The main legal point established is that a buyer's knowledge of encroachment and pending litigation, as disclosed in the E-tender document, precludes the claim of ignorance and supports the interpretation of the contract, upholding the forfeiture of the Earnest Money Deposit (EMD) based on the applicable clause.

JUDGMENT :

RAVINDRA V. GHUGE, J.

1. Rule. Rule made returnable forthwith and heard finally by the consent of the parties.

2. By this petition, the petitioner has putforth prayer clauses A, B and C as under:

(A) That this Hon’ble court may be pleased to issue a writ of certiorary and/or a writ in nature of certiorary and/or any other appropriate writ, order or direction under Article 226 and 227 of the Constitution of India, thereby quashing and setting aside the impugned communication dated 29.5.2012 issued by the Respondent no.3.

(B) That this Hon’ble court may be pleased to issue a writ of Mandamus or any other appropriate writ, order or direction to the Respondents thereby directing to conclude the sale proceedings in respect of free hold land – Taxi stand, bearing City Survey No.20666 of Aurangabad Textile Mills, Aurangabad, which were initiated pursuant to the E-tender dtd. 24.2.2011 and for that purpose issue necessary directions.

(C) Pending the hearing and final disposal of the present Writ Petition, respondents be restrained by an order of injunction from creating any third party interest in respect of free hold land – Taxi stand bearing City Survey No.20666 of Aurangabad Textile Mills, Aurangabad, which were initiated pursuant to the E-tender dtd. 24.2.2011 and for that purpose issue necessary directions.

3. The impugned communication dated 29/05/2012, issued by respondent No.3 informs the petitioner as under:

“Dear Sir,

Please refer to the letters cited above and earlier correspondence exchanged between us regarding sale of the subject property. As informed you earlier we had referred the matter to the Asset Sale Committee (ASC). The ASC after due deliberations and considering all the relevant facts have come to the conclusion that though there was no stay / legal impediment for executing the sale deed and that despite number of opportunities given to you by NTC to comply with the terms & conditions of tender, you failed to avail the same. In view of this the ASC has decided to forfeit the EMD paid by you.

In view of the decision taken by the ADC, we inform you that your EMD amount of Rs.19,55,000/- (Rupees Nineteen Lacs Fifty Five Thousand Only) stands forfeited.

This is for your information.

Thanking you,

Yours faithfully,

For National Textile Corporation Ltd. (WR),

Sd/

(P.M. Bidri)

Chief General Manager – Region Head.”

4. The contention of the petitioner is that respondent No.3 had floated an E-tender in 2011, for inviting offers to sell the freehold land - taxi stand, bearing CS No.20666, opposite MSRTC, Central Bus Depot, Station Road, Aurangabad, which belongs to respondent No.2. The auction was to be conducted by an on-line procedure. The floating of E-tenders was duly approved by the competent authority, which is the Board of Industrial and Financial Reconstruction (BIFR), by its order dated 25/07/2002, which had sanctioned the rehabilitation scheme of the erstwhile NTC (SM) Mills Ltd. An area of 5927.70 sq.mtrs. was put up for auction on “as is where is” and “as is what is”, basis. The schedule of the finalization of the sale was mentioned in the public notice. The last date of submission of the Earnest Money Deposit (EMD) and the documentation fees along with necessary documents, was 24/02/2011 and the date of on-line forward auction was 05/03/2011. The E-tender document published by respondent No.3 indicates a pending litigation in the form of MARJI No.120 of 2007, Aurangabad Textile Mills Vs. Abdul Khalid, filed by respondent No.2 for challenging the judgment and order passed in Civil Suit No.11 of 1981.

5. The petitioner tendered the required documents with the EMD of Rs.19.55 lakhs, on 23/02/2011 and quoted a bid price of Rs.10.58 Crores. As the petitioner was the highest and successful bidder in the on-line auction procedure, the Asset Sale Committee (ASC) of respondent No.3, approved the sale of the subject propert