IN THE SUPREME COURT OF INDIA

CIVIL APPELLATE JURISDICTION

CIVIL APPEAL NOS.5228-5229 OF 2008 (Arising out of S.L.P. (C) No.8122 of 2006)                                                                          

Kalu Ram Ahuja and Another        ...Appellant(s)

Versus

Delhi Development Authority and Another      ...Respondent(s)

O  R  D  E  R

Leave granted.

Heard learned counsel for the parties.

The  Delhi  Development  Authority  (for  short,  D.D.A.],  issued  an

advertisement,  which  was  published  in  the  newspaper  dated  21st May,  1988  for

auction of  Plot  No.235 measuring 84.10 sq.  meter situated at  Padam Nagar,  New

Delhi.  In the auction held on 21st June, 1988, the appellants participated along with

other  bidders.   They  gave  the  highest  bid  of  Rs.3,00,758/-.   In  terms  of  the

advertisement, the bid was required to be approved by the Vice-Chairman, D.D.A.

The latter rejected the same and his decision was communicated to the appellants vide

letter dated 7th July, 1988, sent by Deputy Director [O.S.D.], D.D.A.

The appellants challenged the rejection of their bid by filing writ petition

which  was  dismissed  by  the  learned  Single  Judge  by  relying  on  the  so-called

representation made by ex-Municipal Member to espouse the cause of residents of the

area.  The Letters Patent Appeal preferred by the appellants was dismissed by the

Division Bench.  Hence, these appeals by special leave.

....2/-

- 2 -

Undisputedly,  the D.D.A. had taken a conscious decision to auction the

plot.   It  is  neither the pleaded case of  the respondents nor any material has been

produced before this Court to show that the said decision was taken by the competent

authority under some mis-apprehension.  It is also not in dispute that the appellants

participated in the auction held on 1st June, 1988, and gave highest bid,  which, as

mentioned above, was rejected by the Vice-Chairman, D.D.A.  The communication

dated 7th July, 1988, does not make a mention of the reason which may have prompted

the Vice-Chairman to reject the bid given by the appellants.  No other record has

been produced before the Court to show that the decision of the Vice-Chairman was

based on rational and tangible reasons and was in public interest.  Therefore, there is

no escape from the conclusion that the decision of the concerned authority was wholly

arbitrary.  The learned Single Judge without property appreciating the nature of the

appellants’ challenge to the rejection of their bid, dismissed the writ petition.  The

Division Bench also committed the same error by dismissing the appeal.  Therefore,

the impugned orders are legally unsustainable. Accordingly,  the  appeals  are

allowed, impugned orders passed by the High Court are set aside, writ petition filed

by the  appellants  before  the  High Court  is  allowed  and the  decision  of  the Vice-

Chairman, D.D.A. to reject the bid of the appellants is quashed.  The appellants are

directed to deposit the amount of bid along with the interest thereon at the rate of

eighteen per cent from the date of bid till the

....3/-

- 3 -

date of actual payment within a period of three months from today.  Thereafter the

D.D.A.  shall  complete  all  the  formalities  of  land and hand over  possession  to the

appellants.  The needful be done within three months from the date the amount is

deposited by the appellants.

......................J.       [B.N. AGRAWAL]

......................J.       [G.S. SINGHVI]

New Delhi, August 25, 2008.