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2010 DIGILAW 542 (CAL)

Efcalon Tie-up Pvt. Ltd. v. STATE OF WEST BENGAL

2010-05-18

DIPANKAR DATTA

body2010
JUDGMENT: Subject matter of challenge in these writ petitions being the same, they were taken up for analogous hearing and are decided by this common order. Sale Notice No.1/Rev/FUO of 2009-10 dated 11.2.2010 was issued by the Divisional Forest Officer, Forest Utilisation Division, Directorate of Forests, Government of West Bengal (hereafter the DFO), notifying that an auction would be conducted on 12.3.2010 in respect of disposal of ‘Red Sander’. Relevant conditions of the auction, as notified by the notice referred to above, are as follows: “2. The intending purchaser is required to deposit Rs.5,00,000/- (Rupees five lacs) only as the Earnest Money. Deposit of the successful bidder will be refunded to him after deposit of 25% of the revenue and execution of agreement in term of clause-4, failing which the Earnest Money will be forfeited to Government. The E.M. Deposit of the unsuccessful bidder will be refunded in due course on application. 3. The bid will be exclusive of sales tax and other taxes and nay dues of the government. The successful bidder after acceptance of his bid will have to deposit 25% of the sale value within 5 working days and corresponding sales tax, failing which the sale will be cancelled. The 25% of the sale value will be treated as security money till the balance revenue is paid by the purchaser. This will be forfeited in case balance revenue is not paid. 5. The balance revenue of the lot including sales tax shall have to be paid in full within 30 days from the date of auction failing which the agreement will be liable for termination. 6. If the balance revenue is not paid within stipulated date, revenue may be accepted at the discretion of the undersigned with the approval of Chief Conservator of Forests/Head Quarters & Land Affairs. On special circumstances a later date of payment may be allowed on payment of surcharge of 1% of the balance amount per 30 days. However the purchaser will have no right to claim such extension after the extended time of payment of balance revenue has expired. Extension period will not in any case be allowed to exceed two months from the dated of auction.” Condition 3, it is claimed by the petitioners in both the petitions, is of mandatory character. However the purchaser will have no right to claim such extension after the extended time of payment of balance revenue has expired. Extension period will not in any case be allowed to exceed two months from the dated of auction.” Condition 3, it is claimed by the petitioners in both the petitions, is of mandatory character. In view of the fact that the condition was too onerous, it is further claimed by them that all the parties intending to bid and present at the time and venue of auction on 12.3.2010 requested the DFO to relax the condition and to allow the successful bidder to deposit 25% of the sale value within 10 working days, instead of 5 working days. The petitioners in unison allege that the prayer was not accepted and the DFO required the bidders to bid without there being any relaxation/modification of condition 3. The petitioners retracted and, therefore, did not bid. However, they aver to have learnt later on that after the auction was over, condition 3 was relaxed and the highest bidder was granted 10 working days time from date of auction to deposit 25% sale value. Such an action is challenged on the ground that had the relaxation/modification been made known to the petitioners, they would have participated in the auction and outbid the highest bidder. The highest bidder, Cygnus Equipment & Rental Pvt. Ltd., has filed an application for its impleadment in W.P. No. 571 of 2010, being G.A. No. 1766 of 2010. By reason of the interim order passed on these writ petitions, the State respondents are unable to issue sale order in its favour. In the event W.P. No. 571 of 2010 succeeds, Cygnus is likely to suffer irreparable loss. The presence of the highest bidder is considered necessary for effective adjudication of the issue involved in this writ petition and, therefore, it is impleaded as additional respondent in W.P. No. 571 of 2010. Cause title shall be suitably amended here and now. G.A. No. 1766 of 2010 stands allowed. Mr. Chatterjee, learned senior advocate for Efcalon, petitioner in W.P. No.556 of 2010, contended that condition 3 being of mandatory character, the same could not have been relaxed/modified. Relaxation/modification, if at all, could be made in terms of conditions 5 and 6 extracted supra. Cause title shall be suitably amended here and now. G.A. No. 1766 of 2010 stands allowed. Mr. Chatterjee, learned senior advocate for Efcalon, petitioner in W.P. No.556 of 2010, contended that condition 3 being of mandatory character, the same could not have been relaxed/modified. Relaxation/modification, if at all, could be made in terms of conditions 5 and 6 extracted supra. Efcalon was, therefore, deprived of the opportunity to bid and I must set the process right by judicial interdict. The contention has not at all impressed me. Relaxation/modification was made on the request of all the intending bidders and not for the purpose of carving out any distinct benefit in respect of one or a class of intending bidders. In the decision reported in (2006) 11 SCC 548 : B.S.N. Joshi and Sons Ltd. vs. Nair Coal Services Ltd., the Supreme Court has ruled as follows : “66. We are also not shutting our eyes towards the new principles of judicial review which are being developed; but the law as it stands now having regard to the principles laid down in the aforementioned decisions may be summarised as under: (i) if there are essential conditions, the same must be adhered to; (ii) ***** (iii) if, however, a deviation is made in relation to all the parties in regard to any of such conditions, ordinarily again a power of relaxation may be held