The Karnataka High Court upheld the Bangalore Development Authority's (BDA) authority to accept or reject bids in site auctions without providing reasons. A division bench overturned a single-judge ruling that had ordered the BDA to accept a bid from Sachin Nagarajappa. The court affirmed that under the BDA (Disposal of Corner Sites and Commercial Sites) Rules, 1984, the BDA is not obligated to explain bid rejections, provided they serve the public interest and aim for the highest price. As no evidence of fraud or misconduct was found, the court supported the BDA's discretion. This ruling reinforces the BDA's operational autonomy and sets a precedent for future public property auctions.
The Karnataka High Court has affirmed the Bangalore Development Authority's (BDA) authority to accept or reject bids in site auctions without the need to provide reasons. A division bench comprising Justice Anu Sivaraman and Justice G. Basavaraja determined that the BDA's decision was lawful, serving the public interest and benefiting the community at large.
This case emerged after the BDA contested a ruling from a single-judge bench that annulled its rejection of a bid from an individual named Sachin Nagarajappa. The single judge had instructed the BDA to approve Nagarajappa's bid of INR 1,54,000 per square metre, which led the authority to file an appeal.
The BDA contended that its actions were in accordance with the BDA (Disposal of Corner Sites and Commercial Sites) Rules, 1984, which grant the authority the power to accept or reject bids without the obligation to provide explanations. The BDA highlighted that the objective of public property auctions is to achieve the highest possible price, asserting its right to annul bids if the proposed price is considered insufficient.
The division bench referred to Rule 7 and the General Terms and Conditions outlined in the BDA's e-Auction Notification, indicating that the rule permits the authority to reject bids without needing to give reasons. The court underscored that the judiciary should not interfere with policy decisions made by the legislature or regulatory bodies unless there is clear evidence of illegality or misconduct.
As the respondent did not contest the constitutionality of Rule 7 and no evidence of fraud, collusion, or favoritism was submitted, the court noted and concluded that the BDA's decision was neither arbitrary nor irrational.
It also observed that the property had been sold for over INR 10 crore in a subsequent auction, resulting in a benefit for the BDA. The division bench overturned the ruling of the single-judge bench and upheld the BDA's decision to reject the bid.
The Karnataka High Court's ruling reinforces the Bangalore Development Authority's (BDA) discretion in managing site auctions, allowing it to reject bids without justification. This decision underscores the importance of safeguarding public interest and ensuring the optimal return on public property sales. The court's affirmation of the BDA's authority not only supports its operational autonomy but also sets a precedent for future auction processes, promoting transparency and accountability in public asset management.
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