Order I.A. No. 1877 of 2013: Per D.N. Patel, J.-This interlocutory Application is filed under Section 5 of the Limitation Act praying for condonation of delay of four days in filing this Letters Patent Appeal. 2. Counsel Shri Indrajit Sinha is appearing on behalf of the respondent in this appeal as well as in the Interlocutory Applications. 3. Having heard counsel for both sides and looking to the reasons stated in this Interlocutory Application, specially in paragraph 4, 5, 6, 7 and 8 therein, there are reasonable grounds for condonation of four days' delay in filing this appeal. We, therefore, allow this interlocutory application (I.A. No. 1877 of 2013) and condone the delay in filing the Letters Patent Appeal. I.A. No. 1876 of 2013: 4. This Interlocutory Application is filed for stay of the impugned order dated 25th February, 2013 passed in W.P.(C) No. 6719 of 2012 by the learned Single Judge. Counsel for both sides are ready to argue their case and therefore, instead of hearing this interlocutory application, which will be as good as hearing; the Letters Patent Appeal, this court has heard the arguments of both sides for final disposal of the Letters Patent Appeal itself. 5. The present L.P.A. has been preferred against a judgment and order dated 25th February, 2013 passed in W.P.(C) No. 6719 of 2012, whereby the writ petition was allowed and Office Order No. 953 dated 19th October, 2012 was quashed and set aside. This office order was issued by the Executive Engineer, Irrigation Mechanical Division, Ranchi. By this order, Auction-Sale Notice No. 9/12-13 was cancelled, which resulted in cancellation of the earlier auction. This decision taken by the Government was under challenge in W.P.(C) No. 6719 of 2012. Being aggrieved and feeling dissatisfied by order dated 25th February, 2013, passed by the learned Single Judge, respondents of the writ petition-State of Jharkhand through Principal Secretary, Irrigation Department, Government of Jharkhand and others have preferred the present Letters Patent Appeal. 6. Factual Matrix: . Auction Sale Notice No. 9/12-13 was published (Annexure-1 to the writ petition) . • Initially the reserved price was fixed at Rs. 10,54,700/- as per the aforesaid auction notice, but thereafter, corrigendum was issued on 22nd September, 2012 whereby the reserved price was increased up to Rs. 13,34,985/-(Annexure-2 to the writ petition). • Auction was held on 4th October, 2012 and Rs. • Initially the reserved price was fixed at Rs. 10,54,700/- as per the aforesaid auction notice, but thereafter, corrigendum was issued on 22nd September, 2012 whereby the reserved price was increased up to Rs. 13,34,985/-(Annexure-2 to the writ petition). • Auction was held on 4th October, 2012 and Rs. 16,14,000/- was the price offered by the' present respondent. On 9th October, 2012, present respondent was directed to pay Value Added Tax amount to Rs. 80,7001-, which was deposited by the respondent on 11 th October, 2012. • On 9th October, 2012 complaint was received by the Secretary, Water Resources Department, Government of Jharkhand at Ranchi (Annexure-A to the counter affidavit filed by the present appellant in the writ petition), alleging fraud and conspiracy against the present respondent (original petitioner in the writ petition) and the officials of the Department, under whose supervision auction process was conducted. Similar complaint was also received by the Executive Engineer, Mechanical Division, Ranchi on 9th October, 2012. It is alleged by the signatories to the complaint, who were 10 in number and who had participated in the auction process, that goods worth crores had been auctioned at a throwaway price and rest of the participants in the auction were prevented from bidding and that the petitioner of the writ petition had also administered threat upon rest of the bidders. • Immediately, the Chief Engineer (Monitoring), Water Resources Department, Ranchi ordered an enquiry into the matter and on the very same day, i.e. on 9th October, 2012 the Superintending Engineer (Flying Squad Circle), Water Resources Department, Ranchi was directed to conduct enquiry by Departmental Memo No. 733 dated 9th October, 2012 (Annexure-B to the counter affidavit filed by the State of Jharkhand in the writ petition). A detailed report was prepared by a committee, consisting of following persons:- Mr. Vinay Sharma-Junior Engineer Mr. Pradeep Kr. Gupta-Assistant Engineer Mr. Ranjit Kr. Rana-Assistant Engineer . Mr. Rakesh Kr. Mishra-Executive Engineer Mr. Binay Kr.