State of U.P. and Others vs Arun Kumar Singh alias Anju Singh and Another

R.K. Mahajan, J.—This First Appeal has been filed against the judgment and decree passed by Additional District Judge, Ghazipur dated 15.7.93 in Original Suit No. 28 of 1976 decreeing Rs. 19,525 with interest pendente lite and future at the rate of 6% per annum against the Defendant-Respondent with cost.

In order to understand and decide the controversy involved in this case, the following facts are relevant.

Respondent-Plaintiff in pursuance of advertisement published in the newspaper ''Aaj'' took part in the auction held by Liquidator on 6.5.74 at the premises of Deokari Co-operative Sugar Mill. The Plaintiff-Respondent''s bid was the highest, i.e., for Rs. 78,100. In terms of the auction the Plaintiff-Respondent had deposited Rs. 19,515 (l/4th of the bid money) with the auctioneer at the spot. The remaining amount of the bid was to be paid after acceptance. The bid was not accepted for a long time and finally the acceptance of the bid was communicated to the Plaintiff-Respondent through letter dated 20.1.76 by the Appellant. The Plaintiff-Respondent kept on making correspondence with the Appellant for refund of amount deposited by him and he even effected notice u/s 117 of the U.P. Co-operative Societies Act before filing the suit.

The grievance of the Plaintiff-Respondent is that the goods became rotten or deficient because of the delay in the acceptance. The Defendant had taken unreasonable time to confirm the sale. The Plaintiff further asserts in the plaint that he was given to understand that the bid would be accepted within 15 days. Since the bid was not accepted for a considerable long time and it was finally accepted on 20.1.76, after 20 months, the Plaintiff filed a suit for recovery of l/4th amount deposited by him at the time of auction.

The case of the Appellant-Defendant is that the auction was held on 6.5.74 and was finally accepted on 20.1.76, thus, there was a concluded contract. There was no condition regarding the period of acceptance of the offer. The bid was accepted on 20.1.76 as such the Plaintiff cannot resile from it. It is also staled by the Appellant-Defendant that the trial court wrongly made interpretation of Section 6(2) of the Contract Act regarding the acceptance of the proposal.

The trial court gave a finding in favour of the Plaintiff that the Defendant took 20 months time to accept the auction and it was unreasonable time to do so and the Plaintiff could revoke the proposal before the acceptance. The trial court was also of the view that a valid notice has been served u/s 117 of the U.P. Co-operative Societies Act. The trial court accordingly decreed the suit. Feeling aggrieved, the state has filed the present First Appeal.

Learned standing counsel has submitted that since the bid was accepted and l/4th money was deposited by Plaintiff in pursuance thereof, as such there was no occasion for the Appellant-Defendant to go back from the bid. He further submitted that wrong interpretation has been made to Section 6(2) of the Contract Act by the trial court.

After hearing both the learned counsel for the parties, I am of the view that the appeal of the State deserves to be dismissed on the following reasons. The auction purchaser was not borne out to wait indefinitely. The Appellant took more than 20 months to finalise the proceedings of acceptance of the auction. It was highly deplorable and unreasonable delay. It was bureaucratic inaction. Reasonableness means some rational time so that the auction purchaser can utilise the goods. The goods had also become rotten, deficient and decadent as observed in the lower court judgment. The court below has also observed that even notice was given on 20.8.75 by the Plaintiff on Appellant but of no avail. It is very strange and unusual that 20 months had taken in accepting the approval of auction. The submission of the learned standing counsel that Section 6 of the Contract Act has been interpreted wrongly is not sustainable.

Section 6 of the Contract Act lays down as follows:

(1) By the communication of notice of revocation by the proposer to the other party;

(2) By the lapse of the time prescribed In such proposal for its acceptance, or, if no time is so prescribed, by the lapse of a reasonable time, without communication of the acceptance;

(3) By the failure of the acceptor to fulfil a condition precedent to acceptance; or

(4) By the death or insanity of the proposer, if the fact of his death or insanity comes to the knowledge of the acceptor before acceptance.

By no stretch of imagination it can be held that more than 20 months were mentioned for the acceptance of the proposal. The Appellant should have revoked the offer within a reasonable time and 20 months cannot be described as a reasonable time at all. I, therefore, find no infirmity in the lower court''s judgment holding that Plaintiff-Respondent was entitled for refund of l/4th money deposited at the time of auction. The judgment of the lower court is well reasoned and based on appreciation of evidence. I, therefore, uphold the judgment of the learned 1st Addl. District Judge, Ghazipur, dated 15.7.78. The appeal lacks force and is accordingly dismissed with costs.