1. Auction of commercial plots — Failure to deposit required bid amount — Cancellation of allotment — Suit for declaration and stay. (Para 5 , 6 )
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2025 Supreme(SC) 88
SUPREME COURT OF INDIA
Sanjiv Khanna, CJI, Sanjay Kumar, K.V. Viswanathan, J.
Anil Kumar Agrawal – Appellant
Versus
Gopichand Khemani & Anr. – Respondents
Civil Appeal No. 200 of 2025 (arising out of SLP (C) No. 23881/2014) With Civil Appeal No. /2025 (arising out of SLP(C) No. 24090/2014, Civil Appeal No. /2025 (arising out of SLP(C) No. 30903/2014, Civil Appeal No. /2025 (arising out of SLP(C) No. 30870/2014
Decided On : 07-01-2025
Advocates:
Advocate Appeared:
For the Petitioner: Mr. Ravindra Shrivastava, Sr. Adv., Mr. Navin Prakash, AOR, Mr. Anshuman Shrivastava, Adv., Mr. Abhijeet Shrivastava, Adv., Mr. Ieeshan Sharma, Adv., Mr. Aniket Singh Das, Adv., Ms. Devangna Singh, Adv., Ms. Sanya Shukla, Adv., Ms. Rhea Rao, Adv., Mr. Mohit D. Ram, AOR
For the Respondent: Mr. Pardeep Gupta, Adv., Mr. Parinav Gupta, Adv., Mrs. Mansi Gupta, Adv., Dr. Mrs. Vipin Gupta, AOR, Mr. Navin Prakash, AOR, Mr. Rajul Shrivastav, Adv., Mr. Mohit D. Ram, AOR, Ms. Nayan Gupta, Adv., Mr. Anubhav Sharma, Adv.
Advocate Appeared:
For the Petitioner: Mr. Ravindra Shrivastava, Sr. Adv., Mr. Navin Prakash, AOR, Mr. Anshuman Shrivastava, Adv., Mr. Abhijeet Shrivastava, Adv., Mr. Ieeshan Sharma, Adv., Mr. Aniket Singh Das, Adv., Ms. Devangna Singh, Adv., Ms. Sanya Shukla, Adv., Ms. Rhea Rao, Adv., Mr. Mohit D. Ram, AOR
For the Respondent: Mr. Pardeep Gupta, Adv., Mr. Parinav Gupta, Adv., Mrs. Mansi Gupta, Adv., Dr. Mrs. Vipin Gupta, AOR, Mr. Navin Prakash, AOR, Mr. Rajul Shrivastav, Adv., Mr. Mohit D. Ram, AOR, Ms. Nayan Gupta, Adv., Mr. Anubhav Sharma, Adv.
The court emphasized that parties must approach the court with clean hands and comply with auction terms, ruling that the plaintiffs' failure to do so justified the dismissal of their suits.
Headnote:(A) Civil Procedure Code, 1908 - The plaintiffs failed to comply with the auction terms, depositing only 10% instead of the required 30% and subsequently 20% instead of 90% - The High Court's affirmation of the first appellate court's judgment was erroneous as the plaintiffs did not approach the court with clean hands. (Paras 3, 4, 5, 10)
(B) Auction Terms - The plaintiffs were required to follow up with the authority regarding payment, and their claims of not receiving notices were insufficient to overturn the cancellation of allotment. (Paras 6, 8, 9)
Facts of the case:
The plaintiffs bid for plots in an auction held on 08.12.1988 but failed to deposit the required amounts, leading to the cancellation of their allotment by the Raipur Development Authority. They claimed not to have received notices regarding the payment requirements.
Findings of Court:
The court found that the plaintiffs were duly served with the notice and their suits were not maintainable as they sought declarations rather than specific performance.
Issues: The main issues included the plaintiffs' compliance with auction terms and the validity of their claims regarding notice receipt.
Ratio Decidendi: The court ruled that the plaintiffs' failure to comply with the auction terms and their lack of clean hands justified the dismissal of their suits.
Result: Appeals allowed; suits dismissed.
