Ganga Dhar vs The Administrator, Haryana Urban Development Authority and Another

G.C. Garg, J.—Petitioner in this writ petition seeks the quashing of the communication dated 24.2.1988, Annexure P-5 with a further prayer that the amount paid by him be ordered to be refunded to him.

Learned counsel for the parties are agreed that the order passed in this writ petition shall squarely cover the dispute raised in C.W.P. Nos. 3669, 3670, 3671 of 1988, 974 and 975 of 1989 as all these writ petitions raise identical questions of fact and law. In this view of the matter, this order shall dispose of these five writ petitions as well.

The Haryana Urban Development Authority (herein after referred to as The Authority) advertised the sale by auction of the booths and other properties to be held on 19.1.1988 at 11.30 AM in the park of the Model Town (Opp. Cinema), Fathehabad. Against item 2 of the advertisement 32 plots were indicated for sale. These plots under the heading Sector number wise indicated to be situated in "residential-cum-commercial area." The area of the 12 plots in this category was indicated by measurements to be 10 Marias each and the area of 20 plots was indicated by measurements to be 8 Marias each. The allegation of the petitioner is that he was misled by the Estate Officer and he gave the highest bid on the ground that the plots being auctioned in this category were residential-cum-commercial. It is the further case of the petitioner that 10% of the bid money at the fall of the hammer was payable at the spot and the balance 15% was payable within 30 days from the acceptance of the bid and that the Estate Officer who conducted the auction gave out that these sites were meant for shop-cum-Flats, being situated in residential-cum-commercial area and are thus of great value. Petitioner acting on this representation gave bid in the auction under the clear impression that the plot was a residentialcum-commercial one. His bid in the sum of Rs. 2,51,500/- for a plot of 8 Marias (30'' x 60'') turned out to be the highest and he accordingly deposited 10% of the earnest money i.e. Rs. 25,150/-, vide receipt dated 19.1.1988, copy Annexure P-2. Petitioner thereafter made enquiries regarding the letter of allotment and the payment of instalments. He was surprised to learn that he had been allotted only a residential plot and not a shop-cum-flat. He consequently, sent a telegram dated 5.2.1988, which reads thus:-

"I withdraw my bid for plot No. 52 Residential-cum-commercial area put to auction on 19.1.1988 at Fatehbad for Residential-cum-commercial area since receipt late on issued by the office shows that plot as residential only. Kindly do not accept my offer and also refund the amount."

Petitioner got no reply to his telegram and, therefore, he served a registered A.D. notice on the respondent through his counsel withdrawing his offer and requesting the authorities not to issue him the allotment letter, with a further request that the amount of earnest money be refunded to him. Copy of notice dated 5.2.1988 is attached as Annexure P-4 to the writ petition. No action was taken by the authorities either on the telegram or on the notice and they proceeded to issue the letter of allotment dated 24.2.1988 making it clear for the first time that the allotment made was of a residential plot and requiring the petitioner to remit a sum of Rs. 37,725/- in order to make the price upto 25% within 30 days from the date of issue of the allotment letter. It was further provided that in the event of failure to deposit the amount within the specified period, the allotment shall be cancelled and the deposit of 10% bid money deposited at the time of bid shall stand forfeited to the Authority, against which he shall have no claim for damages. Copy of the allotment letter is Annexure P-5 to the writ petition. Petitioner seeks quashing of this allotment letter with a prayer that a direction be issued to the Haryana Urban Development Authority to refund the 10% amount of earnest money with interest.

