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NAZUR

NAZURNAZURNAZURNAZURvNAZURNAZURNAZURNAZURNAZURNAZURNAZURNAZURNAZURvNAZURvNAZURNAZURNAZURNAZURNAZURNAZUR
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0% found this document useful (0 votes)
36 views17 pages

NAZUR

NAZURNAZURNAZURNAZURvNAZURNAZURNAZURNAZURNAZURNAZURNAZURNAZURNAZURvNAZURvNAZURNAZURNAZURNAZURNAZURNAZUR
Copyright
© © All Rights Reserved
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Available Formats
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1

IN THE HIGH COURT OF MADHYA PRADESH


AT JABALPUR
BEFORE
HON'BLE SHRI JUSTICE ARUN KUMAR SHARMA
FIRST APPEAL No. 634 of 1999

BETWEEN:-

INDRAJEET SINGH, S/O SHRI BHANWAR


SINGH, AGED ABOUT 51 YEARS, R/O E-4/136,
ARERA COLONY, BHOPAL (MADHYA
PRADESH).

.....APPELLANT

(BY SHRI AJAY KUMAR OJHA - ADVOCATE)

AND

1. STATE OF MADHYA PRADESH, THROUGH


THE COLLECTOR BHOPAL, DISTRICT
BHOPAL (MADHYA PRADESH).

2. NAZUL OFFICER, RAJDHANI PARIYOJNA


JAWAHAR CHOWK, NORTH T.T NAGAR,
BHOPAL (MADHYA PRADESH)

.....RESPONDENTS

(BY SHRI MUKUND AGRAWAL – GOVERNMENT ADVOCATE)

------------------------------------------------------------------------------------------------

Reserved on : 10-05-2023

Signature Not Verified


Signed by: JITENDRA
KUMAR PAROUHA
Signing time: 6/13/2023
4:42:46 PM
2

Pronounced on : 13-06-2023

------------------------------------------------------------------------------------------------

This appeal having been heard and reserved for order, coming on for

pronouncement this day, the court pronounced the following:

JUDGMENT

By this first appeal under Section 96 of Code of Civil Procedure, the


appellant has challenged the impugned judgment and decree dated 27.07.1999
passed by the District Judge, Bhopal in Civil Suit No. 2-A/1996, whereby
learned trial Court dismissed the suit of the plaintiff and directing the defendants
to refund Rs.3,310/- with interest @ 12% to the plaintiff till its realization.

2. The facts in brief culled out from the record and relevant for the purpose
are that a notification to sell the subject land was issued on 28.01.1969 by the
Nazul Officer, Bhopal for auction of certain plots situated in private sector E/2,
E/3, E/4 and E/5 in Tatya Tope Nagar, near Habibganj, Bhopal town to be held
on 26th, 27th and 28th February, 1969 at 11 A.M. Several plots located in various
sectors referred to above were put to auction as scheduled. The plaintiff was
declared as the highest bidder quoting price of Rs.33,100/- for plot No.15 in
Sector E-2, Arera Colony Bhopal in the auction held on 26.02.1969. Pursuant
thereto, 1/10th of the bid amount i.e. Rs.3,310/- was deposited by the appellant
with the respondent authorities on 26.02.1969 at the spot subject to its
confirmation. The balance amount was to be deposited within 30 days of the
communication of the acceptance of bid. The plaintiff was always ready and
willing to deposit the balance amount and made several queries from the

Signature Not Verified


Signed by: JITENDRA
KUMAR PAROUHA
Signing time: 6/13/2023
4:42:46 PM
3

respondent authorities; but nothing was done, for almost 8 years. Ultimately the
Collector Bhopal instead of confirming the sale in favour of the plaintiff ordered
for re-auction of the plot in question without even bothering to communicate the
decision to the plaintiff.

