Research › Search › Judgment

Madhya Pradesh High Court · body

2008 DIGILAW 1256 (MP)

MANOJ v. MUNICIPAL COUNCIL

2008-10-24

N.K.MODY

body2008
Judgment ( 1. ) BEING aggrieved by the judgment and decree dated 24. 12. 2004 passed by IVth Additional District Judge, Mandsaur in Civil Suit No. 19-A/2003, whereby the suit filed by the appellant for realization of a sum of Rs. 75,000/- was dismissed, present appeal has been filed. ( 2. ) SHORT facts of the case are that on 18. 8. 2003 appellant filed a suit against the respondent alleging that respondent Municipal Council, Mandsaur is owner of a shop situated at Samrat Market, behind Kalkamata Temple. It was alleged that respondent auctioned the shop. It was alleged that appellant also participated in the said auction which took place on 18. 8. 2000. It was alleged that appellant deposited a sum of Rs. 5,000/- as security and the highest bid of the appellant was for Rs. 3,35,000/-, which was accepted by the respondent. It was also alleged that on 19. 8. 2000 appellant deposited a sum of Rs. 75,000/- towards premium. It was alleged that balance amount was required to be deposited within a period of 30 days. It was alleged that because of financial crises appellant could not manage the amount, hence appellant moved an application before respondent and prayed for refund of the amount showing the inability in depositing the remaining amount. Further case of the appellant was that instead of refunding the amount respondent forfeited the amount deposited by the appellant. It was alleged that the action of , the respondent is illegal and deserves to be set aside. It was alleged that under sub Rule IV of Rule 6 of M. P. Municipality (Transfer of Immovable Property)Rules 1996 (hereinafter referred to as the Rules) in case of failure on the part of the appellant the respondent was entitle to forfeit the security amount only and not of the amount deposed by the appellant towards premium. It was prayed that it be declared that the action of the respondent in forfeiting the amount of premium deposited by the appellant is illegal and decree, be passed against the respondent for refund of the amount along with interest. ( 3. ) THE suit was contested by the respondent by filing the written statement wherein, it was not disputed that the respondent is the owner of the said market. ( 3. ) THE suit was contested by the respondent by filing the written statement wherein, it was not disputed that the respondent is the owner of the said market. It was also not disputed that the appellant participated in public auction for taking shop on lease and deposited an amount of Rs. 5,000/- as security. It was alleged that the auction was commenced on 18. 8. 2000 and the highest bid was of the appellant for a sum of rs. 3,35,000/ -. It was alleged that as per the terms and conditions of the auction, which were well known to the appellant, 1/4th amount of the auction money was required to be deposited immediately after the auction and balance amount was to be deposited within a period of 30 days. It was alleged that inspite of lapse of time and also inspite of giving repeated reminders appellant failed to deposit the balance amount, hence the amount deposited by the appellant was forfeited, as per terms and conditions of the auction. It was prayed that the suit filed by the appellant be dismissed. ( 4. ) AFTER framing of the issues and recording of evidence, learned Trial Court dismissed the suit filed by the appellant, hence this appeal. ( 5. ) AT the time of hearing of the appeal, notices were sent to the respondent, but the respondent remained absent inspite of receipt of notice. Thereafter SPC was also issued to the respondent, but was of no avail. In the circumstances this court was left with no option except to hear the appellant and decide the appeal on merits. ( 6. ) LEARNED counsel for the appellant submits that learned Court below committed error in dismissing the suit filed by the appellant. It is submitted that learned Court below committed error in treating the entire amount deposited by the appellant as security amount. It is submitted that the security amount was of rs. 5,000/- and the balance amount of Rs. 75,000/-deposited by the appellant was towards auction amount and was not security amount. It is submitted that even if any term and condition imposed by the respondent at the time of auction which was not in accordance with the Rules, then the same could not have been enforced and the suit filed by the appellant deserves to be decreed. 