The allegations made in the writ petition have been denied by filing a written statement. It is denied that the petitioner was misled. It is averred that repeated announcements were made at the time of auction on the mike that 8/10 Marias plots were not commercial but were residential and only the name of the scheme was" residential-cum-commercial" because in this particular area plots were being auctioned for both commercial as well as residential sites. Petitioner gave the bid after he understood the instructions announced at the time of auction and which bid was later-on accepted by the competent authority and as a result thereof, allotment letter was issued. It is also stated that only four allottees out of the 27 allottees have filed the writ petitions in this court and 13 out of the remaining 23 have already deposited the amount of 15% after the receipt of the allotment letter without any objection and thus accepted the allotment of the site. It is the further case of the respondents that this clearly goes to show that there was no misrepresentation on the part of the Estate Officer and it is rather the petitioner who is trying to mislead the court by making false averments for getting the refund of 10% as he did not deposit 15% of the amount within 30 days of the allotment letter and consequently it stood forfeited. Merely because the residential-cum-commercial area was mentioned in the category, it did not mean that the plots being auctioned were residential-cum-commercial. As regards the withdrawal of bid offer it is stated that the respondents were not bound to give any reply regarding sending of the telegram or the notice, since the bid made by the petitioner had been accepted by the competent authority and the allotment letter was issued. In the end it is prayed that the writ petition be dismissed with costs.

In order to appreciate the controversy raised in the writ petition it is necessary to notice the advertisement appearing in the Tribunal dated 14.1.1988, the relevant portion of which reads thus:-

------------------------------------------------------------------ S. Sector No. Description Size No of Site No. No. of the site site ------------------------------------------------------------------- 1. Shopping Booths 9''-9'' x 25'' 26 14 to 26 Centre-II 1 28 to 36 61 to 64 Booth 9''-9'' x 25'' 27 (Corner) 2. Residential- 10 Marla 30'' x 75'' 832 to 35 cum-commer- cial Area. 46 to 49 10 " 30'' x 75'' 4 31,36,45,50 (Corner) 30'' x 60'' 1462 to 65, 68 8 Marlas to 71, 52 to 54 57 to 59. 8 " (Corner) 30'' x 60'' 666, 67, 51, 55 56, 60 3. Residential Area (A) 8 Marlas 30'' x 60'' 1249 4. Residential 10 " 30'' x 75'' 173 Area-II (Corner) ------------------------------------------------------------------

VENUE OF AUCTION

The Booth sites and residential plots shall be put to public auction on 19.1.1988 at 11.30 AM in the part of Model Town (Opp. Cinema) Fatehabad.-

TERMS AND CONDITIONS

10 per cent of bid money shall be payable at the fall of the hammer in cash or by Bank draft in favour of Estate Officer, HUDA, Hisar.

Another 15 per cent shall be payable within 30 days from the acceptance of bid.

3 to 6. XXXX XXXX XXXX XXXX XXXX Administrator Haryana Urban Development Authority, Faridabad."

A plot of 8 Marias as indicated against item No. 2 of the advertisement is one of the plots purchased by the petitioner in this case. Section 53 of the Haryana Urban Development Authority Act, 1977 provides that the State Government may, by notification, make rules for carrying out the purpose of this Act and Section 54 provides that the Authority i.e. HUDA may, with the previous approval of the State Government, make regulations consistent with this Act, and without prejudice to the generally of this power such regulations may provide for the matters details in the Section. Clause (e) of Section 54 provides the terms and interest in any right, title & interest in any land or building may be permitted. It is under this power the Authority has notified the Haryana Urban Development (Disposal of Land and Building) Regulations 1978, (for Short the Regulations). Regulation 3 provides for the mode of disposal of the land belonging to the Authority, in developed or under-developed form and by way of sale or lease either by allotment or by auction, which may be by open bid or by inviting tenders. Regulation 6 provides for the sale or lease of land or building by auction. Sub Regulation (2) of Regulation 6 provides that 10 per cent of the highest bid shall be payable on the spot by the highest bidder in cash or by means of a demand draft in the manner specified in sub-Regulation (2) of Regulation 5 and that the successful bidder shall be issued allotment letter in form ''CC or ''C-II by registered post and another 15 per cent of the bid accepted shall be payable by the successful bidder, in the manner indicated, within thirty days of the date of the allotment letter conveying acceptance of the bid by the Chief Administrator, failing which the 10 per cent amount already deposited shall stand forfeited to the Authority and the successful bidder shall have no claim to the land or building auctioned.

