Prem Chand Jain, Ag. C.J.
1. The only legal question that needs determination by this Bench may be formulated thus:--
Is the settlement Commissioner or other officer under rule 5(i) of the Rules for sale of Surplus Rural Property, bound to give reasons for not accepting the highest or other bids.?
2. The land in question measuring 50 karnals 1 marla situated in a village Kamalpur Gadrian, Tahsil and district Karnal and evacuee property. It was put to auction several times but for one reason or the other the auction was not accepted. The last auction took place on 24th November, 1978. In this auction the petitioner and his brothers gave highest bid 20,400/-. A sum of Rs. 2550/- was deposited as earnest money/sale proceeds of the aforesaid property vide receipt No. 94. Book No. 1600 dated 24th November 1978. It appears that soon after the auction a writ petition was filed in this court on the ground that the land in dispute could not be put to the auction as the same was not an evacuee was ultimately dismissed, the petitioner was not able to make a party. However it appears that the settlement officer (sales) without issuing any notice or affording an opportunity of hearing to the petitioner, set aside the auction in his favour by passing the following order:--
'The land is of Shamlat Deh, Hence the sale is set aside.'
3. Feeling aggrieved from the aforesaid order, the petitioner preferred a revision petition, but the same was dismissed by respondent No. 1 vide his order dated 7th January 1983. The petitioner through his petition has challenged the legality and propriety of the order of the settlement Officer (sales) and the order of respondent No. 1 passed on 7th January 1983.
4. The petition has been contested on behalf of the respondents. In the return filed by the Joint Secretary to Government, Haryana, Rehabilitation Department the averments made in the petition in the on merits have been controverted. However certain preliminary objections have also been taken out of which the one which needs specific mention reads as under:--
'That this highest bid of Rs. 20,400/- offered by the petitioner along with his brothers Shri Natha Ram, Ram Kishan and Baljit on 24-11-1978 for the land in dispute has not been confirmed. This Hon'ble High Court in a case reported in AIR 1983 Punj. & Har 57 has held as under:--
'As under a rule relating to the sale of the Package deal Property, the highest bid offered by the purchasers at the time of auction was subject to approval by the settlement Officer or the Settlement commissioner declined to approve of the highest bid was not liable to be set aside.'
5. When the matter came up for arguments before the motion bench. The learned counsel for the state pressed the aforementioned preliminary objection. After hearing the learned counsel for the parties, it appears that the bench did not find itself in agreement with the view taken in the State of Haryana v. Asha Ram AIR 1983 Punj. And Har 57 Consequently the petition that was submitted to hearing full bench. That is how we are seized matter.
6. It was contended by the learned counsel for the petitioner that the settlement Officer is bound to give reasons for declining to accept the highest or other bids and that those reasons have not to be extraneous or irrelevant. In other words has sought to be argued was Settlement Officer has no jurisdiction to refuse to accept the highest or other bids on arbitrary or whimsical grounds and in case an order of refusing to accept the highest or other bids is challenged in a court of law then the appropriate authority is bound to disclose the reasons which weighed with it for accepting the bid. On the learned State counsel submitted that the Settlement Officer is not under any obligations to give reasons for declining to accept the highest or other bids and mere auction of land without confirmation does not give any legal to bidder so as to enable him to challenge the legality of the order of refusing the accept the highest or other bids. In support of his contentions the learned state counsel placed great reliance on the judgment of this court in Asha Ram's case (supra)
7. To get a correct and plausible answer to the question arising out of the contentions of the learned counsel for the parties, which has been formulated in the earlier part of the judgment, Rule 5 of the rules for state of Surplus Rural Properties.
'Procedure !or Sale of Property by Public Auction.' 'Where any property to be sold by public auction:
(a) The property shall be sold through' the officers appointed by the State Government to this behalf:
(b) The Settlement Commissioner or any other Officers empowered to sell any such, property shall cause a proclamation of the intended sale to be made in the language of the principal Civil Court of the Original jurisdiction within whose jurisdiction the property is situated.
(c) Notice of the intended sale shall be given at least 15 days before the proposed sale and every such notice should state the date, time and place of the proposed sale, the description of the property to be sold, the location and boundaries, where possible, the terms and condition of the sale and any other particular which the Settlement Commissioner or other Officer considers material. One only of the notice shall De affixed in a conspicuous place in the village (s) where the property is situated e. g. the Panchayat Ghar, Gurudwara, Mandir; School. to. It shall be within the discretion of the Settlement Commissioner other Officer to advertise the sale in newspaper and in such other manner as he may deem fit.
(d) No sale shall take Place until after the expiry of the period of fifteen days L on the date of publication of. the notice.
