K S Asif vs The State Of Andhra Pradesh
2022 Latest Caselaw 2337 AP

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      HON'BLE SRI JUSTICE D.V.S.S.SOMAYAJULU
             WRIT PETITION No.28921 of 2021
ORDER :

This Writ Petition is filed challenging the Notification

dated 01.12.2021 issued by the 2nd respondent as illegal,

inoperative and contrary to law.

This Court has heard Sri V.S.R.Anjaneyulu, learned

senior counsel for the petitioner, Sri Shaik Karimulla, learned

standing counsel appearing for the 2nd to 4th respondents and

Sri G. Ramgopal, learned counsel for the unofficial

respondents and the learned Government Pleader for Social

welfare appearing for the 1st respondent.

The petitioner in this case is questioning the actions of

the Waqf Board and in particular the 3rd respondent who

according to the petitioner granted some "extra bounty" and

privileges to the 5th respondent in a tender. Learned senior

counsel has filed a list of dates, which are taken on record.

He relied upon the said dates to argue that the entire action

in this case is vitiated. He points out that the issue in this

case relates to the tender dated 07.07.2021 for about 17

items which were later reduced pursuant to the order of the

Court. Learned senior counsel submits that the terms and

conditions of the tender are reproduced in the writ affidavit

itself and they are not denied. As per him there is a strict

time frame even for payment of the sums due. It is his

contention that 20% should be paid on the day of the auction,

30% within seven days and 50% within 90 days as per the

tender conditions. He also says that penal consequences are

attached to the same. Therefore, learned senior counsel

argues that the action of the respondents in granting time to

the 5th respondent extending time upto March, 2022 under

various letters, which are filed, clearly amounts to an undue

favour. He points out that even in the Writ Appeal which was

filed against the learned single Judge's order, the permission

was given to make a representation only, but the said

representation cannot be disposed of contrary to the terms of

the tender. Learned counsel argues in this case if the tender

conditions were to be relaxed, all the tenderers should be

given equal opportunity to pay the money in installments etc.

He also argues that the counter is only filed by the 5 th

respondent and despite the allegations made the 3rd

respondent has not filed a counter denying the allegations. It

is also pointed out that when the Writ Appeal was being heard

against the order in W.P.No.20624 of 2021 the Waqf Board

did not raise a proper protest or seek to adjudicate the case

on merits. As a result of which, he says that the 5th

respondent has got undue benefit.

The essential arguments in this case are advanced by

Sri G. Ramgopal, learned counsel for the 5th respondent. He

submits that his client is being unnecessarily penalized. It is

admitted that the 5th respondent is a successful tendered in

the tender referred to above. The Chief Executive Officer

initially granted 15 days time to pay the amount as per the

Bid. Thereafter, on 31.08.2021, due to covid calamity the 5th

respondent made a representation to grant installments and

considering the situation the 3rd respondent permitted him to

pay by installments. This is based upon an earlier precedent

of January, 2017, where a similar benefit was extended to the

tenderer in that case. With regard to the Writ Appeal it is

submitted that the Division Bench gave permission to the 5 th

respondent to make a representation and did not impose any

other conditions on the 3rd respondent to take a decision. The

3rd respondent considering the facts and circumstances took

a decision granting time to pay the amounts considering the

financial scenario in the country, covid, droppage in the

market etc. It is also submitted that in the interest of revenue

generation, the said order was passed, therefore, it is not an

unreasoned order. Learned counsel submits that the

petitioner is essentially ventilating his grievances against the

Board because of other reasons and if the overall situation is

considered there is no mistake in the orders passed. It is

reiterated that as the 5th respondent has paid substantial

sums of money; the Writ Petition should be dismissed, the

interim order should be vacated and he should be permitted

to continue the tender.

Sri Shaik Karimulla, learned standing counsel argues

for the Waqf Board and justifies the action of the 3rd

respondent.

This Court is of the opinion that to decide this matter

the terms of the tender are to be considered. The tender in

this case was floated on 07.07.2021. It is for a period of one

year. A substantial part of Item No.1 of the tender is involved

in the present dispute. The terms and conditions of the tender

which are of the consequence and important are as follows:

"7. Immediately after conclusion of the bid the successful bidder shall remit the amount in the Board's treasury as follows:

(a) 20% of the total auction amount in cash or in shape of D.D. on the same day i.e., on the day of auction itself.