-Superintending Engineer This report is dated 11th October, 2012, in which it has been stated that there is under-valuation of the property auctioned and the earlier committee, which has valued the goods, has neither made any spot inspection nor any inventory was prepared and the latest valuation was also - not made. There is no basis of the calculation of the Reserved Price arrived at by the Government. There is no basis of the calculation of the Reserved Price arrived at by the Government. Further, there is no fixed quantity of the goods, so that a proper valuation can be arrived at. Lastly, it was mentioned that there are several items at the place, which do not find mention in the list of goods, to be auctioned and it is mixed with the goods auctioned in a manner making it very difficult to be segregated. Thus, if this auction is allowed, not only the goods, which were auctioned, will be taken away, but, several other goods, which are not included in the auction, will also be lifted. Several such type of observations were made by this Committee. The said report is at Annexure-D to the counter affidavit filed by the State of Jharkhand in the writ petition. • In the light of the recommendations of the Flying Squad (Departmental Vigilance Committee), the department issued a direction to constitute a Committee to make valuation of the Government materials to be auctioned. • In view of this report dated 11th October, 2012 submitted by the Departmental Vigilance Committee, entire auction process pursuant to Auction Sale Notice No. 9/12-13 was decided to be cancelled vide departmental letter no. 953 dated 19th October. 2014 (Annexure-6 to the writ petition) as there were ingredients of fraud, undue influence and misrepresentation and a decision was taken to issue fresh auction notice. • To prevent the loss of revenue, fraud, undue influence and misrepresentation, a new committee was constituted vide letter number 875 dated 27th November, 2012 for proper valuation of the material in question and the Revaluation Committee gave its report vide letter no. 1916 dated 13th December, 2012 and the valuation was at Rs. 36,59,712/-. Thereafter, there was corrigendum issued and the price was fixed at Rs. 41,23,012/- because some material was inadvertently not valued. • Thereafter, fresh advertisement for auction of the material in question was published for which letter dated 14th February, 2013 was written for publication to the Director, Information & Public Relation Department, Govt. of Jharkhand, Ranchi and the auction was held on 1st March, 2013. The petitioner in the writ petition challenged Order No. 953 dated 19th October, 2012 of the Executive Engineer, Irrigation, Mechanical Division, Ranchi, whereby a decision was taken that earlier auction-sale notice no. 9/12-13 has been cancelled. of Jharkhand, Ranchi and the auction was held on 1st March, 2013. The petitioner in the writ petition challenged Order No. 953 dated 19th October, 2012 of the Executive Engineer, Irrigation, Mechanical Division, Ranchi, whereby a decision was taken that earlier auction-sale notice no. 9/12-13 has been cancelled. This writ petition has been allowed vide order dated 25th February, 2013. Meanwhile, a letter has been received by the State of Jharkhand, which is at Annexure-11 to the supplementary affidavit filed in this Letters Patent Appeal, offering As. 42 lakhs for the goods in question. • Govt. of Jharkhand also issued show-cause notices to its officers for under-valuation of the goods as well as for not making proper quantification of the goods and for playing fraud and their connivance in the matter of auction. This, Notice is at Annexure-12 to the supplementary affidavit filed by the State of Jharkhand in this Letters Patent Appeal. Arguments on behalf of the Appellant-State of Jharkhand: 7. It is submitted by learned Additional Advocate General that auction-sale notice was initially issued with a reserved price of As. 10,54,700/- which was subsequently increased up to 13,04,985/-, as per corrigendum published on 22nd September, 2012. Auction was held on 4th October, 2012 and the present respondent (original petitioner) has offered As. 16,14,000/-. Thereafter, the present respondent had deposited As. 2,63,700/before 4th October, 2012. The auction was held on 4th October, 2012 and on 9th October, 2012, rest of the amount, i.e. As. 12,80,000/- was deposited. It is submitted by learned Additional Advocate General that on the very same day, i.e. on 9th October, 2012 there were complaints received. The respondent deposited As. 80,700/- towards Value Added Tax etc., The complaints on behalf of rest of the bidders dated 9th October, 2012, received by the State, contained several allegations that fraud is being played and under undue influence, the goods worth in crores were sold away at a negligible price. Immediately a committee was constituted on the very same day, i.e. on 9th October, 