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Karnataka High Court · body

2012 DIGILAW 582 (KAR)

Krishan Chandra Pai v. Mysore Urban Development Authority, Represented By Its Commissioner

2012-07-20

RAM MOHAN REDDY

body2012
Judgment 1. Petitioner responded to an-e-Auction Notification, Annexure-A, issued by the Mysore Urban Development Authority, for short MUDA, signed by the Engineer Member, Mysore Urban Development Authority, Mysore, published in the news paper ‘The Times of India’, Mysore, dated 7/11/2011. By making an offer of Rs.58,00,000/-for Item No.31 bearing Site No.7663 in Vijayanagara, 4th Stage, 2nd Phase, measuring north to south 18.00 meters and east to west (12.30+14.00)/2 meters, totally measuring 236.70 square meters, as against the minimum prescribed price of Rs.38,00,000/-, being a corner site. The general terms and conditions for e-Auction in Annexure-A, paper publication, requires the participants to comply with the formalities of their identification and remittance of e-Auction fee, and EMD, as set out in the e-Procurement Portal i.e., to deposit 25% of the bid amount into the Bank Account, on or before 72 hours of closing of the e-Auction; while Clause 13, states that sites are auctioned on “as is where is condition” and before participating in the e-Auction, bidders could visit the sites; Clause 22 states that any difference in site measurement if found at the time of handing over of the site, additional or less amount is to be paid by the bidder as per the bidding price, as otherwise the auction would be cancelled. 2. The Auction Portal on the website uploaded by the respondent-MUDA on 24.11.2011 over final details of e-Auction is said to indicate Site No.7663 measures north to south 18.00 meters; east to west (10.90)/2 meters and the total are as 196.20 square meters, in Vijanagara, 4th State, 2nd main, Mysore. The petitioner’s bid of Rs.58,00,000/-was selected, since six other bids less than the petitioner’s offer were rejected. Petitioner addressed a letter informing the respondent-MUDA of his participation in the e-Bid Process and was the highest bidder, for Site No.7663 of Vijayanagara, 4th Stage, 2nd Phase, with measurements 18x(12.30+14.00)/2 meters, enclosing photographs attested by the Gazetted Officer. Petitioner made a deposit of Rs.14,50,000/-on 26/11/2011 into the account of the respondent-MUDA maintained at Vijaya Bank, MUDA Branch, under Challan Annexure-D. 3. Petitioner made a deposit of Rs.14,50,000/-on 26/11/2011 into the account of the respondent-MUDA maintained at Vijaya Bank, MUDA Branch, under Challan Annexure-D. 3. It appears that the respondent-MUDA by letter dated 13/2/2012, Annexure-E, while accepting and confirming the petitioner’s bid Rs.58,00,000/-in the e-Auction, however, called upon the petitioner to pay Rs.69,97,248/-after deducting Rs.14,50,000/-in deposit within 45 days, and further indicating that the e-Auction held on 24/11/2011 was for Site No.7663 measuring 18.00x(10.92)/2=196.20 square meter, while the actual measurement of the site is 18.00x(12.30+14.00)/2=236.70 square meters, and as the petitioner’s offer was at the rate of Rs.29,561.67 per square meter for 196.20 square meters was required to pay at the very same rate for 236.70 square meters hence the demand for Rs.69,97,248/-. Petitioner responded to the said letter by communication dated 13/3/2012, Annexure-F, once again brining to the notice of the MUDA that the offer of Rs.58,00,000/-was based upon Annexure-‘A’ publication in the news paper for Site No.7663measuring 236.70 square metes and not for site No.7663 measuring 196.20 square meters. The respondent-MUDA by endorsement dated 17/3/2012 declined to accept the plea of the petitioner and directed the petitioner to make payment as demanded in Annexure-E letter, within the time stipulated therein, failing which, the bid would be cancelled. 4. Hence, this petition calling in question Annexure-G and for a direction to the respondent-MUDA to accept Rs.43,50,000/-being the balance of the bid amount for Site bearing No.7663 measuring 236.70 square meters and to declare the letter of confirmation of e-Auction, Annexure-E, as illegal insofar as it relates to the demand in excess of Rs.58,00,000/-. 5. Petition is opposed by filing statement of objections interalia contending that in addition to the e-Auction Notification, published in the news paper, Annexure-‘A’, when uploaded on the website of MUDA petitioner being one of the participants in the auction proceeding uploaded his bid for Rs.58,00,000/-on the website in the e-Auction for purchase of Site No.7663 Vijayanagara, 4th Stage, 2nd Phase. It is further stated that the e-Auction Notification published in the news paper disclosed the dimension of the site as 18 meters x (12.30 meters + 14.00 meters)/2 totally measuring 236.70 square meters, while the dimension of the site was “wrongly” uploaded as north to south 18.00 meters, east to west (10.90)/2 metes totally measuring 196.20 square meters. It is further stated that the e-Auction Notification published in the news paper disclosed