3. The plaintiff on coming to know of the said decision of the Collector


Bhopal made a representation to the Commissioner, Bhopal Division Bhopal,
which was registered as Representation No.222/77-78 and was allowed vide
order dated 03.11.1979, whereby the order of the Collector Bhopal regarding re-
auctioning of plot was set-aside and the case was remanded to him for fresh
disposal with certain observations. However, no orders were passed by the
Collector, Bhopal in pursuance to the said remand order and another sale notice
was published in Nav Bharat newspaper dated 07.01.1996 for re-auction of the
plot in question with wide publication to fetch the maximum price.

4. Several successful bidders in respect of other plots auctioned in pursuance


to the same sale notice in February 1969 and whose highest bids were similarly
not confirmed by the Collector Bhopal also represented to Commissioner
Bhopal Division Bhopal, but they were rejected vide order dated 12.05.1975.
Against the order of the Commissioner dated 12.05.1975 a representation was
made to the State Government on behalf of Shri S.K. Bhatia, Shri Hari Singh,
Shri Rewachand, Smt. Shakuntala Verma, Shri Gopi Krishan and Shri S.K.
Narang, which was allowed vide order dated 27.04.1977 and action of the
Collector Bhopal and Commissioner Bhopal Division was set-aside. In the said
order it was directed that all those persons who were highest bidders and had
deposited 1/10th of the bid amount should be given the lease of the respective

Signature Not Verified


Signed by: JITENDRA
KUMAR PAROUHA
Signing time: 6/13/2023
4:42:46 PM
4

auctioned plot after confirming the sale. Their auction was accordingly
confirmed and they were granted lease of the respective plots.

5. The plaintiff on coming to know of the auction notice published in Nav


Bharat dated 07.01.1996 for re-auction of the plot in question, filed a Civil Suit
before the District Judge, Bhopal for declaration, perpetual injunction and for
specific performance in regard to plot No.15 in E-2 Arera Colony, Bhopal,
which was registered as C.S.No.2-A/1996. Plaintiff examined P.W.-1 Dinesh
Kumar Bajpai, P.W-2 K.K. Jaiswal, P.W.-3, R. S. Tiwary, P.W-4 Mujjaffar
Hussain and himself in support of his case. He also produced the order of the
Commissioner Bhopal dated 03.11.1979 and filed copy of the order of the State
Government dated 27.04.1977 directing grant of lease to S.K. Bhatia and others
besides other documents. Notices were also issued to under Secretary Bhu
Parimap & Bandhobast Revenue Department, Bhopal twice for production of
original records relating to the order dated 27.04.1977 of the State Government
in favour of S.K. Bhatia & Others, but no records were produced in spite of
service of summons. The defendants examined only one witness D.W-1 Mujibur
Rahman Khan, Nazul Officer Rajdhani Pariyojna Bhopal, who avoided to assert
anything on the plea of non availability of record.

6. The trial Court on the basis of the pleadings of the parties, framed as
many as eight issues, recorded the evidence of the parties and vide judgment and
decree dated 27/07/1999 dismissed the suit of the plaintiff with the direction to
refund the deposited amount of Rs.3,310/- with interest @ 12%. Being
aggrieved by the impugned judgment and decree, the plaintiff has preferred
instant appeal before this Court.

Signature Not Verified


Signed by: JITENDRA
KUMAR PAROUHA
Signing time: 6/13/2023
4:42:46 PM
5

7. Learned counsel for the appellant – plaintiff averred that learned trial
Court failed to appreciate that the Collector Bhopal acted illegally in ordering
re-auction without deciding the case in terms of the remand order of the
Commissioner, Bhopal Division dated 03.11.1979 in Representation Case
No.222/77-78. The action of the Collector Bhopal in the matter was most
injudicious, arbitrary, illegal and contrary to the settled judicial norms. The
learned lower Court instead of ordering very serious action against the Collector
Bhopal for judicial impropriety; left the matter untouched. It is also submitted
that the learned trial Court erred in law in drawing adverse inference against the
defendants on their failure to produce the original records in spite of service of
summons twice. The attitude and the deposition of the only defense witness Shri
Mujibur Rehman was most evasive and irresponsible. Here again the law
demanded drawing an adverse inference against the State. It is further submitted
that the learned lower Court failed to appreciate that the power of the Collector
to auction for and on behalf of the State Government are limited and cannot go
beyond the decision of the State itself. When the State Government vide its
order dated 27.04.1977 criticized the action of the Collector for re-auction of
similarly placed plots and directed grant of lease after confirmation of auction in
favour of Shri S.K. Bhatia and others; it was not within the competence of the
Collector, Bhopal to have taken a different decision against the specific order of
the State Government on whose behalf he is authorized to act. It is also
submitted that the learned lower Court ought to have decreed the suit of the
plaintiff in the light of the order of the State Government dated 27.04.1977
applying the principle of estoppels. It is further submitted that the learned lower
Court failed to appreciate that the action of the Collector, Bhopal in ordering re-

