WP/3543/2005 of A. Odelu, Vs Govt. of Andhra Pradesh, on 31 December 2009

IN THE HIGH COURT OF JUDICATURE,ANDHRA PRADESH AT HYDERABAD(Special Original Jurisdiction)

PRESENT:THE HON’BLE MR. JUSTICE C.V.NAGARJUNAREDDY

THURSDAY, THE THIRTY FIRST DAY OFDECEMBER,TWO THOUSAND NINE

WRIT PETITION No.3543 of 2005

Between:A.Obelu.

… Petitioner

AndGovernment of Andhra Pradesh, reptd., by theDivisional Forest Officer, Narsipatnam, VisakhapatnamDistrict and two others.

… Respondents

Counsel for the petitioner: Sri S.Lakshma Reddy.

Counsel for the respondents: AGP for Forests.

This Court made the following:-ORDER:

This Writ Petition is filed for a Mandamus todeclare the inaction of the respondents in refunding theEarnest Money Deposit/sale amount of Rs.2,75,200/- tothe petitioner and to set aside letters dated 21-12-2004,31-12-2004 and 21-1-2005 issued by therespondents.

Heard Sri S.Lakshma Reddy, learned counsel forthe petitioner, and the learned Assistant GovernmentPleader for Forests.

The petitioner is a Forest Contractor. Inpursuance of tender-cum-auction notice, dated 13-9-2004, inviting sealed tenders for collecting Beedi (tuniki)leaves in seven forest areas of Narsipatnam Division forthe years 2005-07, the petitioner submitted his bid andparticipated in the auction held on 29-9-2004. Heemerged as the highest bidder and, accordingly, hedeposited 1/4[th] of the bid amount i.e., Rs.2,75,200/-. Hereceived the confirmation letter, which was dispatchedby registered post, on 8-12-2004. Thereupon, he issuednotice, dated 16-12-2004, to respondent No.3, revokinghis offer and requested for refund of the EMD amounton the ground that the respondents failed to confirm thebid within 30 days from the date of auction, viz., 29-9-2004. However, respondent No.3 issued notice, dated21-12-2004, wherein he has taken the stand that theConservator of Forests, Visakhapatnam, respondentNo.2 herein, confirmed the sale within the stipulated time and communicated the same to the petitioner tofulfill the other conditions. Respondent No.3, therefore,called upon the petitioner to explain why the amountspaid by him should not be forfeited to the Governmentas he failed to comply with the conditions of tender-cum-auction notice. This notice was replied to by thepetitioner, vide: his letter dated 27-12-2004, wherein hereiterated his plea that the confirmation order wasdispatched only on 6-12-2004; and thereby adelay of 39 days occurred in confirming the sale. Thepetitioner, therefore, maintained that in pursuance of therevocation letter issued by him, he is entitled to refundof the EMD amount. On receipt of the said notice,respondent No.3 issued final notice, dated 31-12-2004,calling upon the petitioner to pay all the balanceamounts under the contract, failing which it was statedthat all the amounts paid by the petitioner will beforfeited to the Government. The petitioner filed anappeal, against the said order, before respondent No.2,who by his order, dated 20-1-2005, dismissed the sameby holding that the sale was confirmed within 30 days,as required by the conditions of general sale notice.The said orders of respondents 2 and 3 are questionedin this Writ Petition.

A detailed counter-affidavit has been filed byrespondent No.3, wherein it is, inter alia, stated thatrespondent No.2, vide his proceedings dated 29-10-2004 confirmed the sale and the said confirmation letterwas sent to the petitioner, vide: his office letter dated 27-11-2004. Respondent No.3 has, thus, taken the stand that within the stipulated period of 30 days from the dateof auction the sale was confirmed; and that as thepetitioner failed to fulfill the tender conditions by payingthe balance sale consideration and entering into acontract, the respondents are entitled to forfeit the EMDamount paid by the petitioner.

