SASIDHARANWRIT Appeal No.135 of 2004& W.P.No.39213 of 20031. S. Sharravvanan2. S. Sasikala v. Registrar of Co-operative Societies Chennai-600 010

#4. The relevant facts for deciding the writ appeal and the writpetition are as follows:-The erstwhile Ramanathapuram District Central Co-operative BankLimited was functioning from their Head Quarters at Madurai upto1.9.1993. On the trifurcation of the Ramanathapuram District intothree separate Revenue Districts, the said bank was also trifurcatedinto three banks viz., (1) Ramanathapuram District Central Co-operative Bank Limited with head quarters at Ramanathapuram (2)Pasumpon Muthuramalinga Thevar District Central Co-operative BankLimited with head quarters at Sivaganga (3) Kamarajar DistrictCentral Co-operative Bank Limited with head quarters atVirudhunagar. All the three banks started functioning in theirrespective headquarters with effect from 2.9.1993. The Head Officebuilding of the erstwhile composite bank situated at Madurai becamevacant and proposals were initiated to sell the building with vacantland. All the three Banks by resolution No.28 dated 18.9.1993unanimously resolved to sell the building and the vacant land.5. In accordance with the resolution dated 18.9.1993 stepswere taken and the Government accorded their permission on 3.5.1994to dispose the property. The Registrar of Co-operative Societies thesecond respondent herein also granted permission to dispose theproperty as per proceedings dated 17.5.1994. Subsequently secondrespondent constituted a joint Committee of all the three CentralCo-operative Banks and the said Committee resolved to conduct tendercum public auction for disposal of the property. Though offer wasgiven for a sum of Rs.1,53,00,000/- by one Sharravanan, theGovernment as per proceedings dated 20.12.1994 granted permissionfor the sale of the property only on payment of a sum ofRs.1,77,12,000/-. In view of the Government order, the bid amountwas raised and permission for sale was granted by the secondrespondent on 27.1.1995.6. The order dated 27.1.1995 of the second respondent acceptingthe bid for a sum of Rs.1,77,12,000/- was challenged inW.P.Nos.4735, 5092 and 6941 of 1995 by Mr.S.Marimuthu, Mr.R.K.Thandiappan and Mr.Subha Thangavelan respectively. Initiallyinterim stay of all further proceedings pursuant to the acceptanceof bid was granted in all the three writ petitions. As against theinterim orders, writ appeals were preferred by the highest bidder inWrit Appeal Nos.939 to 941 of 1995. Those writ appeals along withwrit appeal Nos.982 to 984 of 1995 preferred by the Joint Registrar-cum-Managing Director of the Pasompon Muthuramalinga Thevar DistrictCentral Co-operative Bank Limited were taken up for hearing and allthe six writ appeals were disposed by the Division Bench and acommon judgment was delivered on 21.11.1995. In the judgment dated21.11.1995, the Division Bench directed fresh tender process andalso gave specific direction as to how the matter should be https://hcservices.ecourts.gov.in/hcservices/ proceeded with and the relevant directions as contained in para 30of the judgment is reproduced below:-"(i) To conduct a public auction on a dateto be specified and notified after due andsufficient publication of the proposed auctionwith particulars relating to the property to besold and the upset price which shall be thevalue fixed viz., Rs.1,77,12,000/-.(ii) Simultaneously, publish anotification inviting sealed tenders also to beopened at the time of and immediately after thepublic auction only and accept as hereinafterprovided the best of the two offers - made atthe time of public auction and received in theform of sealed tenders, if considered torepresent real market value of the property inquestion.(iii) The auction shall commence at thetime, date and place specified in the notice ofauction. No bid or tender below the upsetprice shall be entertained or considered. Immediately after the close of the bidding theSale Officer shall record the maximum bidamount and thereafter the tenders, if any, received shall be taken and opened by the Saleofficer. If the tender is found to be in order, it shall be taken as part of the sales recordsand the amount offered in the tender also shallbe considered. If the amount quoted in thehighest tender is higher than the maximum bidamount recorded in open auction, the saleofficer shall continue the auction allowing theparticipation of only the highest bidder andthe tenderers who have quoted the above of thehighest bid. If there are no tenders or aftercontinuing the auction between the highestbidder and the highest tenderer, the saleofficer shall then provisionally accept thehighest of the bid subject to the approval ofthe General Body of the three District CentralBanks and the Registrar of Co-operativesocieties, Tamil Nadu state. On such approvalonly, the acceptances of the offer the bid madeand provisionally accepted shall become finaland operative and binding between parties https://hcservices.ecourts.gov.in/hcservices/ iv) Immediately after conclusion of theauction as above, the authority shall cause thesame to be placed before the General Body ofthe three District Central Banks, through theirspecial officer's / Managing Directors/Secretaries concerned within four weeks andthere upon place the same, with the approval, if any, accorded to the Registrar who shallpass orders either way within four weeks fromthe date of receipt of the relevant papers byhim.v) If the approval has been accorded asabove, thereafter, the sale can be effected, asrequired in law."7. Subsequently tender-cum-public auction was conducted to sellthe property and in the public auction ultimately one M.Janakiramanoffered a sum of Rs.3,75,00,000/- and since he withdrew his offerbefore confirmation, the second appellant and seventeen othersoffered a sum of Rs.3,75,00,000/- and the offer was placed beforethe general body of three Central Co-operative Banks during themonth of February, 1996. The general body of the three banksapproved the tender and subsequently as per the direction containedin the judgment of the Division Bench, the same was forwarded to