2012. The committee gave a detailed report, mentioning therein, that the previous committee, responsible for valuation, had neither visited the place where the goods (scraps) were lying nor was there any proper quantification of the goods as to how many metric tonnes of goods were lying and what quantity of goods are sold out. The committee gave a detailed report, mentioning therein, that the previous committee, responsible for valuation, had neither visited the place where the goods (scraps) were lying nor was there any proper quantification of the goods as to how many metric tonnes of goods were lying and what quantity of goods are sold out. Moreover, it has been observed by the committee in its report dated 11th October, 2012 that there was no basis of valuation arrived at by the earlier committee before the auction and that the valuation was very much on the lower side. Immediately, on 18th October, 2012, a decision was taken to cancel the auction and it was cancelled on 19th October, 2012. This decision was challenged by the present respondent, i.e. original petitioner in W.P.(C) No. 6719 of 2012. Fresh valuation was ordered to be made and fresh valuation arrived at, was much higher than the earlier valuation. Notice of fresh auction was also published on 14th February, 2013 and the price now offered is at approximately Rs. 42 lakhs. It is also submitted by the Additional Advocate General, upon instruction from the Chief Engineer, who is present in the Court, that the goods in question is scrap iron, approximately thousand metric tonnes in weight. 1 Metric ton=1000 kgs. and therefore, weight of the total goods in question is 1000 X 1000 kgs.=1000000 Kgs. The minimum price of scrap iron in the open market is Rs. 20 per kgs. and therefore, total minimum value of the goods will come to 10,00,000 kg. X Rs. 20/- = Rs. 2,00,00,0001, i.e. 2 Crores. 8. It is submitted by the Additional Advocate General that this is the minimum valuation. Now, the price has also been offered at Rs. 42 lakhs and therefore, let the Government be permitted to obtain highest value of the goods, in question. It is submitted by the Additional Advocate General that possession of the goods, in question, was never given to the original petitioner. There is remarkable difference in between the fresh valuation of the goods, arrived at by the Government, and the price offered by the original petitioner (Rs. 16,14,000/-) and since the price now offered is at Rs. 42 lakhs, if permission is granted to hold auction under the direct supervision and control of the present Appellant No.2, i.e. Principal Secretary, Irrigation Department, Ranchi, the Government of Jharkhand may fetch 2 Crores. 16,14,000/-) and since the price now offered is at Rs. 42 lakhs, if permission is granted to hold auction under the direct supervision and control of the present Appellant No.2, i.e. Principal Secretary, Irrigation Department, Ranchi, the Government of Jharkhand may fetch 2 Crores. Thus, the price difference is very high. 9. It is further submitted by the Additional Advocate General that looking to the report given on 11th October, 2012 by the Committee constituted by the Government of Jharkhand, which is at Annexure-D to the counter affidavit filed in the writ petition, it appears that several undisputed facts have been pointed out, like the earlier committee never visited the place of auction where the goods were lying and neither it had arrived at any conclusion about the 'quantity of the goods to be sold out nor it had arrived at any basis for the valuation. Moreover, several other goods which were not mentioned in the auction-sale notice were also mixed with the goods to be sold in a manner making it very difficult to be segregated. Meaning thereby, goods worth in crores were sold at a -throwaway price of Rs. 16,14,000/- only. The, original petitioner would have lifted the goods, which were auctioned, and in the process he would have also taken away the goods, which were deliberately not put for auction. This has been done with connivance of the officers of the State and therefore, departmental proceedings have also been initiated against the erring Government officers. Thus, there were several irregularities and fraud in the conduct of sale and therefore, earlier auction sale was cancelled. This aspect of the matter has not been properly appreciated by the learned Single Judge and hence the judgment and order passed by the learned Single Judge deserves to be quashed and set aside. Counsel for the appellant has relied upon the following decisions:- (a) M/Is Navalka and Sons vs. Sri Ramanya Das and Others reported in (1969)3 SCC 537 para no. 6. (b) Allahabad Bank and Others vs. Bengal Paper Mills Co. Ltd. and Others reported in (1999)4 SCC 383 . (c) Divya Manufacturing Company (P) Ltd. Tirupati Woollen Mills Shramik Sangharsha Samity and Another vs. Union Bank of India and Others Official Liquidator and Others reported in (2000)6 SCC 69 . 