was not under any legal
or constitutional obligation to entertain the bid which was
much below the reserved price. The plea that there was
B some vagueness, uncertainty and misunderstanding in
the matter of depiction of rates is clearly an after thought.
AMS never sought any clarification whatsoever from the
Authority as regards the fixation of reserved price in
respect of 20,000 sq. mts. of plot. This plea was not raised
C even in the Writ Petition filed by the AMS. [Para 19] [684G-H; 685-A-D]
1.4. "J:he MDA, though not under any obligation, .
provided a further opportunity to the Society and
expressed its willingness to part away with the land,
D provided AMS agreed to pay the reserved rate of Rs.690
per sq.m. AMS did not avail this opportunity. It expressed
its desire to purchase the said land @ Rs.560 per sq.m.
only. It is difficult to discern as to on what basis AMS
asserted its right and insisted that the Authority should
E part away with its valuable land at a price lesser than that
of the reserved price. AMS proceeded on the assumption
as if it has some unassailable right in respect of the said
plot of land merely because it had earlier got allotted
adjoining plot of land for the construction of its buildings.
F Had the Authority conceded to the request so made by
AMS it would have been an unfair and arbitrary decision
and the courts may have interfered with the same in
exercise of judicial review power. The tender process
actually stood terminated with the letter of the MDA dated
G 27 .11.2001 allotting 37 ,000 sq.mts. of land alone. The
rights of AMS, if any came to an end when it informed the
Authority - MDA that it was not claiming any right over
the land admeasuring 20,000 sq.mts. and made a further
request to delete its offer in respect of the said land. [Para
H 20] [685-0-H; 686-A-B]
MEERUT DEVELOPMENT AUTH. v. ASSOCIATION 669
·--
OF MANAGEMENT STUDIES
->
· 1.5. The subsequent letters sent by AMS at its own
A
'.
choice is of no consequence. The MDA did not make any
promise that the suggestion of AMS to allot the plot at
Rs.560 per sq.m. was under its consideration. Many a
letters including the letter dated 03.01.2002 of the Society
makes it clear that there was no confusion whatsoever B
with regard to reserved price fixed at Rs.690 per sq.m.
-
Once it is clear that there was no vagueness, uncertainty
-4
or any confusion with regard to the reserved price there
is no scope for any interference in the matter by this
court. The terms and conditions of tender were expressly c
clear by which the authority as well as the bidders were
bound and such conditions are not open to judicial
scrutiny unless the action of the tendering authority is
found to be malicious and misuse of its statutory powers.
-')
[Para 21] [686-B-E]
D
Tata Cellular v. UOI 1994 (6) SCC 651; Air India Ltd. v.
Cochin International Airport Ltd. 2000 (2) SCC 617;
Directorate of Education v. Educomp Datamatic Ltd. 2004 (4)
SCC 19; Association of Registration Plates vs. UOI 2005 (1)
SCC 676 and Global Energy Ltd. v. Adani Exports 2005 (4)
E
SCC 435; Purvanchal Projects Ltd. v. Hotel Venues 2007(10)
sec 33, relied on .
., 't1.6. The bids offered by AMS received their due
attention in a fair and transparent manner free from any
F
bias at the hands of MDA. No rights of AMS have been
infringed by MDA in not giving opportunity to involve
itself in lengthy negotiations. The Authority was free to
make its choice and to invite fresh bids after the Society
~
relinquished its claim in respect of the disputed plot by G
·~
letter dated 17.09.2001 which was accepted by MDA. The
decision of the Authority was duly communicated to the
AMS by letter dated 27 .11.2001. The decision so taken by
the MDA resolved in infringement of rights of AMS. (Para
22] [686-F; 687-A-B]
H
670
SUPREME COURT REPORTS
[2009] 6 S.C.R.
A
2.1. The authorities owe a duty to act fairly but it is
equally well settled that in judicial review, the court is not
concerned with the merits or correctness of the decision,
but with the manner in which the decision is taken or the
order is made. The Court cannot substitute its own
8 opinion for the opinion of the authority deciding the
matter. [Para 25] [689-E-F]
2.2. By way of judicial review, the court cannot
examine the details of the terms of the contract which
have been entered into by the public bodies or the State.