the dimension of the site as 18 meters x (12.30 meters + 14.00 meters)/2 totally measuring 236.70 square meters, while the dimension of the site was “wrongly” uploaded as north to south 18.00 meters, east to west (10.90)/2 metes totally measuring 196.20 square meters. It is also stated that uploading the dimension of the site in the e-Auction Notification on the website “a patent error” in view of the fact that the dimension of Site No.7673 at Serial No.31 is actually 18 meters x 10.90 meters “due to wrong data entry”, which was not noticed at the time of e-Auction. At paragraph 6 of the statement of objections, it is stated that upon payment of 25% of the bid amount by the petitioner, auction confirmation letter dated 13/2/2012 was issued indicating the extra price of Rs.11,97,247/= to be paid for the excess area of the land, since there was a difference of 40.50 square meters in the dimension of the said site and further that the auction was confirmed subject to the petitioner paying the difference of amount. According to MUDA, the petitioner’s request to accept Rs.58,00,000/-being the bid amount for the sale of the said site was rejected by endorsement dated 17/3/2012 impugned and having accepted to pay the amount demanded, the request for extension of time by 60 days from 12/4/2012 to make payment, was permitted upto 19/6/2012. In paragraph 9, it is stated that on securing a report of the correct dimension of Site No.7673, (located adjacent to Site No.7663) actually measures 234.00 square meters though indicated as 196.20 square meters in the e-Auction Notification, while Site No.7663 measured 18 meters x (12.30 meters + 12.50 meters)/2 totaling to 223.20 square meters as against 236.70 square meters indicated in the paper publication, Annexure-‘A’ and 196.20 square meters on the website. MUDA maintains that due to the variation in the dimensions of the two sites, required the auction bidder of Site No.7673 and the petitioner in respect of Site No.7663 to pay the price difference as per the endorsement dated 27/4/2012. MUDA maintains that due to the variation in the dimensions of the two sites, required the auction bidder of Site No.7673 and the petitioner in respect of Site No.7663 to pay the price difference as per the endorsement dated 27/4/2012. Hence the modification of the demand in Annexure-‘E’ from Rs.55,47,248/-to Rs.51,48,161/-, excluding Rs.14,50,000/-in deposit, in accordance with Clause No.23 of General Condition for e-Auction in the Notification, Annexure-‘A’, stating that the auction bidder will have to pay the price for extra area of land. 6. Sri T.N. Raghupathy, learned counsel for the petitioner reiterates the averments in the memorandum of writ petition to submit that the publication, Annexure-A, of the e-Auction Notification in the news paper ‘The Times of India, Mysore, dated 7/11/2011 indicating the dimension of Site No.7663 as 236.70 square meters, on a spot inspection the offer of Rs.58,00,000/-was made by way of an e-Bid. According to the learned counsel, the mistake committed by MUDA while uploading the measurements in the website, indicating the dimension of Site No.7663 as 196.20 square meters cannot and does not mean that the petitioner’s offer of Rs.58,00,000/-is for Site No.7663 measuring 196.20 square meters. Regard being had to Annexure-A, paper publication, the respondent-MUDA, it is submitted, was not justified in making a demand for Rs.67,14,981/-as against the petitioner’s offer of Rs.58,00,000/-being the highest. Learned counsel hastens to add that the respondent-MUDA having threatened cancellation of the auction bid, if the price was not paid compelled the petitioner to pay the entire sum, inclusive of the excess of Rs.9,14,981/-on 19/6/2012, after filing the petition, and on obtaining a loan. Learned counsel further submits that MUDA was not justified in demanding and recovering interest at 18% for a period of two months, on Rs.9,14,981/-. 7. Sri T.P. Vivekandanda, learned counsel for the respondent-MUDA seeks to support the endorsement impugned as being well merited, fully justified and not calling for interference. Learned counsel further submits that MUDA was not justified in demanding and recovering interest at 18% for a period of two months, on Rs.9,14,981/-. 7. Sri T.P. Vivekandanda, learned counsel for the respondent-MUDA seeks to support the endorsement impugned as being well merited, fully justified and not calling for interference. According to the learned counsel, petitioner’s bid was based upon the e-Auction Notification uploaded in the website maintained by the respondent-MUDA and not on the e-Auction Notification published in ‘The Times of India’, Mysore, Annexure-A. In other words, the offer of Rs.58,00,000/-was for site No.7663 measuring 196.20 square meters as indicate din e-Point and in view of Clause 23 of the General Terms and Conditions of e-auction hence justified in calling upon the petitioner to pay the price for the extra area of 27 square meters in terms of the endorsement dated 27/4/2012 and as set out in paragraph 9 of the statement of objections. Learned counsel submits that petitioner having made a representation on 12/4/2012 seeking extension of 60 days time for payment of the amount demanded in Annexure-E, confirmation letter, cannot be permitted to contend that he is not liable to pay the price for the area in excess of 196.20 square meters. 