Aman Hospitality Pvt. Ltd. V.

The Delhi Development Authority

High Court Of Delhi

WP(C) No. 5655/2006

Judgment Date:
24-11-2006

Aman Hospitality Pvt. Ltd. ..Petitioner

The Delhi Development Authority ..Respondent

Bench:
{HON'BLE JUDGE KAILASH GAMBHIR , ACTING C.J. }

Citation:

1 (2007) BC 154 ; (2006) ILR 2 DELHI 1360 ; LQ/DelHC/2006/2593 ;

Kailash Gambhir, J.

1. The petitioner being aggrieved with the rejection of its bid in respect of Hotel Plot
No. 1, Central Business District (East), Shahadra, Delhi, has filed the present writ
petition seeking mandamus or any other direction for quashing the order of the
respondent with further direction for the approval of the bid of the petitioner in
respect of the said plot being the highest bidder. The brief facts which are not in
dispute, inter alia, are that pursuant to the advertisement by the Delhi Development
Authority (hereinafter referred as ‘DDA’) for holding a public auction for the sale of
nine Hotel plots, the petitioner had participated in the auction held on 3.3.2006 in
respect of the said plot at Central Business District (East), Shahadra, Delhi measuring
20,000 sq. mtrs. Reserve price of this plot was fixed at Rs. 167.40 crores @ Rs.
83,700/- per sq. mtrs. of the plot area and Rs. 37,200/- for the builtup area. The
petitioner gave bid at Rs. 170.001 crores which was admittedly the highest bid in
respect of the said plot in question, and as per the terms of the auction the petitioner
had deposited an amount of about Rs. 42.5 crores being 25% of the bid amount. After
expiry of more than one month from the date of auction, the petitioner was informed
by the DDA through their letter dated 4.4.2006 stating that the bid offered by the

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 Aman Hospitality Pvt. Ltd. V. The Delhi Development Authority

petitioner was not approved by the competent authority, i.e., Vice-Chairman, Delhi
Development Authority/respondent. Since there was no reason or ground contained in
the said letter rejecting the bid of the petitioner, therefore, the petitioner sought to
know the reasons by taking recourse under the provision of Right to Information Act
and through this process, the petitioner came to know the detailed history of various
bids as invited by the DDA in respect of the same plot prior to the aforesaid bid in
question. The petitioner has given details of all these bids and the same are
reproduced as under :

Date of tender/Reserve PriceBid received

open auction

28.6.1996 (through tender)64.66 croresNo bid

16.4.1998 (through tender)82.05 coresNo bid

23.10.2002 (though tender)72.45 croresNo bid

19.11.2003 (open public auction)90.00 croresNo bid

22.3.2004 (open public auction)90.00 croresNo bid

3.3.2006 (open public auction)167.40 crores170.001 crore

2. The petitioner further states that the reserve price of Rs. 167.40 crores of the bid
in question was fixed by the DDA after wide consultations and with due diligence and
after taking into account various factors including current market price of the land in
the area, size and usage of the plot and the said reserve price was almost double to
the reserve price which was fixed for the open public auction dated 22.3.2004, in
response to which no bid was received by the respondent. The contention of the
Counsel for the petitioner is that in all the five previous auctions when tenders/bids
were invited, no response was received by the DDA and when the petitioner had given
the bid for a price more than the reserve price, its bid has been arbitrary rejected
without any ground or reason. The Counsel for the petitioner has also taken us
through the relevant proceedings of the DDA concerning the auction of this plot which
clearly shows that at every step approval to the said bid of the petitioner was
accorded except when it reached to the Member (Finance) whovide his note dated
23.3.2006 opined that the bid price of Rs. 37,778/- per sq. metre in respect of the said

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 Aman Hospitality Pvt. Ltd. V. The Delhi Development Authority

plot in question, appeared to be on the lower side. The Member (Finance) took into
consideration the price range of Rs. 75,960/- per sq. meter to Rs. 1,26,068/- per sq.
metre fetched by the DDA for some Shopping/Office plot in Kondli Gharoli (East Delhi)
in the commercial auction held on 23.3.2006 and based on this opinion the DDA was
advised to re-auction the plot in question for realizing the alleged real value of the
said plot.