C Courts have inherent limitations on the scope of any
such enquiry. If the contract has been entered into
w!thout ignoring the procedure which can be sai~ to be
basic in nature and after an objective consideration of
different options available taking into account the interest
D of the State and the public, then the court cannot act as
an appellate court by substituting its opinion in respect
of selection made for entering into such contract. But at
the same time the courts can certainly examine whether
'decision making process' was reasonable, rational, not
E arbitrary and violative of Article 14. [Para 25] [689-G-H; 690A-B]
Ramana Dayaram Sheffy v. International Airport
Authority of India 1979 (3) SCC 489; Kasturi Lal Lakshmi
Reddy v. State of J & K 1980 (4) SCC 1; Ram and Shyam
F Co. v. State of Haryana 1985 (3) SCC 267; Mahabir Auto
Stores v. Indian Oil Corporation 1990 (3) SCC 752; Sterling
Computers Ltd. v. M & N Publications 1993(1) SCC 445; A.B.
International Exports v. State Corporation of India. 2000 (3)
SCC 553 and Administrative Law, 9th Edition, H. WR. Wade
G & C.F. Forsyth, relied on.
Chief Constable of North Wales Police v. Evans (1982)
3 ALLER 141; R. v. Independent Television Commission, ex.
P.
TSW Broadcasting
Limited (1996)
JR 185;
H Nottinghamshire Country Council v. Secretary of State for the
...
MEERUT DEVELOPMENT AUTH. v. ASSOCIATION 671
OF MANAGEMENT STUDIES
,._
Environment (1986) 1 AllER 199 and Lochner v. New York A
-t
198 US 45, 76 (1995), referred to.
3.1. There is nothing on record to suggest that
impugned decision was taken only for making higher
financial gain and profit. However, there is nothing wrong
even if any such effort was made by MDA to augment its B
financial resources. The effort, if any, made by MDA to
_,
augment its financial resources and revenue itself cannot
..
be said to be unreasonable decision. It is well said that
the struggle to get for the State the full value of its c
resources is particularly pronounced in the sale of State
owned natural assets to the private sector. Whenever the
Government or the authorities get less than the full value
of the asset, the country is being cheated; there is a
simple transfer of wealth from the citizens as a whole to
D
whoever gets the assets 'at a discount'. Most of the times
-1.:
the wealth of a State goes to the individuals within the
country rather than to multi-national corporations; still,
wealth slips away that ought to belong to the nation as a
whole.The impugned action of the authority in the
present case did not suffer from absence of jurisdiction E
nor was vitiated and ultra vires. Financial gain was not at
the cost of any social welfare. [Paras 27 and 28] [693-AD; 694-B]
-' ~·
Bangalore Medical Trust v. B.S. Muddappa (1991) 4 F
SCC 54 and Padma v. Hirata/ Moti/al Desarda & Ors. (2002)
7 sec 564, referred to.
3.2. The MDA having considered the representation
made by an individual to allot the land for residential
G
purpose at the rate of Rs. 775/- per sq.m. and as well as
....
a proposal/request of AMS to allot the land @ Rs. 690/-
~
per sq. m. rejected both the suggestions and invited
tenders after giving wide publicity. The decision of MDA
could not be characteris~ as an unreasonable one. That
was the only course left open to the Authority. The H
:i
672
SUPREME COURT REPORTS
[2009] 6 S.C.R.
A money to be realized by the sale of public auction is
required to be applied towards meeting the expenses
incurred by the Authority in the administration of the Act
which mainly includes securing the development of the
development area. [Para 29] [695-A-D]
B
3.3. In refusing to accept the tender of the AMS on
the ground that the offer made by it was lower than that
of the reserved price is legal, valid and by no stretch of
imagination can be characterized as an illegal one. In fact,
C there was no option available to the MDA but to reject the
tender of the AMS as the offer made was much below
than the reserved price. [Para 30] [695-E-G]
4. The disputed land in the Master Plan was reserved
for 'Residential' purpose. The residential category of use
D is a category in contrast with industrial, agricultural,
commercial, recreational, green belt, or institutional
category in use. It does not mean exclusive use for
housing on every inch of the land. The expression
residential use in the Master Plan means that the land can
E be used for housing, various other kinds of uses such
as institutional, commercial etc. The MDA had earlier
relaxed the use and made it for 'educational' purpose'
though it is earmarked for residential use in the Master
Plan. There is nothing unreasonable in changing the land
F use and earmarking it again for 'Residential' use. Once it
is clear that the land in the Master Plan was reserved for
residential use where educational institutions could also
be permitted within that area, it cannot be said that there
has been a change of land use as such. [Para 31] [696G B-F]
5.1. AMS may have established Engineering Colleges
to impart education and may have a role to play in
providing education in engineering courses; out it
cannot insist the MDA to provide land at the rate chosen
H by it for itself.The object of the Uttar Pradesh Urban
+
MEERUT DEVELOPMENT AUTH. v. ASSOCIATION 673
OF MANAGEMENT STUDIES
Planning and Development Act, 1973 under which MDA
A
is constituted was to provide for development of certain
areas according to plan and for matters ancillary thereto.