theRegistrar of Co-operative Societies for his approval in terms ofRule 78(3) of the Tamil Nadu Co-operative Societies Rules, 1998.Since the second respondent has not passed orders within four weeksas per the direction contained in the judgment of the DivisionBench, the appellants issued lawyer's notice dated 22.4.1996 to thesecond respondent and the said notice was duly replied stating thatthe Registrar has already passed an order on 26.2.1996. However asthe bid has to be confirmed by the Government in terms ofG.O.Ms.No.325 dated 15.4.1993, the matter was stated to have placedbefore the Government for appropriate orders.8. Subsequently the third respondent passed an order in termsof Rule 78(3) on 5.6.1996 whereby the second appellant was informedthat the Government had taken a decision not to dispose of thevacant site and building of the erstwhile Ramanathapuram DistrictCentral Co-operative Bank Limited situated at Madurai and decided toclose the case. Along with the said proceedings, the earnest moneydeposit made by the first appellant was also returned. Challengingthe said order, the first appellant has preferred W.P.No.6870 of1996.9. In the affidavit filed in support of W.P.No.6870 of 1996 thefirst appellant herein contended that in view of the judgment of theDivision Bench dated 21.11.1995 in W.A.Nos.939 to 941 of 1995 the https://hcservices.ecourts.gov.in/hcservices/ Registrar has no other option than to approve the proposal, asaccording to the appellants, the Registrar and the Government hadalready exercised their powers under Rule 78(3) of the Tamil NaduCo-operative Societies Rules and as such by passing the impugnedorder the Registrar as well as the Government virtually flouted thejudgment of the Division Bench. According to the appellants, thewhole issue is covered by the decision in W.A.No.939 to 941 of 1995and in view of the approval of the general body for the proposedsale coupled with the direction of the Division Bench, the secondrespondent and the Government had no role to play in the matter andas such the first appellant prayed for setting aside the impugnedorder and to direct the respondent to communicate the acceptance ofthe tender.10. In the said writ petition respondents 1 and 3 filed counteraffidavit and opposed the prayer. According to the firstrespondent, the Government after careful consideration of thematter, decided that there is no necessity to sell the vacant siteand building of the erstwhile Ramanathapuram District Central Co-operative Bank at Madurai and passed an order in G.O.Ms.No.115 dated30.5.1996, which is perfectly in order and does not call forinterference. The third respondent in their counter contended thatthe Registrar of Co-operative Societies considered the proposalforwarded by the General Body of the Society and since the authorityto approve the contract and tender above the value of Rs.1 crore isthe Government, in turn, forwarded the same to the Government forapproval, which ultimately culminated in rejecting the proposal bythe Government. It is their further contention that till the bid isfinally accepted no right would accrue to the appellants herein. Itis also stated that along with the impugned order dated 5.6.1996,the earnest money was returned and the same was encashed without anydemur and only as an after thought the writ petition has beenpreferred.11. The learned Single Judge considered the entire aspect inthe light of the earlier judgment of the Division Bench dated21.11.1995 in W.A.No.931 to 941 of 1995 and quashed the impugnedorder dated 5.6.1996 on the file of the third respondent. Howeverthe learned Judge felt that the consequential relief of direction tothe respondents for communicating the acceptance of the tendercannot be ordered, as according to the learned Judge it is for thesecond respondent to take a dcision either to grant sanction or torefuse the same. As such, the learned Single Judge directed thesecond respondent to consider the recommendation of the committeeand the approval of the general body of the bank for sale of thebuilding and vacant land in question, in the light of theobservation made in the order and more particularly with referenceto Rule 78(3) of the Tamil Nadu Co-operative Societies Rules andpass appropriate orders and communicate the same to the second https://hcservices.ecourts.gov.in/hcservices/ petitioner/second appellant on or before 21.11.2003. It is the saidorder of the learned Single Judge which is challenged in the presentwrit appeal.12. Thiru G. Rajagopal, learned Senior Counsel for theappellants contended that having found that the order of the thirdrespondent dated 5.6.1996 issued in pursuance of the decision of theGovernment not to sell the building and vacant land as arbitrary andillegal, the learned Judge should have granted the further prayer, as according to the learned Senior Counsel, the whole matter iscovered by the judgment of the Division Bench dated 21.11.1995 inW.A.Nos.939 to 941 of 2005. According to the learned SeniorCounsel, the Government as well as the second respondent are boundby the judgment of the Division Bench and as such the learnedcounsel prayed for setting aside the order of the learned SingleJudge and prayed for a direction for sale of the property to theappellants.13. Per contra, Thiru Vijay Narayan, learned Senior Counselappearing for the third respondent submitted that the decision ofthe Government as well as the Registrar is perfectly in order, inasmuch as in the judgment dated 21.11.1995 in W.A.Nos.939 to 941of 1995, the Division Bench had given liberty to the Registrar topass orders in either way and as such the Registrar and theGovernment in exercise of their powers took a decision not to sellthe property. It is the further contention of the learned SeniorCounsel that the value of the property has increased considerablyand as such due to change in circumstance, it is not in publicinterest to order sale of the property in favour of the appellants.14. We have heard the learned senior counsels appearing oneither side at length and we have also perused the judgment of theDivision Bench dated 21.11.1995 and the order