JUDGMENT S. A. BOBDE, J. :- Rule. Rule returnable forthwith. Heard finally with consent of learned counsel for parties. 2. The petitioner has challenged the communication dated 19-11-2009 and the demand notice dated 3-12-2009 calling upon the petitioner to pay 75% of the amount for which sand ghats were leased out to the petitioner. It is not in dispute that the petitioner participated in the auction of sand ghats of sixteen taluqas of y avatmal district for 2008-09. Petitioner's bid for an amount of Rs. 18,22,275/- was accepted. The petitioner had already deposited 1/4th amount of bid along with the bid itself. After the bids were accepted the petitioner was required under the terms of the auction to deposit 75% of the bid amount within a period of 15 days, which the petitioner did not. The respondents then cancelled the petitioner's bid. 3. The question that arises is, whether the respondents can call upon the petitioner to deposit 75% of the bid amount though the petitioner did not pay the said amount as required, as a result of which the bid in petitioner's favour has already been cancelled. Mr. Mehadia relied on sub-clauses (7) and (8) of Clause 3 which reads as follows :-- "(7) After acceptance of the highest bid and deposit of 1/4th amount, the bidder with two persons shall execute an agreement taking responsibility to deposit the balance amount within 15 days on the stamp paper of Rs. 100/- at his own expenses. On failure of the bidder to execute such agreement the 1/4th amount shall be forfeited and the sand ghat shall be put to re-auction. In case the said agreement is not executed in time, the Government shall not be responsible for the loss, if any, to the bidder. After deduction of the amount deposited as per Clause 5, the balance 75% amount will have to be deposited within 15 days from the date of the auction. After payment of the balance 75% amount and execution of agreement by the bidder, the possession of the sand ghat shall be actually delivered latest within seven days to him. (8) When the auction of the sand ghat is cancelled, the said sand ghat shall be put to auction again. In case the bid received in re-auction is less than in earlier auction, the amount of difference shall be recovered as arrears of land revenue from the bidder. (8) When the auction of the sand ghat is cancelled, the said sand ghat shall be put to auction again. In case the bid received in re-auction is less than in earlier auction, the amount of difference shall be recovered as arrears of land revenue from the bidder. In case the bid received in re-auction is higher, the earlier bidder shall not have any right on the same." 4. The learned counsel then submitted that respondents are entitled to demand 75% of the amount within a period of 15 days of acceptance of bid. However, if for any reason the contract of the successful bidder has to be cancelled, the respondents are entitled to re-auction the sand ghats and if the highest bid received in the re-auction is lower than the bid made by the earlier bidder in the earlier auction, the respondents may recover the difference from the earlier bidder. The learned counsel submitted that if no such re-auction is made then the respondents are not entitled to claim any amount. 5. The petitioner's bid was accepted along with 1/4th of the amount of the bid. But after acceptance of the bid the petitioner failed to pay 75% of the balance amount within 15 days, as a result of which his bid was cancelled. When this happened, the respondents were entitled to re-auction the sand ghats and recover the deficient amount, if any, from the earlier bidder, such as the petitioner. However, the respondents failed to re-auction the sand ghats. What is important is, whether the respondents have any power to recover 75% of amount even after the cancellation of the petitioner's bid and without re-auctioning the sand ghats. There is no doubt that the rights and liabilities of both parties to an auction must be determined with reference to the terms of the auction agreed to by the purchaser. Nothing is pointed out from the terms of the auction which suggests that the respondents can cancel the bid in favour of a bidder and yet demand the amount of 75%. There would be no justification for such a recovery. The only recovery that can be made is the difference between the amount of the bid received in re-auction and the amount of the bid of the cancelled auction, if the latter is more under clause 3(8) above. There would be no justification for such a recovery. The only recovery that can be made is the difference between the amount of the bid received in re-auction and the amount of the bid of the cancelled auction, if the latter is more under clause 3(8) above. It is not permissible for the respondents to not put the sand ghats to re-auction and seek to recover the entire balance amount of 75% from the earlier bidder whose bid has been cancelled. There is no clause in any of the terms of the auction from which it may be inferred that the respondents have such a power or that the petitioner had agreed to the same. 6. Mrs. Dangre, learned Addl. G.P., submitted that the respondents could not re-auction the sand ghats because they were prohibited from doing so as the code of conduct was in force. We do not see the relevance of code of conduct in putting the sand ghats to auction. Be that as it may, we are not inclined to go into the justification of the failure on the part of the respondents to re-auction the sand ghats. Whatever be the reason, the respondents cannot seek to penalise the petitioner for their failure. In the circumstances, we set aside the impugned communication dated 19-11-2009 and demand notice dated 3-12-2009. Rule is made absolute in above terms. 7. Since we have held that the respondents are not entitled to recover 75% of the amount of the cancelled bid from the petitioner, we direct that the amount of Rs. 2,50,250/- already adjusted by the respondents against the recovery of the said 75%, shall be refunded to the petitioner within a period of eight weeks. We see no merit in the contention raised on behalf of the respondents that the said amount was paid by the petitioner in respect of subsequent bid, from which the petitioner has subsequently withdrawn and therefore this amount is not liable to be refunded. It goes without saying that if a party has withdrawn from the bid, he is entitled to refund of the amount which is deposited towards the bid. We, therefore, direct the respondents to refund the amount of Rs. 2,50,250/- to the petitioner within eight weeks. Petition disposed of. Order accordingly.