6. (b) Allahabad Bank and Others vs. Bengal Paper Mills Co. Ltd. and Others reported in (1999)4 SCC 383 . (c) Divya Manufacturing Company (P) Ltd. Tirupati Woollen Mills Shramik Sangharsha Samity and Another vs. Union Bank of India and Others Official Liquidator and Others reported in (2000)6 SCC 69 . (d) +Valji Khimji and Company vs. Official Liquidator of Hindustan Nitro Product (Gujarat) Limited and Others reported in (2008)10 SCC 440 . (e) *FCS Software Solutions Ltd. vs. La Medical Devices limited and Others reported in (2008) 9 see 299. 10. On the basis of the aforesaid decisions, it is submitted by the counsel for the appellant-State of Jharkhand that whenever possession is not given and the sale agreement is not executed and there is a fraud or gross undervaluation of the goods and grossly inadequate is the price offered, the auction sale can be cancelled. This aspect of the matter has also not been properly appreciated by the learned single Judge and therefore also, judgment and order passed by the learned single Judge deserves to be set aside. It is further submitted by the Additional Advocate General that in view of the fresh auction-sale notice, the original petitioner can also participate. Arguments on behalf of Respondent-Original Petitioner: 11. We have also heard counsel for the respondent (original petitioner). It is mainly submitted by the counsel for the respondent that the auction had taken place on 4th October, 2012 and after long lapse of time, i.e. on 19th October, 2012 the auction was cancelled. This is not permissible in the eye of law. Secondly, it is submitted by the counsel for the respondent that in all the earlier decisions cited by the appellant the auction was to be finally approved by the Company Court Judge, whereas in the present case auction is held by the Government and therefore, the decisions cited by the counsel for the appellant-State are not applicable to the facts of the present case. Moreover, there is no condition like confirmation of sale by a court or by the Government in the present auction sale. Once the auction process is over, the sale is concluded. On 4th October, 2012 the sale process was complete and the present respondent (original petitioner) was the highest bidder and as he has deposited the price of the goods alongwith Value Added Tax etc. Once the auction process is over, the sale is concluded. On 4th October, 2012 the sale process was complete and the present respondent (original petitioner) was the highest bidder and as he has deposited the price of the goods alongwith Value Added Tax etc. now, there is estoppel on the part of the State of Jharkhand and it cannot cancel the auction. This aspect of the matter was properly appreciated by the learned Single Judge and therefore, this Letters Patent Appeal may not be allowed by this Court. It is also submitted by the counsel for the appellant that new goods have been added in the second auction notice and therefore, there is higher valuation. Counsel for the appellant has also relied upon the decision rendered by the Hon'ble Supreme Court in *FCS Software Solutions Ltd. VS. La Medical Devices Limited and Others reported in (2008)9 SCC 299 in Paragraph Nos. 27, 29 and 30. On the basis of the aforesaid decision, it is submitted by the counsel for the respondent (original petitioner) that the sale which has been already confirmed by the Government may not be interfered by this court. Reasons: 12. Having heard counsel for both the sides and looking to the facts and circumstances of the present case, we, hereby, quash and set aside the judgment and order dated 25th February, 2013, passed by the learned Single Judge in W.P.(C) No. 6719 of 2012, mainly for the following facts and reasons:- (I) It appears from the facts of the case that in pursuance of auction-sale notice bearing number 9/2012-13 and corrigendum dated 22nd September, 2012 in a local daily newspaper namely "Dainik Jagaran", reserved price for the goods (iron scrap) to be auction was' increased from As. 10,54,700/- to As. 13,34,985/-. The original petitioner deposited As. 2,63,700/- prior' to the auction, which was held on 4th October, 2012. The original petitioner offered As. 16,14,000/- and he deposited the purchase amount on 9th October, 2012 and on 11th October, 2012 original petiti0ner .further deposited As. 80,700/- towards value Added Tax etc. Now, before the Value Added Tax and the rest of the price was deposited by the original petitioner, there were complaints