STATE OF PUNJABversusM/S. BAN DEEP SINGH & ORS.

                        [2015) 10 S.C.R. 496


A                        STATE OF PUNJAB
                                   v.
                   M/S. BAN DEEP SINGH & ORS.
                    (Civil Appeal No. 629 of 2006)
B                         AUGUST 25, 2015
       [VIKRAMAJIT SEN AND SHIVA KIRT! SINGH, JJ.]
         Auction - Auction process - Public auction of two
    properties - Deposit of earnest money with twenty five per
C   cent of auction bids by respondents -Auction bid marginally
    above the reserve price fixed by the competent authority -
    Subsequently decision by the appellants to re-auction the
    properties - Respondents not conveyed reasons for not
    accepting their bids, which were highest as also higher than
0
    the reserve price - Challenge to - Held: Every decision of
    an administrative or executive nature must be a composite
    and self sustaining one - It should contain all the reasons
    which prevailed on the official taking the decision to arrive at
E   his conclusion - High Court rightly concluded that no
    sustainable justification a·nd rationalization was recorded in
    writing at the relevant time for ordering the re-auction of only
    the two subject properties - It cannot be said that the
    Government is bound in every case to accept the highest
F   bid above the reserve price - Presence of cartelization or
    "pooling" could be a reason for the cancellation of an auction
    process as also the ground that the property fetched too low
    a bid when compared to the prevailing market price - In the
    instant case, however, while the latter was ostensibly the
G   reason behind the decision for conducting a fresh auction,
    there is no evidence on the record to support the said
    contention - Highest bids, marginally above the reserve
    price, were accepted in the self-same auction - Assailed

H                                496
  STATE OF PU~JAB v. MIS. BANDEEP SINGH & ORS.                497
              [VIKRAMAJIT SEN, J.] .

action of the appellant is not substantiated in the noting, which A
ought at least to have been conveyed to the respondents -
On facts of the case, in the endeavour to do justice,
respondents directed to pay the price of the land at the
prevailing Circle Rates, which was accepted by the counsel
for both the parties.                                             B
     Mohinder Singh Gill v. The Chief Election
     Commissioner, New Delhi (1978) 2 SCR 272; Anil
     Kumar Srivastava Vs. State of U.P. (2004) 8 SSC
     671: 2004 (3) Suppl. SCR 675; B. Susi/a Vs.                 c
     Saraswathi Ammal AIR 1970 Mad 257; Ram
     Kishun Vs. State ofU.P. (2012) 11SCC511: 2012
     (6) SCR 105; Sterling Computers Ltd. v. M & N
     Publications Ltd. (1993) 1 SCC 445: 1993 (1)
     SCR 81; Tata Cellular v. Union of India (1994) 6            D
     SCC 651: 1994 ( 2 ) Suppl. SCR 122; Air India
     Ltd. v. Cochin International Airport Ltd. (2000) 2
     sec 617: 2000 (1) SCR 505; B.S.N. Joshi &
     Sons Ltd. v. Nair Coal Services Ltd. (2006) 11
     sec 548: 2006 (8) Suppl. SCR 11; Jagdish                    E
     Manda/ v. State of Orissa (2007) 14 SCC 517:
     2006 (10) Suppl. SCR 606- referred to.

                   Case Law Reference
                                                                 F
  (1978) 2 SCR 272              referred to.      Para 4, 6

  2004 (3) Suppl. SCR 675 referred to.             Para. 5

  AIR 1970 Mad 257              referred to.       Para. 5

  2012 (6) SCR 105              referred to.       Para. 5
                                                                 G

  1993 (1) SCR 81               referred to.       Para. 5

  1994 (2)Suppl. SCR 122         referred to.      Para. 5

  2000 (1) SCR 505               referred to.      Para. 5       H
498        SUPREME COURT REPORTS                [2015] 10 S.C.R.


A       2006 (8) Suppl. SCR 11      referred to.       Para. 5

        2006 (10) Suppl. SCR 606 referred to.          Para. 5

          CIVILAPPELLATE JURISDICTION: Civil Appeal No. 629
 B    of2006

          From the Judgment and Order dated 20.09.2005 of the
      High Court of Punjab and Haryana at Chandigarh in CWP No.
      9621 of 2004.

c                                WITH

          C.A. NO. 630 OF 2006     _

           Saurabh Ajay Gupta, Nishant Bishnoi, Kuldip Singh for
 D    the Appellant.

         Amarendra Sharon, Tushar Bakshi, Sanchit, Jagjit Singh
      Chhabra for the Respondents.

