- 1 - HC-KAR NC: 2025:KHC:47768 WP No. 16755 of 2021 IN THE HIGH COURT OF KARNATAKA AT BENGALURU DATED THIS THE 19TH DAY OF NOVEMBER, 2025 BEFORE THE HON'BLE MR. JUSTICE R. NATARAJ WRIT PETITION NO. 16755 OF 2021 (LB-RES) BETWEEN: VISHAL PATHANGE G SON OF GOPAL KRISHNA RAO, AGED ABOUT 43 YEARS, AND RESIDING AT NO.2082, SHOBHA CHYRASANTHEMUM, TANISANDRA MAIN ROAD, NARAYANAPURA, BENGALURU-560077 …PETITIONER (BY SRI. ABHINAY Y.T., ADVOCATE) AND: 1. THE STATE OF KARNATAKA REPRESENTED BY ITS PRINCIPAL SECRETARY, DEPARTMENT OF URBAN DEVELOPMENT, VIDHANA SOUDHA, BENGALURU-560001 2. MYSORE URBAN DEVELOPMENT AUTHORITY JHANSI RANI LAKSHMI BAI ROAD, CHAMARAJAPURA, LAKSHMIPURAM, MYSORE-570005, REPRESENTED BY ITS COMMISSIONER …RESPONDENTS (BY SRI. B. BOPANNA, ADDITIONAL GOVERNMENT ADVOCATE FOR RESPONDENT NO.1; SRI. G.B.SHARATH GOWDA, ADVOCATE FOR RESPONDENT NO.2) Digitally signed by SUMA Location: HIGH COURT OF KARNATAKA - 2 - HC-KAR NC: 2025:KHC:47768 WP No. 16755 of 2021 THIS WP IS FILED UNDER ARTICLES 226 AND 227 OF THE CONSTITUTION OF INDIA PRAYING TO QUASH THE UNNUMBERED ORDER DATED 2(/3) AUGUST 2021 PASSED BY THE 2ND RESPONDENT (ANNEXURE-D) ONLY IN RESPECT OF SITE BEARING NO.4026/A OF VIJAYANAGAR 4TH STAGE, 2ND PHASE, MYSORE. THIS PETITION, COMING ON FOR ORDERS, THIS DAY, ORDER WAS MADE THEREIN AS UNDER: CORAM: HON'BLE MR. JUSTICE R. NATARAJ ORAL ORDER The petitioner has sought for a writ in the nature of certiorari to quash the 'unnumbered' order dated 2nd/3rd of August, 2021 passed by respondent No.2 in respect of site bearing No.4026/A of Vijaynagar 4th Stage, 2nd phase, Mysuru. 2. (i) The petitioner contends that respondent No.2 published a notification dated 05.07.2021 for e-auction of corner and middle sites. The petitioner was interested in site bearing No.4026/A, Vijaynagar 4th Stage, 2nd phase, Mysuru, for which the reserved price was fixed at Rs.47,66,000/-. The petitioner submitted his bid for Rs.47,66,000/- and emerged as the highest bidder. He thereafter received an SMS on 06.08.2021 from an officer of respondent No.2 calling upon him - 3 - HC-KAR NC: 2025:KHC:47768 WP No. 16755 of 2021 to deposit 25% of the bid amount. Accordingly, the petitioner deposited a sum of Rs.12,00,000/- on 06.08.2021. (ii) The petitioner contends that on 01.09.2021, respondent No.2 issued another e-auction notification proposing to sell 282 sites. The site for which the petitioner had submitted his bid was also re-notified. On verification, the petitioner came to know that respondent No.2 passed an order rejecting his bid on the ground that the price offered was not satisfactory. (iii) The petitioner claims that he was not informed of the reason of rejection of his bid. He therefore filed an application under the Right to Information Act, 2005 (henceforth referred to as 'RTI Act' for short) and came to know that in an earlier auction, the respondent No.2 had accepted a price escalation ranging from Rs.50,000/- to less than Rs.2,00,000/-. He therefore contends that respondent No.2 having fixed the reserve price, could not have abandoned the auction process but must have negotiated the price with him. He further contends that the reason for respondent No.2 not being satisfied with his bid amount was that, in respect of - 4 - HC-KAR NC: 2025:KHC:47768 WP No. 16755 of 2021 another auction conducted two months after the auction of site No.4026/A, respondent No.2 had received a higher bid. He contends that this cannot be criteria for canceling the auction of site No.4026/A. He also contends that various sites in Devanur, 2nd Stage, 2nd phase, Hebbal 1st stage and Vijayanagara 4th Stage, 2nd phase were sold for lesser amounts and therefore the claim of respondent No.2 that it was not satisfied with the petitioner's bid is only a ruse to deny him the benefit of the auction. 3. The learned counsel for the petitioner reiterated the above contentions and submitted that the reason for rejection of the bid of the petitioner is apparently illegal, in as much as, the respondent No.2 had called upon the petitioner to deposit 25% of the bid amount, which was accordingly done and long thereafter, without notice to the petitioner, the auction was cancelled. He contends that various other sites in the locality were sold at much lesser price and hence the reason for rejecting the bid of the petitioner is not honest and bona fide, but is driven by other extraneous consideration. - 5 - HC-KAR NC: 2025:KHC:47768 WP No. 16755 of 2021 4. (i) Per contra, the learned counsel for respondent No.2 has filed statement of objections inter alia contending that one of the conditions of the auction