It is mainly concerned with an orderly development of the
areas and balanced use of the available land within the
development area. The Authority in law is not entitled to
B
gift or freely make available any land or at a rate lesser
than that of reserved price. [Para 32) [697-8-0)
Unni Krishnan J.P. v. State of A.P. (1993) 1 SCC 645
and TMA PaiFoundation v. State of Kamataka (2002) 8 SCC
C
481, referred to.
5.2. The MDA in terms of the directions of the
Government vide G.O. dated 19.04.1996 has already
decided to make the lands available to the institutions
imparting education in engineering at a concessional
D
rate i.e. to say 50% of the sector rate and accordingly
fixed reserve price @ Rs. 690 per sq. meter. The public
interest parameters have been duly taken into
consideration by the Government itself in directing MDA
to make the lands available to educational institutions at
E
a concessional rate. It is difficult to appreciate as to what
more the AMS expects from the Authority. The Society in
fact availed that assistance from MDA on an earlier
occasion but failed to avail the facility this time for which
the AMS has to blame itself. The AMS having failed to offer
F
at least the reserved price cannot be permitted to turn
round and ask for a mandamus to allot the land in its
favour based on self-serving representations. The AMS
indulged to say the least in speculative litigation. The
State had already made effective provision for securing
G
right to education by resolving to make the land available
at concessional rate to educational institutions imparting
education in engineering courses. Obviously, such a
decision was taken only with the view to give effect to the
Directive Principles of State Policy enshrined under
H
674
SUPREME COURT REPORTS
[2009) 6 S.C.R.
A Article 41 of the Constitution of India. The AMS has no
legal or constitutional right to make any perpetual
demands and dictate terms to the MDA to allot any
particular land at the chosen rate. [Para 32] [697-E-H; 698A-D]
B
6. The expression 'public interest' if it is employed in
a given statute is to be understood and interpreted in the
light of the entire scheme, purpose and object of the
enactment but in the absence of the same it cannot be
C pressed into service to confer any right upon a person
who otherwise does not possess any such right in law.
The High Court virtually converted the judicial review
proceedings into an inquisitorial one. The way
proceedings went on before the High court suggest as if
the High Court was virtually making an inquiry into the
D conduct and affairs of the MDA in a case where the court
was merely concerned with the decision making process
of the MDA in not accepting the offer/tender of the AMS
in respect of the disputed plot on the ground that the offer
so made was less than that of the reserved price fixed by
E the MDA. The High Court went to the extent of holding that
there was a concluded contract between MDA and AMS.
[Para 33] [697-E-H; 698-A-D]
7. The AMS expressed its willingness to pay such
F reasonable price as may be fixed by this Court. The prices
of the land in the vicinity of are have gone up many times
and as at present prevailing rates are very high. Equity
is not a one way street. The conduct of the AMS does not
entitle it to get any such relief in equity. [Para 34] [700-AG C]
8. The cancellation of the auction was not tenable.
But the fact remains the appellant, the auction purchaser
deposited only an amount of Rs. 5,50,000/- towards
earnest money out of huge amount of total consideration.
