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2014 DIGILAW 97 (MAD)

M. Eswari v. Regional Manager MSTC Limited

2014-01-10

N.PAUL VASANTHAKUMAR

body2014
JUDGMENT 1. The prayer in the writ petition is to issue a Writ of Mandamus directing the first and second respondents to dispose of the petitioner's representation dated 9.2.2013. 2. In the representation, the petitioner has prayed for return of EMD to the tune of Rs.8,75,029/- with 2% interest from the date of deposit in addition to Rs.10,00,000/- as compensation by the first respondent for not paying due attention before auction and Rs.25,00,000/- for creating hardship and mental agony. 3. The said representation was submitted on the following circumstances. "(i) The petitioner participated in the e-auction held by the first respondent-company on 3.7.2012 and he was declared as the purchaser of "Film solar photovoltic module" for an amount of Rs.35,00,114/- and he was asked to pay EMD amount of Rs.8,75,029/- to the second respondent. The petitioner has paid the said EMD amount on 10.7.2012 and he was asked to pay the remaining amount within six days. (ii) According to the petitioner, he made a representation on 10.7.2012 demanding sample pieces and extension of time, for which, the second respondent issued a letter on 12.7.2012 to the third respondent directing the third respondent to hand over 10 numbers of samples, of which only 9 numbers of solar panels were given as samples by the third respondent. On processing, the petitioner was warned by the Pollution Control Board officials for carelessly handling the waste and gave a direction in disposing of the wastes i.e. only through factory outlet processing method and under their supervision. (iii) On 21.8.2012, the petitioner addressed a letter to the second respondent and explained about the difficulties as well as the oral instruction given by the Pollution Control Board. The petitioner demanded 500 numbers of solar panels from the New India Assurance and he processed 100 numbers as per the guidelines given by the Pollution Control Board. (iv) While the process was going on, they stopped the process and demanded e-waste certificate and e-waste disposal license by the petitioner. The petitioner was instructed to stop further processing till the certificate was obtained. The petitioner stopped the process and intimated the same on 30.10.2012 to the second respondent and requested to return the EMD. (v) On 14.12.2012, the second respondent informed that due to failure of non-payment of balance amount, the entire process of disposing the material was transferred to the third respondent. The petitioner stopped the process and intimated the same on 30.10.2012 to the second respondent and requested to return the EMD. (v) On 14.12.2012, the second respondent informed that due to failure of non-payment of balance amount, the entire process of disposing the material was transferred to the third respondent. The second respondent also transferred the EMD amount of Rs.8,75,029/- and instructed the petitioner to contact L & T for payment, but the same was denied with a direction to meet the second respondent officials. (vi) The petitioner again submitted a representation to respondents 1 and 2 on 27.12.2012 and demanded the EMD deposit. The petitioner again submitted a representation on 2.1.2013, for which, on 9.1.2013, the second respondent gave a reply. Not satisfied with the said reply, the petitioner submitted further representation on 9.2.2013, which is sought to be disposed of by this writ petition." 4. The said prayer in the writ petition is opposed by respondents 1 and 2. 5. The learned counsel appearing for the first respondent relying on the auction condition, particularly condition No.7, submitted that the petitioner having chosen to participate in the e-auction, on the basis of as is where is condition, he is not entitled to now turn around and state that he is not aware of the licence to be obtained and applying the Principle of Caveat Emptor, the petitioner is not entitled to demand refund of EMD with any further relief. 6. The learned counsel appearing for the second respondent submitted that similar issue was considered by the Honourable Supreme Court in the decision reported in 2011 STPL (Web)705 SC (State of Haryana & Others vs. M/s.Malik Traders) and stated that the petitioner is not having any enforceable right for giving direction to consider the representation of the petitioner. 7. I have considered the rival submissions made by the respective parties. 