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Subramaniam Vs. the Special Officer, Nambiyoor Town Panchayat and ors. - Court Judgment

LegalCrystal Citation
SubjectCivil
CourtChennai High Court
Decided On
Reported in(1984)1MLJ247
AppellantSubramaniam
RespondentThe Special Officer, Nambiyoor Town Panchayat and ors.
Excerpt:
- .....applied for injunction restraining the respondents 1 and 2 from holding the second auction. the learned judge ordered interim injunction and there seems to be some controversy between the parties, whether the interim order of the learned judge reached respondents 1 and 2 before or after the auction on 10th march, 1983. the stand taken by respondents 1 and 2 that it reached after the auction was not accepted by the learned single judge. no argument has been advanced before us on behalf of the state that the learned judge was in any way wrong in arriving at the said conclusion. the learned judge also came to the conclusion that the deposit has not been made by the third respondent as required by condition 2d of the conditions of auction as published in the district gazette, and lesser.....
Judgment:

K.B.N. Singh, C.J.

1. This writ appeal is directed against the order of Sathiadev, J., dated 18th April, 1983 made in Writ Petition No. 2084 of 1953. The appellant herein filed the writ petition challenging the notification Na. No, 1333 of 1982, dated 3rd March, 1983 of the Nambiyoor Town Panchayat directing re-auction of the right to collect fee from the vendors at the weekly market at Nambiyoor. The appellant's case is that the first auction was held on 11th February, 1983, for the year 1983-84 in which the appellant was the highest bidder, his bid amount being Rs. 78,010. As per the conditions of auction published in the District Gazette in January, 1983, the appellant deposited a sum of Rs. 500 as earnest money, and after the bid he deposited 25 percent, of the bid amount, namely, Rs. 19,510. The appellant made representations to the first and the second respondents for the grant of the licence in his favour, as the period of lease would start on 1st April, 1983 and he had to make arrangements, for the collection of fee from the vendors in the market. In spite of the request, no licence was issued to him On enquiries, the appellant learnt that the third respondent herein had applied for re-auction offering to pay a higher amount to the Executive Officer of the Panchayat. As per condition 20 of the auction sale, a person who applies for re-auction shall do so within three days of the auction after depositing one-fourth of the highest bid offered at the first auction together with the difference between his offer and the highest offer. The third respondent deposited only Rs, 19,510 and prayed for time to deposit the balance. On 3rd March, 1983, he deposited a sum of Rs. 18,002 and on the above deposit, the application for re-auction was allowed and the second auction was ordered to be hold on 10th March, 1983. In the auction held on 10th March, 1983, the third respondent's bid was the highest, his bid was for Rs. 85,906.

2. There is no dispute as to the above said-facts. After the appellant received the notice of the second auction, he filed the writ petition for quashing the notification and he also applied for injunction restraining the respondents 1 and 2 from holding the second auction. The learned Judge ordered interim injunction and there seems to be some controversy between the parties, whether the interim order of the learned Judge reached respondents 1 and 2 before or after the auction on 10th March, 1983. The stand taken by respondents 1 and 2 that it reached after the auction was not accepted by the learned single Judge. No argument has been advanced before us on behalf of the State that the learned Judge was in any way wrong in arriving at the said conclusion. The learned Judge also came to the conclusion that the deposit has not been made by the third respondent as required by condition 2D of the conditions of auction as published in the District Gazette, and lesser amount has been deposited. The sum required to be deposited was one-fourth of the highest bid amount and also of the excess amount which he offered. The learned Judge on that ground set aside the second auction. This finding of the learned Judge has not been challenged before us.

3. Mrs. Nalini Chidambaram, learned Counsel for the appellant has urged that the second auction having been held to be invalid, the learned Judge should have directed that the bid of the appellant should be accepted and the licence should have been issued to him. The learned Judge however did not accept this contention holding that no such direction could be issued, as it was in the discretion of respondents 1 and 2 to accept the bid or reject it. It is against this part of the Judgment of the learned Single Judge that this writ appeal has been filed.

4. Learned Counsel for the appellant has submitted that the earlier bid was not cancelled, and the re-auction was ordered not on the ground of insufficiency of the bid amount, but on account of the third respondent offering a higher bid as contemplated in condition 2D of the notification. She also submitted that the lease period being upto 31st March, 1984, several months have elapsed and the money deposited by the appellant on 11th February, 1983, is lying without any advantage to the appellant so far, and giving any option to the Panchayat to reconsider the matter which they did not do in the first instance will only result in further loss of time. The learned Government Pleader on the other hand submitted that respondents 1 and 2 have the power not to accept the highest bid of the appellant and order re-auction under conditions 3, 5 and 6 of the conditions of auction as notified. H3 also submitted that the earlier auction having bean not confirmed on the ground of condition 29, it was open to respondents 1 and 2 to take steps under conditions 3, 5 and 6 for a re-auction. Learned Government Pleader however did not dispute the power of this Court to issue direction for confirming the original bid and to issue licences to the appellant herein in view of the decision of a Bench of this Court in The Government of Tamil Nadu, Deportment of Prohibition and Excise by its Secretary and another v. Majestic Bottling Company, represented by its Managing Partner, Royapattah, Madras W. A. No. 528 of 1983. and also the decision rendered in State of Tamil Nadu v C. Vadiappasri : AIR1982Mad386 .