H Having regard to the totality of the facts and
MEERUT DEVELOPMENT AUTH. v. ASSOCIATION 675
OF MANAGEMENT STUDIES
\--. *
circumstances, interference with the order of cancellation A
passed by MDA on 14.5.2007 in exercise of jurisdiction
under Article 136 of the Constitution of India is not called
for. [Para 38] [701-E-F]
9. The MDA shall be at liberty to call for fresh tenders
B
in accordance with law but duly notifying the land use for
both 'educational' and 'residential' and invite bids
--
accordingly. It shall permit AMS and other educational
·"'-
institutions intending to participate in the auction. In view
of the undertaking given by MDA to this Court it shall not c
raise any objection for the use of the land for educational
purposes in case if any educational institution is found
to be the successful bidder. The bids shall obviously be
invited from the intending bidders duly notifying the
'residential' and 'educational' use. [Para 39] [701-G-H;
702-A]
D
- J.
Case Law Reference
1994 (6) sec 651
relied on
Para 21
2000 (2) sec s11
relied on
Para 21
E
2004 (4) sec 19
relied on
Para 21
-'(
2005 (1) sec 676
relied on
Para 21
~
2005 (4) sec 435
relied on
Para 21
•
2001(10) sec 33
relied on
Para 21
F
1979 (3) sec 489
relied on
Para 25
1980 (4) sec 1
relied on
Para 25
1985 (3) sec 261
relied on
Para 25
1990 (3) sec 752
relied on
Para 25
G
,..
1993(1) sec 445
relied on
Para 25
2000 (3) sec 553
relied on
Para 25
(1982) 3 ALLER 141
referred to
Para 23
H
676
SUPREME COURT REPORTS
[2009] 6 S.C.R.
,...~
A
(1996) JR 185
referred to
Para 25
...
(1986) 1 AllER 199
referred to
Para 26
198 us 45, 76 (1995)
referred to
Para 26
(1991) 4 sec 54
referred to
Para 28
B
(2002) 1 sec 564
referred to
Para 29
(1993) 1 sec 645
referred to
Para 32 -
,f\
(2002) 8 sec 481
referred to
Para 32
c
CIVIL APPELLATE JURISDICTION : Civil Appeal No.
2619 of 2009.
From the Judgment & Order dated 16.11.2007 of the High
Court of Judicature at Allahabad in Civil Misc. Writ Petition No.
D 18578 of 2002.
WITH
~-
C.A. Nos. 2620-2621 of 2009.
P.S. Patwalia, Rakesh Dwivedi Sunil Gupta, J.S. Attri,
E Shiva Kumar Sinha, Kavin Gulati, Rashmi Singh, T. Mahipal,
Vinay Garg, Ajay Kumar, Deepam Grag, Jyoti Sharma and
Avnish Pandey for the appearing parties.
The Judgment of the Court was delivered by
'# "
F
B. SUDERSHAN REDDY, J. 1. Leave granted.
2. Both these appeals can be dealt with under a common
judgment since one and the same issue requires to be
decided. The brief facts relevant for the purposes of disposing
G of these appeals may be stated.
3. Association of Management Studies (for short 'AMS')
is a Society registered under the provisions of the Societies
Registration Act, 1860. It is stated to be managing various
educational institutions imparting education such as MBA,
H MCA, Engineering etc., the details of which are not required
MEERUT DEVELOPMENT AUTH. v. ASSOCIATION OF 677
'""""
MANAGEMENT STUDIES [B. SUDERSHAN REDDY, J.]
""' +
to be noted.
A
4. Meerut Development Authority (for short 'MDA') has
been constituted as an Authority called as the Development
Authority by the U.P. State Government under Section 3 of the
Uttar Pardesh Urban Planning and Development Act, 1973. The
B
said Act, has been enacted to provide for development of
certain areas of Uttar Pardesh according to plan and for matters
·-'
ancillary tbereto. The main object and reasons for the enactment
A.
was to tackle resolutely the problems of town planning and urban
development in the State of Uttar Pardesh.
c
FACTUAL MATIERS:
5. On 12.05.2000, MDA allotted a plot· of land
admeasuring 20,000 sq.mts. situated in Pocket 'O' Ganga
Nagar Residential Scheme at the rate of Rs.560/- per sq.m. to
D
-).
