Tuesday 10 November 2015

Whether auction purchaser can refuse to pay balance amount in auction sale on the ground that part of allotted land is encroached?

Be that as it may, we do not find any good reason to interfere in this Special Appeal, as the appellant has not deposited the amount of his highest bid, either in terms of the conditions of sale or in pursuance to the interim direction, as granted by this Court. The explanation that 100 sq.yards of the land out of 2056.32 sq.meters is under encroachment, and further, no development was made appears to be an excuse, as the details of encroachment or the failure of development or any reminders, or any representation, to this extent, was not brought on record, nor pleaded before learned Single Judge.
IN THE HIGH COURT OF JUDICATURE FOR RAJASTHAN
AT JAIPUR BENCH, JAIPUR


D.B. SPECIAL APPEAL No.1784/2014
M/s.High Image Developers (P) Limited 
Vs.
The State of Rajasthan & Anr.
Dated;13.02.2015
HON'BLE THE ACTING CHIEF JUSTICE MR. SUNIL AMBWANI
HON'BLE MR. JUSTICE PRAKASH GUPTA
Reportable
Citation; AIR 2015(NOC)1167 RAJ

1. We have heard learned counsel appearing for the appellant.
2. The appellant challenged a notice dated 8.8.2008, in terms of clause 6(c) of the Condition of Sale of the Plot carried out by the Jaipur Development Authority, by auction, in which the petitioner was successful bidder to deposit the remaining amount, failing which the allotment was to be cancelled automatically, and the amount deposited, to be forfeited.
3. An interim order was passed on 20.8.2008 that if the petitioner is aggrieved on account of the letter issued by the respondent-Jaipur Development Authority dated 8.8.2008, by which he has been directed to deposit the entire sale price within seven days, he will, in accordance with his undertaking, deposit the entire balance amount on or before 31.3.2009 alongwith interest, that may be determined by the Jaipur Development Authority.


4. The petitioner filed an application for extension of time, on account of financial hardship and recession in the real estate market. He however, did not deposit any amount over and above Rs.1.00 crore. It is admitted that he has by now deposited an amount of Rs.1,04,65,000/-, as against total amount of Rs.2,82,56,507/-, for which his bid accepted, and in terms of which he was required to deposit the entire amount within 30 days.
5. Learned Single Judge has dismissed the writ petition on the ground that in terms of the conditions of auction, the petitioner failed to deposit the amount, and thus, he is not entitled to any relief.
6. A review petition was filed by learned counsel appearing for the petitioner, stating that since the Advocates were on strike, the petitioner appeared himself, and had argued the matter, however, certain facts could not be brought to the notice of the Court, which included the letter written by the Jaipur Development Authority on 12.6.2013 for settlement of the dispute, on the condition of withdrawal of the writ petition. Learned Single Judge found that the letter had no bearing, inasmuch as the petitioner had, despite issuance of the letter, did not opt to withdraw the writ petition, nor did he deposit the entire amount, which was due from him, despite of undertaking given to the Court.
7. Learned Single Judge found that in the auction in the year 2007, the petitioner was allotted the land, but the payment of due amount was not made for years together. Various reasons and explanations were given, which included the alleged encroachment on a part of the land. The Court considered the explanation and observed that the petitioner had mislead the Court, on which the delay could not be condoned. When the notice of the writ petition was issued, a conditional stay order was passed, with an undertaking to pay the amount by 31.3.2009, and which was not deposited.
8. It is submitted that there is an encroachment over about 100 sq.yards of the area, and that, since the Jaipur Development Authority did not take any step to develop the land, the appellant was not bound to deposit the amount, and in any case, the appellant is now ready to deposit the entire amount alongwith interest, which may be considered by the Court.
9. An auction of the plot No.8 measuring 2056.32 sq.meters, was conducted by the Jaipur Development Authority in Govindpura (Kalwad Road) Yojana, Jaipur, in which the petitioner-Company was the successful bidder. It deposited an initial amount of Rs.15.00 lacs, and thereafter, another Rs.15.00 lacs, vide challans in the Bank of Rajasthan. A demand letter dated 1.3.2007 for deposit of Rs.2,52,56,507/-, against which Rs.40,65,000/- was deposited vide challan dated 15.3.2007, and another sum of Rs.5.00 lacs on 16.7.2007. When the full amount was not deposited, a notice was issued on 8.8.2008, as per condition 6(c), which provided that if the amount was not deposited within the prescribed period, the Commissioner can, on the payment of the entire amount within a quarter, give an approval for deposit alongwith interest of 22.5% per annum, failing which the allotment will be cancelled, and that, the entire deposit will be forfeited. Condition No.6(a) provided that 10% amount has to be deposited within 72 hours of the acceptance of the highest bid, failing which the earnest money will be forfeited, and that, the remaining amount of 90% will be deposited within 30 days. In case, the bidder does not want to deposit the entire amount, he may given an application within 72 hours, for depositing the 25%, at the time of acceptance of the bid, or within 15 days of the demand letter, and deposit the remaining 75% amount in four instalments with 15% interest.
10. In the present case, the appellant was defaulter in depositing the amount, after his bid was accepted. After depositing Rs.30.00 lacs as against highest bid of Rs.2,82,56,507/-, he failed to deposit the amount. He deposited only Rs.30.00 lacs within 30 days. There is nothing on record to show that he had made a request to deposit the remaining amount in instalments. The amount of Rs.40,65,000/- was deposited on 15.3.2007 and Rs.5.00 lacs on 16.7.2007 on his discretion, and thereafter, the petitioner has not deposited any amount, until the notice was given.
11. It is submitted that some more amount was deposited, totalling the entire deposit of Rs.1,04,65,000/-, on the deposits made on the sweet will of the appellant, for which no approval has been brought on record.
12. Be that as it may, we do not find any good reason to interfere in this Special Appeal, as the appellant has not deposited the amount of his highest bid, either in terms of the conditions of sale or in pursuance to the interim direction, as granted by this Court. The explanation that 100 sq.yards of the land out of 2056.32 sq.meters is under encroachment, and further, no development was made appears to be an excuse, as the details of encroachment or the failure of development or any reminders, or any representation, to this extent, was not brought on record, nor pleaded before learned Single Judge.
13. The Special Appeal is accordingly dismissed.

(PRAKASH GUPTA),J.         (SUNIL AMBWANI),ACTG.CJ.


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