75,000/-deposited by the appellant was towards auction amount and was not security amount. It is submitted that even if any term and condition imposed by the respondent at the time of auction which was not in accordance with the Rules, then the same could not have been enforced and the suit filed by the appellant deserves to be decreed. It was prayed that appeal filed by the appellant be allowed and the judgment and decree passed by learned Court below be set aside. ( 7. ) IN exercise of the powers conferred by State Government under Section 355 read with Section 109 of the M. P. Municipalities Act, 1961 (No. 37 of 1967), the state Government has framed the Rules known as M. P. Municipalities (Transfer of Immovable Property) Rules 1996. Sub Rule (IV) of Rule 6 read as under:- ( 8. ) AS per sub Rule (IV), the highest bidder was required to deposit 100% of the auction/offer price within 30 days from the date of receipt of the notice of intimation that his bid has been accepted by the authorities as referred in Condition no. 2. It further lays down that the amount of security deposited shall be adjusted in the said auction/offer price and in case the highest bidder fails to pay such amount within the said period the security deposit shall be forfeited. In the present case Exp-1 is the terms and conditions of public auction on the basis of which shops situated at Samrat Market were auctioned. As per Clause VI of Ex. P-1, which lays down terms and conditions of auction, the highest bidder was required to deposit 1/4th amount of the auction immediately after the auction, failing which the security amount stands forfeited. As per Clause VIII of Ex. P-1 after depositing 1/4th amount the balance amount of 75% was required to be deposited within the stipulated time mentioned in the intimation failing which 1/4th amount deposited stands forfeited automatically. ( 9. ) IN the present case undisputedly petitioner deposited the security amount on 18. 8. 2000 and participated in auction on 19. 8. 2000. Appellant was the highest bidder for a sum of Rs. 3,35,000/- and Rs. 75,000/- i. e. 25% of the bid amount was deposited by the appellant on 19. 8. 2000 and the balance amount was to be deposited after receipt of notice within stipulated time. 8. 2000 and participated in auction on 19. 8. 2000. Appellant was the highest bidder for a sum of Rs. 3,35,000/- and Rs. 75,000/- i. e. 25% of the bid amount was deposited by the appellant on 19. 8. 2000 and the balance amount was to be deposited after receipt of notice within stipulated time. It is no more in dispute that letters were issued by the respondent to the appellant from time to time, but appellant failed to deposit the balance amount. The only question for consideration which arises is whether the respondent Council was right in forfeiting 1/4th amount deposited by the appellant, which was not at all the security amount. It is true that as per sub Section (IV) of Rules 6 of the Rules, in case of failure on the part of highest bidder in depositing 100% of the auction price within a period 30 days, the security amount has to be forfeited. In the present case the security amount was rs. 5,000/- and the amount of Rs. 75,000/- which was deposited by the appellant was 1/4th amount of the highest bid. Therefore, it cannot be said that this amount was the amount of security. As per Ex. P-1 which is the terms and conditions of auction, it was specifically made clear that l/4th amount deposited by the highest bidder shall be forfeited. So far as Rule 6 of the Rules is concerned, it empowers the Council to impose other conditions in addition to the conditions mentioned in rule 6 of the Rules which the Council may think fit. In the present case while fixing the terms and conditions it was made clear by the Council that the highest bidder is required to deposit 1/4th amount immediately after conclusion of the bid and in case of failure on the part of the higher bidder in depositing the balance 75% amount, 1/4th amount deposited by the highest bidder shall stand forfeited automatically. This condition imposed by the Municipal Council, Mandsaur is in addition to the conditions imposed by Rule 6 of the Rules for which the respondent was empowered under the Rules. It is not the case of the appellant that appellant was unaware with the condition that 1/4th bid amount deposited by the appellant shall be forfeited. This condition imposed by the Municipal Council, Mandsaur is in addition to the conditions imposed by Rule 6 of the Rules for which the respondent was empowered under the Rules. It is not the case of the appellant that appellant was unaware with the condition that 1/4th bid amount deposited by the appellant shall be forfeited. It is also not the case of appellant that appellant was not intimated by the respondent to deposit balance amount. On the contrary, case of the appellant is that because of financial crises appellant could not deposited the auction amount. There is nothing on record to show that later on whether the suit shop was reauctioned or not and if reauctioned, then for what amount and on what date. ( 10. ) IN the facts and circumstances of the case since the respondent was empowered to impose conditions in addition to the conditions mentioned in Rule 6 of the Rules, therefore, in the opinion of this Court, no illegality has been committed by the learned Court below in dismissing the suit filed by the appellant, as the respondent was within its rights to impose the conditions for forfeiting the 1/4th of the auction amount. ( 11. ) IN view of this the appeal filed by the appellant stands dismissed. No order as to costs. Appeal dismissed.