Legal Battle Over APMC Shop Allotment: Supreme Court’s Landmark Judgment on Fair Bidding Process

The Supreme Court of India recently adjudicated a highly contested legal dispute concerning the allocation of a large shop (Gala No. F-158) in the Mumbai Agricultural Produce Market Committee (APMC), Vashi. The case raised fundamental questions about the fairness of government allotment processes, the legitimacy of lottery-based selection, and the necessity of transparent bidding in public property transactions.

Background of the Case

To reduce congestion in Mumbai’s Crawford Market, the Maharashtra government decided to shift the wholesale fruit and vegetable market to the APMC in Vashi, Navi Mumbai. As part of this process, the APMC constructed multiple commercial spaces or ‘galas’ for traders. These shops were divided into:

• Small shops (300 sq. ft.)
• Large shops (450 sq. ft.)

Justice S.M. Daud was appointed as a court commissioner to determine eligibility for these shops. The eligibility norms were established for traders who were actively engaged in business operations, had an APMC license, and had consistently paid market cess. The eligibility criteria were based on two periods:

• 1985-86 to 1994-95
• 1991-92 to 1994-95

Only traders who met these requirements could be considered for shop allotment.

The Dispute Over Gala No. F-158

Initially, the APMC allotted Shop F-158 to Hanumant Murlidhar Gavade. However, his allotment was canceled due to non-compliance with the cess payment requirements. This led to multiple claimants competing for the now-vacant shop. The main contenders were:

• M/s Ramchandra Vitthal Dongre
• M/s Hande Wavare & Co.
• Habibullah Farhatullah

APMC decided to allocate the shop via a lottery system, which resulted in M/s Hande Wavare & Co. winning the allotment. However, the other claimants challenged this decision, arguing that the shop should have been awarded based on a merit-based selection process.

Challenges to the Lottery System

Two primary challenges were raised:

• M/s Ramchandra Vitthal Dongre and Habibullah Farhatullah argued that they had stronger claims to the shop based on eligibility norms.
• The Director of Agricultural Marketing ruled that conducting a lottery was an improper method for allocation and ordered that the shop be allotted through a sealed bidding process.
• However, the Maharashtra Minister for Cooperation later overruled this decision, upholding the lottery-based allotment.

This led to further legal battles, culminating in an appeal before the Bombay High Court.

High Court Ruling

The Bombay High Court ruled in favor of Habibullah Farhatullah, stating that:

• He had met the eligibility criteria based on the norms established by the Justice Daud Committee.
• The APMC should have directly allotted the shop to him instead of conducting a lottery.

The High Court directed APMC to assign Shop F-158 to Habibullah Farhatullah.

Supreme Court’s Verdict

The Supreme Court overturned the Bombay High Court’s ruling, stating that:

• Habibullah Farhatullah was not eligible for allotment since he had not booked or paid for the shop in his own name.
• The transfer of booking from his father to him was not permitted under the established norms.
• Given that multiple claimants had marginally failed to meet the eligibility criteria, a sealed bidding process would be the fairest method for allocation.

The Court directed that the shop be allotted through a sealed bidding process to ensure transparency and maximize revenue for APMC.

Key Takeaways

• Fairness in Public Property Allotments: The ruling reinforces that government property must be allocated through clear, predefined rules.
• Transparent Bidding is the Best Solution: The judgment affirms that a sealed bidding process is the most transparent and fair method for disputed allotments.
• Preventing Arbitrary Decision-Making: Authorities cannot change allotment rules to favor specific applicants.
• Rule-Based Governance: Government bodies must follow their established policies and not alter them to benefit select individuals.

Conclusion

The Supreme Court’s ruling ensures a transparent and equitable approach to the allocation of commercial spaces in APMC markets. It prevents arbitrary decision-making and reinforces sealed bidding as the most suitable method for resolving disputes over shop allotments.

Petitioner Name: M/S Hande Wavare & Co..
Respondent Name: Ramchandra Vitthal Dongre & Ors..
Judgment By: Justice R. Banumathi, Justice R. Subhash Reddy.
Place Of Incident: Mumbai, Maharashtra.
Judgment Date: 10-07-2019.

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Download Judgment: MS Hande Wavare & C vs Ramchandra Vitthal D Supreme Court of India Judgment Dated 10-07-2019.pdf

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