TMI Blog2017 (10) TMI 1553X X X X Extracts X X X X X X X X Extracts X X X X ..... to stipulate a term in the contract in that behalf. A fortiori, if there is no stipulation in the contract of forfeiture, there is no such right available to the party to forfeit the sum - Equally well settled principle of law relating to contract is that a party to the contract can insist for performance of only those terms/conditions, which are part of the contract. Likewise, a party to the contract has no right to unilaterally alter the terms and conditions of the contract and nor they have a right to add any additional terms/conditions in the contract unless both the parties agree to add/alter any such terms/conditions in the contract. Similarly, it is also a settled law that if any party adds any additional terms/conditions in the contract without the consent of the other contracting party then such addition is not binding on the other party. Similarly, a party, who adds any such term/condition, has no right to insist on the other party to comply with such additional terms/conditions and nor such party has a right to cancel the contract on the ground that the other party has failed to comply such additional terms/conditions. The public notice (advertisement), only s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ansaction. Such action on the part of the Appellant (bidder) did not amount to a breach of Clause 4 so as to give right to the State to forfeit the security deposit. Thus, the Appellant did not commit any breach of the term(s) and condition(s) of the notice inviting bids and on the other hand, it was the Respondents who committed breaches. In these circumstances, the State had no right to forfeit the security amount and instead it should have been returned when demanded by the Appellant - In this case, it was expected from the State officials to have acted as an honest person while dealing with the case of an individual citizen and in all fairness should have returned the security amount to the Appellant without compelling him to take recourse to the legal proceedings for recovery of his legitimate amount which took almost 21 years to recover. The Courts below were not justified in their respective reasoning and the conclusion in dismissing the Appellant's suit. The Appellant's suit should have been decreed against the Respondents - Appeal allowed. - Civil Appeal No. 7665 of 2009 - - - Dated:- 25-10-2017 - R.K. Agrawal and Abhay Manohar Sapre, JJ. For Appella ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... losure of auction for the plot in question. 5. Within 7 days from the date of acceptance of his bid, the bidder shall have to deposit entire amount of his bid after adjustment of security deposit and one fourth amount already deposited. 6. After receipt of full payment, the possession of plot after demarcation shall be delivered to bidder on site and he shall be granted a permanent lease for 30 years. 7. Collector, Bhopal shall have power to cancel any auction/bid without assigning any reasons. 5. The Appellant was one of the participants in the auction proceedings. The Appellant, accordingly, in terms of clauses 2 and 3 of the public notice deposited his Income Tax Return for the year 1994-95 and also deposited a sum of ₹ 3 lakhs vide Bank Draft No. 6858812 dated 10.01.1996 with Respondent No. 3 as security. 6. The auction was held on 11.01.1996. The Appellant quoted his bid at ₹ 53,80,000/- for plot No. E-5/5 situated in Mahavir Nagar, Arera Colony, Bhopal. The Appellant's bid was declared the highest amongst those who participated. The Respondent No. 3 accordingly accepted the Appellant's bid for plot No. E-5/5. 7. The Respondent No. 3 then ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s, therefore, constrained to file the civil suit against the Respondents for a declaration that the letter dated 24.02.1996 forfeiting the security amount of ₹ 3 lakhs be declared as bad in law and further prayed for refund of ₹ 3 lakhs along with interest at the rate of ₹ 18% p.a.. 13. In substance, the Appellant's suit was founded on the allegations, inter alia, that firstly, the Appellant was within his right to refuse to accept the special terms and conditions contained in the acceptance letter dated 24.01.1996 of Respondent No. 3 because according to the Appellant these terms and conditions were never part of the original public auction notice pursuant to which he had submitted his bid and nor such terms and conditions were communicated to the Appellant till his bid was accepted and hence these conditions were not binding on him; Secondly, in the absence of any terms and conditions published in the public notice empowering Respondent No. 2 to forfeit the security amount (₹ 3 lakhs), Respondent No. 2 had no right/authority to forfeit a sum of ₹ 3 lakhs deposited by the Appellant; and lastly, the Appellant had performed his part by ensuring ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd nor mentioned the facts of Priyanka's case with a view to show similarity between both the cases and nor recorded any independent reasoning for dismissal of the appeal. 