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P. Ansari Doraiswamy Vs. the Union Territory of Pondicherry Administration Locale, Represented by Its Asst. Secy. and ors. - Court Judgment

LegalCrystal Citation
SubjectCivil
CourtChennai High Court
Decided On
Case NumberWrit Petn. No. 1491 of 1963 (P)
Judge
Reported inAIR1964Mad437
ActsConstitution of India - Article 226
AppellantP. Ansari Doraiswamy
RespondentThe Union Territory of Pondicherry Administration Locale, Represented by Its Asst. Secy. and ors.
Appellant AdvocateN. Arunachalam, Adv.
Respondent AdvocateGovt. Pleader and ;T. Chengalvarayan, Adv.
Cases ReferredK.N. Joglekar v. Commr. of Police
Excerpt:
.....in manner in which petitioner was excluded from further participation in auction - one of terms of auction definitely infringed because mayor demanded security not after settling highest bid but while bids were still in progress - highest bid to be settled before surety can be demanded by party holding auction - lease right in favour of 3rd respondent cancelled - fresh auction to be held. - - he also furnished, so that the authorities might be satisfied about his solvency, security in the form of third party surety for rs. 1,16,231 the mayor (second respondent) unauthorisedly directed him to furnish security for the uncovered amount forthwith, and, on his failure to do so in immediate compliance excluded him from further participation in the auction. in addition, the..........may be briefly set forth as follows:2. in accordance with a sale notification dated; 9-10-1963, a public auction was held for lease of the right to collect parking dues of vehicles in the' city of pondicherry, for the period 1-1-1964 to 31-12-1964. we have before us both the sale notification, and the separate articles and conditions of lease, termed 'cashier des charges'. we shall refer to one vital article of these terms, and some reference will also be necessary to the original french text of this article, and the proper english translation. very briefly stated, the complaint of the petitioner is this. he made a deposit of rs. 2000 under the terms of the sale notification, which has to be a cash deposit. he also furnished, so that the authorities might be satisfied about his.....
Judgment:

Anantanarayanan, J.

1. This writ proceeding is instituted by a certain Ansari Doraiswami (petitioner), praying for the issue of a writ of mandamus directing the Lt. Governor of Pondicherry to approve and finalise his tender, as that of the highest bidder, in a certain auction sale. The circumstances are indisputably established by the affidavit of the Mayor who presided at, and conducted, this auction, namely, the 2nd respondent M. Edourd Goubert we are accepting the averments in this affidavit as the truth of what happened. The circumstances may be briefly set forth as follows:

2. In accordance with a sale notification dated; 9-10-1963, a public auction was held for lease of the right to collect parking dues of vehicles in the' city of Pondicherry, for the period 1-1-1964 to 31-12-1964. We have before us both the sale notification, and the separate articles and conditions of lease, termed 'Cashier des Charges'. We shall refer to one vital article of these terms, and some reference will also be necessary to the original French text of this article, and the proper English translation. Very briefly stated, the complaint of the petitioner is this. He made a deposit of Rs. 2000 under the terms of the sale notification, which has to be a cash deposit. He also furnished, so that the authorities might be satisfied about his solvency, security in the form of third party surety for Rs. 95000 and of his own property to the extent of Rs. 20000 namely Rs. 1,15,000 in the aggregate. His complaint is that, at a particular stage of the auction which was proceeding, when he had bid for Rs. 1,16,231 the Mayor (second respondent) unauthorisedly directed him to furnish security for the uncovered amount forthwith, and, on his failure to do so in immediate compliance excluded him from further participation in the auction. The result was that the auction wag decided in favour of the third respondent, a certain Masthan Sahib. The broad attack against the proceedings of the Mayor is that the exclusion of the petitioner at that stage was improper, both on the principles of natural justice and as infringing one of the articles which alone gave jurisdiction to the Mayor to test the solvency of any of the bidders; that, in any event, the petitioner should have been furnished reasonable time for finding the additional security, and finally that there has resulted thereby a detriment to public revenue. In addition, the petitioner states (in paragraph 4) that himself and the Mayor of Pondicherry were not on good terms, and that there were political reasons animating the Mayor, for this act of discrimination.

3. As we have stated already, there are several counter-affidavits on record, but we are accepting the facts as set forth in the counter-affidavit of the Mayor (second respondent), as we are satisfied that this really represents on the truth of what happened. We are not at all convinced that there is any basis for the allegations of political animosity and discrimination in consequence), which appear in the affidavit of the petitioner, and which have been emphatically repudiated by the Mayor. But, even as the facts appear in the affidavit of the Mayor, they would seem to be as follows. The auction was held not merely by the Mayor, but assisted by two other members, one of whom is the Receveur de Municipal, ex officio. The petitioner did bid for Rs. -1,16,225. At that stage, the Mayor seems to have asked the Receveur de Municipal, in order to satisfy himself, whether, in fact, the bidders had furnished sufficient security to cover '[the bids. It was then that the Mayor discovered 'that the security furnished by the petitioner amounted to only Rs. 1,15,000, which was not adequate to cover the bid of Rs. 1,16,225 actually made by the petitioner. The petitioner desires to include the cash deposit of Rs. 2000 and to claim that, in effect, his security was Rs. 1,17,000. But we are unable to hold that the Mayor was bound to include the amount of the cash deposit, in assessing the security. The Mayor then demanded additional security from the petitioner, and as the petitioner was unable to comply forthwith, excluded him from the auction. The Mayor claims, and we have no doubt, that this is so, that he acted in the discharge of his duties, and In good faith. The result was that the third respondent was declared the highest bidder.