Signature Not Verified


Signed by: JITENDRA
KUMAR PAROUHA
Signing time: 6/13/2023
4:42:46 PM
6

auction of the plot in question was not only discriminatory but also against the
law and Constitution of the Country. As a responsible Officer of a Welfare State
he is duty bound to act, honestly, fairly and in discriminatory. To buttress his
contentions, learned counsel for the appellant has placed reliance on Shree
Hanuman Cotton Mills and Others Vs. TATA Air Craft Limited (1969) 3 SCC
522 and prayed that the appeal be allowed and the respondents authorities be
directed to execute the sale deed in favour of the plaintiff after taking balance
amount.

8. On the other hand, learned Government Advocate for the respondents


/State opposed the contentions raised by learned counsel for the appellant by
contending that the suit was filed for the relief of declaration, perpetual
injunction and specific performance and the case of the appellant /plaintiff was
that a notice dated 28.08.1969 was issued by Nazul Officer, Bhopal for auction
of disputed plot No.E-2/15 Arera Colony, Bhopal. In that auction the appellant
was the highest bidder and deposited 1/10th amount of the bid i.e. Rs.3310/- on
26.02.1969 and the competent authority did not approve his bid and issue notice
for re-auction of the disputed plot. It is also contended that after 8 years,
appellant preferred a representation to the Commissioner, Bhopal, against the
order of Collector, Bhopal, which was registered as Case No.222/77-78. By
order dated 03.11.1979, Commissioner remanded the case for fresh disposal and
partly allowed the representation. Accordingly, appellant submitted the
application before the Collector, Bhopal but the Collector, Bhopal did not
appreciate the same. The Nazul Officer, Bhopal published an advertisement for
auction of certain plotd of Arera Colony in newspapers on 07.01.1996. After
knowing the above fact, the plaintiff filed the Civil Suit for declaration,

Signature Not Verified


Signed by: JITENDRA
KUMAR PAROUHA
Signing time: 6/13/2023
4:42:46 PM
7

perpetual injunction and for specific performance regarding the disputed plot
before the learned District Judge, Bhopal, after lapse of almost 27 years. It is
further contended that this Hon’ble Court has only one issue to decide that
whether judgment and decree passed by the learned lower Court should be
interfered with. Exhibit P-4 i.e. notice under Section 80 CPC was issued on
behalf of plaintiff on 24.11.1997 whereby, the suit was filed on 09.01.1996,
which clearly indicates that the notice under Section 80 CPC was given after
more than 22 months from the date of filing of the suit. On this ground only the
suit of the plaintiff is not maintainable and deserves to be rejected. From Exhibit
P-3, it is clearly evident that any bid can be rejected by Collector without any
explanation. The same issue was decided by Supreme Court in the case of
Haryana State Agriculture Marketing Board Vs. Sadhu Ram, (2008) 16 SCC
405. In that case Hon’ble Supreme Court has held that competent authority is
the final authority to approve the auction bid. Accordingly, the Collector,
Bhopal rejected the auction bid and advertised for re-auction of the disputed
plot. Meaning thereby, only depositing of earnest money by the bidder cannot
be called as agreement. According, to Section 7 of the Indian Contract Act, 1872
in order to convert a proposal into a promise, the acceptance must be expressed
in the manner, in which it is to be accepted. If the acceptance is not made then it
cannot be called as a contract, and when there was no agreement executed
between the parties then no question arose for specific performance of the
contract. According to the statements made by plaintiff as PW-4 before the
learned lower Court, it is clearly apparent that the respondent has rejected his
bid. In paragraph 4 of his statement, plaintiff stated that, “his claim and base is
only the receipt i.e. exhibit P-1”, according to his above admission, only the said