(b) 30% of the total auction amount in cash or in shape of D.D. within (7) days from the date of auction, then only the Proceedings to collect the offerings items will be issued to the Contractor.

c) 50% of the total auction amount in cash or in shape of D.D. within (90) days from the date of auction, excluding the E.M.D. amount, failing which the contract shall stand cancelled and the right of the Contractor to collect the offerings in the Hundi shall be rescinded and the Waqf Board shall take control of the Hundi and auction items by giving one weeks advance notice to the Contractor.

d) 1% of the bid amounts towards auction expenses shall be borne by the highest bidder and the said amount shall be deposited in cash, or in the shape of D.D. on the day of auction.

8. The successful bidder should execute an agreement with tile Chief Executive Officer, Waqf Board immediately after the auction is concluded.

9. If the successful bidder fails to remit the bid amount as mentioned above or commits default in any manner whatever amounts deposited by him shall be forfeited and he will not have any right whatsoever to claim the amount remitted/ deposited by him in respect of this auction. Further the auctioned items would be taken under the Direct Management of the A.P. State Waqf Board, and the Hundi amount would directly collected by

the officer deputed by the Warq Board. The rights of the default bidder would be forfeited.

10. The defaulter Contractor of the previous Auction or the present auction shall not be allowed to participate in future auctions conducted by the Waqf Board, since he will be debarred from participating in the auction permanently.

11. If the successful bidder fails to remit the amount within the stipulated time the Waqf Board reserves the right to renotify the auction or to conclude the auction in favour of the 2nd highest bidder and the defaulting bidder shall be liable to pay any loss or shortage that may occur due to reauction."

As can be seen from the record on 10.08.2021 the

quotation of the 5th respondent is accepted and he was

directed to pay the bid amount within 15 days from the date

of receipt of the intimation. Thereafter, the petitioner made a

representation for paying the amount due in installments,

which was negatived / refused by orders dated 14.09.2021.

This was assailed in W.P.No.20624 of 2021. The learned

single Judge by his orders dated 27.09.2021 clearly held that

the terms of the contract of tender or any provision of law do

not enable the petitioner to seek installments. Therefore,

learned single Judge ultimately held that the petitioner is not

entitled to pay the bid amount in installments.

Thereafter, a Writ Appeal was filed by the 5th

respondent. In the Writ Appeal the learned counsel appearing

for the 5th respondent submitted that 50% of the amount

would be deposited within two weeks and the balance 50%

will be deposited within four weeks thereafter. This proposal

was accepted by the counsel for the Waqf Board. The matter

was adjourned from 08.10.2021 after the proposal was noted

in the order. On 06.10.2021, again Waqf Board wrote a letter

to the 5th respondent to pay the amount due and gave him 48

hours time.

Pursuant to the submission made in the Court the

petitioner again submitted a representation dated 20.10.2021

in which he said 50% of the amount would be deposited today

i.e., Rs.86 lakhs out of Rs.1,72,00,000/- and the balance

amount would be deposited within four weeks. On the same

day the 5th respondent also gave eight DDs totaling an

amount of Rs. 86 lakhs to the 3rd respondent. Thereafter, the

Writ Appeal was heard on 25.11.2021, and on that date the

Writ Appeal was withdrawn by the 5th respondent herein, who

is the petitioner therein, stating that he intends to make a

representation for redressal of his grievances. The Division

bench permitted the withdrawal of the Writ Appeal granting

liberty as prayed for. Thereafter, a final order dated

01.12.2021 is passed, by which the outstanding amount of

Rs.86 lakhs was directed to be paid in two further

installments. This is the subject matter of the Writ Petition.

This Court finds that in the impugned order dated 01.12.2021

it is agreed that time upto 10.12.2021 would be given to pay

Rs.25 lakhs and the balance amount should be paid within

90 days from the date of allotment of the contract. The date

of allotment is fixed as 10.12.2021, by which date the

petitioner had to pay Rs.25 lakhs. Therefore, the effect of this

order is that if Rs.25 lakhs was paid by 10.12.2021, the 5th

respondent would get a further period of 90 days i.e., upto

March, 2022 to pay the balance of Rs.62.72 lakhs. This is the

order challenged in this case.

Lot of arguments were advanced by the learned senior

counsel for the petitioner of the alleged bios etc. This Court is

not proposing to go deeper into the matter of bias since clear

pleading to prove the same are not there. Reading of the facts

support the conclusion this Court is arriving at basing upon

the law on the subject.

It is clear that if there is a term in the contract which

also stipulates penalty or stipulates the consequences, it is an

essential term. The terms of the tender are also to be

construed carefully. If the terms of the tender make it clear

that there would be consequences if the term is not adhered

to. The Hon'ble Supreme Court has clearly held that it is an

essential term of the contract. If it is essential term of the

contract it cannot be relaxed. If it is to be relaxed, all the

tenderers should be given an equal opportunity. The

judgment in The judgments of the Hon'ble Supreme Court in

Kanhaiya Lal Agarwal v Union of India1.

