NAZUR
NAZUR
BETWEEN:-
.....APPELLANT
AND
.....RESPONDENTS
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Reserved on : 10-05-2023
Pronounced on : 13-06-2023
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This appeal having been heard and reserved for order, coming on for
JUDGMENT
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
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.
auctioned plot after confirming the sale. Their auction was accordingly
confirmed and they were granted lease of the respective plots.
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.
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-
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.
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
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
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
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
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
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
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."
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
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.
21. Let a copy of this judgment along with record be sent back to the
concerned trial Court for information and its compliance.