In order to resolve the dispute raised in this writpetition, it is necessary to notice the relevant generalsale conditions. Under Condition No.7, where theamount of the bid knocked down exceeds Rs.1,000/-,the successful bidder shall pay 1/4[th] of the bid amount,less the EMD; and if the amounts are not paid, the EMDpaid by the successful bidder stands forfeited to theGovernment. Under Condition No.8, the bid once givenis final and cannot be revoked and the highest biddershall be bound to accept the contract if the ordersconfirming the bid are communicated by the competentauthority. Condition No.8 (ii), which is very material for the present purpose, reads as under:

“The date of confirmation for this purpose shall be date ofdispatch of the confirmation order by the competentauthority”.

Condition No.9(ii) envisages that the competentauthority shall confirm or reject the bid within 30 daysfrom the date of sale, and once it is confirmed, aconcluded contract is deemed to have been effectedbetween the Governor of Andhra Pradesh and thebidder, in whose favour the bid is confirmed in token ofacceptance. Proviso to the said condition provides thatthe bid may be revoked by specific notice to thecompetent authority, if it is not confirmed within the period of 30 days.

As stipulated in Condition No.9(ii), the competentauthority shall confirm or reject the bid within 30 daysfrom the date of sale. Condition No.8(ii) explicitly makesit clear as to what constitutes the date of confirmation.According to this condition, the date of dispatch of theconfirmation order shall constitute the date ofconfirmation.

In the light of the above discussed saleconditions, it is necessary for the respondents to provethat they have confirmed the sale within a period of 30days by dispatching the confirmation order within thesaid period. As 29-9-2004 was the date of auction/sale,the confirmation order should have been dispatched bythe respondents on or before 29-10-2004. As notedabove, though respondent No.3 has taken the stand inthe counter-affidavit that on 29-10-2004 respondentNo.2 confirmed the sale, for the purpose of satisfyingCondition Nos.8 and 9, the said date cannot be takenas the material date of confirmation unless the saidconfirmation order was dispatched on that day. Even onthe respondents’ own showing, the said confirmationorder was sent to the petitioner through respondentNo.3’s office proceedings dated 27-11-2004. A copy ofthe said order was filed by the petitioner. A perusal ofthe said order shows that while the same bears 27-11-2004 as the date, it was signed by the Superintendenton 6-12-2004. Both in the correspondence and in theaffidavit filed by the petitioner he pleaded that the saidorder was dispatched through registered post on 6-12-

2004, which plea has not been disputed by therespondents. These uncontroverted facts, thus, make itclear that the confirmation order was dispatched only on6-12-2004 as against the stipulated date of 29-11-2004.Accordingly, the respondents failed to comply with themandatory requirements contained in Condition Nos.8and 9 of the general sale notice. A right has, therefore,accrued to the petitioner under proviso to ConditionNo.9(ii) to revoke the bid by issuing a specific notice.The petitioner, accordingly, exercised this right bywriting revocation letter, dated 16-12-2004. In the light ofthese facts, the stand taken by the respondents that thepetitioner’s bid was confirmed in accordance with theconditions stipulated in the general sale notice, cannotbe accepted. As the respondents failed to confirm thebid within the stipulated time, the petitioner revoked hisbid by exercising his right in this regard, as envisaged inthe proviso to Condition No.9(ii). In this view of thematter, the respondents are not entitled to forfeit theEMD made by the petitioner equivalent to 1/4[th] of thebid amount. The respondents are, therefore, liable torefund the said amount along with the payments, if anymade, by the petitioner as the bid has become abortivewith its revocation made by the petitioner in terms of theconditions referred to above.

For the above mentioned reasons, the WritPetition is allowed. The impugned proceedings are setaside. Respondents 2 and 3 are directed to refund theamount of Rs.2,75,200/- paid by the petitioner towardsEMD within a period of four weeks from the date of receipt of a copy of this order. If the amount is notrefunded within the said period, the respondents will beliable to pay interest from the expiry of the abovementioned period at the rate of 18%, per annum, tillsuch time as the payment is made to the petitioner.

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C.V.NAGARJUNA

REDDY,J

Dt.31-12-2009MNR