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1991 Supreme(All) 717

High Court of Allahabad
S.D.Agarwala & S.C.Verma, JJ.
Om Prakash Rajpoot
Vs.
State of U. P.
Civil Misc. Writ Petition No. 20159 of 1990
Decided On : Sep 23, 1991

Advocates:
Advocate Appeared:
Ashok Khare

The validity of a solvency certificate for an auction must strictly adhere to the requirements specified in the auction notice, including the type of property covered and the issuing authority.

Headnote:

AUCTION - RIGHT TO COLLECT TOLLS - SOLVENCY CERTIFICATE - REQUIREMENT - INTERPRETATION OF AUCTION NOTICE - VALIDITY OF SOLVENCY CERTIFICATE - CONDITIONS - DISTRICT MAGISTRATE'S SIGNATURE - CASH AND IMMOVABLE PROPERTY - GOVERNMENT ORDER - EXECUTIVE ENGINEER'S DECISION - JUDICIAL REVIEW.

Fact of the Case:

Petitioner challenged the auction proceedings for the right to collect tolls of a bridge, alleging that he was illegally excluded from participating in the auction due to an invalid solvency certificate.

Finding of the Court:

The court found that the petitioner's solvency certificate was not in accordance with the auction notice, which required a certificate for cash and immovable property issued by the District Magistrate. The court also noted that the petitioner's certificate included movable property and was not signed by the District Magistrate.

Issues: 1. Whether the petitioner's solvency certificate was valid according to the auction notice? 2. Whether the Executive Engineer acted illegally in excluding the petitioner from the auction?

Ratio Decidendi: The court interpreted the auction notice's clause 2, which required a solvency certificate for cash and immovable property issued by the District Magistrate. The court held that the petitioner's certificate, which included movable property and was not signed by the District Magistrate, did not comply with the auction notice.

Final Decision: The court dismissed the petition, upholding the Executive Engineer's decision to exclude the petitioner from the auction.

JUDGMENT

S. D. Agarwala, J.

1. This is a petition under Article 226 of the Constitution of India. Since the counter affidavit and rejoinder affidavits have been exchanged parties are agreed that the petition may be disposed of finally,

2. We have heard learned counsel for the parties.

On 19-6-1990 an auction notice was issued by the Executive Engineer, Public Works Departments, Hamirpur for settlement of right to collect tolls of bridge Sanjay Setu' situate at 65 Kilometer on Kanpur- Hamirpur Kabrai Marg. The settlement was to be made for a period of one year and the auction was scheduled to be held on 31st July, 1990. Under the terms of the auction notice every bidder at the said auction had to submit certain documents and then only he was to be permitted to take part in the auction. One of the important documents was a solvency certificate for a sum of Rs. 25,00,000/-. It was provided in the auction notice that in case the solvency certificate was not submitted in accordance with the terms or the auction notice then such person will not be permitted to bid at the auction.

3. The petitioner submitted a solvency certificate on 24-7-1990. On 31-7-1990 the Executive Engineer, Public Works Department, Hamirpur notified the list of persons permitted to participate in the auction as also a list of persons excluded from participating in the auction. Petitioner made an enquiry as to why he was not permitted to participate in the auction; The petitioner was informed that since the solvency certificate submitted by the petitioner was on the basis of movable and immovable property, the same was not in accordance with the condition No. 2 of the auction notice and consequently the solvency certificate was not a valid certificate and as such the petitioner was not permitted to participate in the auction.

4. On 31-7-1990 auction was held. Prithviraj Singh gave highest bid for a sum of Rs. 21,15,000/-. The second bidder was Munindra Nath Upadhyaya who gave bid for Rs. 21,13,000/-. These were only two bidders at the auction. Since the petitioner was not permitted to participate in the auction, petitioner filed the present petition challenging the auction proceeding held on 31-7-1990.

Learned counsel for the petitioner has contended that the Executive Engineer, Public Works Department, Hamirpur acted illegally in exercise of his jurisdiction in refusing to permit the petitioner to participate in the auction. His contention is that the solvency certificate submitted by him was a valid certificate in accordance with the auction notice and consequently the proceedings of the auction held on 31-7-1990 are liable to be quashed.

5. Copy of the auction notice has been attached as Annexure 3' to this petition. Clause 2' which is relevant for the purposes of decision in this petition is quoted below ;

"2-Prataik biddar ko uprokta karya hetu apni hasiyat pramaan patra dena hogi jisme Nagad Evam achal Sampatti ka viran diya jayega jo ki Sanjay Setu hetu 25,00000/- Pacheese Lakh se kam ka na hoga. Prastut kiye gaye haisiyat pramaan patra se adhik boli mannya nahi hogi. Yadi haisiyat pramaan patra se adhik boli thekedar bolta hai to use utni' haisiyat ka pramaan patra boli bolne ke 15 din ke andar prastut karna hoga anyatha uski dharoher dhanrashi jabta karne ka adhikar Sarkar ko hoga. Varsh ki isthiti me haisiyat pramaan patra firm ke naam prastut karna hoga. Firm ke alag alag Sajhidaron ka haisiyat pramaan patra maanya nahi hoga. Hasiyat pramaan patra se saath aaykar adhikari ka aadeya pramaan patra no dues certificate prastut karna anivarya hai. Yah haisiyat pramaan patra apne zile ke zilaadhikari se mool rup me prastut karna hoga jo ki karyalaya me zama rahengey. Boli sveekrit na hone ki dasha me vaidhata samapta hone par hi vapis kiye ja saktey hain."

The above clause (2) of the notice clearly provides that every bidder shall have to submit a solvency certificate for a sum of rupees twenty five lacs inrespect of his cash and immovable property. This certi




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