3. To properly appreciate the stand of the DDA, it would be relevant to reproduce the
following paragraph from the proceeding-sheet of the DDA which has been taken out
from page 78-A of the paper book :

“In this regard, it is informed that Plot No. 1 was put for auction on 19.11.2003 and
22.3.2004, but no bid was received. In March, 2004, the Reserve Price was Rs. 90
crores. In the present auction, the Reserve Price was increased from Rs. 90.00 crores
to 167.40 crores. Despite raising almost double the Reserve Price, the multiple bidding
has taken place and the bid has been received, which is quite satisfactory, considering
the fact that CBD Shahdara is not a very good location for Hotel plots considering its
distance from the Airport and other major destination of Delhi. Hence the bid is
recommended for acceptance.”

4. Equally important would be to reproduce the observations of the Member (Finance)

when he had recommended re-auction of the said plot :

“In Plot No. 1, the bid price is Rs. 37,778/- per sq.m. In the recent commercial auction
on 23.3.2006, in Kondli Gharoli, East Delhi, the auction price range is between Rs.
75,960 per sq.m. To Rs.126,068 per sq.m. Rs. 37,778 per sq.m. seems on the lower
side. We may go for re-auction to realize the real value.”

5. Needless to state that the competent authority, i.e., the Vice-Chairman had put a
seal on the said advice of the Member (Finance) and thereafter the said rejection of
the bid was communicated to the petitioner which action of the respondent is assailed
in the present writ petition being termed as illegal, arbitrary, wrongful, whimsical and
clear case of non-application of mind.

6. In the interregnum,vide our order dated 18.9.2006 we had permitted the DDA to go
ahead with the re-auction of the said plot which was scheduled for 25.9.2006 and the
petitioner was given the liberty and right to participate in the said re-auction.
However, the respondent was directed not to declare the successful bidder. We have
now been informed that auction of ten prime plots on freehold basis for construction

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 Aman Hospitality Pvt. Ltd. V. The Delhi Development Authority

of hotels in Delhi including the plot in question, took place on the said scheduled date,
i.e., 25.9.2006 and except one bid for plot at Manglam Place Rohini, no party came
forward to participate in any of the bids for rest of the plots at various places. This
time, the respondent had kept the reserve price for the plot in question at Rs. 244.30
cores as against the reserve price of Rs. 167.40 crores for the auction in question,
which took place on 3.3.2006. There is, thus, phenomenal increase in the reserve price
within a gap of six months but without response from any bidder. Earlier in the said
auction of 3.3.2006 as many as 51 bidders had participated and amongst those 51
bidders, the petitioner’s bid was the highest. The chart giving details of auction dated
25.9.2006 of these ten plots, which has been filed today, is taken on record. Mr. Ajay
Verma, learned Counsel appearing for the respondent made a vain attempt to justify
non-participation of the bidders in the auction of 25.9.2006 by contending that there
was a deterrent effect due to pendency of the present writ petition concerning plot
No. 1 which fact was duly notified in the advertisement and, therefore, there was no
response from the interested parties. However, Mr. Ajay Verma failed to explain as to
why there was no response as against the auction of other eight plots against which
also no bidder come forward to participate. Mr. Ajay Verma also contended that as per
Clause 3.3 of the terms and conditions of the auction the competent authority, i.e.,
respodnent is fully competent to reject the bid without assigning any reason. He
further submits that the bid in the present case was rejected on rational grounds after
taking into account, the rates of the shop/office at Kondli Gharoli (East Delhi) which
were in the range of Rs. 75,960/- per sq. metre to Rs. 1,26,068/- per sq. metre. Mr.
Ajay Verma further submits that the power to accept the bid ultimately lies with the
competent authority and it is not necessary that if the bid is above the reserve price,
then under all circumstances such a bid is to be accepted. The evaluation of the bid
as to whether the same is competitive enough to reflect the market value of the plot,
is done subsequently by the competent authority as per Clause 3.2(v) of the terms and
conditions of the auction which reads as under :

“The officer conducting the auction shall normally accept the highest bid subject to
confirmation by the competent authority provided that the highest bid amount is above
the reserve price mentioned in the Press advertisement document/ announced in the
auction and is found to be competitive enough to reflect the market value of the plot.”

