Umesh Kumar Vyas vs State Of Rajasthan (2026:Rj-Jd:12038) on 13 March, 2026

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    Rajasthan High Court – Jodhpur

    Umesh Kumar Vyas vs State Of Rajasthan (2026:Rj-Jd:12038) on 13 March, 2026

    Author: Kuldeep Mathur

    Bench: Kuldeep Mathur

    [2026:RJ-JD:12038]
    
          HIGH COURT OF JUDICATURE FOR RAJASTHAN AT
                           JODHPUR
                      S.B. Civil Writ Petition No. 6122/2025
    
    Umesh Kumar Vyas S/o Shri Gouri Shankar Vyas, Aged About 35
    Years,    Resident        Of     218,      Ward       No.15,          Near    LTM     Katla,
    Ummedpura, District Phalodi.
                                                                                 ----Petitioner
                                             Versus
    1.       State       Of    Rajasthan,         Through         Director,       Local     Self
             Development Department, Government Of Rajasthan,
             Jaipur
    2.       Municipal Council, Phalodi Through Its Commissioner.
    3.       District Collector, Phalodi.
    4.       Additional District Collector-Cum-Administrator, Municipal
             Council, Phalodi.
    5.       Sub-Divisional            Officer-Cum-Commissioner,                     Municipal
             Council, Phalodi.
                                                                            ----Respondents
    
    
    For Petitioner(s)              :     Mr. Manoj Bohra
    For Respondent(s)              :     Ms. Meenal Singhvi for
                                         Mr. Rajesh Panwar, AAG.
    
    
    
                HON'BLE MR. JUSTICE KULDEEP MATHUR

    Order

    13/03/2026

    SPONSORED

    1. By way of filing the present writ petition under Article 226 of

    the Constitution of India, the petitioner has prayed for the

    following reliefs:

    “I. by or an appropriate writ, order directions, the impugned
    minutes of meeting dated 04.12.2024 (Annex.5) and e-. auction
    notice dated 17/18.02.2025 (Annex.6) passed by the respondents,
    qua the plot No.9 (Warehouse), situated in Santosh Nagar
    Aawasiya Scheme, Phalodi may kindly be quashed and set-aside.
    II. Further, by an appropriate writ, order or directions, the
    respondents may kindly be directed to accept the petitioner’s of
    plot No.9 (Warehouse), situated in Santosh Nagar Aawasiya
    Scheme, Phalodi.

    III. Pending the petition, if any order is passed or any action is
    taken prejudicial to the interest of petitioner; same may kindly be
    quashed and set aside.

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    IV. Any other appropriate order or direction, which this Hon’ble
    Court considers just and proper in the facts and circumstances of
    this case, may kindly be passed in favour of the petitioner.
    V. Costs of the writ petition may kindly be awarded to the
    petitioner.”

    2. Learned counsel for the petitioner submitted that the

    respondent – Municipal Council, Phalodi issued an e-auction notice

    dated 30.10.2024 for allotment of various sizes/categories of plots

    situated in the residential/commercial schemes floated by it from

    time to time. Learned counsel submitted that the petitioner

    participated in the e-auction proceedings for Warehouse No.9

    situated at Santosh Nagar. The reserve price for the said

    warehouse was fixed at Rs.24,82,007/-. The petitioner submitted

    a bid of Rs.65,41,997/-, which was much higher than the reserve

    price fixed by the respondent – Municipal Council. After completion

    of the auction proceedings, the petitioner was declared H-1

    (highest bidder).

    3. The grievance of the petitioner is that the respondent –

    Municipal Council, Phalodi, in its meeting dated 04.12.2024, took

    a decision to cancel the entire e-auction proceedings and to

    conduct fresh auction proceedings for the said plot on the ground

    that in the previous auction proceedings conducted for Warehouse

    No.1 (Plot No.1) of the same scheme, the highest bid received was

    Rs.1,91,00,000/-, which is much higher than the bid submitted by

    the petitioner.

    4. Learned counsel for the petitioner further submitted that

    after taking the decision to cancel the auction proceedings

    conducted pursuant to the e-auction notice dated 30.10.2024, the

    respondent – Municipal Council issued a fresh e-auction notice

    dated 17/18.02.2025, again including the plot in dispute, i.e.,

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    Warehouse No.9 situated at Santosh Nagar, while keeping the

    same reserve price of Rs.24,82,007/-.

