TMI Blog1996 (9) TMI 598X X X X Extracts X X X X X X X X Extracts X X X X ..... on under Article 226 where the fact-finding authority had arrived at a conclusion which is not perverse or so unreasonable that, upon the record, it could not have been reached. The Division Bench was, in the circumstances, in error in reaching the conclusion that the auction was not fairly and properly held with the result that the State exchequer had ben subjected to a huge loss. At the same time, the finality of auctions must also be recognised to be in the interests of the exchequer. If auctions are set aside and re-auctions ordered in less than satisfactory material, the loss of the exchequer would be far greater. Appeal allowed - C.A. 7992 OF 1996 - - - Dated:- 17-9-1996 - S.P. BHARUCHA AND K. VENKATASWAMI, JJ. JUDGMENT These are appeals against the judgment and order dated 8th may, 1996, of a Division Bench of the High Court of Punjab Haryana, Passed upon a writ petition filed bu the first respondent, M/S. Yoginder sharma Onkar Rai Co. The subject matter of the writ petition was the auction of liquor vends of Group nos. 108 to 111 in Khanna Circle, district Ludhiana, State of Punjab for the year 1996-97. The first appeal is by the State of Punjab. The ot ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ate for the given year, licensees from other districts had come to see the trends and make a market survey. That only 2 or 3 bidders had given bids for a particular vend was, therefore, not noteworthy. Though the partners of S.P. Kalia and Co. and Puneet kalia and Co. Were relations there was no reason why they should not bid against each other. It was next to impossible that 34 drafts could have been prepared on the day of the auction in banks at Khanna and Mandi Gobind Garh which would reach the pandal by 11 a.m. considering the fast that the banks opened at 10 a.m. at Khanna and mandi Gobind Garh, which was approximately 40-50 kms. from the site of the auction at Ludhiana. It was more likely that all this would take 2 hours. This indicated that the first respondent did not have adequate funds to deposit 15% of the bid money at the fall of the hammer and, therefore, did not bid at all. Note was taken of the pattern of bidding. for Group no. 108 the initial bid was for Rs.3.55 crores, the next was Rs.3.65 crores, then 3.68 crores, than Rs.3.70 and the successful bid was of Rs.3.71 crores. Thus the trend of the rise was Rs.10 lacs in the first instance, then Rs.3 lacs, then Rs.2 la ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tition filed a second writ petition challenging the order; it came up before another Division Bench which, on 9th April, 1996, passed the following order : We find no infirmity in the detailed order, Annexure P-9, passed by the financial commissioner, (Taxation), Punjab. All the points raised before us have been dealt with in detail by the financial commissioner and we concur with the findings recorded by him. Dismissed. The writ petitioner in the third writ petition was the first respondent and it filed the present writ petition (No.5007/96) impugning the Financial commissioner's order 6th April, 1996. this writ petition was disposed of by the judgment and order under appeal. The Division Bench noted therein the case of the first respondent that it had offered Rs.4.21 crores for group no 108 as against the successful bid of Rs.3.71 crores which had been wrongly accepted, thereby putting the public exchequer to a loss of Rs.50 lacs. Similarly, for Group no. 111, the first respondent had offered Rs.3.5 crores but the bid of Rs.3.05 crores was accepted, thus putting the exchequer to a loss of Rs.45 lacs. Though the representatives of the first respondent were presen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... or the purpose of bidding in the auction . The factum of bank drafts was not disputed. The Financial Commissioner's observations in regard to the bank drafts were then set out and the Division Bench observed : The conclusion arrived at by the Financial Commissioner, Taxation, are based upon conjecturers and apparently observed with pale eyes. It is not improbable to obtain 34 drafts prepared from a bank at Khanna and mandi Gobindgarh on the same day and before the time of auction. It is not uncommon that the banks have been providing special services to their customers particularly having huge monetary Taxation, has not referred to any special knowledge of banking system and had arrived at the aforesaid conclusion without ascertaining the true position from the concerned bank. According to the Division Bench, if drafts for such a huge amount had been issued, the same demonstrated the bona fide intention of the first respondent to participate in the auction. Again, it was fully established that the first respondents' representatives were in possession of the bank drafts on the relevant date, which showed their intention to participate in the auction. The provisions ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ly deprived of their right of participation in the bid and the State exchequer was subjected to huge loss, which in no case in lesser than Rs.95 lacs. As far as the Financial Commissioner was concerned, the High Court said : Least we say out Shri Ratra, better it would be. we were interested in the job of adjudication of the rival claims of the parties, presuming him to be an independent and impartial person, keeping in view the status of the post he is holding. During arguments, a reference had been made to Annexure PS2, a press report dated 12th March, 1996, which shows that Shri Ratra had gone to the press with the claim that outcome of the auction had allegedly been better than the expected rise of 12 to 13 per cent. At that time, it was not brought to our notice that Shri Ratra had already taken a stand with respect to the matter in dispute and, presumably, could not have given any other finding than the one, which is incorporated in Annexure P 66. Omission on the part of the parties to bring to our notice the commitments made by Shri Ratra has resulted in the reference being made to him. Ultimately, in the High Court's view, the substance of the circumstances ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e