impugned in the writappeal. A perusal of the judgment of the Division Bench inW.A.No.939 to 941 of 1995 shows that the Division Bench had notdirected the second respondent to exercise the power in a particularmanner. The direction of the Division Bench is with regard to theapproval of the auction by the second respondent as contained inSl.No.4 of the direction, which is extracted in the earlier part. This clearly shows that the Division Bench permitted the secondrespondent to pass orders in either way in respect of the auctionsale of the property and in case the Registrar gives approval, thesale could be effected. Therefore we do not subscribe to theinterpretation of the judgment as given by the learned SeniorCounsel for the appellants to the effect that on account of theearlier permission granted by the Registrar under Rule 78(3) of theTamil Nadu Co-operative Societies Rules, further approval of theRegistrar is unnecessary. While giving direction to the Registrarto pass orders in the matter of confirmation of auction in either https://hcservices.ecourts.gov.in/hcservices/ way, the Division Bench was fully conscious of the earlier grant ofapproval under Rule 78(3) of the Tamil Nadu Co-operative SocietiesRules by the second respondent. Therefore it can be safelyconcluded that even though there was an earlier approval by theRegistrar, the Division Bench felt it necessary to have a freshconsideration in view of the the changed circumstances.15. The next contention of the learned Senior Counsel for theappellant pertains to the so called order of the second respondentwhich is found mentioned in the communication dated 3.5.1996addressed to the learned counsel for the appellants in reply to thecontempt notice. The said letter is extracted below:-"Rc.No.42335/93/CII dated 3.5.96ToThiru G.Baskaran, B.Sc., B.L.,AdvocateGoronel ManorNo.9, Dr.Rangachari RioadMylapore, Madras 600 004Sir, Sub: Disposal of vacant site and buildingof the Composite RamanathapuramDistrict Central Cooperative Bank situated at Madurai. Ref: Your notice dated 22.4.96.-----With reference to the above notice, I wouldlike to say that I am the Registrar ofCooperative Societies. In accordance withthe direction of the Hon’ble High Court inWrit Appeals No.939 of 1995 batch thatimmediately after conclusion of theauction, the authority shall cause the sameto be placed before the General Body of thethree District Central Cooperative Banks, through their Special Officers etc.,concerned, and within 4 weeks thereupon, place the same, with the approval, if any, accorded to the Registrar who shall passorders either way within 4 weeks from thedate of receipt of the relevant papers. The relevant papers were received by theRegistrar of Cooperative Societies on19.2.96 and in obedience to the directionof the Hon’ble High Court, the Registrar ofCooperative Societies has passed his final https://hcservices.ecourts.gov.in/hcservices/ orders on 26.2.96. However, this matterdoes not relate to the permission underrule 78(3) of the Tamil Nadu CooperativeSocieties Rules, 1988, but relates mainlyto the confirmation of the sale. As perthe Government’s Order G.O.Ms.No.325,Cooperation, Food and Consumer ProtectionDepartment dated 15.4.93, all tenders andpurchases the value of which exceeds Rs.1crore should be sent to the Government forapproval. Since the sale is attracted bythe G.O.Ms.No.325 dated 15.4.93, theconfirmation of the sale has to be givenonly by the Government. Besides theHon’ble High Court in the above WritAppeal, hence directed the respondents 1 to3 to proceed in the matter afresh in themanner directed by the Hon’ble High Courtand since the Government is the respondentNo.1, it is necessary on the part of theRegistrar of Cooperative Societies to remitthe matter to the Government for theirorders.I would also like to say that Rule 78(3)relates to the permission for the disposalof any immovable property by the Society.In this case, the Government have alreadygiven permission to the Societies in May’94to dispose of the above property in PublicAuction and pursuance to this, theRegistrar of Cooperative Societies in hisproceedings Rc.No.216947/93/CBPI dated17.5.94 had already issued a permissionunder Rule 78(3) permitting the Bank todispose of the vacant site and building. The process of sale has been conducted inaccordance with the direction of theHon’ble High Court. The issue to be decided in this case isonly the confirmation of the sale. Asmentioned above, as per the G.O., theGovernment is the competent Authority toconfirm any tender above Rs.1 crore. Hencethe matter has been referred to theGovernment as it is outside the competenceof the Registrar of Cooperative Societies. The Hon’ble High Court had directed theRegistrar to pass orders within 4 weeks. The Registrar has already passed orders as https://hcservices.ecourts.gov.in/hcservices/ directed by the High Court within 4 weeksand there is no further action due from theRegistrar. The Registrar of CooperativeSocieties have complied with the orders ofthe Hon’ble Court in all respects. The only issue remaining is theconfirmation of the sale by the Governmentwhich is the competent authority.I hope the above reply would clarify thematter. Yours faithfully, Sd/-(JOR SINGH SYIEM)"16. The above referred letter of the Registrar cannot beconstrued to be a communication with regard to the disposal of thematter as required under Rule 78(3) of the Tamil Nadu Co-operativeSocieties Rules in either way as directed by the Division Bench. Thecircumstances which compelled the Registrar to send such acommunication is also to be seen. When the contempt notice wasissued by the learned counsel for the appellants, the Registrarappears to have sent a status report to the counsel informing himthat the steps to be taken by the Registrar in the matter hasalready been taken and as such the Registrar has complied with theorders of the Honourable High Court in all respects. It is furtherstated in the said communication that the issue remaining is theconfirmation of sale by the Government which is the competentauthority. This communication though refers to the orders passed