7. Based on the above clause the Counsel for the DDA says that action of the
respondent is neither illegal nor arbitrary and the same cannot be interfered with.

8. Delhi Development Authority which was constituted under the provision of Section 3
of the Delhi Development Act is the nodal agency for urban planning and its

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 Aman Hospitality Pvt. Ltd. V. The Delhi Development Authority

implementation in Delhi. Under the Master Plan of Delhi the DDA is not only the
primary organization but has the monopoly to undertake urban planning and facilitate
the development and growth of the city. It is the DDA who has to develop premium
destinations for commerce and industry as well as to ensure construction of shopping
complexes, hotels, hospitals, school, sport complexes and to take all other measures, so
that the image of the city is enhanced and adequate facilities are provided to the
residents of the National Capital Territory of Delhi and the people visiting here. The
recent auction of various hotel plots at prime locations appears to be primarily keeping
in view the forthcoming Common Wealth Games of 2010 when the Capital of the
country is expecting large number of tourists and the participants. The various
corporate sectors including the hoteliers might be evincing interest to buy such plots,
so that they can raise the necessary infrastructure and construct hotels well prior to
the commencement of the Common Wealth Games of 2010. This probably appears to
be the reason of such large participation of 51 bidders in the auction of the said plot
as was held on 3.3.2006. The DDA in its brochure has highlighted its proposal to
construct indoor and outdoor stadiums in Yamuna Sports Complex and a village with
8500 flats in front of Akshardham Temple in East Delhi for the said Common Wealth
Games of 2010. Relevant Clause (1) relating to the location of the said plot in question
and the proposed developments to be undertaken by the DDA for Common Wealth
Games, 2010 is reproduced as follows :

“(1) CBD SHAHADRA

The new Sub-Central Business District, Shahadra (East) is spread over 46 hectares of
land is located in the heart of Trans Yamuna Area. The Metro Rail line is passing
along with the Vikas Marg in Phase.

The CBD Shahadra (East) is flanked by low rise residentials developments of Rishab
Vihar, Arihant Vihar, Surajmal Vihar, Patparganj, Yamuna Sports Complex, Information
Technology Campus, IP University, District Court and other Institutional Complexes.

For Common Wealth Games 2010, DDA is proposing to construct and indoor stadium
and an outdoor stadium in Yamuna Sports Complex and a village with 8500 flats in
front of Akshardham Temple in East Zone.

Total number of plots proposed are about 60 in number with 460.000 sq. mtrs. built
up area. The proposed activities at CBD Shahdara include shopping/office complex,
wholesale, Service Centre facilities, cultural, hotel and housing functions.

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 Aman Hospitality Pvt. Ltd. V. The Delhi Development Authority

On Commercial Plot Nos. 9 B and 9 C a Commercial-cum-Multiplex is already coming

up. Plot No. 9D has also been disposed of as commercial plot.”

9. It is, thus, evident that large number of bidders turned out to participate in the
said auction of Hotel plot No. 1, Central Business District (East), Shahdara, Delhi,
taking into consideration, the potentiality of opening a hotel at the said site on account
of the Common Wealth Games of 2010.