(e) Every auction of a property shall be subject to a reserve price fixed in respect of the property, but such reserve twice shall not be disclosed.
(f) The Officer conducting, the auction may in his discretion withhold sale of any property without assigning any reasons therefor.
(g) The officer conducting the sale may, at his discretion for reasons to be recorded in writing, adjourn the sale to a specified date and hour anl an announcement to that effect shall be made at the time of the adjournment of the sale. Provided that where a sale is adjourned !or a period exceeding fifteen days, a fresh notice shall be publishing.
(h) The person declared to be the highest bidder at the public auction shall pay in cash immediately at the fall of hammer the whole `amount. of the highest. bid if it does not,. exceed ;Rs: 500/- and. if it exceeds. this figure: at amount equal to 25% of the highest bids earnest money.
If this amount is. nor paid,. the bid shall, be cancelled and the property put; to reauction. The loss, i! Any resulting. from. the re-auction shall be recoverable from the previous bidder.
The highest bid in respect of which an initial deposit has been made shall.. be subject to the approval of the Settlement Commissioner or an Officer appointed by, him for the purpose; provided that no bid shall be accepted until after. the expiry of fifteen days. from the date of the auction.
(i) Procedure for acceptance of the highest bid:--(1) The Settlement Commissioner, or other Officer. shall not be bound to accept the highest or other bids and shall not be been to disclose his.. reasons., therefor. Every bidder shall be,.(bound) by his bid and shall if he resiles from such bid, be liable to forfeit his deposit. of earnest money.. The decision of. the Settlement Commissioner with regard to the forfeiture at. the deposit shall be final:
If a bid has been accepted by the Settlement Officer or, other Officer the bidder shall produce before the Tahsildar,.Sales) or any other Officer appointed by the Settlement Commissioner for the purpose within thirty days off. the receipt. of such intimation to him of the acceptance of the bid, a Challan showing. a deposit into the Treasury of the balance of the purchase money.'
8. An analysis of the aforesaid rule' shows that it provides a detailed procedure for the sale of the property, by public auction,, Without dilating in detail on Clauses (a) to (h), reference may' straightway be made to ' Clause (i), on' the interpretation-of which the fate of the case would depend: Under this sub-rule, a Settlement Commissioner or. other Officer is not bound to accept the highest or other bids nor are they bound to-disclose reasons therefor. The question that arises for consideration is' ' whether the Settlement.. Commissioner or other-Officer is also within his power. to decline to accept a bid' without giving reasons. In my view the answer has to-be` in the negative and is. available in the sub-rule itself. As earlier observed,. under this sub-rule. the Settlement. Commissioner or other officer has an absolute power not 'to accept the highest or other bids and not. to disclose his reasons therefor; but refusing. to disclose reasons can by no stretch of imagination be interpretation to mean that the Settlement Commissioner or other Officer is not bound to give reasons: There is difference between 'not disclosing the reasons' and 'non-giving of reasons', In Black's Law Dictionary, the meaning of. the word 'disclose' is To bring into view by uncovering; to expose; to make known, to lay bare, to reveal to knowledge; to free from secrecy or ignorance, or make known'. A thing can be disclosed only when it so exists; but in case it does not exist, then the question of disclosure does not arise. By using the word 'disclose', the intention of the rule-making authority is absolutely clear that while declining to accept the highest bid or other bids, the officer concerned is bound to give reasons and the only right available to him is not to disclose those reasons. Moreover, this non-disclosure of reasons,, in. my view, is meant are the bidders, i, e: that the Settlement Commissioner or other Officer is not bound to tell ' them as to on what grounds has he-not accepted their bid. if the intention. of the rule making. authority had been to vest the officer concerned with. a power to refuse to accept the highest bid without assigning any reasons; then: instead of 'shall not be bound to disclose his reasons', the words would have been 'shall not be bound to give his reasons'. In this view of the matter, I hold that the Settlement Commissioner or other Officer is bound to record reasons. for declining to accept the highest or other bids: Once this conclusion is arrived at, there can be no gainsaying that such reasons. have to be relevant. and not whimsical or arbitrary. As observed by their Lordships of the Supreme Court in Ramana Daya ram Shetty v. International Airport Authority of India; AIR 1979 SC 1628, every order of. the State or its functionary has to meet. the twin test of 'reason and relevance' They just cannot arbitrarily pass an order for any or no reason. The officer. concerned is duty bound under the rules to record relevant legal reasons for refusing to accept the highest or other bids.