notification was that the commissioner of respondent No.2 was entitled to either accept or reject any of the bids submitted by the bidders after assigning reason. It is contended that in the auction held on 09.07.2021 there were only two bidders and the petitioner was the highest bidder at Rs.47,66,000/-. (ii) It is claimed that a meeting of respondent No.2 was held on 02.08.2021 to decide upon the bids submitted by the petitioner and similarly placed persons. Respondent No.2 after considering the bids, noticed that in respect of the auction that was held on 09.07.2021 there were only two participants. It also noticed that other sites situated in the same locality were brought to auction and they fetched better and competitive price. Considering the above, respondent No.2 decided to reject the bid submitted by the petitioner at the meeting held on 02.08.2021. (iii) Respondent No.2 claims that it acted strictly in accordance with law and that no fault could be found with its - 6 - HC-KAR NC: 2025:KHC:47768 WP No. 16755 of 2021 actions. As regards the contention that the petitioner deposited 25% of the bid amount pursuant to an SMS received from an official of respondent No.2, it denies the same and states that there is no practice of sending SMS to auction purchasers to deposit the money and that the petitioner had voluntarily deposited the amount. 5. The learned counsel for respondent No.2 invited the attention of the Court to Rule 6(2) of the Karnataka Urban Development Authorities (Disposal of Corner Sites & Commercial Sites) Rules, 1991 (henceforth referred to as 'the Rules, 1991' for short) and submitted that respondent No.2 is entitled to either accept or refuse any bid after assigning reasons. He submitted that at the meeting held on 02.08.2021 respondent No.2 was of the opinion that the price received at the auction held on 09.07.2021 was not sufficient, which is a valid reason to refuse to accept any bid, including the one submitted by the petitioner. He further contends that the petitioner was aware of this condition at the time of participating in the auction. - 7 - HC-KAR NC: 2025:KHC:47768 WP No. 16755 of 2021 6. I have considered the submissions of the learned counsel for the petitioner and the learned counsel for the respondent No.2. 7. The fact that the petitioner was the highest bidder at the auction held on 09.07.2021 is not in dispute. It is also not in dispute that the price offered by the petitioner was higher than the reserve price fixed. However, the right to accept or refuse any bid remained with respondent No.2, and in the event of refusal of any bid, respondent No.2 was bound to do so only after assigning reasons. 8. In the instant case, the petitioner does not dispute that respondent No.2 has assigned a reason, though he contends that the reason is not a speaking one. However, the fact remains that the discretion to accept or reject a bid is with respondent No.2, and the petitioner has no right until the bid submitted by him is accepted and a sale certificate is issued. Therefore, no effective directions could be issued to respondent No.2 to accept the bid submitted by the petitioner, particularly in the face of the contention of respondent No.2 that the price offered by the petitioner is not satisfactory. - 8 - HC-KAR NC: 2025:KHC:47768 WP No. 16755 of 2021 9. It appears that the petitioner deposited a sum of Rs.12,00,000/- with respondent No.2 pursuant to a SMS allegedly received from an official of respondent No.2. Respondent No.2 has not denied the receipt of Rs.12,00,000/-. After having cancelled the bid submitted by the petitioner, respondent No.2 could not have retained the amount paid by the petitioner. Therefore, respondent No.2 is bound to recompense the petitioner for retaining the amount of Rs.12,00,000/- from the year 2021. 10. In view of the above, the petition is disposed off, directing respondent No.2 to re-auction the site bearing No.4026/A, Vijaynagar 4th Stage, 2nd phase, Mysuru, by giving wide publicity within three months from the date of receipt of a copy of this order and proceed in accordance with law. 11. It is open for the petitioner to participate in the auction that may be conducted by respondent No.2. The respondent No.2 shall forthwith refund a sum of Rs.12,00,000/- to the petitioner along with the interest at the rate of 9% per annum from the date of deposit till the date of re-payment. - 9 - HC-KAR NC: 2025:KHC:47768 WP No. 16755 of 2021 12. In view of disposal of main petition, I.A.No.1/2022 do not survive for consideration and the same stands rejected. Sd/- (R. NATARAJ) JUDGE HJ List No.: 1 Sl No.: 21