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
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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[2026:RJ-JD:12038] (2 of 8) [CW-6122/2025]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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[2026:RJ-JD:12038] (6 of 8) [CW-6122/2025]“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(Uploaded on 15/03/2026 at 01:10:46 PM)
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[2026:RJ-JD:12038] (7 of 8) [CW-6122/2025]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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