bythe Registrar cannot be interpreted to mean that the Registrar hasexercised his powers under Rule 78(3) of the Tamil Nadu Co-operative Societies Rules in a particular manner. The Registrar hadonly communicated that he has done his part and the matter is sentto the Government for taking appropriate decision. Therefore we arenot inclined to accept the submission made by the learned SeniorCounsel to the effect that there was an approval by the Registrarwhich was communicated to the appellants through their counsel asper letter dated 3.5.1996.17. Since the learned Single Judge in Writ Petition No.6870 of1996 had quashed the order dated 5.6.1996 and as the respondentshave not challenged the said order in appeal, we are not called uponto decide the merits of the said part of the order. The issue inthis writ appeal is only in respect of the consequential prayer fora positive order of sale in favour of the appellants.18. The learned Senior Counsel relied on the judgment of theApex Court reported in 2007(11) SCALE 49 (RELIANCE ENERGY LIMITED v.MAHARASHTRA S.R. DEV.CORPORATION) and contended that even incontractual matters judicial review is permissible in case thedecision is arbitrary and unreasonable. https://hcservices.ecourts.gov.in/hcservices/

#19. The learned Senior Counsel appearing for the thirdrespondent supported the finding of the learned Single Judge andcontended that the third respondent cannot be compelled to part withtheir valuable property and the Court is only concerned with thedecision making process and in that process the Court cannotsubstitute its decision how so ever erroneous it may be. In supportof his contention he relied on the judgment of the Apex Courtreported in 2007(1) S.C.C. 477 (RAJASTHAN HOUSING BOARD v.G.S.INVESTMENTS). In the said case the Supreme Court was concernedwith sale of the plots belonging to Rajasthan Housing Board inpursuance of the auction notice dated 3.2.2002 for auction of 50commercial plots followed by another auction notice dated 19.2.2002.The auction was conduced on 20.2.2002 in which the highest bid atthe rate of 5750 per sq.ft. was accepted. Subsequently a news itemwas published in the newspaper that large scale bungling had beendone in the auction due to which the price fetched for the plots inquestion was much below the market rate. The State Governmenttaking note of the news item issued a direction whereby the recordsof the auction was summoned and the Government also stayed allfurther proceedings relating to the auction of the plots. Ultimatelythe State Government passed an order disapproving the auction anddirecting fresh auction. Accordingly, the Rajasthan Housing Boardcalled upon the earlier auction purchaser to take back his earnestmoney deposit by producing the original receipt. The saidcommunication was challenged by the auction purchaser before theHigh Court and ultimately the learned Single Judge disposed the writpetition directing the Housing Board to consider the matter and thesaid order was challenged by the Housing Board before the DivisionBench and the Division Bench dismissed the appeal and aggrieved bythe said order, the Rajasthan Housing Board filed appeal before theSupreme Court. The Apex Court found that as per Section 60 of theRajasthan Housing Board Act, the Government has got powers to issuedirection to the Board in case the Government found that its opinionis necessary or expedient to carry out the purpose of the Act and itshall be the duty of the Board to comply with such direction. TheSupreme Court upheld the decision of the Government in cancellingthe auction and observed that the direction relating to the issuanceof the demand notice for the balance amount virtually amounts toconfirmation of the auction in favour of the auction purchaser bythe court, which was not the function of the court. In the saidfactual background the Apex Court considered the issue with regardto judicial review in the matter of cancellation of auction held bypublic body and held thus. "10. The other question which requiresconsideration is what are the contours of powerwhich the High Court would exercise in a writpetition filed under Article 226 of the Constitution https://hcservices.ecourts.gov.in/hcservices/ where the challenge is to cancellation of an auctionheld by a public body where the prime considerationis fairness and generation of public revenue. Thisquestion has been examined in a catena of decisionsof this Court. In a recent decision rendered inMaster Marine Services (P) Ltd. v. Metcalfe &Hodgkinson (P) Ltd. 6 where after consideration ofseveral earlier decisions, the Bench to which one ofus was a party, summarised the legal principle asunder in paras 11 to 15 of the said Report: (SCC pp.147-48) “ 11 . The principles which have to beapplied in judicial review of administrativedecisions, especially those relating toacceptance of tender and award of contract, have been considered in great detail by athree-Judge Bench in Tata Cellular v. Unionof India 7 . It was observed that theprinciples of judicial review would apply tothe exercise of contractual powers bygovernment bodies in order to preventarbitrariness or favouritism. However, itmust be clearly stated that there areinherent limitations in exercise of thatpower of judicial review. Government is theguardian of the finances of the State. It isexpected to protect the financial interestof the State. The right to refuse the lowestor any other tender is always available tothe Government. But, the principles laiddown in Article 14 of the Constitution haveto be kept in view while accepting orrefusing a tender. There can be no questionof infringement of Article 14 if theGovernment tries to get the best person orthe best quotation. The right to choosecannot be considered to be an arbitrarypower. Of course, if the said power isexercised for any collateral purpose theexercise of that power will be struck down.(See para 85 of the Report, SCC para 70.) 