MAHIPALA VENKANNA Vs. GOVERNMENT OF ANDHRA PRADESH

JUDGEMENT

(1.) The 3rd respondent issued an auction notice dated 8-2-1997 inviting tenders from the bidders for awarding contract for collecting rentals of the shops belonging to R5 Municipality for the period from 1-4-97 to 31-3-98. The said auction was scheduled to be held on 13-3-97. In pursuance of the said notification the petitioner participated in the auction along with others and became the highest bidder of Rs. 6,17,200.00. The auction was confirmed in favour of the petitioner on 13-3-1997 by the 3rd respondent. While the matter stood thus, the impugned auction notice dated 22-3-97 was issued by the 3rd respondent for re-auction of the same rights, namely collection of rentals, which was already confirmed in favour of the petitioner in the earlier auction. Questioning the said auction notice the petitioner approached this Court by way of this writ petition under Article 226 of the Constitution, seeking for writ of Mandamus.

(2.) It is contended by the learned Counsel for the Petitioner that the action of R5 Municipality cancelling the earlier auction and seeking to re-auction the same, was at the instance of the Hon. Minister for Cooperation and hence it was a colourable exercise of power and is liable to be declared as illegal. It is further contended that the petitioner's highest bid having been confirmed by the Commissioner, the Municipal Council ought to have approved the same, since it was much higher than the earlier year's bid of Rs.3,56,000.00. In the resolution No. 352, dated 18.3.97. passed by the Municipal Council the only reason given for not approving the highest bid of the petitioner was the letter written by one Gannavarapu Venkat Rao, dated 17-3-97, in which he requested for re-auction on the ground that he could not attend the auction and that if it was re-auctioned the Municipality would also to get higher bid. It was contended that this reason cannot be a valid reason for cancellation of a validly held auction and hence the said re-auction was vitiated by arbitrariness.

(3.) The 3rd respondent filed counter affidavit. While stating that the petitioner was the highest bidder of Rs. 6,17,200.00 in the auction held on 13-3-97, it was stated that the 3rd respondent placed before the Municipal Council for its ratification and the Council in its resolution No. 352, dated 18-3-97 did not confirm the bid expecting higher amounts than the bid offered by the petitioner. It is also stated that the Commissioner received 2 letters one from G. Venkata Rao and another from A.M. Jaganadha Rao, offering more lease amounts than the petitioner. The Council discussed the matter with reference to the above 2 letters and also with reference to the increase of the rates mentioned in G.O.Ms.No.21, dated 5-1-96. and having expected more lease amounts, which would be useful for providing more civic amenities, rejected the highest bid of the petitioner and resolved to auction the lease-hold rights again. It is also stated that the resolution was passed by majority of members and about 7 members and Chairperson expressed their dissent. It was further stated that there was no mala fide intention in calling for re-auction and that the Municipal Council was the highest decision making body. The 3rd respondent, thus defended the action for conducting fresh auction, on the ground of expecting more revenue.