AMS for construction of buildings meant to be utilised for
educational purposes. The reserved price has been fixed in
terms of G.O. dated 19.04.1996 which provides that plots for
educational institutions/engineering colleges shall be sold at
50% of the sector rate. The AMS has requested to allot an
additional land of 20,000 sq mts. and 37,000 sq. mts. in Ganga
E
Nagar Residential Scheme for establishment of engineering
college and other degree colleges, e.g. masters' course such
..
as MBA, MCA etc. It is noteworthy that the land use of the
.,,
above mentioned land in the Meerut Master Plan 2001 has
F
been shown as 'Residential medium Density'. The MDA having
considered the request and other relevant factors resolved to
invite tenders from interested persons to allot the land
admeasuring 20,000 sq.mts. and another extent of land
admeasuring 37,000 sq. mts. located in the said residential
G
scheme available to be utilised for educational use. The
.~
reserved price has been fixed at Rs.690/- per sq.m. for 20,000
sq.mts. and for the remaining extent of 37,000 sq. mts. of land
at Rs.500/- per sq.m.; both being 50% of sector rate.
6. MDA issued advertisement inviting tenders in respect
H
678
SUPREME COURT REPORTS
[2009] 6 S.C.R.
,. ..
of several plots meant for educational institutions within various
.. ,...
A
residential schemes including the aforesaid two plots in Ganga
Nagar. The tenders were required to be submitted on
18.08.2001. In response to the advertisement inviting tenders
AMS submitted its tender @ Rs.500/- for the plot of land
B admeasuring 37,000 sq. mts. and Rs.560/- for the plot
admeasuring 20,000 sq. mts. The MDA having considered the
tenders so submitted informed AMS vide letter dated 3rd
...
September, 2001 that the commercial offer@ Rs.560/- per sq.
"
m. was less than that of the reserved rate of Rs.690/- per sq.
c m. in respect of 20,000 sq. mts. of land, out of the reserved
57,000 sq mts. of land meant for the engineering colleges. AMS
was put on notice to give its consent within one week if it was
desirous of getting.20,000 sq.m. of land @ Rs.690/- per sq.m.
MDA was willing to consider the allotment of entire land
D admeasuring 57,000 sq.mts. for the establishment of
engineering colleges provided the institute was willing to pay
·-
the reserved price@ 690/- per sq.m. in respect of 20,000 sq.m.
of land. AMS in response to the said letter requested the
Authority to allot 37,000 sq.m. of land @ Rs.500/- per sq.m.
E offered by them in their tender. It is noteworthy that AMS in clear
and categorical terms stated that the other land of 20,000 sq.m;
'may be deleted from ---- offer as the cost of that land is not
viable for ---. However, we are ready to purchase the same
@ Rs.560/- per sq.m. as quoted by us which is the same rate
,.
as we have already purchased the part of that land.'
,,.
F
7. MDA having considered the response of AMS vide its
letter dated 27.11.2001 informed AMS that only 37,000 sq.m.
of land has been allotted for the establishment of engineering
college with the condition that the construction of the
G engineering college is made in accordance with the norms of
the A.l.C.T.I.; and deposit of required amounts within the
stipulated time. This was accepted by AMS and they took the
allotment of only 37,000 sq.mts. of land. In all fairness the matter
should have ended there. But it did not.
H
MEERUT DEVELOPMENT AUTH. v. ASSOCIATION OF 679
.....
MANAGEMENT STUDIES [B. SUDERSHAN REDDY, J.]
t
8. AMS having accepted the offer of 37,000 sq.mts. of A
land, raised an objection stating injustice has been done by the
Authority in fixing the reserved price @ Rs.690/- per sq.m. even
though adjoining plots were allotted @ Rs.500/- and Rs.560/-
per sq.m. MDA in its meeting held on 15.03.2002 has decided
that the disposal of the land be made through Open TenderB
cum-Auction for residential use after giving wide publicity. The
, ....
Authority considered the offer stated to have been made on
...
behalf of the officer's Class Housing Society of the_ Canal
Colony to purchase the bulk of land admeasuring 20,000 sq.m.
@ Rs.775/- per sq.m. and as well as the letter dated c
04.03.2002 sent by AMS. Since this letter reflects the attitude
and conduct of AMS, it is required to be noted in its entirety:
"The Chairman, Dated 04.3.2002
Meerut Development Authority,
D
--~
MEERUT.
Subject :-ALLOTMENT OF LAND AT GANGA NAGAR.
Hon'ble Sir,
Following facts are submitted for your honour's kind
E
consideration:-
1.