Signature Not Verified


Signed by: JITENDRA
KUMAR PAROUHA
Signing time: 6/13/2023
4:42:46 PM
8

receipt cannot be called and defined as the contract and thus, the plaintiff has no
case of specific performance to be decided in his favour. In that manner, the
judgment and the decree passed by the learned lower Court is absolute and
perfect and does not require any interference of this Hon’ble Court. As per the
paragraph No.12 of the plaint, it is evident that the cause of action for filing of
the suit arose on 26.01.1969 and the suit was filed on 09.01.1996, which is
clearly and extremely time barred suit filed by plaintiff. According to Para
No.13 of the plaint, plaintiff / appellant valued his suit for Rs.30 Lacs and this
suit was filed for specific performance, therefore, the plaintiff out to have paid
the ad-valorem Court fee, which he did not pay, hence, in absence of payment of
ad-valorem Court fee, the suit filed by the plaintiff/appellant was not
maintainable. The documents filed by the appellant with application under
Order XLI Rule 27 CPC were not relevant as they are not related to the
plaintiff/appellant. As these documents are not belonged to appellant, therefore,
he did not get any benefit/relief from these documents. These documents are not
essential for just and final adjudication of the case. The Hon’ble Supreme Court
of India in the case of Haryana State Agriculture Marketing Board (supra)
also observed that highest bidder does not acquire any right if auction is subject
to ratification by statutory authority and the competent authority was the final
authority to approve the auction bid, which is in his own discretion. The
Hon’ble Supreme Court in the case of Union of India & Others Vs. Bhimsen
Walaitiram (1969) 3 SCC 146, observed that the contract of sale was not
complete till the bid was confirmed by the Chief Commissioner and till such
confirmation, the person whose bid has been provisionally accepted is entitled
to withdraw his bid. An acceptance of an offer may be either absolute or

Signature Not Verified


Signed by: JITENDRA
KUMAR PAROUHA
Signing time: 6/13/2023
4:42:46 PM
9

conditional, when it is conditional the offer can be withdrawn at any moment


until absolute acceptance has taken place. In the case of Haryana Urban
Development Authorities & Others Vs. Orchid Infrastructure Developer Pvt.
Ltd. (2017) 4 SCC 243, the Hon’ble Supreme Court has held that the highest
bidder has no vested right to have the auction concluded in his favour and the
government or its authorities could validly retained power to accept or reject the
highest bid in the interest of public revenue. On the basis of above facts and
citations observed by the Hon’ble Supreme Court, the appellant has failed to
prove his case, thus, the judgment and decree passed by the learned District
Judge, Bhopal is absolute and perfect and does not require any interference of
this Hon’ble Court. Hence, this appeal deserves to be dismissed with heavy cost.

9. I have heard the rival submissions made by learned counsel for the parties
at great length and also perused the impugned judgment and record. I have given
my thoughtful consideration to the rival submissions made by the parties.

10. From the record it is evident that in the auction held on 26th, 27th and 28th
of February, 1969, the appellant was declared as the highest bidder quoting price
of Rs.33,100/- for the subject plot No.15 in Section E-2, Arera Colony, Bhopal
and as per the terms of the auction, the appellant had also deposited 1/10th of the
bid amount i.e. Rs.3310/- and received a receipt thereof on the same very day
i.e. 26.2.1969. It also emerges from the record that the appellant had number of
times approached the respondents authorities for depositing the remaining bid
amount but all the time he was told that a communication in this regard will be
given to you after approval of the bid by the competent authorities. It is also
gathered from the record that the plaintiff – appellant herein was always ready

Signature Not Verified


Signed by: JITENDRA
KUMAR PAROUHA
Signing time: 6/13/2023
4:42:46 PM
10

and willing to deposit the balance amount and made several queries from the
respondent authorities; but nothing was done, for almost 8 years. The appellant
was very shocked by the conduct of the respondents to the effect that the
Collector Bhopal instead of confirming the sale in favour of the plaintiff ordered
for re-auction of the plot in question without even bothering to communicate the
decision to the plaintiff.