12. After an exhaustive considerationof a large number of decisions and standardbooks on administrative law, the Courtenunciated the principle that the moderntrend points to judicial restraint inadministrative action. The court does notsit as a court of appeal but merely reviewsthe manner in which the decision was made. https://hcservices.ecourts.gov.in/hcservices/ The court does not have the expertise tocorrect the administrative decision. If areview of the administrative decision ispermitted it will be substituting its owndecision, without the necessary expertise, which itself may be fallible. The Governmentmust have freedom of contract. In otherwords, fair play in the joints is anecessary concomitant for an administrativebody functioning in an administrative sphereor quasi-administrative sphere. However, thedecision must not only be tested by theapplication of Wednesbury principles ofreasonableness but also must be free fromarbitrariness not affected by bias oractuated by mala fides. It was also pointedout that quashing of decisions may imposeheavy administrative burden on theadministration and lead to increased andunbudgeted expenditure. (See para 113 of theReport, SCC para 94.) 13 . In Sterling Computers Ltd. v. M&NPublications Ltd. 8 it was held as under:(SCC p. 458, paras 18-19) ‘ 18. While exercising the powerof judicial review, in respect ofcontracts entered into on behalf ofthe State, the court is concernedprimarily as to whether there has beenany infirmity in the “decision-makingprocess”. ... By way of judicialreview the court cannot examine thedetails of the terms of the contractwhich have been entered into by thepublic bodies or the State. Court haveinherent limitations on the scope ofany such enquiry. But at the same time... the courts can certainly examinewhether “decision-making process” wasreasonable, rational, not arbitraryand violative of Article 14 of theConstitution. 19 . If the contract has beenentered into without ignoring theprocedure which can be said to be https://hcservices.ecourts.gov.in/hcservices/ basic in nature and after an objectiveconsideration of different optionsavailable taking into account theinterest of the State and the public, then court cannot act as an AppellateAuthority by substituting its opinionin respect of selection made forentering into such contract.’ 14. In Raunaq International Ltd. v.I.V.R. Construction Ltd. 9 it was observedthat the award of a contract, whether it isby a private party or by a public body orthe State, is essentially a commercialtransaction. In arriving at a commercialdecision, considerations which are ofparamount importance are commercialconsiderations, which would include, interalia, the price at which the party iswilling to work, whether the goods orservices offered are of the requisitespecifications and whether the persontendering is of the ability to deliver thegoods or services as per specifications. 15. The law relating to award ofcontract by the State and public sectorcorporations was reviewed in Air India Ltd.v. Cochin International Airport Ltd. 10 andit was held that the award of a contract, whether by a private party or by a State, isessentially a commercial transaction. It canchoose its own method to arrive at adecision and it is free to grant anyrelaxation for bona fide reasons, if thetender conditions permit such a relaxation.It was further held that the State, itscorporations, instrumentalities and agencieshave the public duty to be fair to allconcerned. Even when some defect is found inthe decision-making process, the court mustexercise its discretionary powers underArticle 226 with great caution and shouldexercise it only in furtherance of publicinterest and not merely on the making out ofa legal point. The court should always keepthe larger public interest in mind in order https://hcservices.ecourts.gov.in/hcservices/ to decide whether its intervention is calledfor or not. Only when it comes to aconclusion that overwhelming public interestrequires interference, the court shouldinterfere.” 20. Matters pertaining to judicial review in administrativeactions came up for consideration before the Supreme Court in thejudgment reported in 2006(8) Scale 588 (GANESH BANK, KURUNDWAD v,U.O.I)wherein it was held as follows:-"52. There should be judicial restraintwhile making judicial review inadministrative matters. Where irrelevantaspects have been eschewed from considerationand no relevant aspect has been ignored andthe administrative decisions have nexus withthe facts on record, there is no scope forinterference. The duty of the court is (a) toconfine itself to the question of legality;(b) to decide whether the decision-makingauthority exceeded its powers; (c) committedan error of law; (d) committed breach of therules of natural justice; and (e) reached adecision which no reasonable tribunal wouldhave reached; or (f) abused its powers. Administrative action is subject to controlby judicial review in the following manner: (i) Illegality .—This means thedecision-maker must understand correctly thelaw that regulates his decision-making powerand must give effect to it. (ii) Irrationality, namely, Wednesburyunreasonableness. (iii) Procedural impropriety. 55 . The court will be slow to interferein such matters relating to administrativefunctions unless decision is tainted by anyvulnerability enumerated above: likeillegality, irrationality and proceduralimpropriety. Whether the action falls withinany of the categories has to be established. Mere assertion in that regard would not besufficient. https://hcservices.ecourts.gov.in/hcservices/

