The Karnataka High Court has affirmed the Bangalore Development Authority’s (BDA) right to reject auction bids without providing an explanation, ruling in favor of maintaining the BDA’s discretionary powers. The decision was handed down by a division bench comprising Justice Anu Sivaraman and Justice G Basavaraja, who found the BDA’s actions to be in line with both public interest and legal norms.
The legal battle began after a single-judge bench of the same court had previously overturned the BDA’s rejection of a bid made by Sachin Nagarajappa, who offered Rs 1,54,000 per square meter for a property. This decision compelled the BDA to appeal, citing its adherence to the BDA (Disposal of Corner Sites and Commercial Sites) Rules of 1984, which explicitly allow the authority to accept or reject bids at its discretion.
During the proceedings, the BDA argued that their policy aims to maximize returns from public property auctions and that they are entitled to cancel bids that do not meet their financial expectations. The division bench supported this view by referring to Rule 7 and the General Terms and Conditions listed in the BDA’s e-Auction Notification, which confirm the BDA’s authority to reject bids without justification.
The court’s judgment stressed that it could not intervene in policy decisions by legislative or regulatory bodies absent clear evidence of illegality, fraud, or corruption. With no such evidence presented against the BDA’s decision-making process in this instance, and no challenge to the constitutionality of Rule 7, the court deemed the BDA’s actions neither arbitrary nor irrational.
Highlighting the practical outcome of the BDA’s policy, the bench noted that the property in question later sold for over Rs 10 crore in a subsequent auction, significantly benefiting the public authority and justifying the bid rejection.