10. There can be no denial of the fact that there is a wide discretion conferred on the
respondent to accept or not to accept a bid in spite of the same being a highest bid
and such decision of the DDA may not be open to question unless there is a clear cut
case of arbitrariness, mala fide, procedural irregularity or there is a total non-
application of mind in rejecting the bid of the highest bidder. In the present facts of
the case, there are no allegations of mala fides against the respondent and, therefore,
we will be testing the decision of the respondent, on the touchstone of arbitrariness,
non-application of mind and perversity in the decision making process. It is not in
dispute that prior to auction on 3.3.2006, the same plot was put to auction for five
times, i.e., on 28.6.1996 (through tender) with reserve price of 64.66 Crores but
without any response; 16.4.1998 (through tender) with reserve price of 82.05 without
any response; 23.10.2002 (though tender) with reserve price of 72.45 crore without
any response; 19.11.2003 (open public auction) with reserve price of 90.00 crore
without any response; 22.3.2004 (open public auction) with reserve price of 90 crore
again without any response. Ultimately, on 3.3.2006 the same plot was put to auction
with reserve price of 167.40 crores when 51 bidders participated and the petitioner
gave its bid more than the reserve price at Rs.170.001 cores. During the pendency of
the present matter, the respondent/DDA had advertised in the daily newspapers of
12.8.2006 thereby holding a fresh auction in respect of plot in question and some
other plots on 25.9.2006, due to which the petitioner had moved CM No. 10193/2006
for seeking stay of holding of the said auction. On hearing the said applicationvide
order dated 18.9.2006, we had permitted the DDA to go ahead with the auction and
the petitioner was also given the liberty to participate in the same and the direction
was given to the DDA not to declare the successful bidder. The said permission to re-
auction the same very plot was given by us, so as to test whether the respondent gets
the highest price of the said plot, then, the one in the last bid. Through this re-
auction, the decision taken by the Member (Finance) which was approved by the
respondent of taking into account the price of two plots sold in auction as held on
23.3.2006 which fetched more price then the price in respect of the plot in question,
could also be tested. Surprisingly in the auction held on 25.9.2006, no participant
came forward to give any bid in respect of the plot in question, not only against the

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 Aman Hospitality Pvt. Ltd. V. The Delhi Development Authority

plot in controversy but even in respect of eight other plots, out of total nine plots. The
non-response from the Hotel Industry/corporate world completely exposes the DDA to
its illogical and irrational decision. The people have either not responded on account of
the fact that the DDA has kept the reserve price of all these plots at highly exorbitant
rates or may be people might have got discouraged to participate not knowing as to
what would be the fate of even a highest bidder.

11. Normally, this Court would have been reluctant to interfere with the decision of
the respondent as it is respondent who is the final authority as far as the approval of
bid is concerned in terms and conditions of the said auction, but in the present case
the decision arrived at by the respondent for re-auction on the basis of a plot of 66
sq. metres to 121.50 sq. mtrs. that too in a shopping/office complex, clearly shows a
complete non-application of mind on the part of the approving authority.

12. It is true that the law of judicial review in relation to actions of a statutory
authority and in relation to discretionary exercise of power by the statutory authority
is limited, in that, save and except determining the legality of a statutory action within
the parameters of reasonableness as understood in Wednesbury’s case, judicial
interference has to be avoided. In the decision in Tata Cellular’scase reported as AIR
1996 SC 11 [LQ/SC/1994/685] , principles as under noted were laid down by the
Hon’ble Supreme Court :

“1. The modern trend points to judicial restraint in administrative action;

2. The Court does not sit as a Court of Appeal over administrative decisions, but
merely reviews the matter in which the decisions were made;

3. The Court does not have the expertise to correct administrative decisions. If a
review of the administrative decisions is permitted it will be substituting its own
decision without the necessary expertise, which itself may be fallible;

4. A fairplay in the joints is a necessary concomitant for the administrative functioning;

5. The administrative decision can be tested by application of Wednesbury principles of

reasonableness, and must be free of arbitrariness, bias or mala fides.”

13. Prima facie, as the law stands today, limited challenge would be entertained by the
Court, being whether the decision in the instant case of the respondent is fair and
reasonable within the parameters of reasonableness as understood in Wednesbury’s

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 Aman Hospitality Pvt. Ltd. V. The Delhi Development Authority

case.