11. It is not out of place to mention here that the respondents authorities
before passing of the order for re-auction of the subject plot had not taken into
confidence the appellant and had also not issued any kind of notice or order
regarding cancellation of the bid dated 26.2.1969. Thus, it is clear that the
respondents authorities had acted in arbitrary and illegal manner with mala fide
intention against the appellant. There is no nothing on record to show that the
bid dated 26.2.1969 was cancelled and a communication in this regard was ever
sent to the appellant. From the conduct of the respondents authorities, it is
crystal clear that the order for re-auction of the subject plot was passed behind
the back of the appellant and keeping the appellant in dark and no opportunity
was afforded to the highest bidder i.e. the appellant before passing the order for
re-auction of the plot in question.

12. The aggrieved appellant on coming to know of the said decision of the
Collector Bhopal made a representation to the Commissioner, Bhopal Division,
Bhopal, which was registered as Representation No.222/77-78 and was allowed
vide order dated 03.11.1979, whereby the order of the Collector Bhopal
regarding re-auctioning of plot was set-aside and the case was remanded to him
for fresh disposal with certain observations. However, no orders were passed by

Signature Not Verified


Signed by: JITENDRA
KUMAR PAROUHA
Signing time: 6/13/2023
4:42:46 PM
11

the Collector, Bhopal in pursuance to the said remand order and another sale
notice was published in Nav– Bharat newspaper dated 07.01.1996 for re-auction
of the plot in question in order to fetch higher price. From the aforesaid it is
apparent that the appellant was always ready and willing to purchase the plot by
depositing remaining bid amount and the respondents authorities have acted
against the terms and conditions of the auction notice and also against the rights
of the highest bidder i.e. the appellant.

13. From the record it is also evident that several successful bidders in respect
of other plots auctioned in pursuance to the same sale notice in February 1969
and whose highest bids were similarly not confirmed by the Collector, Bhopal
also represented to Commissioner, Bhopal Division, Bhopal, but they were
rejected vide order dated 12.05.1975. Against the order of the Commissioner
dated 12.05.1975 a representation was made to the State Government on behalf
of Shri S.K. Bhatia, Shri Hari Singh, Shri Rewachand, Smt. Shakuntala Verma,
Shri Gopi Krishan and Shri S.K. Narang, which was allowed vide order dated
27.04.1977 and action of the Collector, Bhopal and Commissioner, Bhopal
Division, were set-aside. In the said order it was directed that all those persons
who were highest bidders and had deposited 1/10th of the bid amount should be
given the lease of the respective auctioned plot after confirming the sale. Their
auction was accordingly confirmed and they were granted lease of the respective
plots. The plaintiff on coming to know of the auction notice published in Nav
Bharat dated 07.01.1996 for re-auction of the plot in question, filed a Civil Suit
before the District Judge, Bhopal for declaration, perpetual injunction and for
specific performance in regard to plot No.15 in E-2 Arera Colony, Bhopal,
which was registered as C.S.No.2-A/1996. Plaintiff examined P.W.-1 Dinesh

Signature Not Verified


Signed by: JITENDRA
KUMAR PAROUHA
Signing time: 6/13/2023
4:42:46 PM
12

Kumar Bajpai, P.W-2 K.K. Jaiswal, P.W.-3, R. S. Tiwary, P.W-4 Mujjaffar


Hussain and himself in support of his case. He also produced the order of the
Commissioner Bhopal dated 03.11.1979 and filed copy of the order of the State
Government dated 27.04.1977 directing grant of lease to S.K. Bhatia and others
besides other documents. Notice were also caused to be issued to under
Secretary Bhu Parimap & Bandhobast Revenue Department, Bhopal twice for
production of original records relating to the order dated 27.04.1977 of the State
Government in favour of Shri S.K. Bhatia & Others, but no records were
produced in spite of service of summons. The defendants examined only one
witness D.W-1 Mujibur Rahman Khan, Nazul Officer Rajdhani Pariyojna
Bhopal, who avoided stating anything on the plea of non-availability of record.