5. To appreciate the contentions raised on behalf of the appellant and the learned Government Pleader, it will be relevant to refer to the English translations 3, 5, 6 and 20 relied on by the parties The conditions read as under:

Condition No. 3.-The Officer conducting the the auction can refuse to accept the price offered by any bidder.

Condition No. 5.-The licence will be issued to the highest bidder subject to the conditions specified in paragraph 3. In case of any dispute, the decision of the officer conducting the auction will be final. If for any reason the highest bid amount is rejected, the next highest bid amount will be accepted or reaction conducted if the said officer conducting the auction so desires. The auction sale is subject to the confirmation by the Panchayat Union Council The Executive Officer is empowered to reject any bid amount without assigning any reason. The bidders are not entitled to sue for damages on the above grounds.

Condition No. 6.-If the Executive Officer of the Panchayat Union considers that the bid amount is not adequate, he can either postpone the confirmation of the auction sale or refuse to confirm it. Further, the Executive Officer can order the re-auction on the date and at the time and place specified by the person conducting the auction, on the same conditions starting from the last bid amount offered at the previous auction. If any re-auction is thus ordered to be conducted, it will be given wide publicity and started in the name of the highest bidder whose bid amount was accepted in the first auction. If in the reauction a higher bid amount is offered and the same is accepted by the person conducting the re-auction, the highest bid amount offered in the first auction will be deemed to have been cancelled. But if no one offers a higher bid in the said re-auction, the matter will be reported to the Executive Officer by the person conducting the re-auction. The Executive Officer may again order for conducting further auction starting from the highest bid amount in the first auction.

Condition No. 20 : -Any person desiring re-auction for a higher amount should remit one-fourth of the bid amount together with the entire difference of the higher bid amount which he desires to offer, within three days of the auction date and apply for the reauction enclosing the receipt therefor. The higher bid amount so offered should be at least 25 percent higher than the bid amount.

6. It is true that under condition No. 3, the Officer conducting the auction has the power to reject the highest bid. But in the instant case, the appellant's bid was accepted, subject to confirmation and twenty-five per cent of the bid amount was permitted to be deposited. Condition No. 5 no doubt gives the discretion to the town panchayat to reject any bid without assigning any reason But that is not the position in the instant case. After the deposit of twenty-five per cent of the bid amount, the matter went before the Executive Officer and he did not choose to take action under condition No. 6 to reject the bid, Similarly, the Executive Officer did not consider the bid amount to be inadequate and direct re-auction on that ground, although the matter was pending before him for some time It is admitted position before as that this year's bid amount is Rs. 25,000 more than last year's bid amount. Apparently the instant case seems to be not a case of the bid amount being inadequate. However, re-auction has been ordered under condition No. 20 on account of the fact that the third respondent offered a higher bid amount. As already stated, the lease period is from 1st April, 1983 to 31st March, 1984 The first auction was held on 11th February, 1983. In case the Executive Officer of the Panchayat did not propose to take action under conditions 5 and 6, he cannot be given a second opportunity for considering the question whether the bid amount should be rejected on the ground of inadequacy of the bid amount. It must be remembered that the Executive Officer while functioning in the Panchayat has to see that the revenue of the panchayat did not suffer unnecessarily. He has to act promptly is either accepting the bid or rejecting it on whatever ground. While accepting the offer under condition No. 20, if he considered the highest bid should be rejected under condition 5 or 6, he should have done that also at one and the same time. He cannot be permitted to exercise the power piece-meal while considering the highest offer made by a third party. This will result not only in loss of revenue to the Panchayat, but will lead to unnecessary harassment to the highest bidder who has deposited twenty-five per cent of the bid amount and had made other arrangements. In the instant case, the highest bid amount was not rejected, and nearly four-and-a-half months have slapped since the commencement of the lease period. This might have resulted in revenue loss to the Panchayat. That is the additional reason why no second opportunity should be given to the Executive Officer to reconsider the matter. Since some months have passed, we do not think that any useful purpose will be served by merely directing the authorities to consider the question of confirmation of the appellant's bid. In the interests of justice, we feel that the offer made by the appellant should be accepted and licence issued to him.

With the above direction, the writ appeal is allowed. There will be no order as to costs.


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