received by the Secretary, Water Resource Department, Govt. 16,14,000/- and he deposited the purchase amount on 9th October, 2012 and on 11th October, 2012 original petiti0ner .further deposited As. 80,700/- towards value Added Tax etc. Now, before the Value Added Tax and the rest of the price was deposited by the original petitioner, there were complaints received by the Secretary, Water Resource Department, Govt. of Jharkhand, Ranchi, whereby fraud and conspiracy were alleged against the original petitioner and the officers of the Department, under whose supervision and control the auction process was conducted on 4th October, 2012. Similar complaint was also received by the Executive Engineer, Mechanical Division, Ranchi on 9th October, 2012. These complaints are on record of. the proceedings. (II) looking to the nature of the complaints, it appears that original petitioner had administered threat and not allowed the other bidders to offer their higher prices and as a result goods worth several lakhs were sold away at a throwaway price. There is also allegation about connivance of the Government officers. These complaints are at Annexures-4 and 4/1 to the supplementary counter affidavit filed on behalf of the State of Jharkhand in this letters Patent Appeal. Looking to these allegations, it appears that immediately the department. decided to enquire into the matter through Departmental Vigilance, which is also known as a Flying Squad. This decision was also taken on the very same day the complaint was received, i.e. on 9th October, 2012. The Chief Engineer (Monitoring), vine his Letter Number 733 dated 9th October. 2012 issued a direction to the Superintending Engineer. Flying Squad to enquire into the matter on or before 10th October. 2012 and direction was given to submit report on the very same day. In pursuance of this direction, immediately the Flying Squad visited the place where the goods were lying and• after verifying several facts, given a detailed report dated 11th October, 2012. The said report is at Annexure-D to the counter affidavit filed by the State ill the writ petition as well as at Annexure-6 to the supplementary Affidavit filed by the State in this Letters Patent Appeal. In the said report• several irregularities have been pointed out regarding following aspects:- (a) The valuation made by the earlier committee. (b) About the quantity of the goods to be auctioned. In the said report• several irregularities have been pointed out regarding following aspects:- (a) The valuation made by the earlier committee. (b) About the quantity of the goods to be auctioned. (c) The fact that neither there was any basis of valuation made by the earlier committee nor a correct valuation was made by the earlier committee. (d) Several other goods lying there, were so mixed with the goods to be auctioned, that it was difficult to be segregated. Thus, looking to the aforesaid report of the Flying Squad Committee, it appears that there was connivance of the Government officials also. The goods auctioned was much lesser in quantity and they were mixed with other scrap goods in a manner that at the time of lifting of the auctioned goods by the purchaser several other items can also be taken away easily. As a cumulative effect of the aforesaid aspects, it is apparent that there was gross irregularity as well as fraud in the earlier auction process. Due to this report dated 11th October, 2012, department has taken a decision on 18th October, 2012 to cancel the auction and actually it was can. celled vide Office Order No. 953 dated 19th October, 2012 issued by the Executive Engineer, Irrigation Mechanical Division, Ranchi (Impugned order in the writ petition). It appears that no illegality has been committed by the State of Jharkhand in cancelling the earlier auction because even if the sale has been confirmed auction can be cancelled and the sale can also be cancelled. Further, even if there is no allegation of the fraud or irregularity only on the ground that the price fetched by the auction of the Government goods is much lesser and a new price offered by the other party is remarkably high an auction can be cancelled. (III) It has been held by the Hon'ble Supreme Court in M/s Navalkha and Sons vs. Sri Ramanya Das And Others reported in (1969)3 SCC page no. 537 in Paragraph No.6 as under:- "6. The principles which should govern confirmation of sales are well established. Where the acceptance of the offer by the Commissioners is subject to confirmation of the court and offerer does not by mere acceptance get any vested right in the properly so that he may demand automatic confirmation of his offer. 