to be existing;” In my reading of the above principles, clause (i) is qualified by clause (iii). Even though a condition in a tender notice may be mandatory, but for some reason or the other if such a condition is either relaxed or modified to suit the intending bidders and all of them are notified and given the benefit of relaxation/modification, a bidder who reaps benefit thereof and bids cannot subsequently, on becoming unsuccessful, turn around and contend that the relaxation/modification is bad. It is only that party who does not express intention to bid having regard to the onerous condition, not knowing that the same would be relaxed/modified prior to auction, who may have the right to challenge the relaxation/modification. That is not the case here. Efcalon averred in paragraph 8 of its writ petition as follows: “8. It is only that party who does not express intention to bid having regard to the onerous condition, not knowing that the same would be relaxed/modified prior to auction, who may have the right to challenge the relaxation/modification. That is not the case here. Efcalon averred in paragraph 8 of its writ petition as follows: “8. It is pertinent to mention that during the course of the said auction sale, the participating bidders, in presence of the respondent No.3 and petitioners, purposed that the stipulated period to make deposit of initial 25% of the sale value may be extended from 5 days to 10 days because it was difficult on the part of the bidders to arrange for substantial amount in such a short period of time. Such proposal made by the participating bidders, including the petitioner, was not accepted and sale proceedings commenced strictly in terms of said Sale Notice. By retaining the stipulation contained in Clause 3 that deals with the provision for making deposit of 25% within five working days from the date of the auction bid is accepted was retained and not modified, although requested.” Contents of paragraph 8 have been verified as true to the knowledge of Sri Manish Agarwal, the deponent who affirmed the affidavit supporting the petition. In the counter affidavit of the State respondents, their stand is as follows: “3(e) On 12th March, 2010 open bid took place and at the time of open bidding all 13 applicant including the writ petitioner herein requested the then Divisional Forest Officer, forest Utilization Department to relax clause no.3 of the said tender notice wherein it has been stated that the bid will be exclusive of Sale tax and other taxes and any dues of the government. The successful bidder after acceptance of his bid will have to deposit 25% of the sale value will be treated as security money till the balance revenue is paid by the purchasers. This will be forfeited in case balance revenue is not paid. The successful bidder after acceptance of his bid will have to deposit 25% of the sale value will be treated as security money till the balance revenue is paid by the purchasers. This will be forfeited in case balance revenue is not paid. On the basis of such request the then Divisional Forest Officer discussed the said request of all applicants with the representative of Customs Department, Directorate of Revenue Intelligence and thereafter the then Divisional Forest Officer had relaxed the terms and condition of clause 3 of the said sale notice and instead of 5 days to 10 days where given to all the applicants.” In paragraph 3(h) of the counter affidavit, it is the further stand of the State respondents that on 12.3.2010 one Sri Naresh Sahu was present on behalf of Efcalon at the time of open bidding. Sub-paragraphs (e) and (h) of paragraph 3 of the State’s counter affidavit have been dealt with by Efcalon in its affidavit-in-reply in paragraphs 10 and 11 respectively. The same are extracted below : “10. Save and except what are matters of undisputed records, I deny each and every allegation made in paragraph 3 (e and i) of the said opposition. I deny that the no application dated 26.03.2010 addressed to the Divisional Forest Officer, Forest Utilization Division being Annexure P3 (page 29) of the writ petition was received by the office of the Divisional Forest Officer as alleged or at all. I state that the application dated 26.03.2010 bears the signature of the Divisional Forest Officer, Forest Utilization Division thereby acknowledging receipt of the said application. However, it is significant to note that the deponent has admitted in the said paragraph under reference that the Custom Department, Directorate of Revenue Intelligence and Conservator of Forest and Divisional Forest Officer are the necessary parties that are vested with authority to relax the terms and conditions of Clause 3 of the said Sale Notice and the respondent no.3 by consulting with them has extended the time, however, unlawfully. If that be so, even if it is assumed without admitting that the respondent no.3 was not served, the other necessary parties, involved in such unlawful modification of the term of the Sale Notice were duly served as the application dated 26.03.2010 were served upon the Custom Department, Directorate of Revenue intelligence and Conservator of Forest and Divisional Forest Officer (Pages 32 to 42) and the same have been acknowledged. As such, the respondent no.4 was also served and such ignorance or denial is not material. 