8. Condition No.7 of the Special Terms and Conditions of e-Auction is relevant for deciding this case, which is extracted hereunder:- "7) GENERAL: a) INSPECTION OF MATERIALS: Notwithstanding anything contained in the auction sale notice issued as to description and particulars of materials put for sale, the sale is on "as is where is" and no complaint basis only. MSTC/Seller do not give any assurance or guarantee that the materials to be delivered will adhere to notice or list. MSTC/Seller do not give any assurance or guarantee that the materials to be delivered will adhere to notice or list. The purchaser shall have to satisfy himself on inspection of the lots as to what they contain and make his/her offer accordingly. No plea or misunderstanding or ignorance or conditions put forth subsequent to any confirmation of sale shall be accepted. The principle of "CAVEAT EMPTOR" (LET THE BUYER BE AWARE) WILL APPLY. The registered Parties (or their Authorised Representative) should inspect the materials at the specified locations by producing their e-Auction Photo ID Card to the Seller or by producing a copy of this e-auction Catalogue downloaded from the Website." From the perusal of the above condition, which is binding on the petitioner, petitioner is not entitled to contend that he was not aware of the necessity to obtain e-waste certificate and e-waste disposal licence. 9. As rightly contended by the learned counsel for the first respondent, the principle of Caveat Emptor will apply in this case with all force. The principle of Caveat Emptor was considered by the Honourable Supreme Court in the decision reported in 2009 (11) SCC 18 (Commissioner of Customs (Preventive) vs. Aafloat Textiles (I) P Ltd), wherein in paragraphs-15 to 17, the said principle is explained as follows:- "15. “Caveat emptor is the ordinary rule in contract. A vendor is under no duty to communicate the existence even of latent defects in his wares unless by act or implication he represents such defects not to exist.” (See William R. Anson, Principles of the Law of Contract 245, Arthur L. Corbin, ed., 3d Am. Edn. 1919.) Applying the maxim, it was held that it is the bounden duty of the purchaser to make all such necessary enquiries and to ascertain all the facts relating to the property to be purchased prior to committing in any manner. 16. Caveat emptor qui ignorare non debuit quod jus alienum emit. A maxim meaning “let a purchaser beware; who ought not to be ignorant that he is purchasing the rights of another”. (Hob. 99; Broom; Co., Litl: 102 a: 3 Taunt. 16. Caveat emptor qui ignorare non debuit quod jus alienum emit. A maxim meaning “let a purchaser beware; who ought not to be ignorant that he is purchasing the rights of another”. (Hob. 99; Broom; Co., Litl: 102 a: 3 Taunt. 439.) As the maxim applies, with certain specific restrictions, not only to the quality of, but also to the title to, land which is sold, the purchaser is generally bound to view the land and to enquire after and inspect the title deeds; at his peril if he does not. 17. Upon a sale of goods the general rule with regard to their nature or quality is caveat emptor, so that in the absence of fraud, the buyer has no remedy against the seller for any defect in the goods not covered by some condition or warranty, expressed or implied. It is beyond all doubt that, by the general rules of law there is no warranty of quality arising from the bare contract of sale of goods, and that where there has been no fraud, a buyer who has not obtained an express warranty, takes all risk of defect in the goods, unless there are circumstances beyond the mere fact of sale from which a warranty may be implied. (Bottomley v. Bannister and Ward v. Hobbs) (Latin for Lawyers). No one ought in ignorance to buy that which is the right of another. The buyer according to the maxim has to be cautious, as the risk is his and not that of the seller." Thus, the petitioner cannot blame the respondents 1 and 2 for the fault committed by him in not noticing the fact about obtaining consent from the Pollution Control Board for removal of e-waste. 10. In the e-Tender Notification itself, Condition No.3 clearly states that failure to complete the contract by the successful bidder will entail forfeiture of EMD. The Supreme Court in the decision reported in2012 (6) CTC 621 (Sathish Batra vs. Sudhir Rowal) considered the applicability of forfeiture clause contained in the contract and held that if there is a forfeiture clause in the contract and in case, the agreement/transaction is cancelled, the earnest money will be forfeited. 11. The Supreme Court in the decision reported in2012 (6) CTC 621 (Sathish Batra vs. Sudhir Rowal) considered the applicability of forfeiture clause contained in the contract and held that if there is a forfeiture clause in the contract and in case, the agreement/transaction is cancelled, the earnest money will be forfeited. 11. It will be relevant to point out here that forfeiture clause is always included to ensure that only genuine person can make a bid and to prevent persons, who do not have capacity or intention of entering into contract by making bid. 12. Considering all the above reasons, there is no infirmity on the part of the respondents 1 and 2 in 13. In the light of the said decisions of the Supreme Court as well as the condition contained in e-auction notification, this Court is not inclined to give any direction as prayed for, as the petitioner has no enforceable right for issuance of writ of mandamus to consider his representation. Hence, the writ petition is dismissed. No costs.