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1994 Supreme(All) 204

HIGH COURT OF ALLAHABAD
ANSHUMAN SINGH, R.B. MEHROTRA, JJ.
Munindra Nath Upadhya - Appellant
Versus
State of Uttar Pradesh - Respondent
Civil Misc. Writ Petition No. 22318 of 1992
Decided on : Feb 28, 1994

Advocates:
Advocate appeared:
Shitla Prasad Pandey

The interpretation of auction conditions and the consequences of non-compliance with those conditions.

Headnote:

AUCTION - TOLL TAX COLLECTION - CONDITIONS OF AUCTION - INTERPRETATION - RIGHT TO COLLECT TOLL TAX - DELAY IN REGISTRATION OF LEASE - REFUND OF EARNEST MONEY AND SECURITY DEPOSIT WITH INTEREST.

Fact of the Case:

The petitioner participated in an auction for the right to collect toll tax over a bridge for the year 1990-91. The petitioner's bid was accepted, and he deposited the required amount. However, the petitioner did not submit the lease for registration on the requisite stamp papers within seven days of the countersigning of the lease by the Commissioner, as required by the auction conditions. The petitioner challenged the assessment of stamp duty in court, and the matter was delayed for several months. The Commissioner subsequently canceled the petitioner's bid and ordered a fresh auction.

Finding of the Court:

The court held that the petitioner did not comply with the auction conditions by failing to submit the lease for registration within the stipulated time. Therefore, the petitioner did not have a subsisting right to collect toll tax on the basis of the acceptance of his bid. However, the court also held that the respondents were responsible for the delay in taking a decision on the matter and for withholding the petitioner's earnest money and security deposit. The court directed the respondents to refund the earnest money and security deposit with interest.

Issues: 1. Whether the petitioner had a subsisting right to collect toll tax on the basis of the acceptance of his bid in 1990? 2. Whether the respondents were justified in canceling the petitioner's bid and ordering a fresh auction? 3. Whether the petitioner was entitled to a refund of his earnest money and security deposit?

Ratio Decidendi: 1. The court interpreted the auction conditions and held that the period of the contract was to begin from the date the contract was granted to the petitioner, not from the date the petitioner took over the charge of the bridge for collecting toll. 2. The court held that the petitioner's failure to comply with the auction conditions by not submitting the lease for registration within the stipulated time resulted in the loss of his right to collect toll tax. 3. The court held that the respondents were responsible for the delay in taking a decision on the matter and for withholding the petitioner's earnest money and security deposit. Therefore, the petitioner was entitled to a refund of his earnest money and security deposit with interest.

Final Decision: The court dismissed the petitioner's writ petition seeking a direction to the respondents to permit him to collect toll tax. However, the court directed the respondents to refund the petitioner's earnest money and security deposit with interest.

JUDGMENT :

R.B. Mehrotra, J.

1. By a public notice published in the newspaper, it was advertised that right to collect toll tax over the bridge, situate at 56 Kms/239, Jalalpur, district Jaunpur over river Sai will be auctioned on 25th of April, 1V90. The petitioner participated in the aforesaid auction which was held on 25th of April. 1990, The petitioner was the highest bidder and his bid was to the tune of Rs. 41,090 lacs. The petitioner's bid was finally accepted by the Commissioner on 19th of July, i990. In accordance with the terms and conditions of the action notice, the petitioner deposited 1/4th of the total amount of the bid on 23rd of July, 1990. The petitioner's case is that he gave an application to the competent authority for assessment of the stamp duty for executing the agreement and stamp duty was assessed at Rs. 6,42,062.05.

2. Aggrived by the aforesaid assessment, the petitioner filed a writ petition in this Court and on 10th of January, 1991, this Court passed an Interim order in the said writ petition that the orders, dated 15th of November, 1990, 17th of November, 1990 and 31st of December, 1990 are to remain stayed during the pendency of the writ petition and the petitioner was permitted to pay stamp duty in accordance with the decision of the Full Bench of the Court in the Case of Board of Revenue v, Mulk Raj and others.

On 11th of January, 1991, the petitioner claims of have given an application to the Executive Engineer, National High way No. 1,-PWD Varanasi that the petitioner, is submitting the necessary stumps for registration of the agreement of lease in accordance with the interim order passed by the High Court. The respondents, however, according to the petitioner did not permit the petitioner to carry on his contract inspite of submission of necessary stamp duty. The petitioner continued to approach the authorities concerned seeking permission to start collection of toll tax. On 28th of April, 1992, after a lapse Of one year, the Executive Engineer, National High way No. 1, PWD, Varanasi informed that auction, of, right to collect toll tax, on National Highway No. 56 at Kms. 238/239, Jalalpur, district Jaunpur on river. Sai was held on 25th of April, 1990. The bid was accepted on 19(h of July, 1990. The contractor objected" to the payment of the stamp duty and) thereafter obtained an interim order from the High Court. The lease could not be registered and in between by a notification, dated 19th of February, 1992, the scheduled rates for collecting the toll tax has been increased, Respondent No. 3 recommended, in the aforesaid circumstances, that a fresh auction be held and necessary permission may be given for the same.

3. On behalf of the Commission, Varanasi, vide latter, dated 14th of May, 1992 addressed to the Executive Engineer, National High way No. 1, PWD Varanasi, the Senior Administrative Officer of the Commissioner, informed that since two years have lapsed from the date of auction for collecting toll was given, the Commissioner has decided to cancel the bid of the petitioner and has further decided that a fresh auction be held for collecting the toll over the aforesaid bridge.

4. Aggrieved by the aforesaid order, the petitioner has filed the present writ petition. In response to the notice issue by this Court, counter affidavits have been filed on behalf of respondent no. 2 and 3.

Before considering the submission made by the petitioner, it is necessary to notice the conditions of auction on the basis of which the petitioner is claiming his right to collect toll tax in pursuance of the bid made in his favour for collecting the toll lax over the bridge in question for the year 1990-91. Condition no. 'V of the auction notice provided that the auction is being made for the year 1990-91 and this period will begin from the date the contract is given for realisation of the toll tax. Condition No. 7' of the auction notice provided that the highest bidder on acceptance of his bid will be requi











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