11. Save and except what are matters of undisputed records, I deny each and every allegation made in paragraph 3 (f, g and h) of the said opposition. I state that the writ petitioners are entitled to refund of the said EMD of Rs. 5 lacks. Therefore, vide letter dated 25th March 2010 the said EMD was demanded. I state that the refund of the said EMD is not a material fact for the adjudication of the instant writ petition, therefore the same is not stated. The cause of action of the instant writ petition is the manner in which the Sale was conducted and the purported modification of the essential terms of the Sale Notice. I state that the refund of EMD has no bearing in the adjudication of the instant writ petition. Nevertheless, the writ petitioner cannot prejudice its money only because the respondents are proceeding illegally.” It would appear from the aforesaid pleadings that the stand of the State respondents that condition 3 was relaxed/modified on the request of the intending bidders on 12.3.2010 has not been denied at all. Moreover, the claim in the writ petition that the request of the bidders to relax/modify condition 3 was not accepted by the DFO is that of Sri Manish Agarwal who was not even present at the time and venue of auction. It is only Sri Naresh Sahu who could have provided information to Efcalon regarding what transpired on 12.3.2010. Sri Agarwal, not being present at the time and venue of auction on 12.3.2010, could not have personal knowledge of what transpired thereat. I am, therefore, unable to conclude on the basis of affidavit evidence that there was no relaxation/modification of condition 3 by the DFO upon request made by the intending bidders. Efcalon cannot legitimately raise a grievance that it was discriminated. I am, therefore, unable to conclude on the basis of affidavit evidence that there was no relaxation/modification of condition 3 by the DFO upon request made by the intending bidders. Efcalon cannot legitimately raise a grievance that it was discriminated. For reason best known to it, its representative did not bid and, therefore, I find no reason to interfere. So far as Uma, petitioner in W.P. 571 of 2010, is concerned, the State respondents by filing counter affidavit have raised similar contentions as noticed above. When his turn for advancing argument arrived, Mr. Dutta, learned advocate for Uma contended that due to belated service of copy of the counter affidavit, it has not been possible for Uma to deal with the same and he sought for time to file its reply. This prayer has not been made at the inception of proceedings today but at a time when hearing of the petition of Efcalon was complete, obviously because Mr. Dutta could sense that Uma is in real trouble for defective pleadings and that opportunity to file reply, if given, could be utilized for plugging the loopholes. I did not consider it necessary to grant time to Uma to file its reply since I proposed not to rely on the counter affidavit filed by the State respondents. Mr. Dutta was called upon to advance arguments based on the pleadings in the writ petition. More or less the arguments of Mr. Chatterjee have been repeated by Mr. Dutta. I have heard Mr. Dutta and considered the averments in the petition. On the basis of its own pleadings in the petition, the claim raised by Uma is not tenable. Grievance of Uma is founded on contents of paragraph 9 of its petition. Paragraph 9 reads as follows: “9. The representative of the petitioner was present at the time of bidding. The petitioner’s representative requested the Officials conducting the auction to grant relaxation in condition No.3 of the sale notice and to allow the petitioner to deposit 25% of the bid amount within 10 days and in case of relaxation, the petitioner would enhance the offer. The petitioner’s representative disclosed that if condition no.3 is relaxed the petitioner would enhance the offer by Rs. 10 per kg. over and above the offer of the highest bidder for the above lots. The petitioner’s representative disclosed that if condition no.3 is relaxed the petitioner would enhance the offer by Rs. 10 per kg. over and above the offer of the highest bidder for the above lots. However such request was not accepted to by the officials conducting the said auction.” The petition is accompanied by an affidavit of one Md. Halim, claiming to be the authorised representative of the proprietor of Uma, Sri Arup Kumar Kedia. The contents of paragraph 9 have been verified as information derived from Sri Kedia. The said Md. Halim does not even say that the information derived is believed to be true. Mr. Dutta in course of hearing conceded that Sri Kedia was not present on 12.3.2010 at the time and venue of auction. The name of the representative of the petitioner, allegedly present at the time of bidding, has not been disclosed in the petition. The alleged assertion of the said unnamed representative before the DFO that if condition 3 is relaxed, offer of Uma could be raised by Rs. 10 per kg. over and above the offer of the highest bidder could not have been known to Sri Kedia unless of course the fact of such an offer being made was communicated to him by the said representative. Similarly, the DFO who conducted the said auction did not accept the request for relaxation/modification made by the said representative and the other bidders present at the venue could not also have been within the knowledge of Sri Kedia, unless conveyed to him by the said representative. In the absence of any statement in the petition to the effect that the said representative duly communicated all that transpired on 12.3.2010 to Sri Kedia, the entire contents of paragraph 9 are not considered credit-worthy and I am unable to give any credence to the same. The person who could have thrown light on what transpired on 12.3.2010 is nowhere in the picture. The pleadings in the petition of Uma are such that they do not appeal to me to hold that it has arbitrarily been deprived of the opportunity to participate in the auction. Both the petitions, therefore, must fail. They are dismissed without order for costs. Photocopy of this judgment and order shall be retained with the records of W.P. No. 571 of 2010, duly countersigned by the Assistant Registrar (Court). Both the petitions, therefore, must fail. They are dismissed without order for costs. Photocopy of this judgment and order shall be retained with the records of W.P. No. 571 of 2010, duly countersigned by the Assistant Registrar (Court). Urgent Photostat certified copy of the judgment and order shall be given to the applicants, if applied for, as early as possible.