That M.D.A. on 19.9.2001 floated a tender for
Ji.
allotment of two pieces of land measuring 37,000
'?'
and 20,000 sqm bulk scale for Technical Institute
F
after getting the approval of rates from Board viz
Rs.500/- and 690/- respectively.
2.
We deposited 25% of a sum as first installment for
37000 sqm of land as demanded on 27.11.2001.
,__
G
3 .
That due to paucity funds, we could not deposit the
..
25% of amount for 20,000 sqm land on 27.11.2001.
4.
That now we are ready to deposit the demanded
amount and kindly condone the delay and oblige.
H
680
SUPREME COURT REPORTS
[2009] 6 S.C.R.
,..~·
.+
A
With Regards,
Yours faithfully,
(YOGESH MOHAN)
Chairman."
B
9. AMS vide its letter dated 27.03.2002 requested the
Authority to allot the said land @ Rs.690/- per sq.m. or in the
"'-
alternative, the topography of the land be so adjusted that both
j,
the 20,000 sq.m. of land and 37,000 sq.m. of land already
c allotted to the Society may be made contiguous to each other
so that the entire land can be fruitfully utilised by it for
educational purposes.
10. On 15.04.2002, MDA got issued fresh advertisement
D inviting applications in newspapers for allotment of the
aforementioned plot of land of 20,000 sq. m. inviting bids from
...
foreign direct investors, building developers etc. for housing
purposes with the reserved price of Rs.885/- per sq.m. and
earnest money of Rs.5.50 lakhs. AMS filed C.M.W.P.No.18578/
E
02 in the High Court of judicature at Allahabad on 01.05.2002
with the following prayers:
(i)
to issue a Writ Order or direction in the nature of
certiorari quashing the advertisement dated
~
15.4.2002 issued in the newspaper Amar Ujala of
..
F
the said date.
(ii)
To issue a Writ, Order or direction in the nature of
mandamus restraining the respondent from
changing the use of the plot of land in question from
G
being used for Engineering college to residential
purpose.
..
,.
(iii)
To issue a Writ, Order or direction in the nature of
mandamus directing the respondent to allot the said
plot of land to the petitioner society at the reserved
H
price fixed by it i.e. Rs.690/- per sq.metre and the
MEERUT DEVELOPMENT AUTH. v. ASSOCIATION OF 681
\....,
MANAGEMENT STUDIES [B. SUDERSHAN REDDY, J.]
l
interest till the payment of the amount by the
A
petitioner or in the alternative direct the respondent
to consolidate the two plots of land already
demised in favour of the petitioner society into one.
(iv)
To issue any other suitable writ, order or direction
which the Hon'ble Court may deem fit and proper
B
.J
in the circumstances of the case .
A
(v)
To award cost of this petition to the petitioner.
11. The High Court vide its interim order dated c
07.05.2002, permitted MDA to allot the land in pursuance of
the advertisement dated 15.04.2002 "but the allotment shall be
subject to the decision of this Writ Petition. It shall also be
mentioned in the allotment order, if issued by MDA to the
allottee."
D
-).
12. In the auction Pawan Kumar Aggarwal, the appellant
in C.A.Nos. 2620-2621/09 arising out of SLP ( C ) No. 160203/2008 became the highest bidder@ Rs.1365/- per sq.m. and
the bid was accepted. He has deposited only the earnest
E
money of Rs.5.50 lakhs. The balance consideration was
required to be paid in installments. But during the pendency of
the Writ Petition, the MDA vide its order dated 14.05.2007,
"¥ f>
cancelled the auction and the decision of allotment to Pawan
Kumar Aggarwal. He filed the Writ Petition No.3007 of 2007
challenging the order of cancellation. The High Court by the
F
impugned order allowed the Writ Petition filed by AMS and
dismissed the Writ Petition filed by Pawan Kumar Aggarwal.
Hence these appeals.
SUMMARY OF SUBMISSIONS :
G
·-
13. We have heard the learned senior counsel Shri P.S.
Patwalia for the appellant - MDA, Shri Rakesh Dwivedi
appearing on behalf of the appellant - Shri Pawan Kumar
Aggarwal and Shri Sunil Gupta, learned senior counsel
H
682
SUPREME COURT REPORTS
[2009] 6 S.C.R.