and Taxation Commissioner and Shri Y.S. Ratra, Financial Commissioner, Taxation shall not be associate in any manner. In case, the petitioners opt not to participate in the new auction bid and no other bidder offers the bid of the amount already offered by the private respondents-successful bidders, this petition shall be deemed to have been dismissed with costs of rupees one lac to be paid to the private respondents. However, on the completion of the fresh process of auction, the private respondents shall be liable to pay a sum of Rs.10,000/- as costs which shall be deposited in the State Treasury. Learned counsel for the appellants submitted that questions of fact were involved. At the hearing of the earlier writ petition this had been recognised by the Division Bench and the first respondent had been referred to the Financial Commissioner treating the writ petition as a representation or revision under the statutory provision. The order of the Financial Commissioner was reasonable in its appreciation of the facts. The Division Bench had not found it to be perverse. The Division Bench, therefore, was not entitled to reverse it. In any event, the judgment of the Division ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ich in view of the involved procedure, was rendered impossible of fulfillment. The appellant had tendered cash security of Rs.7 lacs on the date of the auction and sought permission to particular, but the request had been turned down. Upon this, the appellant had given Rs.86 lakhs per year as against the accepted bid of Rs.75 lacs per year. After hearing counsel, this Court was persuaded to take the view that the ends of justice would be met by an order directing a re-auction subject to certain conditions, the first being that the appellant should, with a view to establishment its readiness and willingness to stand by the offer of Rs. 86 lacs per year, deposit a sum of Rs. 25 lacs on or before the stated date. If the sum of Rs.25 lacs was deposited, the contract in favour of the successful bidder would stand set aside. Learned counsel submitted that the present was a case where the ends of justice required that the judgment and order under appeal be maintained subject to such conditions as this Court might deem fit to impose. The question that goes to the root of these appeals is : did the first respondent make bids at the auction of Rs.50 and Rs.45 lacs respectively over the su ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... different names. In all the telegrams no mention had been made of the quantum of the higher bid but merely that a lower bid had been accepted against a higher bid. The Financial Commissioner noted that two partnerships had bid against each other but commented, with some justification, that the mere fact that their partners were relations did not make for a rigged auction. The Division Bench castigated the Financial Commissioner for his report and stated that his conclusions were based upon conjectures and apparently observed with pale eyes . It said that it is not improbable to obtain 34 drafts prepared from a bank at Khanna and Mandi Gobindgarh on the same day and before the time of auction. It is not uncomman : that banks provide special services to their customers particularly if they have huge monetary dealings. The Financial Commissioner had not referred to any special knowledge of the banking system and had arrived at his conclusions without ascertaining the true position from the concerned bank. The Division Bench did not state its authority for its statements about banking practices. The Division Bench found that it was fully established that the first responde ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the Division Bench is based upon conjectures and inferences more tenuous than those it found the Financial Commissioner guilty of. Such conjectures and inferences are impermissible in a judgment upon a writ petition under Article 226 where the fact-finding authority had arrived at a conclusion which is not perverse or so unreasonable that, upon the record, it could not have been reached. The basic question which cannot be lost sight of is : did the first respondent make bids at the auction of Rs.50 and Rs.45 lacs respectively over the successful bids for Group nos. 108 and 111? Securing Group nos. 108 and 111 was so important for the first respondent, it would have us believe that it raised the bids by the staggering sums of Rs.50 and Rs.45 lakhs respectively. If it did, the previous rises having been of the order of Rs.10 lacs, Rs. 3 lacs, Rs.2 lacs and Rs.1 lacs, it would have attracted the attention of some, if not most, of the twelve to thirteen hundred persons in the auction pandal. It would be a brave auctioneer indeed who would, in the circumstances, ignore such bids. The partners of the first respondent would not in the ordinary course of human conduct have let it pa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he first respondent opts not to participate in the fresh auction and no other bidder offers a bid of the amount equivalent to the earlier successful bid, this petition shall be to have been dismissed . It is a very difficult order to appreciate. If at the fresh auction the first respondent does not bid and no other bidder offers a bid equivalent to the earlier successful bid and the writ petition is to stand dismissed, what is the State Government's authority for holding the fresh auction? Whether or not the first respondent bids or somebody else bids an amount equivalent to the earlier successful bid can be known only after the fresh auction is held. If at that stage the petition is to stand dismissed, there is no authority for holding the fresh auction. Secondly, if at the fresh auction the first respondent does not bid and no other bidder offers a bid equivalent to the earlier successful bid, it must mean that the earlier successful bidder is no longer interested; but, by reason of the dismissal of the writ petition, he remains bound by his earlier bid. This not a workable or well thought out order. In cases where there is real need to set aside an auction, he who cha ..... X X X X Extracts X X X X X X X X Extracts X X X X
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