537 in Paragraph No.6 as under:- "6. The principles which should govern confirmation of sales are well established. Where the acceptance of the offer by the Commissioners is subject to confirmation of the court and offerer does not by mere acceptance get any vested right in the properly so that he may demand automatic confirmation of his offer. The condition of confirmation by the Court operates as a safeguard against the property being sold at inadequate price whether or not it is a consequence of any irregularity or fraud in the conduct of the sale. In every case, it is the duty of the Court to satisfy itself that having regard to the market value of the property the price offered is reasonable. Unless the court is satisfied about the adequacy of the price the' act of confirmation of the sale would not be a proper exercise of judicial discretion. In Gordhan Das Chuni Lal vs. T. Sriman Kanthimathinatha Pillai it was observed that where the property is authorised to be sold by private contract or otherwise it is the duty of the Court to satisfy itself that the price fixed is the best that could be expected to be offered. That is because the Court is the custodian of the interests of the Company and its creditors and the sanction of the Court required under the Companies Act has to be exercised with judicial discretion regard being had to the interest of the Company and its creditors as well. This principle was followed in Rathnaswami Pillai vs. Subbaraya Mudaliar vs. K. Sundarajan vs. M/s Roshan & Co. In A. Subbaya Mudaliar vs. K. Sundarajan it was pointed out that the condition of confirmation by the Court being a safeguard against the property being sold at an inadequate price, it will be not only proper but necessary that the Court in exercising the discretion which it undoubtedly has of accepting or refusing the highest bid at the auction held in pursuance of its orders, should see that the price fetched at the auction held in pursuance of its orders should see that the price fetched at the auction is an' adequate price even though there is no suggestion of irregularity or fraud. It is well to bear in mind the other principle which is equally well-settled namely that once the Court comes to the conclusion that the price offered is adequate, no subsequent higher offer can constitute a valid ground for refusing confirmation of the sale or offer already received. (See the decision of the Madras High Court in Roshan & Co's. case (supra)]." (Emphasis supplied) In view of the aforesaid decision, if the price fetched in the auction is inadequate it can be cancelled even though there is no suggestion of irregularity or fraud. It has been found by the Hon'ble Supreme Court that in the facts of that case, neither the possession of property was given nor the sale deed was executed in favour of the highest bidder and instead of Rs. three crores, there was offer of Rs. Two crores and this difference was remarkable. Therefore, even it it may cause some inconvenience or loss to the highest bidder, but that cannot come in the way of cancellation of the earlier auction. In the facts of the present case the price offered by the original petitioner as the highest bidder is Rs. 16.14.000/-. whereas, subsequently another bidder has already offered Rupees 42 lakhs. Thus, the difference is of more thin 200%. and as submitted by the Additional Advocate General of the State, in fact, if this court permits fresh auction to be conducted under the direct supervision and control of the present appellant no.2-Principal Secretary, Irrigation Department, Government of Jharkhand, Ranchi, as per their calculation, the goods are worth minimum Rupees 2 Crores. Thus, the difference will be more than hundred times than the price offered by the present respondent (original petitioner). Moreover, the auction has taken place on 4th October, 2012. The original petitioner deposited Rs. 12,80,000/- on 9th October, 2012, i.e. the day on which the complaints were received and on the same day Flying Squad Committee was constituted. Immediately, on 11th October, 2012. report of the Committee was given to the Government and on the same day the original petitioner deposited Rs. 80,700/- towards value. added tax etc. on 11th October, 2012 and the Government has taken a decision to 'cancel the auction on 18th October, 2012 and the final office order was passed by the Executive Engineer on 19th October, 2012, which is the impugned decision in the writ petition. 