14. Considering the doctrine of reasonableness as propounded in Wednesbury’s case,

we feel that the competent authority, i.e., respondent had taken a decision in such a
casual and opaque manner and, therefore, in the facts of the present case, the
decision of the respondent under no circumstances can be considered to be fair and
reasonable. We once again make it clear that the right to reject the bid even of the
highest tenderer certainly lies within the domain of the competent authority who has
to take decision after weighing various factors commercial as well as others, but the
decision of the competent authority must be a reasoned and well informed decision. It
would, therefore, depend on the facts of each and every case and in the given
circumstances, the decision of the competent authority can be justified even when
rejecting the bid of the highest bidder or directing re-auction till suitable price of the
plot/sites could be fetched. Every case, thus, will depend in its own facts and
circumstances, but every action of the State or instrumentality of the State has to be
decided on the touchstone of Article 14 of the Constitution of India. At any stage
during the decision making process if any arbitrariness, unfairness, mala fides or
unreasonablenesses are traced then such an action of the Government has to be set
aside being violative of Article 14 of the Constitution of India. It would be worthwhile
to reproduce the following paragraph from the judgment of Kumari Shrilekha Vidyarthi,
etc., v. State of U.P. and Others, reported in AIR 1991 Supreme Court 537.

“35. It is now too well settled that every State action, in order to survive, must not be
susceptible to the vice of arbitrariness which is the crux of Art. 14 of the Constitution
and basic to the rule of law, the system which governs us. Arbitrariness is the very
negation of the rule of law. Satisfaction of this basic test in every State action is sine
qua non to its validity and in this respect, the State cannot claim comparison with a
private individual even in the field of contract. This distinction between the State and
a private individual in the field of contract has to be borne in the mind.

36. The meaning and true import of arbitrariness is more easily visualized than
precisely stated or defined. The question, whether an impugned act is arbitrary or not,
is ultimately to be answered on the facts and in the circumstances of a given case. An
obvious test to apply is to see whether there is any discernible principle emerging
from the impugned act and if so, does it satisfy the test of reasonableness. Where a
mode is prescribed for doing an act and there is no impediment in following that
procedure, performance of the act otherwise and in a manner which does not disclose
any discernible principle which is reasonable, may itself attract the vice of
arbitrariness. Every State action must be informed by reason and it follows that an act

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 Aman Hospitality Pvt. Ltd. V. The Delhi Development Authority

uninformed by reason, is arbitrary. Rule of law contemplates governance by laws and

not by humour, whims or caprices of the men to whom the governance is entrusted for
the time being. It is trite that ‘be you ever so high, the laws are above you’. This is
what men in power must remember, always.”

15. Let us now examine whether the action of respondent in the present case is
reasonable or fair or does not suffer from the vice of non-application of mind or is
free from arbitrariness.

16. The contention of the petitioner is that after holding of the said auction on
3.3.2006 an exhaustive note was put up by the concerned Assistant in respect of the
said auction. In the said note the Programme Assistant (CL) of DDA has stated that
despite raising almost double the reserve price, the multiple biding has taken place
and the bid which was received is quite satisfactory, considering the fact that the
location of the plot in question is not a very good location for hotel plots considering
its distance from the Airport and other major destination of Delhi. On the said basis,
the Programme Assistant (CL) of DDA has recommended the said bid of the petitioner
for acceptance. Thereafter, the file was put up to the Assistant Director (CL), Deputy
Director (CL), Commissioner (CL) and the Principal Commissioner. All these officers
have accepted the recommendations of bid of the petitioner and dissent to the same
came when the file was placed before the Finance (Member) DDA. The Finance
(Member), DDA recommended for re-auction of the said plot in question, so as to
realise the real value on the analogy that in the recent commercial auction on
23.3.2006 in Kondli Gharoli, East Delhi the auction price as submitted by the highest
bidder was between Rs. 75,960/- per sq. mtr. to Rs. 1,26,667/- sq. mtr. and considering
the auction price of these commercial plots the Finance (Member) felt that the auction
bid at Rs. 37,778 per sq. mtr. as submitted by the petitioner in the auction of 3.3.2006
was quite on the lower side. The dissent note of the Finance (Member) is at page 83
of the paper book and the recommendations of other officers from Programme
Assistant (CL) to Principal Commissioner are placed at pages 78 and 79 of the paper
book. It would be interesting to note that when the DDA had fixed the reserve price of
the plot in question, the prices of the two plots which were sold in East Delhi at
Karkardooma were not taken into consideration by holding that the rates of these plots
being single storyed and of different sizes cannot be taken into consideration for fixing
the reserve price for the hotel plot. Relevant portions from the notes and proceedings-
sheet of the DDA as placed at pages 98, 100-101 are reproduced as under :