~
,... ,,
-t
A appearing for AMS. Elaborate submissions were made by the
counsel for the respective parties. The following is the surr.mary
of contentions urged by respective ~enior rounse! which aie
critical and crucial to decide the case.
B
14. The principal objection of MDA is that the High Court
was not justified in scrutinising its action and the tendering
process in such great detail as if it was hearing an appeal
.......
against its decision in the matter. The High Court virtually acted
A,
as more than the appellate court and went into the merits in
c evaluating the decision making process of the MDA. It was
submitted that the High Court practically converted itself into an
Enquiry Commission and heard the Writ Petition in such a way
a.s if it was making an enquiry into the affairs of the MDA which
is impermissible in law. It was submitted MDA was left with no
D
option except to invite fresh bids after rejecting the offer made
by AMS which was less than that of the reserved price. Shri
(•
Rakesh Dewedi, learned senior counsel appearing for
appellant - Pawan Kumar Aggarwal submitted that MDA acted
fairly and it did not commit any error in not accepting the tender
of AMS. The decision making process according to him does
E not suffer from any vice of illegality or unconstitutionality. He,
however submitted that the MDA was not justified in cancelling
thP. auction and its decision to allot land in favour of appellant
··· Pawan Kumar Aggrawal. Shri Suni! Gupta, learned senior
+ ,..
counsel for the respondent - AMS submitted that the decision
F of MDA in not allotting the land was unreasonable. whimsical,
capricious and violative of Article 14 of the Constitution. The
decision is not in public interest. MDA committed mistakes in
the matter of depiction of rates in the notice inviting tenders as
is evident from their supplementary counter affidavit filed in the
G High Court. There was snme ~"nf• is ion as regards reserved
•
price in respect of disputi:-t~ ;:i•• · of bnt! which led AMS ~o offc"
bid at a lesser rate than the reserved price. It was further
submitted that MDA's decision to put the disputed plot of land
to reauction in spite of willingness on the part of AMS to pay
H the reserved price is unsustainable in law. The decision to
MEERUT DEVELOPMENT AUTH. v. ASSOCIATION OF 683
~--
MANAGEMENT STUDIES [B. SUDERSHAN REDDY, J.]
t
reauction the land by changing the land use from that of A
'educational' to 'residential' is motivated and inspired by
extraneous considerations. Public interest requires allotment of
the said land in favour of AMS which is catering the needs of
public at large in imparting education in engineering courses.
These contentions ·are culled out from the storms of
B
submissions made during the course of hearing of these
,A
appeals.
ISSUES REQUIRING RESOLUTION :
c
15. Shorn of all the details· and embellishments and
notwithstanding the display of forensic skills by the senior
counsel, the substantial ·question that really arises for our
consideration in these appeals is whether the decision of MDA
dated 15.03.2002 resolving to invite fresh tenders and making
D
- ),
the land available for residential use suffers from any legal or
constitutional infirmities ?
16. Having regard to the above submissions, we propose
to deal with the matter from the following four aspects:
E
(a)
what is the nature of rights of a bidder participating
in the tender process?
;,
(b)
the scope of judicial review in contractual matters;
- . '9
(c)
whether the decision of the Authority is vitiated by
F
any arbitrariness and therefore hit by Article 14 of
the Constitution of India? and
(d)
whether the decision is not in public interest?
,.
WHAT IS THE NATURE OF RIGHTS OF A BIDDER
G
...
PARTICIPATING IN THE TENDER PROCESS?
17. A tender is an offer. It is something which invites and
is communicated to notify acceptance. Broadly stated it must
be unconditional; must be in the proper form, the person by
H
684
SUPREME COURT REPORTS
[2009] 6 S.C.R
~#"'
,j
A whom tender is made must be able to and willing to perform
his obligations. The terms of the invitation to tender cannot be
open to judicial scrutiny because the invitation to tender is in
the realm of contract. However, a limited judicial review may
be available in cases where it is established that the terms of
B the invitation to tender were so tailor made to suit the
convenience of any particular person with a view to eliminate
all others from participating in the biding process. The bidders
participating in the tender process have no other right except
the right to equality and fair treatment in the matter of evaluation
c of competitive bids offered by interested persons in response
to notice inviting tenders in a transparent manner and free from
hidden agenda.