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IN THE HIGH COURT OF ANDHRA PRADESH AT AMARAVATI
B. KRISHNA MOHAN, J.
Prahalada Enterprises - Appellant
Versus
The State of Andhra Pradesh - Respondent
Writ Petition No. 21649 of 2021
Decided On : 31-10-2022
AUCTION - LEASE - FORFEITURE OF DEPOSIT - CONDITION NO.9 OF PUBLIC AUCTION NOTICE - INTERPRETATION - REFUND OF DEPOSIT - JUST AND PROPER MANNER.
Fact of the Case:
Petitioner participated in an e-tender-cum-public auction for a license to sell various items at a temple. He became the highest bidder and paid a caution deposit of Rs. 5,00,000/-. The petitioner was allowed to conduct sales from 27.08.2021 onwards and paid a further Rs. 30,00,000/- towards the bid amount. However, the petitioner failed to pay the balance amount within the stipulated time. The respondent temple forfeited the entire deposit of Rs. 35,00,000/-.
Finding of the Court:
The court held that the respondent temple was not entitled to forfeit the entire deposit of Rs. 35,00,000/-. The court found that the respondent temple had not acted in accordance with condition No.9 of the public auction notice, which required the highest bidder to pay the total bid amount immediately on the day of the auction. The court also found that the respondent temple had not given the petitioner a reasonable opportunity to pay the balance amount.
Issues: 1. Whether the respondent temple was entitled to forfeit the entire deposit of Rs. 35,00,000/-? 2. Whether the petitioner was entitled to a refund of any amount out of the deposited amount of Rs. 35 lakhs?
Ratio Decidendi: The court held that the respondent temple was not entitled to forfeit the entire deposit of Rs. 35,00,000/- because it had not acted in accordance with condition No.9 of the public auction notice and had not given the petitioner a reasonable opportunity to pay the balance amount. The court also held that the petitioner was entitled to a refund of the balance amount after deducting the lease amount, costs for cancellation of the lease, and costs for re-auction.
Final Decision: The court set aside the impugned order of the respondent temple dated 17.09.2021 to the extent that it forfeited the entire deposit of Rs. 35,00,000/-. The court directed the respondents to refund a sum of Rs. 20,00,000/- to the petitioner within a period of six weeks from the date of receipt of the order.
ORDER :
Heard the learned senior counsel for the petitioner; the learned government pleader for endowments for the respondent Nos.1 to 4; and the learned standing counsel for the respondent No.5.
2. This writ petition is filed questioning the action of the respondent No.5 in forfeiting a sum of Rs.35,00,000/- deposited by the petitioner on the ground that the condition No.9 of the auction notice dated 05.08.2021 is violated.
3. The learned senior counsel for the petitioner submitted that the respondent No.5 issued e-tender, sealed tender and public auction notice dated 05.08.2021 for the sale of offerings to the deity of Sri Lakshmi Panakala Narasimha Swamy presided on the uphill of Mangalagiri as shown in the list of item in the table given in the auction notice for the period from 27.08.2021 to 26.08.2022. The said auction notice was issued and affixed on the notice board. As per the tender conditions, the 13 items specified in the notice can be sold by the highest bidder at the prescribed rates for a period of one year commencing from 27.08.2021 to 26.08.2022. The interested person shall deposit the EMD of Rs.5,00,000/- to participate in the public auction. The petitioner being a regular visitor and strong devotee of Sri Lakshmi Panakala Narasimha Swamy participated in the auction and offered Rs.1,35,00,000/- towards bid amount and the same was accepted by the respondent No.5 on the auction dated 13.08.2021. The petitioner deposited Rs.5,00,000/- towards earnest money deposit. Then the respondent No.5 informed the petitioner to deposit the balance amount within a reasonable time and it was allowed to rise necessary infrastructure and procure the items immediately to conduct the sales of the items as mentioned in the above said public auction notice to cater the needs of the devotees. Then the petitioner incurred an expenditure of Rs.7,00,000/- for erection of the shop and spent about Rs.8,00,000/- to purchase the items. Also paid a sum of Rs.18,00,000/- through RTGS to the account of the respondent No.5 on 26.08.2021 and Rs.2,00,000/- on the same day for which the respondent No.5 issued receipt Nos.3682 and 3683 dated 26.08.2021 towards the part of bid amount. Thus the respondent No.5 received a sum of Rs.25 lakhs in total as on 26.08.2021 which is about 20% of the bid amount. The petitioner was permitted to sell the items with effect from 27.08.2021 as per the schedule fixed in the above said public auction notice. Then the respondent No.5 issued a letter-cum-notice in Rc.No.A1/219/2013 dated 27.08.2021 to the petitioner to pay the balance bid amount of Rs.1,10,00,000/- within five days from the date of receipt of this notice failing which the tender would be cancelled by forfeiting the amount already deposited and fresh public auction would be conducted. Consequently the petitioner paid a sum of Rs.5,00,000/- on 27.08.2021, Rs.2,50,000/- on 01.09.2021 and Rs.2,50,000/- on 07.09.2021 towards the part of bid amount. With these payments it came to a total sum of Rs.35,00,000/- out of Rs.1,35,00,000/- that was deposited by the petitioner towards part of the bid amount. Then the petitioner submitted an explanation/request letter dated 07.09.2021 to the respondent No.5 seeking extension of time for payment of the balance amount. But the respondent No.5 did not consider the representation of the petitioner. Under those circumstances, the petitioner filed W.P.No.19877 of 2021 before this Hon’ble court and the same was disposed of by its order dated 14.09.2021 observing that it is open to the petitioner to place any such proposal for payment of the balance amount before the respondent No.5 and thereafter the respondent No.5 has to take a decision on the matter keeping in view of the possible hardship to the devotees if the said bid is cancelled. In view of the same, the petitioner made another representation dated 14.09.2021 expressing it’s willingness and preparedness to pay a sum of Rs.15,00,000/- by 20.09.2021, another sum of Rs.1
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