A perusal of the terms of the contract which are

included in the writ affidavit and are also not denied makes it

very clear that the following schedule must be followed.

(2002) 6 SCC 315

On the conclusion of the bid the bidders shall remit the

amount as follows:

(a) 20% on the date of the auction;

(b) 30% within seven days and then only the

proceedings to move forward will be given;

(c) 50% of the amount within 90 days from the date of

the amount, failing which the contract shall stand

cancelled and the right of the contractor shall be

rescinded.

(d) 1% of the bid amount towards auction expense shall

be deposited on the date of the auction.

(e) Clause 8 also states that the successful bidder

should execute an agreement with Chief Executive

Officer immediately after the auction is concluded.

(f) Clause 9 states if the successful bidder fails to remit

the amount or commits default the amounts deposit

shall be forfeited and he shall not have a right to

claim the amounts. The auctioned items will be

taken under the direct Management of the Board

and the rights of the bidder will be forfeited.

(g) Clause 10 states that the defaulting contractor shall

not be allowed to participate in the future auction.

(h) Lastly, it is also stipulated that the Board reserves a

right to conclude the auction in favour of the 2 nd

highest bidder and the defaulter bidder shall be

liable to pay the loss and shortage.

In the light of these penal consequences, this Court is

of the firm opinion that the time schedule mentioned above is

an essential part or an essential term of the contract. It

cannot be relaxed. The law on the subject is also sufficiently

clear that an essential term of the contract cannot be relaxed.

The same need not be repeated hear.

If the present case is examined against the law it is

clear that the tender dated 07.07.2021 was accepted on

10.08.2021. This is not in dispute. As per the above

schedule the deposits were to be made. The 5th respondent

was given 15 days time to pay the amount. Just before the

15 day period was to elapsed he made a representation, which

was rejected on 14.09.2021. He challenged the same before

the learned single Judge in W.P.No.20624 of 2021, which was

dismissed. Writ Appeal was also dismissed on 20.10.2021.

He made a representation offering to pay a sum of Rs.1.72

crores in two installments. The 1st installment of Rs.86 lakhs

was in fact paid on 18.10.2021. He sought four weeks time to

pay the balance 50%. However, when the Writ Appeal was

taken up for hearing on 25.11.2-21 he informed the Court

that he will be making representation and therefore the

Division bench permitted the petitioner to make a

representation. By that date he already made a

representation. Even though the petitioner sought four weeks

time to pay the balance amount the 3rd respondent in his

wisdom granted 10 days time to pay Rs.25 Lakhs and a

further period of 90 days i.e., 12 weeks to pay the balance

amount. In the opinion of this Court this action is totally

flawed and contrary to the terms of the tender. If the period

granted by the 3rd respondent to the 5th respondent is

counted it will be extending to March, 2022. As per the terms

and conditions of the auction 50% of the amount should be

paid within seven days from the date of the auction and the

balance 50% of the amount within a period of 90 days. From

14.08.2021 the 5th respondent had seven days to pay 50%

and a further period of three weeks to pay the balance. While

this Court does not want to reproduce the strong language

used by the learned senior counsel on these concessions, the

fact remains that this Court holds that the action of the 3rd

respondent in granting the bounty to the 5th respondent is

contrary to the terms and conditions of the auction. It is also

to be noticed that the litigation was started by the 5th

respondent himself. Therefore, he cannot take this advantage

of his own wrong and claim the benefits.

This Court unhesitatingly holds that the action of the

3rd respondent in granting this liberty is totally contrary to

law and opposed to terms and conditions of the tender.

Therefore, the Writ Petition is allowed.

In view of the interim order the work was not actually

executed. Therefore, there shall be a direction to the 3 rd

respondent to refund all the amounts that are paid by the 5 th

respondent in this case to him and to conduct a fresh action

within 30 days. The judgments of the Hon'ble Supreme Court

of India and the law on the subject should be kept in mind

while framing the terms and conditions of the auction and in

taking decision. The 3rd respondent Chief Executive Officer as

a guardian and "caretaker" of the religions institution should

be scrupulously careful in dealing with the properties of the

institution. There shall be no order as to costs.

Consequently, the Miscellaneous Applications pending,

if any, shall stand closed.

__________________________ D.V.S.S.SOMAYAJULU,J Date:05.05.2022 Ssv