          The Judgment of the Court was delivered by
 E
         VIKRAMAJIT SEN, J. 1 These Appeals assail the
   Judgment dated 20.9.2005 of the Division Bench of the Punjab
   and Haryana High Court in CWP No. 9621 of2004. The factual
   matrix is that pursuant to an Auction Notice dated 1.5.2004
 F issued by the Managing Director, Punjab State Leather
   Development Corporation Ltd., several properties, of which
   we are only concerned with two, were to be put to a public
   auction. The salient terms as contained in the auction Notice
   required the interested persons to deposit an amount of
 G \2,00,000/-as Earnest Money; the successful bidder would
   have to deposit twenty five per cent of the auction amount at
   the conclusion of the bidding, and the remaining amount within
   thirty days of the approval of the bid by the Government. It is
   not disputed that the two Respondents/Writ Petitioners had
 H deposited the Earnest Money together with twenty five per cent
  STATE OF PUNJAB v. MIS. BAN DEEP SINGH & ORS.               499
              [VIKRAMAJIT SEN, J.]

of the auction bids which, admittedly, were only marginally       A
above the reserve price fixed by the Competent Authority. In
respect of the Hide Flaying and Carcass Utilization Centre,
Jhabal Road, Village Fathepur, Amritsar the reserve price was
45.50 lakhs and the highest (subject) bid was 46 lakhs; and
for Tanning Centre Jhabal Road, Village Fathepur, Amritsar        B
the reserve price was 37.25 lakhs and the highest (subject)
bid was 38.10 lakhs.

    2 However, the notings rlisclose that a certain person,
referred to as Mr. Walia had orally complained that the           C
successful bidders had promised to associate him in their
venture as their partner, but had thereafter resiled from this
commitment. S~ri Walia was obviously a disgruntled party,
and any official with a modicum of experience would not require
superlative sagacity to discount or ignore his complaint. This    D
is especially so since, admittedly, Shri Walia had been called
upon to file his complaint in writing, but which he declined to
do.

      3 Without conveying to the Respondents the reasons for E
not accepting their bids, being the highest offer received in
the course of the auction process, a decision was taken by
the Appellant to recauction the said two properties. This was
despite the fact that the Chairman-cum-Managing Director of
the Punjab State Leather Development Corporation Ltd. had F
recorded, on 15.6.2004, that the bids of the Respondents were
not only the highest, but were also higher than the reserve price.
The notings of the Chairman-cum-Managing Director in fact
do not recommend that the offers should be rejected; instead
it solicits acceptance/approval of the Government through its G
Director, Industries and Commerce. However, when the case
was submitted to the Director, Industries and Commerce, he
opined that a re-auction should be conducted as the two subject
bids were only marginally higher than the reserve price. H
Indubitably, the Impugned Order mentions instances where
500       SUPREME COURT REPORTS                   [2015] 10S.C.R.


A bids were not accepted because they were only marginally
  higher than the reserve price; but failing to give due weightage
  and consideration to those instances where similar bids had
  in fact been accepted.

 B     4. There can be no gainsaying that every decision of an
  administrative or executive nature must be a composite and
  self sustaining one, in that it should contain all the reasons
  which prevailed on the official taking the decision to arrive at
  his conclusion. It is beyond cavil that any Authority cannot be
C permitted to travel beyond the stand adopted and expressed
  by it in the impugned action. If precedent is required for this
  proposition it can be found in the celebrated decision titled
  Mohinder Singh Gill v. The Chief ElectiQn Commissioner,
  New Delhi [1978] 2 SCR 272, of which the following paragraph
D deserves extraction:

         "8. The second equally relevant matter is that when a
         statutory functionary makes an order based on certain
         grounds, its validity must be judged by the reasons so
E        mentioned and cannot be supplemented by fresh reasons
         in the shape of affidavit or otherwise. Otherwise, an order
         bad in the beginning may, by the time it comes to court
         on account of a challenge, get validated by additional
         grounds later brought out. We may here draw attention
F        to the observations of Bose J. in Gordhandas Bhanji
         [1952] 1 SCR 135:

          Public orders publicly made, in exercise of a statutory
          authority cannot be construed in the light of Explanations
G         subsequently given by the officer making the order of what
        · he meant, or of what was in his mind, or what he intended
          to do. Public orders made by public authorities are meant
          to have public effect and are intended to affect the acting
          and conduct of those to whom they are addressed and
H
  STATE OF PUNJAB v. M/S. BANDEEP SINGH & ORS.                   501
              [VIKRAMAJIT SEN, J.]