14. On perusal of the order of the State Government dated 27.4.1977 it is


found that the State government had not only set-aside the orders of the
Collector and Commissioner, Bhopal but also directed the authorities to grant
lease of the auctioned plot to all those persons who were the highest bidders and
had deposited 1/10th of the bid amount after confirming the sale. In pursuant to
the order of the State Government, the auction was accordingly confirmed and
they were granted lease of the respective plots. Since the appellant was one of
the highest bidders and had also deposited 1/10th of the bid amount, therefore,
the appellant was entitled to have possession of the subject plot and was also
entitled for the similar treatment.

15. It is not in dispute that the appellant was the highest bidder in a public
auction and had also deposited 1/10th of the bid amount. It is also not disputed
that the sale was confirmed to all those persons who were the highest bidders

Signature Not Verified


Signed by: JITENDRA
KUMAR PAROUHA
Signing time: 6/13/2023
4:42:46 PM
13

and had deposited 1/10th of the bid amount on the strength of the order of the
State Government dated 27.4.1977. It is a settled law that unless and until it was
found that there was any material irregularity and/or illegality in holding the
public auction and /or auction sale was vitiated by any fraud or collusion, it is
not open to set aside the auction or sale in favour of the highest bidder on the
basis of whimsical of some respondents authorities. It is also required to be
noted that once the sale was confirmed in favour of the highest bidder who
deposited 1/10th of the bid amount, the order for re-auction of the plots in
question would frustrate the object and purpose of holding the public auction
and also the sanctity of the public auction. Unless there is concrete material and
it is established that there was any fraud and/or collusion or the land in question
was sold at a throwaway price, the sale pursuant to the public auction cannot be
set-aside at the instant of strangers to the auction proceedings.

16. Hon’ble the Supreme Court in Shree Hanuman Cotton Mills (supra)
has observed as under :-
The learned Judge, quoting the observations of Hamilton, J.,
in Sumner and Leivesley v. John Brown & Co.(1), observes
at p. 409:
"Earnest'. . . meant something given for the purpose of
binding a contract, something to be used to put pressure on
the defaulter if he failed to carry out his part. If the contract
went through, the thing given in earnest was returned to the
giver, or, if money, was de- ducted from the price. If the
contract went off through the giver's fault the thing given in
earnest was forfeited."

Signature Not Verified


Signed by: JITENDRA
KUMAR PAROUHA
Signing time: 6/13/2023
4:42:46 PM
14

The Judicial Committee had to consider in Chiranjit Singh


v. Har Swarup (2) the question as to whether a payment
made by way of earnest money by a buyer could be
recovered when the buyer had committed breach of
contract. In that case the plaintiff had entered into a contract
with the defendant for purchase of a property. One of the
terms of the contract of sale was :
"Willing on old terms namely earnest twenty thousand
balance in two moieties. first payable on executing
conveyance, last within six months net cash we receive 4
lakhs 76,000."
The plaintiff did not pay the earnest money so nomine but
sent two cheques amounting to Rs. 1,65,000 and obtained a
receipt ?hat this amount was paid towards the sale price of
the estate in question out of the total consideration of Rs.
4,76,000. Later the plaintiff informed the defendant that he
was not in a position to complete the purchase and gave
opportunity to the latter to sell the property to any other
party. Therefore it was clear that the plaintiff-purchaser was
unable or unwilling to complete the contract of purchase.
The, plaintiff, notwithstanding his default, sued to recover
the entire sum of Rs. 1,65,000 paid by him. The High Court
held that as the plaintiff had broken the contract, he must
lose the earnest money of Rs. 20,000 but was entitled to a
refund of the balance amount of Rs. 1,45,000 from and out