#56. The famous case commonly known as ‘Wednesbury case ’ is treated as the landmarkso far as laying down various basicprinciples relating to judicial review ofadministrative or statutory direction. 58. Therefore, to arrive at a decisionon ‘reasonableness’ the court has to find outif the administrator has left out relevantfactors or taken into account irrelevantfactors. The decision of the administratormust have been within the four corners of thelaw, and not one which no sensible personcould have reasonably arrived at, havingregard to the above principles, and must havebeen a bona fide one. The decision could beone of many choices open to the authority butit was for that authority to decide upon thechoice and not for the court to substituteits view. "21. The learned Judge is perfectly right in rejecting theprayer for communication of acceptance of the sale. The decision tosell the property was originally taken in the year 1994 and theRegistrar granted permission as per order dated 17.5.1994. Due topassage of time, the value of the property had increasedtremendously and therefore considering the factual situationprevailing during the relevant period, if a decision was taken todrop the proposal to sell the property, it cannot be said that sucha decision is arbitrary. Till the auction is confirmed, no body getsany right. The bid submitted is only an offer and till it isconfirmed, it continues to be an offer. The appellants participatedin the auction knowing fully well the conditions of auctionincluding the direction given by the Division Bench to the Registrarto take decision either way. Therefore we do not find any substancein the argument with regard to the rejection of the prayer tocommunicate the acceptance of the offer. As such we are notinclined to interfere with the order of the learned Single Judge.22. In compliance of the order dated 30.10.2003 in W.P.No.6870of 1996 the second respondent had passed the order in Rc.No.42335/93ACS/93 dated 14.11.2003 which is challenged by the appellants inW.P.No.39213 of 2003. In the Memorandum of Grounds of the said writpetition, the appellants herein attacked the order on similarreasons as found in W.P.No.6870 of 1996. It is contended that the https://hcservices.ecourts.gov.in/hcservices/ order is bad in law and factually incorrect inasmuch as the bid wasgiven in 1994, and the same cannot be set at naught relying on theguideline value for the year, 2003.23. In the counter filed by the third respondent it iscontended that in the changed situation, the third respondent isnot interested to proceed with the auction and sell the property atall. The other respondents have also filed their counter and opposedthe prayer.24. The learned Senior counsel for the writ petitionerssubmitted that the second respondent erred in passing the impugnedorder on the basis of the guideline value for the year, 2003 andaccording to the learned counsel the right of the partiescrystalized as early as in 1993 when the auction was conductedoriginally and as such on the basis of the guideline value for theyear 2003, the Government cannot deny approval for the sale. By wayof alternative submission the learned Senior Counsel submitted thatthe petitioners are prepared to purchase the property for thepresent guideline value, which according to him is an amount ofRs.2,000/- per sq.ft.25. However the learned Senior Counsel for the third respondentreiterated that they are not prepared to sell the property presentlyand according to the learned Senior Counsel, the present value ofthe property would run into several crores. It is further contendedby the learned Senior Counsel that this Court in a proceeding underArticle 226 of the Constitution of India cannot compel the partiesto sell the property. It is also contended that the property issituated at Madurai Town and if it is sold in public auction it willfetch several crores, which would be several times more than theamount offered by the petitioners and as such the auction sale whichis the subject matter of this writ petition is not in the interestof the bank and he prayed for dismissal of the writ petition.26. A perusal of the order impugned in this writ petition showsthat the second respondent had considered the rise in prices for theimmovable property and having found that the proposed sale is not inthe interest of the Bank, declined to grant permission. The saidorder cannot be termed to be arbitrary or irrational. It cannot besaid that the Registrar had taken irrelevant materials intoconsideration or he was actuated by malafides in passing theimpugned order. While passing the impugned order, the Registrartook into consideration all the relevant materials including theinterest of the third respondent and a decision was arrived ataccordingly in public interest. The said decision cannot be said tobe unreasonable. While exercising the power of judicial review, thiscourt cannot act like an appellate authority. The writ jurisdictionis not an appellate jurisdiction. Similarly while exercising https://hcservices.ecourts.gov.in/hcservices/ judicial review the court is not concerned with the decision. Thecourt is concerned only with the decision making process. As suchwhether to sell the property or not is a question to be decided bythe authorities keeping in view the best interest of the concernedbank. It is not for this court to substitute its opinion in suchmatters. It is trite law that when there is a conflict betweenpublic interest and private interest the public interest alone wouldprevail.27. When the second respondent found that the amount offered inthe year 1994 was much less when compared to the guideline value forthe year 2003 and as such it is not in the interest of the bank tosell the property in 2003 for the value of 1994, it cannot be saidthat the said decision is erroneous and amenable for correction bythis court in an equity jurisdiction under Article 226 of theConstitution of India. In view of the power conferred on the secondrespondent under Rule 78(3) of the Tamil Nadu Co-operative SocietiesRules it cannot be said that the second respondent had nojurisdiction to pass the impugned order. Similarly in view of heconsideration of the supervening public interest the order cannot besaid to be unreasonable. In any sale, the paramount consideration isto get the best price.28. In the judgment reported in 2005(3) Scale 414 (KARNATAKASTATE INDUSTRIAL INVESTMENT & DEVELOPMENT CORPORATION LIMITED v. M/sCAVALET INDIA LIMITED) the Apex Court summarised the principlesculled out from various decisions pertaining to judicial review inadministrative matters as follows:-19. From the aforesaid, the legalprinciples that emerge are: (i) The High Court while exercisingits jurisdiction under Article 226 of theConstitution does not sit as an appellateauthority over the acts and deeds of theFinancial Corporation and