Karnataka High Court upholds BDA's right to reject auction bids without explanation

Bengaluru: The Karnataka High Court has upheld the Bangalore Development Authority's (BDA) power to accept or reject bids in site auctions without providing reasons.

A division bench consisting of Justice Anu Sivaraman and Justice G Basavaraja concluded that the BDA's decision was lawful, aligning with the public interest and benefiting the general public.

The case arose after the BDA challenged a single-judge bench decision that quashed its rejection of a bid by a person named Sachin Nagarajappa.

The single judge had directed the BDA to confirm Nagarajappa's bid of Rs 1,54,000 per square metre, prompting the authority to appeal.

The BDA argued that its actions were consistent with the BDA (Disposal of Corner Sites and Commercial Sites) Rules, 1984, which empower the authority to accept or reject bids without offering explanations.

The BDA emphasised that public property auctions aim to secure the highest possible price, and it retains the right to cancel bids if the offered price is deemed inadequate.

The division bench referred to Rule 7 and the General Terms and Conditions of the BDA's e-Auction Notification, noting that the rule allows the authority to reject bids without providing reasons.

The court emphasised that the judiciary cannot interfere with the policy decisions made by the legislature or regulatory bodies unless there is evidence of illegality or misconduct.

Since the respondent did not challenge the constitutionality of Rule 7, and no evidence of fraud, collusion, or favoritism was presented, the court observed and concluded that the BDA's decision was neither arbitrary nor irrational.

It further noted that the property had been sold for over Rs 10 crore in a subsequent auction, benefiting the BDA.

The division bench set aside the single-judge bench ruling and upheld the BDA's decision to reject the bid.