Content Provider | Supreme Court of India |
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e-ISSN | 30484839 |
Language | English |
Access Restriction | NDLI |
Subject Keyword | 1872 - s.74 - Public auction - Forfeiture of Security deposit - Legality Contract Act |
Content Type | Text |
Resource Type | Law Judgement |
Jurisdiction | India |
Case Type | Appeal |
Court | Supreme Court of India |
Disposal Nature | Appeal Allowed |
Headnote | Contract Act, 1872 - s.74 - Public auction - Forfeiture ofSecurity deposit - Legality of - Respondent No.3 issued anadvertisement inviting participation in public auction off our nazul plots of the State by following terms and conditions set out therein -Appellant, one of the participants in the auction proceedingsdeposited a sum of Rs. 3 /akhs with respondent No.3 as security interms of public notice - Appellant's bid was declared the highestand accordingly accepted by the Respondent No.3 subject to"special terms and conditions" - Appellant declined to accept the ''special terms and conditions" and requested for regime of thesecurity amount of Rs.3 lakhs - Consequently, respondent No.2informed appellant that a sum of Rs.3 lakhs deposited by him(appellant) has been forfeited - Civil suit filed by the appellant forrefund of security amount - Trial Court and High Court held that Erespondents were justified in foveating the security amount deposited- On appeal, held: Forfeiture of security amount deposited byappellant is illegal and bad in law - Public notice (advertisement)only stipulated a term for deposit of the security amount of Rs.3lakhs by the bidder (appellant) but it did not publish any stipulationthat the security amount deposited by the bidder (appellant) is liablefor forfeiture by the State - A stipulation for deposit of securityamount ought to have been qualified by a specific stipulationproviding therein a right offo1:feiture to the State - Similarly, itshould have also provided the contingencies in which such right off01:feiture could be exercised by the State against the bidder - It isonly then the State would have got a right to forfeit- It was, howeve1;not so in instant case - Furthe1; it was mandatory on the part of therespondents (State) to have published the four ''special conditions"at the time of inviting the bid~ itself- Bidders were entitled to knowthese material terms at the time of submitting the hid itself- Since these four conditions were added unilaterally and communicatedto the appellant by respondent No. 3 while accepting his bid, theappellant had eve1y right to refuse to accept such conditions andwriggle out of the auction proceedings and demand refund of hissecurity amount - The State, in such circumstances, had no right loinsist upon the appellant to accept such conditions much less locomply and nor it had a right to cancel the bid on the ground ofnon-compliance of these conditions by the appellant - Appellantdid not commit any breach of the term(s) and condition(s) of thenotice inviting bids and on the other hand, it was the respondentswho committed breaches - State Had no right to fo1j'eit securityamount - Impugned Judgment and decree of High Court and trialCourt set aside. |
Judge | Hon'ble Mr. Justice Abhay Manohar Sapre |
Neutral Citation | 2017 INSC 1052 |
Petitioner | Suresh Kumar Wadhwa |
Respondent | State Of M.p. & Ors. |
SCR | [2017] 14 S.C.R. 1 |
Judgement Date | 2017-10-25 |
Case Number | 7665 |
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