80,700/- towards value. added tax etc. on 11th October, 2012 and the Government has taken a decision to 'cancel the auction on 18th October, 2012 and the final office order was passed by the Executive Engineer on 19th October, 2012, which is the impugned decision in the writ petition. Thus, it appears that immediately the steps have been taken by the. Government and in a day or two the Flying Squad Committee gave its report to the Government. It appears that there is no delay by the Government at all. On 20th December, 2012, a fresh valuation report was given and on 14th February, 2013 fresh auction notice has also been issued. (IV) A contention has been raised by the counsel for the present respondent (original petitioner) that there is a long delay between the first auction dated 4th October, 2012 and the second auction notice dated 20th February, 2013. This contention is not accepted by this court for quashing the decision of the Government to cancel the earlier auction mainly for the reason that whenever there is allegation of fraud and connivance of the Government officials in the auction process conducted by the Government. it is bound to take some time to unearth the fraud. The allegations are to be inquired into. The reports are to be received by the Government. These reports are to be perused and appreciated by high ranking Government officers and thereafter final decision is being taken to cancel the earlier auction and again it takes time for advertisement of the second auction notice. which cannot be expected to be done by the Government overnight. Fraud and collusion on the part of the officials of the Government can be found out, but, this process is bound to take sometime. But, merely because there is some delay on the part of the Government in cancelling the earlier auction it cannot be said that the Government has illegally cancelled the same. (V) It has been held by the Hon'ble Supreme Court in FCS Software Solutions Ltd. vs. La Medical Devices Limited and Others reported in (2008)10 SCC in paragraph no. 34 and 35 as under:- "34. In Divya Manufacturing Co. (P) Ltd. vs. Union Bank of India this Court held that even a confirmed sale can be set aside. (V) It has been held by the Hon'ble Supreme Court in FCS Software Solutions Ltd. vs. La Medical Devices Limited and Others reported in (2008)10 SCC in paragraph no. 34 and 35 as under:- "34. In Divya Manufacturing Co. (P) Ltd. vs. Union Bank of India this Court held that even a confirmed sale can be set aside. In that case, the highest bid by a party was accepted by the Court and the sale was confirmed, but before possession was delivered to the auction-purchaser and the execution of the sale deed, other parties offered much higher price. The High Court required the subsequent bidders to deposit an amount of 25% which was done. Considering the facts in their entirety, the High Court set aside the confirmation of past highest bid. The said action was challenged in this Court. This Court held that in an appropriate case even confirmed sale can be set aside. The Court held that in an appropriate case, even confirmed sale can be set aside. The Court in this connection, relied upon earlier two decisions in LICA (P) Ltd. (1) vs. Official Liquidator and LICA (P) Ltd. (2) vs. Official Liquidator. 35. The learned counsel for the appellant is no doubt right in submitting that in Divya there was a specific condition (Clause 11) which empowered the Court to set aside confirmed sale "in the interest of creditors, contributors and all concerned and/or in public interests". But the Court put the matter on principle and stated: (SCC p. 78, para 13) "13. .......it is duty of the court to see that the price fetched at the auction is an adequate price even though there is no suggestion of irregularity or fraud." It proceeded to observe:-(SCC p.79, para 16) "16 ....Confirmation of the sale by a court at a grossly inadequate price, whether or not it is a consequence of any irregularity or fraud in the conduct of sale, could be set aside on the ground that it was not just and proper exercise of judicial discretion. In such cases, a meaningful intervention by the court may prevent to some extent underbidding at the time of auction through court." (Emphasis supplied) In the aforesaid decision, it has been held by the Hon'ble Supreme Court, based upon earlier decision, that even confirmed sale can be set aside. In such cases, a meaningful intervention by the court may prevent to some extent underbidding at the time of auction through court." (Emphasis supplied) In the aforesaid decision, it has been held by the Hon'ble Supreme Court, based upon earlier decision, that even confirmed sale can be set aside. Therefore, in the facts of the present case; the confirmed sale can be set aside by the State Government on the basis of the report submitted by the Flying Squad Committee dated 11th October, 2012 (Annexure-D to the counter affidavit filed in the writ petition). (V) It has been held by the Hon'ble Supreme Court in Valji Khimji & Company vs. Official Liquidator of Hindustan Nitro Product (Gujarat) Limited & Others reported in (2008)9 SCC page no. 299 [: 2008(4) JLJR (SC)146] in paragraph no. 28:- “……………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………. Of course, the situation may be different If an auction-sale is finalised, say for Rs. 1 crore and subsequently somebody turns up offering Rs. 10 crores. In this situation it is possible to infer that there was some fraud because if somebody subsequently offers Rs. 10 crores, then an inference can be drawn that an attempt had been made to acquire that property/asset at a grossly inadequate price. This situation itself may indicate fraud or some collusion. However, if the price offered after the auction is over which is only a little over the auction price, that cannot by itself sugqest that any fraud has been done." (Emphasis supplied) Thus, if there is a remarkable difference in the price offered in the first auction sale and in the subsequent auction sale and the earlier price offered is grossly inadequate, the first auction sale can be cancelled because the price difference will indicate fraud or some collusion. In the facts of the present case the price offered by the original petitioner is Rs. 16.14.000/-. whereas now the price offered by one of the parties is at 42 lakhs. In the facts of the present case the price offered by the original petitioner is Rs. 16.14.000/-. whereas now the price offered by one of the parties is at 42 lakhs. which can still be increased as per the calculation shown by the Additional Advocate General and it can go up to minimum 200 lakhs (Two crores).- Thus the price offered by the original petitioner is grossly inadequate and whenever there is a grossly inadequate price fetched in the first auction sale then the same can be cancelled by the Government because this gross inadequacy in the price indicates fraud or some collusion and therefore even though there is no direct allegation of fraud or irregularity, then also looking to the gross difference in the price offered the first auction sale can be cancelled by the Government. This aspect of the matter has not been properly appreciated by the learned Single Judge and therefore also the judgment and order passed by the learned Single Judge deserves to be quashed and set aside. (VI) Paragraph No. 11 of the decision rendered by the learned Single Judge reads asunder:- "Moreover, it also appears that no opportunity was afforded to the petitioner before the order cancelling the auction notice was passed. The impugned action of the respondents are therefore arbitrary, unreasonable and cannot be sustained in law as well as on facts........................." Thus, the reasons given by the learned Single Judge is that before cancelling the first auction sale, opportunity of being heard should be given to the highest bidder and if this opportunity is not given the fresh auction of the Government becomes arbitrary and unreasonable. In fact, there is no legal requirement of affording any opportunity of being heard to the earlier bidder. First auction sale can be cancelled by the State of Jharkhand on the basis of the report given by the Flying Squad Committee dated 11th October. 2012. in which there are allegations of undervaluation of the goods to be auctioned leading to much lower Reserved Price. Further the goods to be auctioned were so mixed with the goods which are not auctioned that they were difficult to be segregated. 2012. in which there are allegations of undervaluation of the goods to be auctioned leading to much lower Reserved Price. Further the goods to be auctioned were so mixed with the goods which are not auctioned that they were difficult to be segregated. Thus, the auction purchaser was facilitated by the connivance of Government Officers (Upon whom departmental proceedings have been initiated), to lift the goods which are auctioned and other goods also because other goods were not possible to be segregated from the auctioned goods. In the complaint, there were allegations about fraud and collusion by the Government officers. In these set of circumstances no illegality has been committed by the State Government in cancelling the first auction sale. The reason given in paragraph 11 of the decision of the learned Single Judge is also not tenable at law. 13. As a cumulative effect of the aforesaid facts, reasons and judicial pronouncements, we, hereby, quash and set aside the judgment and order dated 25th February, 2013, passed by the learned Single Judge in W.P.(C) No. 6719 of 2012. 14. This letters Patent Appeal allowed and disposed of. 15. I.A. No. 1876 of 2013 is disposed of accordingly. 16. I.A. No. 1877 of 2013 is also allowed and disposed of.