Legal Category Hierarchy
Table of Contents
2. Whether cancellation of allotment was illegal due to the authority's failure to provide proof of service of payment notices. (Para 7 )
3. Bidder's duty to follow up on payments — Inference of service based on partial payment — Non-maintainability of suits for declaration instead of specific performance. (Para 8 , 9 , 10 )
4. A bidder's failure to follow up on payment obligations cannot be excused solely by the authority's failure to prove service of notices. (Para 8 )
5. Appeals allowed — Impugned judgments set aside — Original suits dismissed. (Para 11 , 12 )
6. Does the failure of an authority to prove service of payment notices automatically invalidate the cancellation of a bid?
No. A bidder is expected to follow up with the authority to ensure balance payments are made. Lack of proof of service alone does not excuse a bidder from their payment obligations. (Para 8 )
7. Can payment made on a stipulated deadline be used to infer service of a notice?
Yes. If a party makes a payment on the exact last date stipulated in a notice, it is fair to conclude that the party was duly served with that notice. (Para 9 )
8. Is a suit for declaration that a bid cancellation is illegal maintainable instead of a suit for specific performance?
No. Suits framed as declarations or stays of auction are not maintainable when the appropriate remedy is a suit for specific performance. (Para 10 )
ORDER :
1. Leave granted.
2. This common order disposes of the present appeals.
3. In our opinion, the High Court, vide the impugned judgment(s), was clearly wrong in affirming the judgments of the first appellate court, which reversed the judgments and decrees of the trial court, dismissing two suits qua Plot Nos. 73 and 74 in Indira Commercial Complex, Pandari Tarai, Raipur, under the Devendra/Devinder Nagar Commercial Scheme, and in declaring the cancellation of allotment of the aforesaid plots in favour of the plaintiffs as illegal.
4. The facts are startling and show that the said plaintiffs, the respondents before us, had not come to the Court with clean hands and were guilty of suppressing important and relevant facts.
5. It is an accepted position that the auction of the said two plots was held on 08.12.1988 and as per the terms of the auction, the plaintiffs/respondents were required to deposit 30% of the bid amount immediately. However, they only deposited 10% of the bid amount. It is the case of the appellants, including the Raipur Development Authority1[For short, “RDA”], that the Chairman confirmed the highest bids given by the plaintiffs/respondents and issued letter dated 05.01.1989 requiring them to deposit the entire bid amount, that is, the balance 90% by 16.01.1989. This was in conformity with clause 9 of the terms of the auction. It is also an accepted position that the plaintiffs/respondents deposited 20% of the bid amount and not 90% on 16.01.1989, as required by clause 9 of the auction terms read with the letter dated 05.01.1989.
6. It is the case of the RDA that it had subsequently issued notices, that is, Exhibit D-3 dated 11.04.1989, Exhibit D-4 dated 11.05.1989, Exhibit D-5 dated 06.03.1990, Exhibit D-6 dated 12.07.1990 and, thereafter, the allotment was cancelled by notice, Exhibit P-7, dated 12.10.1990.
7. What has weighed with the first appellate Court and the High Court is the plea and contention of the plaintiffs/respondents that they did not receive any of the above notices. The RDA was remiss, as it did not file proof of service of the said notices.
8. There is no doubt that there was a lapse on the part of the RDA in the above regard but this factum alone, in the facts of the present case, would not matter as anyone who has given a bid would follow up with the authority (RDA) and ensure that the balance payment is made. There is a yawning gap between the date of auction, that is, 08.12.1988 and the date of filing of the suit, that is, 10.03.1992.
9. Further, the plaintiffs/respondents themselves made payment on 16.01.1989, which was the last date mentioned in the letter dated 05.01.1989. In our opinion, it would be fair to draw a conclusion that the plaintiffs/respondents were duly served with the notice dated 05.01.1989 and, therefore, they made the payment on the last date stipulated therein.
10. Lastly, we may note that the plaintiffs/respondents had not filed suits seeking specific performance and had instead filed suits for stay of the proposed auction and for declaration that the cancellation of their bids was illegal. The suits, as framed, were not maintainable and should have been dismissed on this ground alone.
11. Recording the aforesaid, the impugned judgment(s) is/are set aside and the appeals are allowed.
12. The result will be that Civil Suit Nos. 169A/1995 and 170-A/1995 filed by the plaintiffs/respondents, shall be treated as dismissed.
13. There shall be no order as to costs.
