The cancellation of an auction long after the confirmation of the bid must be justified, and there must be exceptional circumstances, such as fraud, to cancel a confirmed sale.

This writ petition is directed against the proceedings dated 18. 2008 on the file of the fourth respondent whereby confirmed sale of condemned Rafmat Wheel Lathe in favour of the petitioner was cancelled on administrative grounds.

2. The factual matrix necessary for the disposal of the writ petition are as under:

Petitioner’s version

The second respondent issued a notification for auction of various goods including condemned Rafmat Wheel Lathe in ‘as is where is’ condition, fixing the auction on 12. 1999. In the said notification condemned Rafmat Wheel Lathe was shown as item No. 62 and pursuant to the said notification issued in November, 1999, the petitioner took part in the auction which was conducted by Varma & Company auctioneers on behalf of Integral Coach Factory. The auction was conducted on 12. 1999 and the bid given by the petitioner was found to be the highest and as such, the same was accepted by the respondents and accordingly, the petitioner had paid a sum of Rs. 25,000/- on 12. 1999 and the balance amount was paid on 1. 2000. As per the practice prevalent in the Railways, they would give a particular date for removal of the scrap or other materials sold in public auction and the same was called “Point Booking Date” and the successful tenderer has to take delivery of the materials on the said date. Since the respondents were not able to uproot the machine they failed to hand over the Rafmat Wheel Lathe to the petitioner.

3. Since the materials were not delivered to the petitioner, he submitted a representation on 21. 2000 requesting the respondents to intimate the date on which he could take delivery of the materials. Since no reply was received from the respondents, the petitioner submitted another representation on 22. 2000, which was followed by a notice dated 6. 2000. Subsequently, the petitioner received a copy of the communication dated 17. 2000 addressed to the authorities by the Assistant Controller of Stores to undertake the job of uprooting of the machine. Later, on 27. 2000, the petitioner received a letter from the Deputy Controller of Stores stating that he would be permitted to remove the goods on or before 8. 2000. Accordingly, when the petitioner approached the respondents for removal of the goods, he was asked to come with necessary transport and men for lifting the materials, and the petitioner arranged for transport as well as labourers and appeared before the respondents on 30.7.2000, but to his surprise, it was noticed that the machine was not uprooted.

.4. Immediately, the petitioner had sent a letter to the respondents on 8. 2000 stating that though he was granted permission to remove the goods on 30.7.2000, the respondents have not chosen to uproot the machine and therefore it caused him considerable financial loss. Subsequently, the petitioner received the impugned order dated 18. 2000 cancelling the auction on administrative grounds with a direction to the petitioner to approach the Railway Office for return of the amount paid by him. Aggrieved by the said order, the petitioner has filed the present writ petition.

.Defence

.5. In the counter affidavit filed by the Deputy Chief Materials Manager on behalf of the respondents, they have admitted the auction held on 12. 1999 and the acceptance of the bid submitted by the petitioner in respect of item No. 62 as the same was the highest offer. The entire payment made by the petitioner was also admitted. It was the contention of the respondents that the machine was not given delivery as it was not possible to uproot the machine easily. However, no demurrage charges were levied on the petitioner for not taking delivery since the machine was not uprooted. The third respondent as per his communication dated 23. 2000 expressed his inability to uproot the machine since the weight of the machine was about 15 MT. Finally orders were issued whereby the Railways themselves under took the job of uprooting the machinery.

.6. Subsequently, t