4. Now, turning both to the sale notification and the terms of the auction (Cashier des Charges), it is at once obvious that the petitioner had another remedy, which he could have followed even after the auction had been settled. Under Article 3 of the terms, within five days of this auction, if any person makes a deposit or bid of 10 per cent above the auction price, then the auction need not be confirmed in favour of the previous highest bidder, and the authorities have a discretion to hold a fresh auction. No doubt, this article (Article 3) contemplates that this offer of ten per cent above the previous highest bid should be made by a third party, presumably not a bidder at the actual auction. But this remedy was conceivably open to the petitioner, and he did not follow it. Even so, the main question is whether the Mayor was really clothed with a discretion to intervene at that stage, to demand additional security from the petitioner, during the progress of an auction, and to exclude the petitioner from further participation, because he (the petitioner) failed to furnish the additional security forthwith.

5. This depends upon the interpretation of Article 4, for, admittedly the Mayor holding the auction has no other power to demand the security at an auction. The French text of Article 4 is in the following terms:

'Article 4 - La Personne en favour de laquelle I' adjudication aura ete tranchee devra immediatement presenter une caution solvable at notoirement connue.'

The free English translation, that has been made for us in the High Court, is to this effect:

'The person in whose favour the auction was decided, should immediately produce a solvent and well-known surety.'

The French text uses the word 'tranchee' and the following is an extract from the Dictionary of Synonyms in the French language by Larouses at page 180:

'Trancher: C'est decider, resoudre hardiment d' une facon categorique et d'un seul coup'.

The translation of this is as follows:

'Trancher: To decide, To resolve boldly in a categorical manner and at one go, or stroke'.

This will make it clear that the highest bid has to be settled, before the surety can be demanded by the party holding the auction. That is not what happened in the present case, according to the very averments on record. The petitioner had no doubt made a bid, but that was not settled as the highest bid, nor was the auction then closed. The auction was in progress, and further bids might well have been made, when the surety was demanded by the Mayor for the uncovered amount. This the Mayor had really no jurisdiction to do, under the terms governing the auction. Hence, it can be said that the principles of natural justice were contravened in the manner in which the petitioner was excluded from further participation, in the auction, and that one of the terms of the auction was definitely infringed because the Mayor demanded the security, not after settling the highest bid, but while bids were still in progress.

6. Even so, it may not at all be clear that we would be justified in interference by virtue of our powers under Article 226 of the Constitution, for it is well-known that in such matters the party does not claim relief from the Court ex debito justitiae; it is not every irregularity which will be set right by this Court; and the power is discretionary one vested in Court, not a right to be invariably invoked by a party at his own instance. But we are further satisfied that interference is necessary, upon one important canon of propriety, as laid down in the cases. Where we are satisfied, not merely that a party to an auction has been improperly excluded, but that conceivably there has been a detriment to public revenue by this act, it is abundantly clear that our interference is imperative, and called for. In Kannapa Gouder v. District Forest Officer, : (1958)2MLJ268 the Bench of Rajamannar C. J. and Ramachandra Iyer, J. (as he then was) laid down that the very essence of a public auction was that it should be open to the public, and that if a person is improperly excluded from a public auction, it is no doubt a hostile discrimination. In K.N. Guruswamy v. State of Mysore, : [1955]1SCR305 , their Lordships of the Supreme Court were dealing with a similar contingency of a public auction, and the following observation in the judgment is significant:

'Apart from all else, that in itself would in this case have resulted in a loss to the State, because, as we have said, the mere fact that the appellant has pursued this writ with such vigour shows that he would have bid higher'.

In the instant case, we are fully satisfied that, if the petitioner had not been improperly excluded from the auction at that stage, the bids would have gone far higher, and that there has been a detriment to public revenues by the exclusion of the petitioner at a stage which was not a final stage of the auction, but a transitional stage. We do not think it necessary to deal with the other ground that the petitioner should have been afforded a reasonable opportunity or time to produce the additional surety. The interpretation of the word 'forthwith' came up for consideration by the Supreme Court in K.N. Joglekar v. Commr. of Police, (S) : 1957CriLJ10 and their Lordships quoted the dicta of Lord Abinger C. B. to the effect that the word should really mean 'within such reasonable time as will not frustrate the object for which time had to be given.' Applying this test, it is true that the petitioner might have asked for some time, but he cannot hold up the auction indefinitely while searching for additional surety, as this will, in effect, frustrate the object of the public auction altogether. We are not at all convinced that the petitioner would have been able to furnish surety within such short time as to permit a continuance of the auction, without defeating the object of the auction which was to keep the bidding warm, if we may so term it, so that public revenues might benefit by the keenness of the competition. This consideration apart, for reasons we have set forth above, we are satisfied on both grounds, firstly, that the petitioner was improperly excluded from the auction, because the relevant article did not clothe the Mayor with the jurisdiction to exclude him at that stage; and, secondly, because, had he not been excluded, a much higher bid might actually have been realised, that our interference in writ jurisdiction is called for. Accordingly, we direct the issue of a writ of mandamus for the cancellation of the lease right in favour of the third respondent, and the holding of a fresh auction, upon the following terms.

In order to make competition possible and to maximise public benefit, the auction will now be held for a fresh period of one year from the date of auction excluding the period that has already elapsed when the rights of the highest bidder have been in virtual suspension. Again, the initial bid will be the bid of the third respondent, as offered by his learned counsel, for Rs. 1,25,000. If there are no higher bids, the third respondent will have to be declared the highest bidder at the auction and auction determined in his favour. If there is competition, the auction will follow the usual course. If, for any reason connected with the administrative feasibility, the auction cannot be held for the period of one full year from the date of auction, the Administration will be given a discretion to proportionately reduce the liability of the highest bidder, with reference to the period of actual currency of the rights, after the auction has be settled. Accordingly, a writ of mandamus will issue. The parties will bear their own costs.


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