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High Court of Delhi
RAJIV SAHAI ENDLAW, J.
M/s. Sikka Promoters Pvt. Ltd.
Versus
National Agricultural Cooperative Marketing Federation of India Ltd.
CS(OS) 2363 of 2010
Decided on : 16-07-2013.
Mistake - Auction of Property - Indian Contract Act, 1872, Sale of Goods Act, 1930 - The court found that the plaintiff bid under the bona fide impression that the property was situated in 'Mohan Cooperative Industrial Area' but had subsequently learnt of the property being situated in 'Mohan Co-operative Industrial Area Extension'. The court held that the sale was by description and the option to inspect cannot change the nature of the sale. The plaintiff was found entitled to a decree for refund of monies under Section 20 of the Indian Contract Act, 1872 and Section 15 of the Sale of Goods Act, 1930.
Fact of the Case:
The plaintiff sought recovery of Rs.5,37,50,000/- with interest, claiming that it bid under the impression that the property was situated in 'Mohan Cooperative Industrial Area' but had subsequently learnt of the property being situated in 'Mohan Co-operative Industrial Area Extension'. The defendant contested the suit, claiming that the plaintiff was fully aware of the property's description and measurement.
Finding of the Court:
The court found that the plaintiff bid under a bona fide impression and was entitled to a refund of the monies paid. The court held that the sale was by description and the option to inspect cannot change the nature of the sale. The plaintiff was found entitled to a decree for refund of monies under Section 20 of the Indian Contract Act, 1872 and Section 15 of the Sale of Goods Act, 1930.
Issues: The main issue was whether the plaintiff was entitled to a refund of the monies paid due to the mistaken impression about the property's location.
Ratio Decidendi: The court held that the sale was by description and the option to inspect cannot change the nature of the sale. The plaintiff was found entitled to a decree for refund of monies under Section 20 of the Indian Contract Act, 1872 and Section 15 of the Sale of Goods Act, 1930.
Final Decision: The court passed a decree in favor of the plaintiff for recovery of Rs.5,37,50,000/- with interest accrued thereon while lying deposited in the Court. The plaintiff was also entitled to costs of the suit.
Rajiv Sahai Endlaw, J.
1. The plaintiff in this suit, inter alia for recovery of Rs.5,37,50,000/-with interest, seeks judgment on admissions. The defendant while contesting the said application also seeks release unto itself of the said amount lying deposited in this Court together with interest accrued thereon.
2. It is not in dispute:
(i) that the defendant on 06.06.2008 got published in the newspapers a notice of public auction to be held on 25.06.2008 of various residential and industrial properties as per orders of this Court and the description in the said notice of one of the properties with which the suit is concerned was as under:
S. Description of Property Reserve Price No.
Property No.E-16/B-1,
Mohan Co-operative
Industrial Area. An
Industrial Building on Plot Rs.10,00,00,000/- area admeasuring 1428
Sq. Yds. Covered Area
24300 Sq.ft approx.
“Note: All the above properties can be inspected by all intending purchasers between 11.00 A.M. and 3.00 P.M. on 10th, 15th, 17th and 22nd June, 2008” The other contents of the said notice, relevant for the present purpose, were as under: “1. The properties are being sold by the Auctioneers under Instructions from the National Agricultural Co-operative Marketing Federation of India Ltd., New Delhi in pursuance of the order dated 04.04.2008 passed by Hon’ble the High Court of Delhi in W P (CRML) No.:785/2007 & 461/2007 and the auction is subject to confirmation by Court Observer appointed by the Hon’ble High Court of Delhi.
2. Any further information regarding the properties to be auctioned, inspection of title deeds, terms and conditions of sale can be had / verified from Sh. Kunwar Singh, Manager Mobile: 9350308630 on any working day between 11.00 AM to 4 P.M.
3. The persons interested in inspecting the property / properties may do so on the dates indicated in the catalogue. The area mentioned in respect of each property is based on the documents available on record and / or as intimated by the concerned parties.
4. All the bidders should prior to the auction satisfy themselves about the correctness of the description, measurements, boundaries etc. of the properties. No enquiries in this regard will be entertained at the time of auction. On the property being knocked down in favour of a bidder in the auction, he shall be held to have waived all the objections to the titles, description etc. of the property.
5. NAFED has made its best effort to ascertain the quantum of outstanding amount in respect of properties offered for auction sale. The prospective bidders shall have to bear any further outstanding amounts that may come to light hereafter. xxxxx
10. Intending bidders are required to deposit for participation in the auction, a REFUNDABLE CAUTION DEPOSIT of Rs.5,00,000/- (Rupees Five Lacs only) with the Auctioneers by a crossed Bankers Pay Order/ Demand Draft drawn in favour of the NAFED, New Delhi payable on any scheduled Bank in Delhi. These deposits will be refunded subject to the terms thereof to the respective bidders except the successful bidder who will be entitled for the refund of the deposit only on payment of Earnest Money. However, if the successful bidder so wants, this amount will be adjusted against the earnest money payable by him. The caution deposit is liable to be forfeited if the bidder concerned causes or attempt to cause disturbance or hurdles in the conduct of the auction or fails to pay earnest money on the fall of hammer. The intending bidder paying Rs.5,00,000/- in the manner indicated above, may be allowed to take one extra person to the auction hall, with the condition that the intending bidder will be responsible for his proper conduct, decorum and observance of rules of the auction sale, failing which the above sum of Rs.5,00,000/- is liable to be forfeited.
11. The officer conducting the auction may, withdraw all the properties or any one or more of them from the auction without assigning any reason.
12. NAFED, New Delhi reserves the right t
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