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2010 Supreme(Mad) 1792
High Court of Judicature at Madras
THE HONOURABLE MR. JUSTICE N. PAUL VASANTHAKUMAR
S. Muthukrishnan
Versus
The Commissioner HR & CE Department Chennai & Others
Writ Petition No. 23479 OF 2009 And M.P.NOS. 1 & 2 OF 2009
Decided On : 19-04-2010
For the Petitioner:B.S. Ganandesigan Senior Counsel for M/s. B.S.G. Firm, Advocates.
For the Respondents:R1 & R2, T. Chandrasekar Special Government Pleader & R3, Chitra Sampath, Advocate.
The main legal point established in the judgment is that a bidder is entitled to withdraw the offer until the confirmation of the auction, and the deposit amount is refundable in case of unreasonable delay in confirming the auction.
Headnote:
Withdrawal - Auction of Temple Land - Hindu Religious and Charitable Endowments Act, 1959, Section 34 - Summary of Acts and Sections: The court discussed the provisions of Section 34 of the Hindu Religious and Charitable Endowments Act, 1959, which required the government's permission for the sale of temple land. The court also referred to the Indian Contract Act, 1872, Section 5, and various case laws related to withdrawal of bids and confirmation of auction. The court held that the petitioner was entitled to withdraw the offer as there was no concluded contract until the confirmation order was communicated, and ordered the refund of the deposit amount with interest.
Fact of the Case:
The petitioner participated in an auction for the sale of temple land, expecting to construct a commercial complex. Despite being declared the highest bidder, the confirmation of the auction was delayed for more than one and a half years. The petitioner requested to withdraw from the auction and sought a refund of the amounts deposited.
Finding of the Court:
The court found that the delay in confirming the auction was unreasonable, and the petitioner was entitled to withdraw the offer as there was no concluded contract until the confirmation order was communicated. The court ordered the refund of the deposit amount with interest and directed the initiation of fresh auction proceedings to safeguard the interest of the temple property.
Issues: The main issue was whether the petitioner was entitled to withdraw the offer and seek a refund of the amounts deposited due to the delay in confirming the auction.
Ratio Decidendi: The court held that as per Section 5 of the Indian Contract Act, a proposal may be revoked before the communication of its acceptance is complete, and an offer can be withdrawn before the communication of the acceptance of the offer. The court also referred to various case laws supporting the petitioner's right to withdraw the offer until the confirmation of the auction. The court concluded that the petitioner was entitled to withdraw the offer and ordered the refund of the deposit amount with interest.
Final Decision: The court partly allowed the writ petition and directed the respondents to refund the deposit amount to the petitioner after adjusting a sum spent towards conducting the auction and pay the balance amount within two weeks. The court also directed the initiation of fresh auction proceedings to safeguard the interest of the temple property.
1. The prayer in the writ petition is to quash the auction held on 1.2.2008 pursuant to the tender-cum-auction notice dated 31.12.2007 and the consequential letter of the third respondent dated 8.10.2009 with a further direction to the respondents to refund the EMD amount of Rs.10 lakhs paid by the petitioner on 1.2.2008 and the deposit amount of Rs.50,11,600/- made on 4.2.2008 with interest at 24% per annum within a stipulated time.
2. The case of the petitioner is that the land measuring 4.84 acres in S.Nos.2750/1 (3.58 acres), 2750/2 (0.71 acre) and 2751 (0.55 acre) in Ward No.3, Block No.75 is owned by Arulmigu Varadaraja Perumal Temple, Thirupathiripuliur, Cuddalore District. Based on the order passed by the Division Bench of this Court in Writ Appeal No.3861/2003, dated 16.11.2007, tender-cum-auction notice for the sale of the said lands was issued by the third respondent fixing the upset price at Rs.2 crores. It was indicated in the auction notice that the said land can be utilised for construction of factory or commercial complex or hotel and the sealed tenders are to be submitted before the Assistant Commissioner, Hindu Religious & Charitable Endowment, Sub-Jail Road, Cuddalore-1 on 29.1.2008 between 10 a.m. and 12.30 p.m., and the auction was ordered to be conducted on 1.2.2008 at 1 p.m. The cost of the tender form was fixed at Rs.5,000/-.
3. According to the tender conditions, a sum of Rs.10 lakhs by way of Demand Draft drawn in favour of the Executive Officer of the temple has to be enclosed by the participants and the successful tenderer has to pay 10% of the auction/bid amount within three days from the date of auction, and on receipt of the communication from the third respondent, the balance amount has to be paid within thirty days from the date on which the Commissioner, Hindu Religious & Charitable Endowment has to sanction and approve the successful bid as per clause-9 of the tender conditions. It is stated in condition No.10 that if the above condition is not complied with, the deposit amount already made will be forfeited and will further consequences. Since wide publicity was made in the daily newspapers for the the said auction, several persons participated and the petitioners bid amount having been the highest bid, i.e. Rs.5,01,16,000/- (Rupees Five Crores One Lakh and Sixteen Thousand only), the petitioner was declared as the highest bidder by the third respondent on 1.2.2008.
4. According to the petitioner, he participated in the auction, under the impression that he can construct a commercial complex in the said place and lease out the same to various persons and he also obtained commitments from third parties to raise huge amount to the tune of Rs.5,01,16,000/-. Apart from submitting the Demand Draft for Rs.10 Lakhs towards EMD as per condition contained in Clause-9, the petitioner being declared as successful bidder he paid Rs.50,11,600/-representing 10% of the bid amount on 4.2.2008 i.e. within the stipulated period of three days from the date of auction, which was conducted on 1.2.2008. The third respondent also issued the receipt for the said amounts. The petitioner having deposited the said amounts, as he being declared as highest bidder, he was expecting orders of confirmation after getting permission from the first respondent. However, no intimation regarding confirmation of auction in favour of the petitioner was received even after one year and six months. The petitioner visited the office of the third respondent several times, who in turn informed that the papers have been sent to the first respondent and confirmation order will be issued after receiving the permission from the first respondent and the petitioner has to pay the balance bid amount on receiving the order of confirmation. According to the petitioner he had made commitments to third parties for the construction of commercial complex and the matter being delayed unduly and the petitioner having parted with huge amo
