Summary
The Supreme Court ordered a fresh auction of a housing authority’s commercial plot. The earlier sale remained subject to the pending writ; inadequate publicity and an unduly low reserve price prevented proper realisation of its potential. Wide national and local publicity, expert assessment of the reserve price and transparent bidding conditions were directed. Both earlier bidders were entitled to refunds with 6% interest and could participate afresh without preference.
Issues
- Whether the completed sale prevented a fresh auction when it was expressly subject to the writ petition.
- What safeguards and restitution should accompany re-auction.
Held
- The sale’s completion did not defeat the writ challenge because the auction had expressly been made subject to its outcome, of which the purchaser was aware. (¶¶ 17, 18)
- Only two bidders participated after inadequate publicity, and the offers later made indicated substantially greater commercial potential than the reserve price reflected. Those circumstances warranted a fresh auction. (¶¶ 19, 20, 21, 22)
- The authority must advertise widely in leading national and local newspapers, obtain expert advice on the reserve price and provide transparent bidding conditions. The auction must be fair and completed within six months. (¶¶ 23, 24, 25, 29, 30)
- Both earlier bidders must receive their deposited purchase money with 6% annual interest. As the sale deed became void following the re-auction direction, the purchaser was entitled to refund of the stamp duty, supported by the State’s necessary certificate. (¶¶ 26, 27)
- Both parties could participate as fresh bidders but had no preferential claim based on earlier participation. (¶ 28)
Result
Appeal allowed and High Court order set aside. Fresh auction directed within six months, with refunds carrying 6% interest and stamp-duty refund measures for the purchaser.