17. The Appellant (plaintiff), felt aggrieved, has filed this appeal by way of special leave before this Court. 18. Heard Mr. Prasenjit Keswani, learned Counsel for the Appellant and Mr. Mishra Saurabh, learned Counsel for Respondents 1 2. 19. Having heard learned Counsel for the parties and on perusal of the record of the case, we are inclined to allow the appeal, set aside the impugned judgment and the decree of the two Courts below and decree the Appellant's (plaintiff's) suit against the Respondents as indicated infra. 20. Three questions, basically, arise in this appeal. First, whether the Appellant (plaintiff) committed any breach of the terms and conditions of the public auction notice dated 07.01.1996; second, whether the State was justified in forfeiting the security money (₹ 3 lakhs) deposited by the Appellant for the alleged breach said to have been committed by the Appellant of any terms and conditions of public notice dated 07.01.1996; and third, whether the State had ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... xpression forfeiture in these words: A forfeiture Clause is a Clause which brings an interest to a premature end by reason of a breach of covenant or condition, and the Court will penetrate the disguise of a forfeiture Clause dressed up to look like something else. A forfeiture Clause is not to be construed strictly, but is to receive a fair construction. (See page 838) 25. The author then quoted the apt observations of Lord Tenterden from an old case reported in (1828) Moo. M. 189 Doe d Davis v. Elsam wherein the learned Lord while dealing with the case of forfeiture held as under: I do not think provisoes of this sort are to be construed with the strictness of conditions at common law. These are matters of contract between the parties, and should, in my opinion, be construed as other contracts (see pages 840). 26. Equally well settled principle of law relating to contract is that a party to the contract can insist for performance of only those terms/conditions, which are part of the contract. Likewise, a party to the contract has no right to unilaterally alter the terms and conditions of the contract and nor they have a right to add any additional terms/condi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he Appellant by Respondent No. 3 while accepting his bid, the Appellant had every right to refuse to accept such conditions and wriggle out of the auction proceedings and demand refund of his security amount. The State, in such circumstances, had no right to insist upon the Appellant to accept such conditions much less to comply and nor it had a right to cancel the bid on the ground of non-compliance of these conditions by the Appellant. 33. Learned Counsel for the Respondents (State), however, argued that it was not necessary for the State to specify the condition relating to forfeiture and four additional terms/conditions in the public notice because they were already part of RBC, which is applicable to the nazul lands in question. 34. We find no merit in this submission for more than one reason. First, the public notice inviting bids did not even contain a term that all the provisions of RBC will be applicable to the auction proceedings and second, the relevant clauses of RBC which, according to the State, were to govern the auction proceedings ought to have been quoted in verbatim in the public notice itself. It was, however, not done. 35. In our considered opinion, th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ument. In the first place, the Appellant ensured compliance of the term because he deposited 1/4th amount of ₹ 10,45,000/- on the same day, i.e., 11.01.1996 by cheque. Secondly, the Respondents also accepted the cheque from the Appellant because deposit of money by cheque was one of the modes of payment. Had it not been so, the Respondents would not have accepted the cheque from the Appellant. Thirdly, the stop payment was done when the Appellant received the acceptance letter containing four additional conditions to which he was not agreeable. He had, therefore, every right to wriggle out of the auction proceedings and stop further payment towards the transaction. Such action on the part of the Appellant (bidder) did not amount to a breach of Clause 4 so as to give right to the State to forfeit the security deposit. 40. In the light of foregoing discussion, we are of the considered opinion, that the Appellant did not commit any breach of the term(s) and condition(s) of the notice inviting bids and on the other hand, it was the Respondents who committed breaches. In these circumstances, the State had no right to forfeit the security amount and instead it should have been r ..... X X X X Extracts X X X X X X X X Extracts X X X X
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