Bijay Kumar Agarwal vs The Union Of India And Others
2021 Latest Caselaw 348 Cal/2

                          In The High Court at Calcutta
                         Constitutional Writ Jurisdiction
                                  Original Side

The Hon'ble Justice Sabyasachi Bhattacharyya

                               WPO No. 85 of 2021
                              Bijay Kumar Agarwal
                                       Vs.
                          The Union of India and others

For the petitioner         :       Mr. Soumya Majumder,
                                   Mr. Mainak Gangully
For the respondent

nos. 1 and 2               :       Mr. K. K. Maity,
                                   Ms. Aishwarya Rajashree

Hearing concluded on       :       11.03.2021

Judgment on                :       06.04.2021

The Court:



 1.    An    e-auction    notice    bearing     no.   MSTC/ERO/Kolkata     Customs

(Port)/3/Kolkata/2021/11179 [261655] was floated by respondent no.4

on behalf of the respondent nos. 1 to 3. The articles put up for sale

included those comprised of lot no.1629, which is the subject-matter of

the present writ petition.

2. The auction was conducted on September 1, 2020, in which the

petitioner succeeded as the highest bidder. Accordingly, a sale

intimation letter was issued by respondent no.4 intimating approval of

the bid by the seller. The petitioner was directed to tender an amount of

Rs.2,60,275/- as security deposit, which was deposited by the petitioner

on September 4, 2020.

3. Subsequently, the petitioner was not intimated regarding the date of

delivery of goods. Upon enquiry, the petitioner was instructed to put in

the balance amount of Rs.7,80,885/- which was directly handed over to

the Customs Authorities on September 14, 2020.

4. The copies of the sale intimation letter and the relevant letters indicating

such deposits have been annexed to the writ petition.

5. Subsequently, respondent no.4 issued a delivery order on September 15,

2020 which, along with relevant receipts of acknowledgement regarding

the deposits, are annexed to the writ petition.

6. It is alleged by the petitioner that the petitioner made several deposits for

taking delivery of the subject goods but those were not delivered to the

petitioner.

7. The grievance of the petitioner was intimated to the respondents by a

letter dated September 22, 2020 and a detailed representation was given

through the advocate of the petitioner on September 30, 2020.

Ultimately, the petitioner made an application under the Right to

Information Act, 2005 on October 12, 2020 seeking information

regarding the subject goods and the status of their delivery.

8. In response, vide letter dated November 2, 2020, the respondent

authorities intimated the petitioner that, on a complaint received on

September 3, 2020, a valuation was done by the respondents and the

respondents accordingly had ordered cancellation of lot no.1629 from the

e-auction-cum-e-tender-in-question. Such cancellation was claimed to

have been done in terms of paragraph 8.9(i) of the Disposal Manual of

2019 issued by the Central Board of Indirect Taxes and Customs.

9. Learned counsel for the petitioner argues that, in terms of Clause 8.6 of

the Disposal Manual, 2019, the sale intimation letter issued to the

petitioner amounts to confirmation of the sale in favour of the petitioner.

It is argued that in terms of Clause 6.1 of the auction conditions as well

as Clause 8.10.8 of the Manual, all sales would be subject to Reserve

Price (RP) fixed, subject to approval by the principal, who also had the

option to fix a lower limit of RP for an individual lot. Such lot would not

be declared "sold" on final bidding but declared "pending" during e-

auction irrespective of Reserve Price comparison. As per the said clause,

the sale acceptance would be intimated by the principal within seven

working days from the date of the e-auction.

10. As per Clause 6.3 of the conditions of auction, it would be the bidders'

responsibility to personally see the result of e-auction by downloading

"auction lot status" from the website immediately after closing of e-

auction which would be displayed up to seven days from the closing of e-

auction.

11. Learned counsel further submits that, as per Clause 10.3 of the

conditions of auction, no segregation could be done regarding items from

sole lots. Clause 11 thereof included a default clause in the event the

petitioner (purchaser) defaulted in lifting the goods.

12. It is further contended that Clause 3 of the conditions of auction

stipulate that the sale would be on "as is where is" and "no complaint"

basis. In view of such stringent conditions, which the petitioner

complied scrupulously, and the sale having been concluded as per

Clause 8.6 of the Disposal Manual, there was no scope left for the

authorities to withdraw the lot from the tender and/or cancel the

auction/tender after the sale had been confirmed.

13. By placing reliance on Clause 6.3.4, learned counsel for the petitioner

argues that 'fair price' had to be determined by JPC, which does not

appear to have been done in the present case.

14. It is further submitted that the inspection of the lot-in-question was

undertaken on August 26, 2020, as stipulated in the terms of auction.

The alleged complaint on the basis which the respondent authorities re-

evaluated and cancelled the auction was received by the authorities

subsequently, only on September 3, 2020.

15. As such, learned counsel for the petitioner submits that the unilateral

cancellation after confirmation of sale was invalid in the eye of law and

ought to be set aside.

16. In addition, learned counsel appearing for the petitioner contends that

the Disposal Manual is binding only on the Customs Officials, as

indicated in the foreword of the Manual, and not on the purchasers.

17. Learned counsel for the respondent-authorities argues that Clause 7 of

the conditions of the auction specifically stipulates that the respondents

may withdraw any lot from auction or tendering at any time or cancel the

same at any stage prior to the delivery of the goods.

