M/S Hande Wavare and Co. v. Ramchandra Vitthal Dongre
Background
A large shop/"gala" (No. F-158) in Mumbai's wholesale fruit and vegetable market became vacant after an earlier Supreme Court ruling, and five traders competed for it under norms framed by a court-appointed committee (the Daud Committee) decades earlier. The market committee (APMC) eventually allotted it by lottery to the appellant trader at a steeply discounted price, but a rival claimant challenged this before the Bombay High Court, which instead awarded the gala to a different claimant (Habibullah) based on a separate administrative order allowing him to use his father's earlier booking payment.
Decision Breakdown
The Supreme Court held that Habibullah was not eligible because he had neither booked the gala himself before the cut-off date nor paid any booking amount in his own name: the norms did not permit transferring one person's booking credit to another, so the High Court erred in relying on an administrative order that ignored this. It also held that a partnership firm cannot claim eligibility based on its individual partners' personal payments and licences. Finding that the gala, valued at roughly double what the original lottery price assumed, should fetch the best return for the public market committee, the Court set aside the lottery-based allotment altogether and directed APMC to invite sealed-tender bids from the four genuinely eligible claimants, with the gala going to the highest bidder at a fixed upset price of Rs. 55 lakhs.
Lesson Learnt
Eligibility rules set by courts or committees for public allotments must be followed strictly: a right to a public resource built on borrowed or transferred credentials (like someone else's payment record) generally will not hold up, and courts can order a transparent bidding process instead of an under-valued allotment to protect public revenue.