Andhra Pradesh HC: Publication in New Papers Prior to Public Auction Holds Significance, Not Mere Formality

The Andhra Pradesh High Court recently ruled that the publication of public tender auctions in newspapers should not be a mere formality, emphasizing the importance of having a reasonable time interval between the publication date and the auction itself.
Justice Ravi Nath Tilhari made this observation when overturning specific auction proceedings conducted by the State municipal authorities in March. The court found that the time gap between the newspaper publication and the auction date was inadequate.
According to the judgment, “Publication in newspaper should not be an empty formality. The purpose is to make publicly known an information and to attract the attention of the public/individual concerned to such information for the purposes for which such publication is made.”
The judge clarified that the primary objective of publishing such information in newspapers is to disseminate it to the public, notifying them that a public auction is scheduled to occur on a specific date. This allows individuals sufficient time to participate in the auction by fulfilling the necessary formalities outlined in the publication’s terms.
The Court received a petition challenging the auction process for the collection of market fees within a specific area of the Pedana Municipality.
The auction took place on March 4, while the notice of the auction was published in two newspapers on March 2 and March 3.
The petitioner argued that such a short notice period of only 1 or 2 days was inadequate, resulting in the petitioner’s inability to participate in the auction proceedings.
Upon review, the Court determined that the procedure followed in the auction was flawed and did not comply with the Andhra Pradesh Municipalities (Regulation of Receipts and Expenditure) Rules, 1968.
The Court stated, “It is not as per the spirit of Rule 7 of the Rules 1968, even though Rule does not provide for any specific time gap. A ‘reasonable period’ as of necessity and to ensure fairness, is to be read in Rule 7 (4) of the Rules 1968”.
According to the Court, the short notice provided did not grant the public a reasonable or fair opportunity to participate in the public auction. The Court highlighted that the crucial aspect was not about who could or could not participate in the auction but rather whether there was enough time provided through newspaper publication to ensure wide publicity.
The Court acknowledged “Certainly if wide publicity was given by newspaper publication giving sufficient time, it could have fetched more persons to participate. Such possibility cannot be ruled out. It is a public auction and revenue to the Corporation being involved, the requirement is, adopting the fair and transparent procedure. State largess can be granted only by following that procedure.”
Based on these considerations, the Court granted the petition and invalidated the auction proceedings that took place on March 4. The Court emphasized, “A reasonable time gap is must to enable the public to apply by completing the requisite formalities. Such reasonable period may differ in different kinds of auction and an universal time period may not be laid down by this Court, but in the facts of the present case, the period of just one or two days, between the date of publication of notice in the newspapers and holding of the auction, cannot be considered to be a reasonable period.”

Consequently, the authorities were instructed to conduct fresh auctions in accordance with the provisions outlined in the 1968 Rules.