“1. CBD Shahadra : The price fixed by the Price Fixation Committee and approved by
the VC was Rs. 17,800/-. Now the price has been fixed as Rs. 49,000/-. Finance has

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 Aman Hospitality Pvt. Ltd. V. The Delhi Development Authority

taken the current auction zonal rates of 2005-2006 as Rs. 82,729/- per sq. m. This plot
was earlier put in the auction in March, 2004 and prior to that also, this plot did not
get any bid. In March, 2004, the rate was Rs. 20,000/- per sq.m. And no bid was
received. It is further mentioned that very few plots have been auctioned in the east
zone this year, and this can not become basis for fixing the reserve price. Two plots
have been sold at Karkardooma. Both these plots were single storey plot of 240 sq.m.
And 112 sq.m. Single Storey plot always gets more rate because there is always
change of adding more floor. Similarly, 2 storey plots of Surajmal Park was sold with
an area of 131 sq.m. and one plot of 198 sq.m. with 4 storey was also sold in
Gazhipur. So the rates of these plots can not become the basis for fixing the auction
rate for hotel plot. Plot for Mayur Vihar did not get any bid in October, 2005. Finance
has not taken this aspect into account when the reserve price fixed. No bid was
received when the price was basically revised in the auction of October, 2005.”

“1. CBD Shahadra—As already stated, the fate of the earlier auction fetching no bid
was not brought to the knowledge of the Finance earlier by the Management Wing. In
this case, the current zonal average auction rate was reduced by 25% to assess the
R.P. for general commercial plots, which were further reduced by 20% for hotel sites.
The current average auction rate varies from Rs. 48,032 to Rs. 2,00,568 per sq.m. in
East Zone. The location of CBD Shahadra seems generally ideal for commercial
purposes. PFC in the year 2001, had compared the CBD Shahadra with Karkardooma
as may be seen from the minutes of the meeting dated 1.6.01 (copy placed opposite).
If that is considered, the general commercial rate of CBD Shahadra should be at par
with the rates of Karkardooma of Rs. 2.00 lacs per sq.m. which happens to be highest
rate of the East Zone. But the Finance has considered the zonal average auction rate
of Rs. 82,729/- per sq. m. However, considering the facts now brought in the note that
the plot were earlier put to auction in March, 2004 but could not fetch any bid, the
reserve price proposed may be reduced further by 10%, which may come to Rs.
44,640/- per sq. m. against Rs. 49,600/- already proposed. Likewise reserve price of Rs.
59,600/- proposed earlier for D.C. Mayur Vihar may also be brought down by 10% i.e.
to Rs. 53,640/- per sq.m.”

17. It is, thus, apparent that the Finance (Member) and even the approving authority
of respondent/DDA have not taken into consideration all these aforesaid vital
circumstances before arriving at the decision of recommending re-auction of the plot in
question. The Counsel for the petitioner has also submitted that the plots at Kondli
Gharoli which were sold in auction held on 23.3.2006 are of very small size measuring
from 66 sq. mtrs. to 121.50 sq.mtrs. and the size of the hotel plot in question is about
20,000 sq. mtrs. and, therefore, there cannot be any comparison of the two sites after