    5. Learned counsel submitted that the reason assigned by the

    respondents for cancelling the earlier auction proceedings, namely

    that a higher bid was expected for the plot in question, is illegal

    and arbitrary. He further submitted that once the bid offered by

    the petitioner was found to be higher and well above the reserve

    price, the same ought to have been accepted.

    6. It was also contended that as per Condition No.4 of the e-

    auction notice dated 30.10.2024, the bid submitted by the

    petitioner was required to be accepted or rejected within five

    working days from the date of auction. However, in the present

    case, the decision to cancel the e-auction proceedings or reject

    the bid submitted by the petitioner was taken by the respondent –

    Municipal Council in its meeting dated 04.12.2024, which is

    beyond the timeline prescribed under Condition No.4 of the e-

    auction notice dated 30.10.2024.

    7. On these grounds, learned counsel for the petitioner prayed

    that the decision to conduct fresh e-auction proceedings for

    Warehouse No.9 situated at Santosh Nagar by the respondent –

    Municipal Council, Phalodi be declared bad in the eye of law, and

    the Municipal Council be directed to accept the bid submitted by

    the petitioner and issue an allotment order in its favour for the

    said plot.

    8. In support of his submissions, learned counsel for the

    petitioner placed reliance on the judgment of the Hon’ble Supreme

    Court in “Golden Food Products of India v. State of Uttar

    Pradesh & Ors.” SLP (Civil) Nos.18095-18096/2024.

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    9. Per contra, Ms. Meenal Singhvi, learned counsel appearing

    for the respondents, submitted that the decision of the respondent

    – Municipal Council, Phalodi not to accept the bid submitted by the

    petitioner for Warehouse No.9 and to conduct fresh e-auction

    proceedings for the said plot is well reasoned and justified. She

    submitted that the officials of the respondent – Municipal Council

    are duty-bound to protect its financial interests by ensuring that

    the plot offered in the bidding process is sold at the highest

    possible price.

    10. She submitted that Warehouse No.1, situated in the same

    scheme was auctioned for Rs.1,91,00,000/-. According to her, the

    price offered by the petitioner, though higher than the reserve

    price, is much lower than the prevailing market value, or in other

    words, the price which the plot is capable of fetching in the open

    market.

    11. Learned counsel further submitted that since the price

    offered by the petitioner does not represent the true market value

    of the property, the decision taken by the Three-Member

    Committee consisting of the Administrator, Municipal Council,

    Phalodi; Commissioner, Municipal Council, Phalodi; and Assistant

    Commissioner, Municipal Council, Phalodi, in its meeting dated

    04.12.2024, to reject the offer made by the petitioner and cancel

    the entire e-tender process dated 30.10.2024 cannot be said to be

    arbitrary or unreasonable so as to warrant interference by this

    Court in exercise of its writ jurisdiction.

    12. She further submitted that a bare perusal of Conditions No.5

    and 12 of the e-auction notice dated 30.10.2024, as well as Rule

    72 of the Rajasthan Transparency in Public Procurement Rules,

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    2013, makes it clear that the procuring entity reserves the right to

    accept or reject any or all bids prior to the award of contract. It

    was submitted that a highest bidder does not acquire any vested

    right to have the bid accepted merely upon being declared as the

    highest bidder.

    13. In support of her submissions, learned counsel for the

    respondents placed reliance on the following judgments:

    E-City Entertainment Pvt. Ltd. v. State of Uttar Pradesh &

    Anr., (2017) 13 SCC 271.

    Indore Vikas Pradhikaran & Anr. v. Shri Humud Jain Samaj

    Trust & Anr., passed by the Hon’ble Supreme Court in SLP

    (Civil) No.9940/2022.

    • Mahadev Stone Crusher v. State of Rajasthan & Ors., S.B.

    Civil Writ Petition No.17666/2024 decided on 05.12.2024.

    The Silppi Constructions Contractors v. Union of India &

    Anr. passed by the Hon’ble Supreme Court in SLP (Civil)

    Nos.13802-13805/2019.

    Kuldeep Lodhawat v. The Rajasthan State Industrial Deve.

    And Investment Corporation Ltd. & Anr. passed in S.B. Civil

    Writ Petition No.1423/2021.

    Haryana Urban Development Authority & Ors. v. Orchid

    Infrastructure Developers Pvt. Ltd passed in SLP(C)

    No(s)12166/2011.

    14. Heard.

    15. Condition No.4, Condition No.5 & Condition No.12 of the e-

    auction notice dated 30.10.2024 reads as under:-

    Condition No.4-

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    “The bid shall be subject to the sanction or rejection within 5
    working days from the date of auction and demand note shall
    be issued within 2 days from the date of sanction of the bid.”