9. Further the contention that no legal right vest's' is a highest r or other bidder so as to entitle him. to challenge, and: action of the 'appropriate authority in by using to accept. the, highest. or. other bids, is not legally tenable. The aggrieved' person whose right to the property as a result of-non-acceptance of the highest bid, is being.taken away; can' certainly challenge the action on the ground that the order of the appropriate authority is arbitrary or has come in existence as a result of extraneous considerations and incase it is so proved then the order of non-acceptance Would, certainly be liable to' be quashed. The State Government or the appropriate authority. can defend its' action by disclosing reasons given for non-acceptance of the bid and If the same are found relevant;' relief would straightway be declined. But there is no warrant for this proposition that even if the order of the authority in not accepting the bid is arbitrary and does not disclose any reasons, then also the legality of. the same cannot be challenged in a Court of law,
10. Mr. A. S.. Sandhu has placed great reliance on the judgment in State of Haryana v, Asha Ram, AIR 1983 Punj & Har 57. I have very carefully gone through that judgment. and. find that. the way in which. the point has been raised in this petition was: they were agitated in that ease nor was it decided as such and the decision of that e has: gone on its. own facts. The relevant observations Go which our. attention was drawn from Asha Ram's case (supra),'read as under:
'The contention or the learned counsel for the appellant is that the highest bid offered by the respondent was subject to approval of the Settlement Officer. under the Rules of the sale of surplus rural evacuee property, purchased by the State Government as also the terms of the memorandum of. offer signed by the respondent at the time, of auction. The relevant rule reproduced above and. also the condition contained in the memorandum of offer envisaged that the Settlement Officer was not bound to accept the highest bid or other bid and further was not bound to disclose his reasons therefore. The order of the settlement Officer not approving the highest bid of the respondent and that of the Settlement Commissioner undo-doing it was not liable to be set aside in' C. W. P. No. 3904 of 1977. 'in contention of. the learned counsel for the appellants must prevail.
In view of the discussion above it is clear that the highest bid of Rs. 16,500/- by the respondent was subject to approval by the Settlement Officer or the Settlement Commissioner. The Settlement Officer as also the Settlement Commissioner declined to approve the bid of the respondent. They were competent to decline the highest bid of the respondent in spite of the fact that there was no irregularity no fraud in the publication of sale. The order of the learned-single Judge setting aside the order of the Settlement Officer dated October 12, 1977 and that or the settlement C is owner dated November 30, 1977, cannot be sustained'.
11. A bare perusal of the aforesaid observations, as earlier observed, does not go to show that any findings has been recorded by the learned Judges of the Bench that it was not necessary to give any reasons. R r, the fact is that such a question which has been passed before us was nearer debated before the Bench. It was on the facts of that case that the judgment of the learned single Judge was set aside, the order of the appropriate authority was upheld and the Bench did not deem it proper to upset the order of the appropriate authority declining to accept the bid. However if the observations of the Bench 'they were competent to declining the highest bid of the respondent in spite of the fart that there was no irregularity or fraud in the publications of sale', are being read to mean that no reasons are required to he given at all and that a highest or other bid can be declined without assigning any reason whatever, then with respect, in the view I have taken in the earlier part of the judgment, I am unable to agree with there observations and overrule them.
12. Thus as a result of the aforesaid discussion, I hold that the Settlement Commissioner or other Officer under sub-rule (i) of Rule 5 of the Rules is beyond to record reasons which are relevant for refusing to accept the highest bid or other bids, that such reasons have not to be disclosed to the highest bidder, that in case an action refusing to accept the highest bid is challenged in a Court of law, then the reasons given for refusing to accept the bid have to be made available so as to enable the Court to find out if the same are relevant and germane to the non-acceptance of the bid and that, the. Settlement Commissioner or other Officer cannot arbitrary, whimsically and without assigning any reasons refuse to accept the highest bid or other bids.
13. Coming to the facts of this case, I find that the reason given for non-confirmation of the bid is 'The land is of Shamlat Deh. Hence, the sale is set aside'. Now this reason for refusing to confirm is wholly arbitrary and extraneous. In the written statement no plea has been put forth that the property in dispute is not an evacuee property rather the stand taken is that it is a rural package deal property and wilt be disposed of in accordance with the provisions of the State Rules framed for the disposal of rural package deal properties. This clearly shows that the impugned order is perverse and whimsical. consequently, the order for refusing to confirm, the bid cannot legality be sustained.
14. For the reasons recorded above. I allow this petition, quash the order or the Joint Secretary, Rehabilitation-cum-. Settlement Commissioner, dated 7th January, 1983, copy Annexure P-2 and direct the appropriate authority to confirm: the sale in favour of the petitioner, in the circumstances of the case, I make no order as to costs.
Mital And Tiwana, JJ.
15. We agree.
16. Petition allowed.