Premature auction-portal closure and consequential EMD forfeiture without hearing are arbitrary and unlawful.

UPSIDA advertised industrial Plot No. D-22, TDS City, Ghaziabad, for e-auction, and the petitioner participated in the third auction/“Rollover-2” process.

The petitioner was declared the highest bidder and had deposited ₹73,22,040.60 towards EMD.

By e-mail dated 20 March 2021, the auction service provider required the petitioner to deposit the balance EMD of ₹1,98,934.09 by 24 March 2021.

The petitioner did not deposit the amount by 24 March 2021, citing a medical emergency, and alleged that the portal did not permit payment when it attempted to deposit the amount on 25 March 2021.

UPSIDA treated the balance EMD as unpaid, closed the payment portal, and approved forfeiture of the deposited EMD on 7 April 2021.

The petitioner approached the High Court seeking permission to deposit the balance EMD, completion of the allotment process, and protection against forfeiture or creation of third-party rights.

1. Whether the writ petition was maintainable despite the arbitration clause providing an alternative remedy?

2. Whether closure of the portal before permitting deposit of the balance EMD was legal and justified?

3. Whether the date chart prescribing 24 March 2021 as the last date prevailed over the post-auction condition granting seven days from receipt of the H1 e-mail intimation?

4. Whether the petitioner’s failure to separately challenge the forfeiture approval dated 7 April 2021 was fatal to the writ petition?

The Court applied the principle that the existence of an alternative contractual remedy, including arbitration, does not bar exercise of writ jurisdiction in every case.

Relying on Surendra Pal Singh v. State of U.P., L. Hirday Narain v. Income-Tax Officer, Durga Enterprises (P) Ltd. v. Principal Secretary, Government of U.P., and Roshan Lal v. State of U.P., it held that a writ petition need not be dismissed merely because pleadings have been exchanged and an alternative remedy exists.

For interpreting the auction catalogue, the Court applied the doctrine of harmonious construction, relying on Shri Nashik Panchavati Panjarpol Trust v. Chairman, under which the document must be read as a whole and apparently conflicting clauses should be interpreted consistently with one another and with the parties’ purpose.

The Court further applied the principles of natural justice: an administrative decision causing civil consequences must ordinarily be made after providing an opportunity of hearing, as recognised in State of Orissa v. Binapani Dei, ITC Ltd. v. State of U.P., and Jakson Engineers Ltd. v. State of U.P.

The Court also treated the contractual auction conditions as binding on the parties and interpreted them so as to preserve, rather than defeat, the auction transaction.

The Court found that the date chart stated that dates were to be calculated excluding Saturdays and Sundays, while post-auction Condition 2(c)(iii) granted the H1 bidder seven days from receipt of the e-mail intimating the H1 status.

Although the date chart mentioned 24 March 2021 as the last date, the H1 e-mail was actually sent on Saturday, 20 March 2021.

Excluding 20 and 21 March under the date-chart stipulation resulted in the payment period extending to 26 March 2021.

The same result followed independently from the seven-day period under Condition 2(c)(iii), calculated from receipt of the e-mail on 20 March 2021.

Thus, the two provisions could be harmonised, and the petitioner was entitled to deposit the balance EMD up to 26 March 2021.

The petitioner’s e-mails dated 25 and 26 March showed attempts to make the payment, but UPSIDA did not permit the deposit or provide a timely response.

Consequently, closure of the portal on 24 March and refusal to accept payment on 25 and 26 March were arbitrary and illegal.

The approval dated 7 April 2021 was neither supplied to the petitioner nor placed before the Court, and no opportunity of hearing had been afforded before imposing the civil consequence of forfeiture.

Since the portal closure itself was illegal, the consequential forfeiture was also invalid.

The arbitration objection was rejected because the arbitrator had not been appointed, the respondents did not press the objection during hearing, and the writ petition had already proceeded on exchanged pleadings.

The Court held that the writ petition was maintainable; closure of the payment portal before 26 March 2021 was illegal and arbitrary; the petitioner was entitled to the benefit of the extended payment period; and the forfeiture approval was invalid for violation of natural justice.

UPSIDA was directed to restore the petitioner’s position ante and, upon production of the certified judgment with contact details, issue a fresh e-mail intimating the balance EMD.

The petitioner was directed to deposit the balance amount within two days of that fresh intimation; failing such deposit, the contractual auction consequences would follow.

No order was made as to costs.