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HIGH COURT OF JUDICATURE AT MADRAS
SATISH K. AGNIHOTRI & M. VENUGOPAL, JJ.
The Registrar, Indian Institute of Technology
Versus
M/s. Hameed Enterprises, represented by Mohammed Thayib & Another
W.A.No. 1378 of 2014 & M.P.No. 1 of 2014
Decided on: 28-01-2015
Constitution of India, 1950 - Precondition for participation in e-auction - Appointed as selling agent - Demand draft - Factual matrix leading to filing of writ petition is that in response to e-auction notice SRO Indian Institute of Technology writ petitioner first respondent herein offered its bid for purchase of scraps - Second respondent was appointed as selling agent on behalf of appellant herein first respondent therein - Precondition for participation in e-auction was to deposit a sum of as pre-bid Earnest Money Deposit by way of demand draft on or before as bid was to be opened - Writ petitioner made an highest offer to tune and also deposited requisite EMD amount before specified date - Bid offered by several other bidders ranges - Writ petitioner being highest bidder was informed by email stating that his bid has been accepted provisionally subject to approval of appellant for bid amount - He was further requested to make security deposit of an amount by way of DD PO in favor of appellant within seven days from date of close of auction as per terms and conditions of e-auction – Held, On perusal of chart indicating Bid History offer ranges – Thus findings of learned Single Judge accepting contention of writ petitioner that it was typographical mistake appears to be correct as no prudent business man would offer amount of bid too high which may not be value of goods - Thus without going into question as to whether appellant was entitled to EMD amount as it appears to be case of revocation of offer and also in view of fact that learned counsel for appellant has not pressed point strenuously Court are of considered opinion that writ petitioner is not entitled to any interest on EMD - Action of appellant in accepting bid amount of writ petitioner was also not proper - When figure quoted was astronomical and certainly much more than value of scraps comparing with amount quoted by other bidders appellant ought to have examined fact as to whether it was a mistake or genuine - In such a situation appellant ought not to have acted in haste in accepting offer and conveying immediately in late night to writ petitioner requiring him to deposit security money - In this background it can safely be held that there was a typographical mistake in amount quoted by writ petitioner - Thus both parties were at fault - What is good for goose is good for gander - In that event appellant cannot be permitted to take advantage of technicality – Thus direction to refund EMD amount was rational and proper - It is also not in dispute that on account of failure of auction wherein writ petitioner was highest bidder for amount quoted by him though it may be a typographical mistake second highest bidder was not given opportunity and first appellant was forced to conduct second auction for sale of its scraps - In that process admittedly appellant had incurred expenses to tune - Appellant cannot be saddled with said expenses on account of fault committed by writ petitioner – Thus order of Writ Court to refund EMD after deducting expenses is upheld - Writ appeal is partly allowed
Satish K. Agnihotri, J.
1. The instant intra-court appeal arises from the order dated 18.09.2014 passed in W.P.No.29701 of 2012.
2. The factual matrix leading to filing of the writ petition is that in response to e-auction notice No.MSTC/SRO/Indian Institute of Technology Madras/3/Adyar/11-12/4660[41323], the writ petitioner/first respondent herein offered its bid for purchase of scraps. The second respondent was appointed as selling agent on behalf of the appellant herein/first respondent therein. The precondition for participation in the e-auction was to deposit a sum of Rs.5,00,000/- as pre-bid Earnest Money Deposit (for short “EMD”) by way of demand draft on or before 12.09.2011 as the bid was to be opened on 13.09.2011. The writ petitioner made an highest offer to the tune of Rs.1,24,22,002/- and also deposited the requisite EMD amount before the specified date. The bid offered by several other bidders ranges from Rs.1,24,000/- to Rs.22,55,848/-. The writ petitioner being the highest bidder was informed by email dated 13.09.2011 at 10.40 p.m., stating that his bid has been accepted provisionally subject to approval of the appellant for the bid amount of Rs.1,24,22,002/-. He was further requested to make security deposit of an amount of Rs.12,42,200/- by way of DD/PO in favour of the appellant within seven days from the date of close of the auction as per the terms and conditions of e-auction.
3. It appears, thereafter the writ petitioner, instead of writing to the selling agent, wrote to the Deputy Registrar of the appellant on 13.9.2011, informing that the first respondent / writ petitioner had wrongly quoted the figure as Rs.1,22,42,002/- instead of Rs.12,24,202/- and as such, a request was made to refund the EMD amount of Rs.5,00,000/-. An identical communication was sent to the selling agent, i.e., the second respondent, on 14.09.2011. Treating the aforestated letters as revocation of offer, the pre-bid EMD was encashed and sent to the appellant by the selling agent by communication dated 19.9.2011. It was confirmed subsequently by the electronic communication dated 22.09.2011.
4. Being aggrieved of forfeiture of the EMD, the writ petitioner made several representations for refund of the EMD amount. By communication dated 25.10.2012, the writ petitioner was informed that his offer to the tune of Rs.1,24,22,002/- was accepted and he was requested to deposit the security deposit within seven days from the date of close of the said auction and as such, he failed to comply with the same, exercising power under the terms and conditions of the auction, the pre-bid EMD amount was forfeited.
5. Thereagainst, the writ petitioner has come up with the instant writ petition, questioning the legality of the communication dated 25.10.2012 and further a direction to the appellant herein/first respondent and second respondent therein to return / refund the EMD amount of Rs.5 lakhs with interest at the rate of 12% per annum.
6. In the writ petition, the writ petitioner raised a contention that the offer of Rs.1,24,22,002/- was a typographical mistake, which was corrected immediately before the opening of the tender and as such, the appellant as well as the second respondent were informed well in advance to cancel the offer of the writ petitioner. To that effect, a letter was sent on 13.09.2011 and also on 14.09.2011, seeking refund of pre-bid EMD amount. Thus, the appellant and the second respondent herein were not entitled to forfeit the said amount. Secondly, the writ petitioner was communicated about forfeiture of the pre-bid EMD only on 25.10.2012. Thus, the writ petitioner is entitled to interest thereon.
7. The learned Writ Court, considering the issue of non mentioning of upset price in the e-auction notice, held that the respondents have not followed the mandatory procedure and as such, the same was not legal and proper. It was also held that the acceptance of the petitioner's bid was only provisional subject to confirmation
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