Auction – Conditions of sale – Forfeiture of security deposit – Respondent emerged as successful bidder in auction conducted by forest department, Gorakhpur (U.P.) in 1998 for certain forest produce – Parties executed an Agreement in terms of relevant Conditions of Sale – However despite being informed about last date to deposit the bid amount and complete the work, followed by two subsequent reminder letters/notices, Respondent failed to comply with the said mandate – Resulting in forfeiture of Respondent’s security deposit and re-auctioning – Forfeiture challenged in High court on the ground that department’s approval was not given within stipulated time, and hence Respondent applied for withdrawing its bid – In its support, Respondent relied on Condition of Sale Manual applicable in 1980-81 overwritten as “1997-98” since auction took place in 1998 and argued that concerned provision mandated communicating approval/disapproval within 40 days from auction – High Court allowed the writ petition – Decision challenged in this SLP: Held: 1. High Court erred while relying on Manual applicable in 1980-81 because the year in this manual was overwritten as “1997-98” without bearing any signature – A fact noted by High Court but not given due weightage. [Para 14]
2. Court accepted Appellant’s argument that no manual was published after 1987-88 and hence it will prevail over previous edition of 1980-81 that Respondent sought to reply on – As 1987-88 edition did not contain provision regarding above-noted 40 days’ time period, and required the successful bidder to enquire about the status of acceptance of contract if no formal communication is received by him within 35 days, and provided for deemed approval in absence for formal approval within stipulated time-period of
35 days, the Respondent could not escape the consequences of withdrawing from auction. [Para 15-16]
3. On facts, Respondent did not comply with the initial letter and subsequent reminders which reflected its non-diligent and lackadaisical approach that couldn’t be overlooked and thus the forfeiture of security deposit of Respondents was valid. [Para 17-18]
As published in the Supreme Court Reports, Supreme Court of India. Headnotes prepared by: Niti Richhariya, Hony. Associate Editor (Verified by: Abhinav Mukerji, Sr. Adv.). Text from the Indian Supreme Court Judgments open data set (Dattam Labs), CC BY 4.0.
This page is for informational and research purposes only and does not constitute legal advice. Consult a qualified advocate for advice specific to your situation.