In the face of the above provisions learned counsel for the petitioner submitted that the sale is not complete at the fall of the hammer and even after the deposit of 10 per cent of the bid money. This auction is subject to the acceptance of the bid by the Chief Administrator and, therefore, the bid is provisional till it is accepted by the Chief Administrator. It is there after the letter of allotment is issued requiring the purchaser to deposit the balance 15 per cent within a period of 30 days. Since the bid is not final till it is accepted, it is open to the bidder to withdraw his bid at any time till the same is accepted by the Chief Administrator and the petitioner in this case withdrew his bid after coming to know that the site sold was not residential-cum-commercial but was only a residential site by telegram 5.2.1988, followed by a notice of the same date. Learned counsel further submitted that once the bid had been withdrawn before its acceptance, there are no occasion for the Authority to issue the letter of allotment and to forfeit the amount of 10 per cent paid by him at the time of fall of the hammer. It is in this situation learned counsel submitted that the petitioner is entitled to the refund of the amount paid by him at the fall of the hammer.

Learned counsel for the respondents could not dispute, rater conceded that the bid accepted by the Estate Officer at the fall of the hammer is only provisional and is subject to confirmation/acceptance by the Chief Administrator. Learned counsel submitted that the acceptance of the bid by the Chief Administrator is only a formality and therefore, the petitioner is bound by the offer made and he could not withdraw the same and the 10 per cent of the bid amount has rightly been forfeited in terms of Regulation 6(2) as the petitioner failed to deposit the balance 15 per cent within 30 days of the letter of allotment which was issued on 24.2.1988. He consequently submitted that the writ petition deserves to be dismissed.

On a consideration of the matter, I am of the opinion that this writ petition deserves to succeed. Auction was held on 19.1.1988 and 10 per cent of the bid amount was deposited on that very day against receipt, Annexure P-2. Before the acceptance of the bid petitioner gave a telegram dated 5.2.1988 i.e. within a period of about 15 days withdrawing the offer. Not only this he also served a notice of the same date detailing the reasons for withdrawing his bid. From the reply it seems that the notice withdrawing the bid was not considered by the Authority while considering the acceptance of the bid gave by the petitioner. The contention of the learned counsel that the acceptance of bid is only a formality and the withdrawal thereof before the acceptance is of no consequence, cannot be accepted. Once the bid is subject to acceptance by the Chief Administrator, it is, in my view, open to the bidder to withdraw his - bid before the same is accepted. In the present case the Authority accepting the bid has not at all taken note of the notice withdrawing the bid while accepting the bid. At least this is so clear and apparent from the stand taken in the written statement. It is also shown either in the reply or during the course of arguments that the bid had been withdrawn by the petitioner by serving a notice, it is rather the case of the respondents that they were not bound to give any reply to the notice of the telegram. The acceptance of bid in my opinion is not a mere formality but the Chief Administrator while accepting the bid is required to apply his mind and he may have justifiable reasons while accepting or refusing to accept the bid. Since it is open to the Chief Administrator to accept or to reject the bid, it cannot be said that the bidder is not entitled to withdraw his bid once he has deposited 10 per cent of the amount at the fall of the hammer and is bound by it and it is only the competent Authority who can exercise its option of rejecting or accepting the bid. Offer once made can always be withdrawn before it is accepted. Once it is open to the Chief Administrator to reject bid without assigning any reason, it would equally be open to the bidder to withdraw the offer before it is accepted. Nothing was brought to my notice that even in such a situation the entire bid amount or a part thereof could be forfeited.

For what has been stated above I hold that the offer having been withdrawn before the acceptance thereof, there remained nothing before the Chief Administrator to accept the bid and to forfeit the amount in terms of Regulation 6(2) of the Regulations. In that view of the matter this petition is allowed, order Annexure P-5 is set aside and the respondent-authorities are directed to refund to the petitioner a sum of Rs. 25,150/- within a period of 4 months, failing which petitioner shall be entitled to interest at the rate of 10 % from the date of deposit till payment. There shall, however, be no order as to costs.