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Powai Panchsheel Co-op. Hsg. Society v. Maharashtra Housing Area Development Authority (MHADA)

Civil Appeal · 2018 INSC 962Decided 12 Oct 2018
Civil Appeal No. 7608 of 2009
Justice Abhay Manohar Sapre · Justice S. Abdul Nazeer

Background

MHADA, a statutory housing authority, ran a scheme to sell flats in its "Powai Project" in Mumbai, and after several rounds of advertisements still had 327 flats unsold, so it reduced the price and issued a further advertisement. The appellant housing society submitted a written offer to purchase 110 flats, which was forwarded to the Board by its selling agent along with offers from three other cooperative societies and some banks. The Board then held meetings and allotted 500 flats to three particular cooperative societies without considering the appellant's offer at all, and when the appellant challenged this before the Bombay High Court, its writ petition was dismissed.

Decision Breakdown

The Supreme Court held that the appellant's letter dated 03.03.2003 was, in substance, a genuine written offer to purchase flats at a quoted price, and there was no valid legal basis for the Board to have excluded it from consideration alongside the three societies' offers. The Board's stated reason for excluding the appellant's offer was never recorded in its own meeting minutes, was disclosed only belatedly in High Court proceedings (which the Court held was impermissible), and in any event had no real basis. The Court found the Board's resolution allotting the flats only to the three societies was arbitrary and violated Article 14 (equality before law) of the Constitution, quashed that resolution via a writ of certiorari, and left the Board free to proceed afresh in accordance with law, without needing to examine separate allegations of mala fide conduct by officials.

Lesson Learnt

A public authority allocating a public resource (like government housing) must fairly consider all genuine offers before it and cannot silently exclude one bidder for reasons it never recorded contemporaneously, doing so is arbitrary and violates the constitutional guarantee of equal treatment.

Official source (sci.gov.in)View Judgment (PDF)

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