Minister Had No Authority To Cancel Highest Bid, Housing Board's Post-Facto Approval Was 'Paper Formality': Rajasthan High Court

The Rajasthan High Court has upheld a Single Bench order directing the Rajasthan Housing Board to accept the highest bid submitted by a bidder in an auction for a commercial plot, holding that the Minister of the Urban Development and Housing Department had no authority under the applicable rules to cancel the bid and that the subsequent approval by the Housing Board was merely a “paper formality.”The division bench of Acting Chief Justice Sanjeev Prakash Sharma and Justice Bhuwan Goyal further held that once an e-auction is conducted without any illegality in the auction process, the highest bid cannot be cancelled merely on the ground that another plot in the same vicinity had fetched a higher price.The Court was hearing an appeal filed by the Rajasthan Housing Board against the Single Judge's order allowing the writ petition filed by the bidder. The Single Judge had quashed the order cancelling his highest bid and directed the Housing Board to accept the bid for a commercial plot in Jaipur.The petitioner was declared as the highest bidder. He deposited the bid value, as well as the remaining amount. Thereafter, instead of getting bid confirmation, his amount was returned back. He got to know that his bid was cancelled on the ground of being un-competitive.When the petitioner filed an RTI, it was revealed that the petitioner's bid was cancelled on the ground that another larger plot in the same vicinity was put up for a higher bid. The Court highlighted that after the bid was cancelled by the Minister, meeting of the Housing Board was convened much later, and a post-facto approval was given by members of the Board. Hence, the Board had also merely followed the directions of the Chairman who was the Minister himself. “In our opinion, once an e-auction is conducted, which is faceless and there is no illegality committed during the course of auction, we agree with the view taken by the learned Single Judge that the Board of Directors could not have taken a decision at the behest of the Minister and it was a case where the Minister had already taken a decision for cancelling the auction and he himself was the Chairman of the Board of Directors while the other Members were all subordinate to him. The decision of the Housing Board was, thus, a paper formality.”The Court further observed that there was no occasion to compare the bid of the subject plot to that of a different plot, and that the decision was in culpable exercise of power by the Minister which could not be allowed to be sustained. The Court also made a reference to the Supreme Court cases of Golden Food Products India v State of UP & Ors., and K. Kumara Gupta vs. Sri Markendaya and Sri Omkareswara Swamy Temple and Ors., in which it was held that the cancellation of highest bid, without there being any illegality during its course was unjustified. Accordingly, the order of the single judge was upheld, and the appeal was dismissed. Title: Rajasthan Housing Board & Ors. v Sagar Mal Handala & Anr. Citation: 2026 LiveLaw (Raj) 327Click Here To Read/Download Order

Minister Had No Authority To Cancel Highest Bid, Housing Board's Post-Facto Approval Was 'Paper Formality': Rajasthan High Court

Nupur Agrawal

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Nupur Agrawal

Minister Had No Authority To Cancel Highest Bid, Housing Board's Post-Facto Approval Was 'Paper Formality': Rajasthan High Court

Nupur Agrawal

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Nupur Agrawal

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