18. Since, in the instant case, the cancellation was done prior to the delivery

of goods, such cancellation was well within the powers of the

respondents as contemplated in the conditions of the e-auction itself.

19. Moreover, the balance security, it is submitted by the respondents, was

paid by the petitioner only after the complaint was lodged on September

3, 2020. The respondents had asked the petitioner to take refund of

such amount, which the petitioner did not accede to.

20. Learned counsel appearing for the respondents further submits, on the

strength of Clause 8.9, first sub-clause, that the stipulations of Clause 7

of the auction conditions is also reiterated therein, hence, empowering

the respondents to cancel the auction/tender at any stage prior to

delivery.

21. Thus, it is contended by the respondents that the writ petition ought to

be dismissed.

22. Upon hearing learned counsel for both sides, it is apparent that Clause 7

of the auction conditions and Clause 8.9 of the Disposal Manual have to

be read in proper perspective, in conjunction with the other conditions

and provisions contained in the auction conditions and Disposal Manual

respectively.

23. A perusal of Clause 8.10.8 of the Disposal Manual as well as Clause 6.1

of the auction conditions mark a distinction as regards lots in respect of

which the Reserve Price was fixed at a lower limit. Such lots, as per the

said clauses, would not be declared 'sold' on final bidding but declared

'pending' during e-auction.

24. Clause 8.6 of the Disposal Manual, on the other hand, deals with sale

intimation letters and provides that, on closing of auction, automatic sale

intimation letters will be issued to the highest bidders by e-mail. Sub-

clause (i) provides that, for 'confirmed' sales, automatic confirmed sale

intimation letter will be issued to the H-1 bidder and he will be advised to

deposit 25 per cent of the security deposit within three days.

25. However, sub-clause (ii) stipulates that for 'pending' sales, the bids would

be kept on hold as 'pending' decision.

26. The said clauses, read in conjunction with each other, clearly indicate

that the sale was considered to be confirmed even by the respondents by

virtue of issuance of the sale intimation letter, annexed at page 32 of the

writ petition, and subsequent compliance by the petitioner by making

security deposit of Rs,2,60,275/-. Even thereafter, the balance amount

of Rs,7,80,885/- was paid by the petitioner, which was duly

acknowledged by the respondents upon encashment of the relevant

cheques.

27. Clause 6.3 of the auction conditions clearly contemplates the closing of

e-auction and display of such closure within seven days from the date of

closing.

28. In the present case, not only was the sale confirmation intimation issued

to the petitioner after closure of e-auction, thereby indicating that the

sale was confirmed, as contemplated in Clause 8.6 of the Disposal

Manual, the other connected documents, including the receipts issued

for the security deposits paid by the petitioner and the delivery order

issued in favour of the petitioner clearly indicate beyond all doubt that

the sale was concluded for all practical purposes upon closure of the e-

auction and compliance of all conditions on the part of the petitioner.

29. Interpreting Clause 7 of the auction conditions and Clause 8.9 of the

Disposal manual in their appropriate perspective, read in conjunction

with the other clauses of the Manual and the auction conditions, as

discussed above, it is clear that the scope of withdrawal of any lot from

auction or tendering and cancellation of the tender at any stage prior to

the delivery goods can only remain relevant as long as the auction is not

concluded. In the present case, the auction was not only concluded, the

transaction between the parties in respect of the sale of the goods-in-

question was concluded as well. There was, thus, no question of

'cancelling' the tender/auction since the tender/auction had been

concluded long back and had already fructified in a concluded sale. The

sale having been confirmed, there could not be any justification on the

part of the authorities to withhold delivery of the goods.

30. Since it is sufficiently evidenced from the materials-on-record that the

petitioner did his utmost to get the delivery of the goods within time but

was refused such delivery at the instance of the respondents, the

respondents cannot take advantage of their own wrong and order the

cancellation of lot no.1629 from the e-auction-cum-e-tender, which was

history on November 2, 2020 in view of the closure of the same and

culmination of the transaction by way of a confirmed sale much before

the said date.

31. Hence, in the light of the above observations, the impugned cancellation

of lot no.1629 from the e-auction, as intimated by the respondents to the

petitioner vide letter dated November 2, 2020, was patently illegal and de

hors the provisions of the Disposal Manual as well as the auction

conditions. Even without going into the question as to whether the

provisions of the Disposal Manual are binding only on the Customs

Officials or on the purchasers as well, such conditions themselves, upon

being given a proper interpretation, invalidate the impugned cancellation.

32. As such, WPO No.85 of 2021 is allowed on contest, thereby setting aside

the cancellation of lot no.1629 from the e-auction-in-question, as

intimated vide letter dated November 2, 2020 (Annexure P-10 at page 49

of the writ petition). All consequential and preceding action, respectively

on the basis of and leading to such cancellation, are also set aside.

33. The respondents are directed to immediately hand over the goods-in-

question to the petitioner upon the petitioner approaching the

respondents for the delivery of such goods.

34. There will be no order as to costs.

35. Urgent certified copies of this order shall be supplied to the parties

applying for the same, upon due compliance of all requisite formalities.

( Sabyasachi Bhattacharyya, J. )