Issuance of Letter of Intent Creates No Vested Right if Bid Fails Threshold Methodology Pre-Allotment

The Petitioner participated in an e-auction conducted by the Respondent (DSIIDC) on 06.09.2024 for an industrial plot in Narela

Being the highest bidder, the Petitioner was issued a Letter of Intent (LOI) on 16.12.2024 and subsequently deposited 25% of the premium amount

However, on 26.06.2025, the Respondent withdrew the LOI, citing a "technical glitch" where the bid was accepted despite falling below a prescribed threshold value

The Respondent refunded the deposited amount with interest

The Petitioner challenged this withdrawal, seeking a Mandamus for the issuance of a Demand-cum-Allotment Letter

1. Whether the Respondent was justified in withdrawing the Letter of Intent on the ground that the Petitioner’s bid was below the threshold value determined under the DSIIDC methodology

2. Whether a concluded contract and vested rights were created in favor of the Petitioner upon the issuance of the LOI and deposit of part premium

The court primarily applied the terms of the E-Auction Document, specifically Clause 3 of Chapter VI, which empowers the Corporation to implement a "threshold technique" to ensure bids reflect market value and reserves the right to reject bids without assigning reasons

The court also applied administrative law principles regarding the limited scope of judicial review under Article 226 of the Constitution over commercial decisions, noting such decisions are interfereable only if manifestly arbitrary, mala fide, or irrational

It further relied on the DDA E-Auction Circular (LD) dated 28.06.2019, which provides the methodology for grouping similar plots to calculate threshold values

The court reasoned that under the governing E-Auction Document, the confirmation of a bid was subject to the final approval of the Managing Director, which never occurred as no Demand-cum-Allotment Letter was issued

The Respondent successfully demonstrated that the initial issuance of the LOI was an "inadvertent administrative error" in threshold computation

Upon recalculation using the DDA formula—which groups "similar categories" of plots—the Petitioner’s bid of Rs. 96,335.39 per sq. metre was found to be below the threshold of Rs. 97,715.35

The court rejected the Petitioner's plea to redefine plot categories, stating it cannot substitute its own judgment for the Respondent's technical methodology

Crucially, the court found no arbitrariness because the Respondent uniformly cancelled all seven allotments that fell below the threshold, ensuring equal treatment

The Respondent’s action was found to be non-arbitrary and uniform. Consequently, the Writ Petition was dismissed, and all pending applications were closed