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Suresh Chandra v. U.P. Avas Evam Vikas Parishad

Civil Appeal · 2018 INSC 1143Decided 3 Dec 2018
Civil Appeal No. 11760 of 2018
Justice Abhay Manohar Sapre · Justice Indu Malhotra

Background

Suresh Chandra had been the highest bidder in a public auction of a plot of land in Agra conducted by the U.P. Avas Evam Vikas Parishad (housing board), but the Parishad rejected the bids as too low and decided to re-auction the land. During the pendency of his writ petition challenging the decision to re-auction (which the High Court had allowed to proceed subject to the outcome of his case), the Parishad sold the land in a second auction to another bidder and executed a sale deed, and the High Court then dismissed Suresh Chandra's petition on the ground that nothing survived once the sale was complete. He appealed to the Supreme Court on the limited question of why the land should not be auctioned yet again.

Decision Breakdown

The Supreme Court found that the sale to the second bidder could not defeat the appellant's rights because the re-auction had always been expressly made subject to the outcome of his pending writ petition, and the buyer knew this. The Court also found the Parishad had given inadequate publicity for both earlier auctions (attracting only two bidders each time) and had fixed an unreasonably low reserve price, given that both bidders had later voluntarily offered far higher amounts. To do complete justice and ensure a fair market price, the Court allowed the appeal, set aside the High Court's order, declared the earlier sale deed void, and directed a fresh, widely-publicized auction within six months with a reserve price set after expert consultation, while ordering refunds (with 6% interest) to both the appellant and the earlier purchaser and a refund of stamp duty to the latter.

Lesson Learnt

Public authorities auctioning land must give genuinely wide publicity and set a realistic reserve price; courts can step in to order a fresh, transparent auction, even voiding an already-executed sale deed, if an earlier sale was conducted without adequate competition or at an artificially low price, especially where it was always subject to a pending court case.

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

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