    Condition No.5.-

    “The bid shall be subject to the sanction of the Chairperson of
    the Municipal Council in whom the rights are reserved to
    accept or reject any bid without assigning any reason thereof.”

    Condition No.12-

    “बोली स्वीकार / अस्वीकार करने का अधिकार सभापति एवं आयुक्त
    नगर परिषद फलौदी के पास सुरक्षित रहगा जिसका कारण बताना
    आवश्यक नही होगा।”

    16. Rule 72 of RTPP, 2013 reads as under-

    “72. Procuring entity’s right to accept or reject any or all
    bids.- The Procuring entity reserves the right to accept or
    reject any bid, and to annul the bidding process and reject all
    bids at any time prior to award of contract, without thereby
    incurring any liability to the bidders. Reasons for doing so shall
    be recorded in writing.”

    17. The Hon’ble Supreme Court in ‘Golden Food Products of

    India v. State of Uttar Pradesh & Ors.‘ (supra), after

    considering earlier judgments on the right of a procuring entity/

    auctioning authority to reject the highest bid, observed in

    paragraph 32 as under:

    “An auction process has a sanctity attached to it and only
    for valid reasons that the highest bid can be discarded in an
    auction which is otherwise held in accordance with law. If a
    valid bid has been made which is above the reserve price,
    there should be a rationale or reason for not accepting it.
    Therefore, the decision to discard the highest bid must have a
    nexus to the rationale or the reason. Merely because the
    authority conducting the auction expected a higher bid than
    what the highest bidder had bid cannot be a reason to discard
    the highest bid. In the instant case, no other party had placed
    a bid higher than the appellant herein. There was no infirmity
    in the conduct of the auction. No other party had complained
    about the process of auction conducted by the GDA –
    respondent No.2. The bid offered by the appellant herein was
    the highest and above the reserve price. In the circumstances,
    the said bid ought to have been accepted by GDA respondent
    No.2 rather than cancelling the same without notice to the

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    appellant herein. Hence, the cancellation of the bid submitted
    by the appellant herein is quashed.”

    18. Having heard learned counsel for the parties and upon

    perusal of the material available on record, this Court finds that

    the petitioner, in response to the e-auction notice dated

    30.10.2024, submitted a valid bid for Warehouse No.9 situated

    at Santosh Nagar, which was above the reserve price. Conditions

    No.5 and 12 of the e-auction notice indicate that the right to

    accept or reject any bid is reserved with the Chairperson and

    the Commissioner of the Municipal Council. However, Condition

    No.4 clearly stipulates that such decision must be taken within

    five working days from the date of auction.

    19. In the present case, the last date for submission of bids

    was 22.11.2024 up to 3:00 PM. However, the decision not to

    accept the highest bid was taken by a Three-Member Committee

    on 04.12.2024, which is beyond the five-day period prescribed

    under Condition No.4 of the e-auction notice.

    20. It is pertinent to note that the purpose of fixing a reserve

    price is to ensure that public property is not sold at an

    unreasonably low price and to safeguard the financial interest of

    the auctioning authority. In the present case, although the bid

    submitted by the petitioner was not accepted on the ground that

    it was allegedly much lower than the prevailing market price of

    the plot, the respondents themselves retained the same reserve

    price for the plot in question while issuing the fresh e-auction

    notice dated 17/18.02.2025. Furthermore, the reply filed by the

    respondents does not indicate that any irregularity, fraud,

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    illegality, or collusion among bidders was noticed in the auction

    proceedings dated 22.11.2024.

    21. The Hon’ble Supreme Court in Golden Food Products of

    India (supra) has clearly deprecated the practice of cancelling

    the highest bid merely on the ground that the authority

    expected a higher bid. In other words, the possibility that the

    property may fetch a higher price cannot, by itself, constitute a

    valid ground for cancelling the auction, particularly when no

    third party has raised any objection regarding the conduct of the

    auction process.

    22. In view of the aforesaid discussion and the precedent law

    laid down by the Hon’ble Supreme Court, the present writ

    petition deserves to be allowed.

    23. Accordingly, the writ petition is allowed. The respondents

    are directed to issue an allotment order in favour of the

    petitioner for Warehouse No.9 situated at Santosh Nagar and to

    take all consequential steps for concluding the auction process

    in accordance with law. The petitioner shall deposit the

    remaining cost of the plot with the respondents as per the

    applicable rules.

    (KULDEEP MATHUR),J
    242-himanshu/-

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