seek to correctthem. The doctrine of fairness does notconvert the writ courts into appellateauthorities over administrativeauthorities. (ii) In a matter between theCorporation and its debtor, a writ courthas no say except in two situations: (a) there is a statutory violation onthe part of the Corporation, or (b) where the Corporation actsunfairly i.e. unreasonably. https://hcservices.ecourts.gov.in/hcservices/ (iii) In commercial matters, thecourts should not risk their judgments forthe judgments of the bodies to which thattask is assigned. (iv) Unless the action of theFinancial Corporation is mala fide, even awrong decision taken by it is not open tochallenge. It is not for the courts or athird party to substitute its decision, however, more prudent, commercial orbusinesslike it may be, for the decision ofthe Financial Corporation. Hence, whateverthe wisdom (or the lack of it) of theconduct of the Corporation, the same cannotbe assailed for making the Corporationliable. (v) In the matter of sale of publicproperty, the dominant consideration is tosecure the best price for the property tobe sold and this could be achieved onlywhen there is maximum public participationin the process of sale and everybody has anopportunity of making an offer. (vi) Public auction is not the onlymode to secure the best price by invitingmaximum public participation, tender andnegotiation could also be adopted. (vii) The Financial Corporation isalways expected to try and realise themaximum sale price by selling the assets byfollowing a procedure which is transparentand acceptable, after due publicity, wherever possible and if any reason isindicated or cause shown for the default, the same has to be considered in its properperspective and a conscious decision has tobe taken as to whether action under Section29 of the Act is called for. Thereafter, the modalities for disposal of the seizedunit have to be worked out. (viii) Fairness cannot be a one-waystreet. The fairness required of theFinancial Corporations cannot be carried to https://hcservices.ecourts.gov.in/hcservices/ the extent of disabling them fromrecovering what is due to them. While notinsisting upon the borrower to honour thecommitments undertaken by him, theFinancial Corporation alone cannot beshackled hand and foot in the name offairness. ( ix ) Reasonableness is to be testedagainst the dominant consideration tosecure the best price."29. In the judgment reported in 2006(2) Scale 12 (GOVERNMENT OFANDHRA PRADESH AND OTHERS v. NARSULLAH KHAN) the Apex Court heldthus:-"By now it is a well-establishedprinciple of law that the High Courtexercising power of judicial review underArticle 226 of the Constitution does not actas an Appellate Authority. Its jurisdictionis circumscribed and confined to correcterrors of law or procedural error, if anyresulting in manifest miscarriage of justiceor violation of principles of naturaljustice. Judicial review is not akin toadjudication on merit by re-appreciating theevidence as an Appellate Authority.”30.The learned Senior Counsel for the appellants relied on thejudgment of the Apex Court in the judgment reported in 2007(11)SCALE 49 (RELIANCE ENERGY LTD. v. MAHARASHTRA S.R. DEV CORPORATION)in support of his plea that judicial review is permissible even incontractual matters. In the very same decision, the Apex Courtconsidered the question as to what extent the judicial review ispermissible in contractual matters and observed thus:-"23. In the case of Union of Indiaand another vs. International TradingCo. and another – 2003 (5) SCC 437, theDivision Bench of this Court speakingthrough Pasayar, J had held:"14. It is trite law that Article14 of the Constitution applies also tomatters of governmental policy and ifthe policy or any action of theGovernment, even in contractualmatters, fails to satisfy the test ofreasonableness, it would beunconstitutional. https://hcservices.ecourts.gov.in/hcservices/

#15. While the discretion to changethe policy in exercise of the executivepower, when not trammelled by anystatute or rule is wide enough, what isimperative and implicit in terms ofArticle 14 is that a change in policymust be made fairly and should not giveimpression that it was so donearbitrarily or by any ulteriorcriteria. The wide sweep of Article 14and the requirement of every Stateaction qualifying for its validity onthis touchstone irrespective of thefield of activity of the State is anaccepted tenet. The basic requirementof Article 14 is fairness in action bythe state, and non-arbitrariness inessence and substance is the heart beatof fair play. Actions are amenable inthe panorama of judicial review only tothe extent that the State must actvalidly for a discernible reasons, notwhimsically for any ulterior purpose. The meaning and true import and conceptof arbitrariness is more easilyvisualized than precisely defined. Aquestion whether the impugned action isarbitrary or not is to be ultimatelyanswered on the facts and circumstancesof a given case. A basic and obvioustest to apply in such cases is to seewhether there is any discernibleprinciple emerging from the impugnedaction and if so, does it equallysatisfy the test of reasonableness."24. When tenders are invited, theterms and conditions must indicate withlegal certainty, norms and benchmarks. This "legal certainty" is an importantaspect of the rule of law. If there isvagueness or subjectivity in the saidnorms it may result unequal anddiscriminatory treatment. It mayviolate doctrine of "level playingfield".25. In the case of RelianceAirport Developers (P) Ltd. v. Airports https://hcservices.ecourts.gov.in/hcservices/ Authority of India and others – (2006)10 S.C.C.1, the Division Bench of thiscourt has held that in matters ofjudicial review the basic test is tosee whether there is any infirmity inthe decision-making process and not inthe decision itself. This means thatthe decision maker must understandcorrectly the law that rgulates hisdecision-making power and he must giveeffect to it otherwise it may result inillegality. The principle of "judicialreview" cannot be denied even incontractual matters or matters in whichthe