l Appeal No 1613 of 1966
Appeal from the judgment and decree dated August 19 1963 of the Punjab High Court Circuit Bench at Delhi in Letters Patent Appeal No 50 D of 1960
VA Seyid Muhammad SP Nayar and BD Sharma  for the appellants
ST Desai KLArora Bishambar Lal and HK Puri for the respondent
The Judgment of the Court was delivered by Ramaswami J
This appeal is brought by certificate from the judgment of the Division Bench of the Punjab High Court dated August 19 1963 in Letters Patent Appeal No 50 D of 1960
An auction was held for the sale of licence of country liquor shop in Bela Road for the year 1949 50 on March 23 1949
The auction took place in pursuance of the conditions of Auction of Excise Shops in Delhi for the year Clauses 31 and 33 of the conditions were to the following effect 31
The Chief Commissioner is under no obligation to grant any license until he is assured of financial status of the bidder
At the conclusion of the auction an enquiry will be made into the financial position of any bidder not known to the excise staff and any such bidder shall if necessary be called upon to furnish security for the observance of the terms of his licence as required by sub section 2 of section 34 of the Punjab Excise Act 1 of 1914 as extended to Delhi Province
596 33
All final bids will be made subject to the confirmation by the Chief Commissioner who may reject any bid without assigning any reasons
If no bid is accepted for any shop_ the Chief Commissioner reserves the right to dispose
it off by tender or otherwise as he thinks The respondent offered the highest bid of Rs 401000 for the shop
Under the Excise Rules the bidder had to deposit one sixth of the purchase price within seven days of the auction but the deposit was not made by the respondent
In these circumstances the Chief Commissioner did not confirm the bid of the respondent and resale of the Excise Shop was ordered
On May 3 1949 the shop was again auctioned when Messrs Daulat Ram Amar Singh offered the highest bid of Rs 220000 which was confirmed by the Chief Commissioner on July 7 1949
Holding the respondent liable for the loss of Rs 181000 being the difference between the bid of the respondent and of Messrs Daulat Ram Amar Snigh the Collector of Delhi started proceedings for the recovery of Rs 181000 On July 22 1949 the respondent filed a suit in the court of Senior Subordinate Judge Delhi praying for a permanent injunction restraining the appellants from taking any proceedings to recover the amount
The trial judge decreed the suit holding that the sale was subject to confirmation by the Chief Commissioner under cl 33 and since the auction in favour of the respondent was not accepted by him there was no binding obligation between the parties
The decree of the trial court was upheld by the lower appellate court
In second appeal False J took the view that cl 3 3 was not in consonance with the statutory rules and the contract came into existence when the bidding was closed in favour of the respondent on March 23 1949
The respondent was therefore held liable to make good the loss which the Government sustained in resorting to the resale of the excise shop
The resportdent preferred an appeal under Letters Patent
The Division Bench allowed the appeal reversing the decision of the single Judge and restored that of the trial court
Clause 21 of rule 534 states A person to whom a shop has been sold shall pay one sixth of the annual fee within seven days of the auction any deposits already made shall be credited to this sum and any excess shall be either returned to him or credited to future payments
By the 7th of the month in which he begins his business under his license and by the 7th of every subsequent month the licensee shall pay one twelfth of the annual fee till the whole fee is paid
But he may at any time pay the whole amount due if he wishes
If the total amount due is less than Rs 100 it shall be payable in one sum unless the Collector for 597 special reasons allows payment to be made in instalments
If any person whose bid has been accepted by the officer presiding at the auction fails to make the deposit of one sixth of the annual fee or if he refuses to accept the license the Collector may resell the license either by public auction or by private contract and any deficiency in price and all expenses of such resale or attempted resale shall be recoverable from the defaulting bidder in the manner laid down in section 60 of the Punjab Excise Act 1 of 1914 as applied to the Delhi Province
Rule 22 states When a license has been cancelled the Collector may resell it by public auction or by private contract and any deficiency in price and all expenses of such resale or attempted resale shall be recoverable from the defaulting licensee in the manner laid down in section 60 of the Excise Act as applied to the Delhi Province
 On behalf of the appellants it was contended by Dr Seyid Muhammad that the respondent was under a legal obligation to pay one sixth of the annual fee within seven days of the auction under cl 21 of r 534 and it
was due to his default that a resale of the excise shep was ordered
Under cl 22 of r 534 the respondent was liable for the deficiency in price and all expenses of such resale which was caused by his default
We are unable to accept this argument
The first portion of cl 21 requires the person to whom the shop has been sold to deposit one sixth of the total annual fee within seven days
But the sale is deemed to have been made in favour of the highest bidder only on the completion of the formalities before the conclusion of the sale
Clause 16 of r 534 states that all sales are open to revision by the Chief Commissioner
Under cl 18 the Collector has to make a report to the Chief Commissioner where in his discretion he is accepting a lower bid
Clause 33 of the Conditions exhibit D 28 states that all final bids will be made subject to the confirmation by the Chief Commissioner who may reject any bid without assigning any reasons
 It is therefore clear that the contract of sale was not complete till the bid was confirmed by the Chief Commissioner and till such confirmation the person whose bid has been provisionally accepted is entitled to withdraw his bid
When the bid is so withdrawn before the confirmation of the Chief Commissioner the bidder will not be liable for damages on account of any breach of contract or for the shortfall on the resale
An acceptance of an offer may be either absolute or conditional
If the acceptance is conditional the offer can be withdrawn at any moment until absolute acceptance has taken place
This view is borne out by the 598 decision of the Court of Appeal in Hussey vs HornePayne1
In that case V offered land to P and P accepted subject to the title being approved by my solicitors 