8. Having heard the learned counsel for the parties, perused the pleadings and examined the endorsement impugned, thee can be no dispute and it cannot be disputed that Annexure-A, paper publication, of the e-Auction Notification signed by the Engineer Member of the respondent-MUDA disclosed the dimension of Site NO.7663 as 236.70 square metes. It cannot also be denied that bidders were required to offer their bids through the e-Portal on the website maintained by the respondent-MUDA. The measurement of the said site as 196.20 square meters uploaded in the website is admitted in the statement of objections as “wrongly” uploaded, a “patent error” and due to “wrong date entry” If MUDA did not take precautionary measures in the matter of uploading the correct measurements of the sites in the e-Portal on its website, it ahs to blame itself. Apparently, the bid of Rs.58,00,000/-offered by the petitioner for Site No.7663 measuring 236.70 square meters was based upon the paper publication of the e-Auction Notification, Annexure-A. If that is so, then the petitioner cannot be mulcted with the liability to pay an additional sum of Rs.9,14,981/-in excess of Rs.58,00,000/-offered by the petitioner. Apparently, the bid of Rs.58,00,000/-offered by the petitioner for Site No.7663 measuring 236.70 square meters was based upon the paper publication of the e-Auction Notification, Annexure-A. If that is so, then the petitioner cannot be mulcted with the liability to pay an additional sum of Rs.9,14,981/-in excess of Rs.58,00,000/-offered by the petitioner. The mistake in uploading the measurement of the site No.7663 in the website, having emanated at the hands of MUDA, it cannot be said tha the petitioner’s offer of Rs.58,00,000/-was for Site bearing No.7663 measuring 196.20 square meters. The error in uploading the measurements of the sites in the website, while the e-Auction Notification published in the news paper, Annexure-‘A’ furnished an approximate measurements, cannot, by any stretch of imagination become a tool in the hands of the MUDA to insist upon the petitioner to pay the price for the balance area of 27 square meters by invoking Clause 23 of the general terms and conditions of the e-Auction Notification, since Clause 13 states that it is “as is where is condition”. In other words, Site No.7663 with measurements, location, description, boundaries, areas etc., as it is. It is needless to state that if the condition is ”as-is-where-is whatever is”, then a duty is cast upon the purchaser to carry out his due diligence in the matter of area, description, measurement, location, boundaries etc., and will be deemed to have made his offer with full knowledge as to the defects containing the description, quality or quantity of the asset put to sale. In view of the petition presented on 2.4.2012 it is too futile for the respondent-MUDA to submit that the petitioner’s letter dated 2.4.2012 seeking extension of time of 60 days from 12.4.2012 for payment of the amount demanded, is a waiver of his right to challenge the confirmation letter Annexure-E and endorsement Annexure-G. 9. In view of the petition presented on 2.4.2012 it is too futile for the respondent-MUDA to submit that the petitioner’s letter dated 2.4.2012 seeking extension of time of 60 days from 12.4.2012 for payment of the amount demanded, is a waiver of his right to challenge the confirmation letter Annexure-E and endorsement Annexure-G. 9. In the light of the averments in paragraph 9 of the statement of objections that on a report obtained, site No.7663 measures 18 meters x (12.30 + 12.50)/2 meters equivalent to 223.20 square meters and not 236.70 as advertised, applying Clause 23 of the general terms and conditions of the e-Auction Notification, Annexure-‘A’, the respondent-MUDA is required to refund together with proportionate interest, an amount calculated at Rs.29,561.67 per square metes for 13.50 square meters (236.70 (-) 223.20 square meters) fallen short, from out of Rs.58,00,000/-the bid offered and deposited by the petitioner. 10. In the circumstances, the demand for payment of Rs.9,14,981/-in excess of Rs.58,00,000/-together with Rs.27,450/-being the interest at 18% for a period of two months on the said sum is illegal and unjustified. 11. In the circumstances, this petition is allowed. The impugned demand, Annexure-E, insofar as it relates to payment in excess of Rs.58,00,000/-per square meters, is quashed. As a consequence, endorsement, Annexure-G, is also quashed. The respondent-MUDA is directed to accept the amount equi9valent to value of 223.20 square meters at Rs.29,561.67/= per square meters from out of Rs.58,00,000/-and interest thereon at 18% per annum for a period of two months and refund the balance amount Compliance within a week.