     must be construed objectively with reference to the A
     language used in the order itself.
     Orders are not like old wine becoming better as they grow
     older".
                                                                   B
      We m11st reproduce the noting dated 18.6.2004 of the
Director. Industries and Commerce since there is an endeavour
by the Appellant to add grounds and reasons thereto. It reads
as follows:
     "Above office note may kindly be perused. In my opinion C
     the highest bids offered are marginally higher than the
     reserved price and it would be appropriate not to confirm
     those bids and go for re-auction."
     This noting will palpably clarify that the element of D
cartelization or grouping was not one of the reasons for taking
the decision to re-auction the two properties, which contention
has been strenuously canvassed before us.
      5. As we have already mentioned, the auction notice itself   E
stated that it is the Government and not any other person,
including the Managing Director of the Punjab State Leather
Development Corporation Ltd., which was to approve the bid.
Any challenge to the position that it is the Government on whom
is reposed the final decision, is devoid of substance. It is       F
pertinent to note the judgement of this Court in Anil Kumar
Srivastava Vs. State of U.P. (2004) 8 SSC 671, wherein it was
held that the reserve price merely limits the power of the
Auctioneer by preventing a bid below this price from being
accepted. This Court approved tt:e view taken in B. Susila Vs.     G
Saraswathi Ammal AIR 1970 Mad 257, which held that
"notwithstanding the fixation of upset price and notwithstanding
tile fact that a bidder has offered an amount higher than the
reserve/upset price, the sale is still open to challenge on the    H
502       SUPREME COURT REPORTS                  [2015] 10 S.C.R.


A  ground that the property has not fetched the proper price and
   that the sale be set aside." The same principle was upheld
   more recently in Ram Kishun Vs. State of U.P. (2012) 11 SCC
   511. However, we must hasten to clarify that the Government
   does not have a carte blanche to take any decision it chooses
B to; it cannot take a capricious, arbitrary or. prejudiced decision.
   Its decision must be informed and impregnated with reasons.
   This has already been discussed threadbare in several
   decisions of this Court, including in Sterling Computers Ltd. v. ·
   M & N Publications Ltd. (1993) 1 SCC 445, Tata Cellular v.
C Union of India (1994) 6 SCC 651, Air India Ltd. v. Cochin
   International Airport Ltd. (2000) 2 SCC 617, B.S.N. Joshi &
   Sons Ltd. v. Nair Coal Services Ltd. (2006) 11 SCC 548,
 . Jagdish Manda! V. State of Orissa (2007) 14 sec 517.

D      6. In the impugned Judgment, the High Court has rightly
  concluded that no sustainable justification and rationalization
  was recorded in writing at the relevant time for ordering the re-
  auction of only the two subject properties. However, we should
  not be understood to have opined that the Government is
E bound in every case to accept the highest bid above the reserve
  price. Needless to say, the presence of cartelization or "pooling"
  could be a reason for the cancellation of an auction process.
  In addition, a challenge on the ground that the property has
F fetched too low a bid when compared to the prevailing market
  price, would also be valid and permissible provided this
  approach has been uniformly adhered to. In the case at hand,
  however, while the latter was ostensibly the reason behind the
  decision for conducting a fresh auction, no evidence has been
G placed on the record to support this contention. The highest
  bids, marginally above the reserve price, have been accepted
  in the self-same auction. The factual scenario before us is
  clearly within the mischief which wa:; frowned upon in
  Mohinder Singh Gill. We therefore uphold the impugned
H Judgment for all the reasons contained therein. The assailed
  STATE OF PUNJAB v. M/S. BAN DEEP SINGH & ORS.                     503
              [VIKRAMAJIT SEN, J.]

action of the Appellant is not substantiated in the noting, which A
ought at least to have been conveyed to the Respondents.

      7. The bid of the Respondents is already over a decade
old, which is the period the presentAppeal has been awaiting
its turn in this Court. We must, therefore, balance the equities     B
and interest of the adversaries before us. It has been submitted
by the learned Senior Counsel for the Respondents that
although the Appellant had addressed a letter to the
Respondents purporting to return the sums received from them,
the cheque for this amount was not enclosed with the letter.         C
The fact remains that these sums continue to be in the coffers
of the Appellant. It is also submitted by the learned Senior
Counsel that the balance sale consideration had been
tendered by the Respondents to the Appellant, who declined
to accept it on the premise that their Appeal was pending in         D
this Court. Learned Senior Counsel suggested that in the
endeavour to do justice to all the parties before this Court, we
may direct the Respondents to pay the price of the land at the
prevailing Circle Rates, which suggestion has readily been
accepted by the learned Counsel for the Appellant with alacrity.     E
Since the Respondents have succeeded in the High Court as
well as before us, they should not be deprived of the fruits of
the litigation and suffer the disadvantage of losing the land for
which they have successfully paid the earnest money and              F
deposited more than twenty five per cent of the sale
consideration and have tendered the entire remainder.
Learned counsel appearing for the Appellant conceded that,
in the facts of the present case, if the Respondents are directed
to pay the circle rates, as existing today, the ends of justice      G
would be met. Accordingly, in the circumstances of the present
case, we hold that if the Respondents tender the price of the
land equivalent to the prevailing Circle Rate minus the sums
already paid by them to the Appellant within ninety days from
today, the Appellant shall take all necessary steps to convey        H
504          SUPREME COURT REPORTS                [2015] 10 S.C.R.


A     the land to the Respondents within sixty days thereafter.

          8 The Appeals are disposed of in these terms, with no
      order as to costs. Stay granted by this Court on 16.1.2006 is
      vacated.
B
      Nidhi Jain                                   Appeals disposed of.