V later refused to go on with the contract and the Court of Appeal held that the acceptance was conditional and there was no binding contract and that V could withdraw at any time Until P s solicitors had approved the title
Jessel MR observed at p 626 of the report as follows The offer made to the Plaintiff of the estate at that price was a simple offer containing no reference whatever to title
The alleged acceptance was an acceptance of the offer so far as price was concerned subject to the title being approved by our solicitors 
There was no acceptance of that additional term and the only question which we are called upon to decide is whether that additional term so expressed amounts in law to an additional term or whether it amounts as was very fairly admitted by the counsel for the Respondents to nothing at that is whether it merely expresses what the law would otherwise have implied
The expression subject to the title being approved by our solicitors  appears to me to be plainly an additional term
The law does not give a right to the purchaser to say that the title shall be approved by any one either by his solicitor or his conveyancing counsel or any one else
All that he is entitled to require is what is called a marketable title or as it is sometimes called a good title
Therefore when he puts in subject to the title being approved by our solicitors  he must be taken to mean what he says that is to make a condition that solicitors of his own selection shall approve of the title
 It was submitted on behalf of the appellant that the phrase person to whom a shop has been sold in cl
21 of r 534 means a  person whose bid has been provisionally accepted
It is not possible to accept this argument
As we have already shown the first part of cl
21 deals with a completed sale and the second part deals with a situation where the auction is conducted by an officer lower in rank than the Collector
In the latter case the rule makes it clear that if any person whose bid has been accepted by the officer presiding at the auction fails to make the deposit of one sixth of the annual fee or if he refuses to accept the licence the Collector may resell the licenee either by public auction or by private contract and any deficiency in price and all expenses of such resale shall be recoverable from the defaulting bidder
In the present case the first part of cl 21 applies
It is not disputed that the 1 at 676
599 Chief Commissioner has disapproved the bid offered by the respondent
If the Chief Commissioner had granted sanction under cl 33 of exhibit D 23 the auction sale in favour of the respondent would have been a completed transaction and he would have been liable for any shortfall on the resale
As the essential pre requisites of a completed sale are missing in this case there is no liability imposed on the respondent for payment of the deficiency in the price
For these reasons we hold that the judgment of the Punjab High Court dated August 19 1963 in LPA No 50 D of 1960 is correct and this appeal must be dismissed with costs
GC Appeal dismissed


Summary:
The respondent gave the highest bid at an auction for the sale of license for a country liquor shop in Delhi for the year 1949 50
Under cl 31 of the conditions of sale for that year the Chief Commissioner was under no obligation to grant a license until he was assured of the financial status of the bidder
Under el
33 all final bids were made subject to confirmation by the Chief Commissioner who could reject any bid assigning any reasons
However under cl 21 of r 534 of the Delhi Liquor License Rules a person to whom a shop had been sold had to pay one sixth of the annual fee within seven days of the auction
The respondent not having paid one sixth of the annual fee as required by the said cl 21 the Chief Commissioner did not confirm his bid
Resale of the excise shop was ordered
At the new auction it was sold at a lower price
The Collector Delhi thereupon held the respondent liable to pay the difference between his bid and the bid for which the shop was later sold and commenced proceedings for the recovery of the sum
The respondent filed a suit in the Court of the Senior Subordinate Judge Delhi praying for a permanent injunction restraining the appellants Union of India  Ors from taking any proceedings for the recovery of the amount
The trial judge decreed the suit
The decree was upheld by the first appellate court
In second appeal the Single Judge decided against the respondent
The Division Bench decided in his favour
The appellants came to this Court with certificate
It was contended on behalf of the appellants that the respondent was under a legal obligation to pay one sixth of the annual fee within seven days of the auction under el
21 of r 534 it was due to his default that a resale of the excise shop was ordered and under cl 22 of r 534 the respondent was liable for the deficiency in price and all expenses of such resale which was caused by his default
HELD i An acceptance of an offer may be either absolute or conditional
If the acceptance is conditional the offer can be withdrawn at any moment until absolute acceptance has taken place
H 597 From cl 33 of the conditions of sale it is clear that the contract of sale is not complete till it is confirmed by the Chief Commissioner and till such confirmation the person whose bid has been provisionally accepted is entitled to withdraw his bid
If the bid is so withdrawn before the confirmslion of the Chief Commissioner the bidder will not be liable for damages on account of any breach of contract or for the shortfall on resale
G H 597 Hussers vs Horne Payne  676 referred to
595 ii The phrase person to whom a shop has been sold in el
21 r 534 cannot be accepted to mean a person whose bid has bern provisionally accepted
The first part of el 21 deals with a completed sale and the second part with a situation where the auction is conducted by an officer lower in rank than the Collector
In the latter case the rule makes it clear that if any person whose bid has been accepted by the officer presiding at the auction fails to make the deposit of one sixth of the annual fee or if he refuses to accept the licence
the Collector may resell the licence either by public auction or by private contract and any deficiency in price and all expenses of such resale shall be recoverable from the defaulting bidder
F G 598 In the present case the first part of d 21 was applicable
If the Chief Commissioner had not disapproved the bid offered by the respondent under el
33 of the conditions of sale the auction sale in favour of the respondent would have been a completed transaction and he would have been liable for any shortfall on the resale
As the essential prerequisites of a completed sale were lacking in this case there was no liability imposed on the respondent for payment of the deficiency in the price
598 H 599 A B