Government exercises itscontractual powers, but judicial reviewis intended to prevent arbitrarinessand it must be exercised in largerpublic interest. Expression ofdifferent views and opinions inexercise of contractual powers may bethere, however such difference ofopinion must be based on specifiednorms. Those norms may be legal normsor accounting norms. As long as thenorms are clear and properly understoodby the decision maker and the biddersand other stakeholders, uncertainty andthereby breach of rule of law will notarise. The grounds upon whichadministrative action is subjected tocontrol by judicial review areclassifiable broadly under three heads, namely, illegality, irrationality andprocedural impropriety. In the saidjudgment it has been held that allerrors of law are jurisdictionalerrors. One of the importantprinciples laid down in the aforesaidjudgment is that whenever anorm/benchmark is prescribed in thetender process in order to providecertainty that norm/standard should beclear. As stated above "certainty" isan important aspect of rule of law. Inthe case of Reliance Airport Developers(supra), the scoring system formed partof the evaluation process. The objectof that system was to provide https://hcservices.ecourts.gov.in/hcservices/ identification of factors, allocationof marks of each of the said factorsand giving of marks had differentstages. Objectivity was thusprovided."31. In the judgment reported in 2002(3) S.C.C.496 (HARIYANAFINANCIAL CORPORATION v. JAGADAMBA OIL MILLS) the Supreme Court heldas follows:-"10. The obligation to act fairly onthe part of the administrativeauthorities was evolved to ensure therule of law and to prevent failure ofjustice. This doctrine is complementaryto the principles of natural justicewhich the quasi-judicial authorities arebound to observe. It is true that thedistinction between a quasi-judicial andthe administrative action has becomethin, as pointed out by this Court as farback as 1970 in A.K. Kraipak v. Union ofIndia 3 . Even so the extent of judicialscrutiny/judicial review in the case ofadministrative action cannot be largerthan in the case of quasi-judicialaction. If the High Court cannot sit asan Appellate Authority over the decisionsand orders of quasi-judicial authorities, it follows equally that it cannot do soin the case of administrativeauthorities. In the matter ofadministrative action, it is well known, more than one choice is available to theadministrative authorities; they have acertain amount of discretion available tothem. They have “a right to choosebetween more than one possible course ofaction on which there is room forreasonable people to hold differingopinions as to which is to be preferred”(as per Lord Diplock in Secy. of Statefor Education and Science v. MetropolitanBorough Council of Tameside 4 , All ER atp. 695 f). The court cannot substituteits judgment for the judgment ofadministrative authorities in such cases. Only when the action of the https://hcservices.ecourts.gov.in/hcservices/ administrative authority is so unfair orunreasonable that no reasonable personwould have taken that action, can thecourt intervene. To quote the classicpassage from the judgment of Lord Greene,M.R. in Associated Provincial PictureHouses Ltd. v. Wednesbury Corpn. 5 : (AllER pp. 682H-683A) “It is true the discretion must beexercised reasonably. Now what does thatmean? Lawyers familiar with thephraseology commonly used in relation toexercise of statutory discretions oftenuse the word ‘unreasonable’ in a rathercomprehensive sense. It has frequentlybeen used and is frequently used as ageneral description of the things thatmust not be done. For instance, a personentrusted with the discretion must, so tospeak, direct himself properly in law. Hemust call his own attention to thematters which he is bound to consider. Hemust exclude from his considerationmatters which are irrelevant to what hehas to consider. If he does not obeythose rules, he may truly be said, andoften is said, to be acting‘unreasonably’. Similarly, there may besomething so absurd that no sensibleperson could ever dream that it laywithin the powers of the authority.”32. The offer given by the appellants to purchase the propertycannot be accepted in the changed situation, in view of the rise inproperty value. In case the property is to be sold and a decisionto that effect is taken by the third respondent it can be done onlyby way of public auction so as to fetch the maximum value for theproperty. There cannot be any private sale in respect of publicproperty. Therefore we are not inclined to accept the alternativesubmission of the learned Senior Counsel for the appellants to sellthe property to the appellants on payment of the present guidelinevalue.33. In the decision reported in AGGARWAL & MODI ENTERPRISES v.N.D.M.C. (2007(10) Scale 549 the Supreme Court emphasised the needfor public auction while disposing the public property and observedthus:- https://hcservices.ecourts.gov.in/hcservices/ "Disposal of public propertypartakes the character of trust andthere is distinct demarcated approachfor disposal of public property incontradiction to the disposal of privateproperty i.e it should be for publicpurpose ad in public interest. Invitation for participation in publicauction ensures transparency and itwould be free from bias ordiscrimination and beyond reproach."34. Therefore we do not find any substance in both the writappeal as well as writ petition. Accordingly both the writ appealas well as writ petition are dismissed. In the facts andcircumstances of the case, there will be no order as to costs. Consequently, connected WPMP.47457/2003 is closed.Sd/-Asst. Registrar./true copy/Sub Asst. Registrar.Tr/To1. The Secretary to Government State of Tamil Nadu Food and Consumer Protection Department Chennai-600 009.2. The Registrar of Co-operative Societies Chennai-600 010. 3. The Joint Registrar/President-cum- Managing Director and Convenor P.M.T. District Central Co-operative Bank Limited, Sivagangai.1 cc to Mr.P. Srinivas, Advocate, Sr. 756832 ccs to Government Pleader, Sr. 75435, 75436W.A.NO.135 OF 2004and W.P.9213/03KG (CO)kk 3/1