Rajasthan High Court Raps Tenants For Frustrating Auction Of Shops, Slaps ₹50K Costs For 'Unscrupulous' Practices

The Rajasthan High Court imposed a total cost of Rs. 50,000 on the two shop tenants (petitioners), who were earlier allotted shops on rent by the State, for attempting to mislead the court by concealing the material facts and trying to abuse the judicial process.

The bench of Justice Sanjeet Purohit held that the once the petitioner had voluntarily participated in an earlier round of auction for the shops and frustrated the same by failing to deposit the bid amount, they could not challenge or seek a stay on the subsequent auction.

The Court observed that the conduct on part of the petitioners had caused huge financial loss to the Gram Panchayat, and was an attempt to abuse the legal process.

“This Court strongly deprecates and condemns such dubious and unscrupulous practices adopted by the petitioners. By engaging in conduct that amounts to a clear abuse of the process of law, the petitioners have not only caused financial loss to the Gram Panchayat but have also sought to misuse the judicial machinery.”

The petitioners were allotted the concerned shops as tenants since 2001-02. In 2024, they were issued a notice to vacate the shops for repairs and maintenance with an assurance of return. However, as alleged by the petitioner, after the repair work was over, instead of giving the possession back, the government issued notice for auctioning the shops.

This was challenged by the petitioners, and the Court initially granted interim stay on the auction. However, it was submitted by the counsel for the State that material facts were not disclosed by the petitioners.

It was argued that when the initial notice of vacation was issued, the property was not vacated by the petitioners, and the State had to involve police for the same. Furthermore, a civil suit was also filed by the petitioners challenging the notice of eviction by the State which was dismissed, followed by the dismissal of appeal also. Hence, the present petition was another remedy availed by the petitioners.

Further, it was put forth on behalf of the State that an earlier auction was also conducted of the shops in which the brother of the petitioners had participated and had won with the highest bid. However, they failed to submit the required amount rendering the auction frustrated, and causing losses to the State.

As a defence, it was submitted by the petitioners that the civil suit was filed for challenging the notice of eviction while the petition was filed to challenge the auction notice. Further, it was argued that the first round of auction was attended by the brother of the petitioners, and not themselves.

After hearing the contentions and all the concealed facts, the Court rejected all the arguments put forth by the petitioners.

It was held that the civil suit filed against the eviction notice was a relevant and material fact for the present petition. The petitioners could not be permitted to take different remedies before different forums to challenge the action taken in same sequence.

Furthermore, rejecting the argument of brother's participation in the auction, the Court held that the facts considered in chronological order clearly revealed that the petitioners and the brother were acting in collusion. In this light, the Court held that,

“(Petitioners) have voluntarily participated in the first auction proceedings, which shows the willingness on the part of the petitioners to take the shops on rent through auction. The challenge given in the present writ petition to the subsequent round of auction proceedings after voluntarily participating in the first round of auction proceedings is barred by the principle of estoppal. The challenge so given is also barred by the principle of waiver and acquiescence on the part of the petitioners.”

Highlighting the monetary loss caused to the State owing to the conduct of the petitioners, the Court opined that the petitioners had malafide intentions while participating in the first round of auction.

It was stated that the foremost condition for invoking the writ jurisdiction of a constitutional court was that the petitioner must approach with clean hands, since the foundation of writ jurisdiction was disclosure of true, complete and accurate facts.

Accordingly, the petition was dismissed, and a total cost of Rs. 50,000 was imposed on the petitioners.

Title: Heera Lal Saini & Anr. v State of Rajasthan & Ors.

Citation: 2025 LiveLaw (Raj) 369

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