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 Aman Hospitality Pvt. Ltd. V. The Delhi Development Authority

taking into consideration the wide disparity in the size of the plot. It is also submitted
that the plots at Kondli Gharoli were meant for shopping/office whereas the plot in
question of Central Business District (East), Shahadra, Delhi is primarily for hotel use.
When the reserve price for a hotel plot measuring 20,000 sq. mtrs. in East Delhi could
not have been fixed after comparing the same with the auction price of the single
storied shopping/commercial plots ad measuring 240 sq. metres and 112 sq. metres
situated in East Delhi then the DDA fell in grave error by fixing the same criteria at
the time of recommending re-auction of the plot after simply taking into consideration
the auction bid of 23.3.2006 of two plots of smaller size at Kondli Gharoli. Taking into
consideration the prices of plots, which were for the shopping/office complex, that too
of a smaller sizes comparing it with a hotel plot of 20,000 sq. mtr. and not realizing
that the plot has been put five times into auction and further not taking into
consideration that at the last auction, 51 bidders had submitted their bid in which the
petitioner’s bid was found to be highest. In the sixth bid the reserve price was almost
double to the reserve price of the fifth bid and the petitioner’s offer was higher to the
reserve price, i.e., at Rs.170.001 crores. The DDA has a right to fetch more price but
at the same time DDA should also give due sanctity to such public auctions more
particularly where there is a good response from the participants with competitive
biding. When the Counsel appearing for the DDA had asked us that they can fetch
more price in the auction already scheduled for 25.9.2006 that is during the pendency
of the case, we had permitted the said bid to take place, so as to see the response of
the participants. In the said auction of 25.9.2006 no bidder came forward, not only in
respect of the plot in question but in respect of other eight plots as well. This non
response of the participants in the bid of 25.9.2006 certainly reflects that there is
something drastically wrong at the end of the DDA and if the DDA continue in such
fashion then, certainly, it will lose its credibility. The DDA should have adopted more
realistic approach keeping in view the enthusiasm of the hotel industry to set up hotels
at the auction sites well before the Common Wealth Games and any delay in the
process bound to have proved fatal and which fact stands proved after no response
was received by the DDA in the said public auction of 25.9.2006. Merely, rejecting bid
on the basis of the recommendation of the Finance (Member) without taking into
consideration wide disparities and dissimilarities concerning the site, size and location
of the hotel plot with that of site of shopping/office complex at Kondli Gharoli, was a
case of irrationality and, therefore, evidently the decision making process suffered from
patent arbitrariness. These kind of actions on the part of authorities take away the
public confidence in the open bid system as well as results in avoidable delay in
completing the projects thereby ultimately affecting the development, planning and
growth of the city. It is a case of complete non-application of mind on the part of the
respondent. Who will share the blame and who will be held responsible if the DDA

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 Aman Hospitality Pvt. Ltd. V. The Delhi Development Authority

does not even get the price which has been offered by the petitioner and what would
happen if there is adverse trend in the market or the market people feels that they
may not be able to complete their projects of setting up hotels in a short duration.
The DDA must take decisions which can inspire the trust and confidence of the people
keeping in view the larger public and national interest utmost while fulfilling its
obligation to accomplish its laid down objectives. The bidding process cannot be an
unending process. In the present case itself the petitioner had deposited 42.5 crores
being the 25% of the bid amount and was the highest bidder amongst 51 participants.

18. We, therefore, hold that non-acceptance of the bid of the petitioner and the
decision taken by the respondent suffers from the vice of irrationality, arbitrariness
and lack of credibility. The parameters adopted by the DDA in comparing the prices
for the hotel plot of 20,000 vis-a-vis the price of a commercial shop/office of 66 sq.
metres and 121.50 sq. mtrs. has vitiated the decision of the respondent. For the
foregoing, we quash the decision of the respondent in rejecting the bid of the
petitioner.

19. As we have quashed the decision of the respondent in rejecting the bid of the
petitioner, the petitioner is entitled to the consequential relief and we issue a direction
to the respondent to accept the bid of the petitioner, accordingly.

20. The writ petition is allowed. Rule is made absolute.

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