Signature Not Verified


Signed by: JITENDRA
KUMAR PAROUHA
Signing time: 6/13/2023
4:42:46 PM
15

of the amounts paid by him on that account. The plaintiff,


dissatisfied with the decision of the High Court, carried the
matter in appeal to the Judicial Committee for obtaining
relief of repayment of earnest money also. The Judicial
Committee agreed with the High Court that from and out of
the amounts paid by the plaintiff, a sum of Rs. 20,000 was
earnest money and there was nothing in the contract to
suggest that the seller had agreed to sacrifice the stipulated
earnest. Regarding the legal incidents of earnest money, the
Judicial Committee stated :
"Earnest money is part of the purchase price when the
transaction goes forward; it is forfeited when the transaction
falls through, by reasons of the fault or failure of the
vendee."
Holding that the above principle applied squarely to the
contract before them, they dismissed the plaintiff’s appeal
for refund of earnest.
From a review of the decisions cited above, the following
principles emerge regarding "earnest":
(1) It must be given at the moment at which the contract is
concluded.
(2) It represents a guarantee that the contract will be
fulfilled or, in other words, 'earnest' is given to bind the
contract.

Signature Not Verified


Signed by: JITENDRA
KUMAR PAROUHA
Signing time: 6/13/2023
4:42:46 PM
16

(3) It is part of the purchase price when the transaction is


carried out.
(4) It is forfeited when the transaction falls through by
reason of the default or failure of the purchaser.
(5) Unless there is anything to the contrary in the terms of
the contract, on default committed by the buyer, the seller is
entitled to forfeit the earnest.

17. From the aforesaid observations, it is evident that earnest means it must
be given at the moment at which the contract is concluded and it represents a
guarantee that the contract will be fulfilled or, in other words, ‘earnest’ is given
to bind the contract. In the present case, no doubt that the appellant being the
highest bidder had deposited 1/10th of the bid amount as earnest amount and
therefore, earnest money represents a guarantee that the contract will be
fulfilled. Under these circumstances, in the present case the respondents have
failed to fulfill the conditions of the contract. Needless to say that in the
peculiar facts and circumstances of the case, the judgments cited by learned
counsel for the respondents do not help them.

18. In view of the above and for the reasons stated above, this court is of the
considered view that the findings recorded by the trial court with regard to
issues no. 1, 3 & 7 are unsustainable being contrary to the record. Thus, the trial
Court has committed grave error in dismissing the suit preferred by the plaintiff
overlooking the facts that the plaintiff was the highest bidder @ Rs.33,100/- for
plot No.15 in Sector E-2, Arera Colony Bhopal in the auction held on

Signature Not Verified


Signed by: JITENDRA
KUMAR PAROUHA
Signing time: 6/13/2023
4:42:46 PM
17

26.02.1969 and as per the terms of the auction deposited 1/10th of the bid
amount i.e. Rs.3,310/- was deposited with the respondents authorities on
26.02.1969.

19. Resultantly, the impugned judgment and decree of the trial court is not
sustainable in the eyes of law. The appeal is hereby allowed. Hence, impugned
judgment and decree dated 27/07/1999 passed by District Judge, Bhopal in Civil
Suit No. 2-A/1996 is hereby set aside. Interim order dated 15.12.1999 stands
vacated. The appellant is directed to pay the balance of the bid amount to the
respondents by demand draft / banker cheque within a period of one month from
today and take all consequential steps pursuant to the auction-sale being
confirmed in his favour including getting registration of the sale deed in his
name and taking possession of the land in question in case, the same have not
yet taken place till date.

20. Decree be drawn accordingly. However, in the facts and circumstances of


the case, there shall be no order as to costs.

21. Let a copy of this judgment along with record be sent back to the
concerned trial Court for information and its compliance.

(ARUN KUMAR SHARMA)


JUDGE
JP/-

Signature Not Verified


Signed by: JITENDRA
KUMAR PAROUHA
Signing time: 6/13/2023
4:42:46 PM

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