Civil Appeal No 1932 of 1990
From the Judgment and Order dated 471989 of the Madras High Court in Writ Appeal No 1153 of 1983
R Mohan and R Ayyamperumal for the Appellant
V Krishnamurthy for the Respondents
The Judgment of the Court was delivered by K JAYACHANDRA REDDY J
Leave granted
Heard both the sides
The right to conduct arrack sale in Tamil Nadu was auctioned on 2851981 for the excise year 1981 82
Shop No 49 in Koneripatti village in Sankari Taluk District Salem was auctioned for the excise year 1981 82
Inrespect of the auction of this shop the appellant was the successful bidder and the bid amount was Rs6550 per month
As per the terms the appellant paid the caution deposit of Rs1000 and a half month s rent on the same day
Since the bid amount was found to be inadequate there was a re auction on 1161981 but there was no bidder on that day
Therefore again on 1961981 the same shop was re auctioned and one Mr Chellamuthu was successful bidder at Rs6575 per month but he failed to comply with certain requirements
Therefore it was re auctioned on 27681 but there were no bidders and the shop was re auctioned again on 1781981 when the bid was only Rs3000 by one Doraisamy
The appellant was called upon by way of a communication dated 17482 to pay the notional loss
It was claimed by the department that the bid of the appellant was confirmed on 28681 but the appellant refused to receive the con firmed order and consequently the shop was reauctioned for Rs3000 only and therefore the difference amount is recov erable from the appellant
This impugned order was ques tioned 611 and the learned Single Judge of the High Court dismissed the writ petition
It was observed by the learned Judge that records produced before him were perused and they show that the bid by the appellant was confirmed on 28681 and the appellant can not seek any relief in the writ petition having bidden the auction under certain conditions
In the writ appeal filed against the order of the Single Judge the Division Bench agreed with the learned Single Judge
It was also cOntended before the Division Bench that his bid was never confirmed validly and that auction in favour of Do raisamy alone was the valid auction
Learned counsel for the appellant contended before us that the bid by the appellant was not accepted as per the rules and it was not confirmed by the Collector and the very fact that there was subsequent two re auctions obviously on the ground that the bid by the appellant was inadequate itself shows that the bid was not confirmed as per the rules and therefore the question of recovery of resultant loss from the appellant does not arise
It is also submitted that Chellamuthu who was successful bidder in the auction that was held on 19681 should be held responsible for the resultant loss if any since he was the highest bidder because his bid was higher than that of the appellant
To appreciate these contentions it becomes necessary to refer to the relevant rules
Some of the relevant rules of the Tamil Nadu Toddy and Arrack Shops Disposals in Auction Rules 1981 were framed under the powers conferred by Sec tion 4 of the Tamil Nadu Prohibition Act
Rule 3 lays down that the privilege of selling liquor by retail shall be granted to any person by auction and the period shall be one excise year
Under Rule 5 a notice has to be given mention ing particulars as required under Rule 6
The tenders also will be received an hour before the commencement of the auction
Under Rule 8 every person desiring to bid in such open auction shall deposit a sum of Rs 1000 as earnest money and only the bidders who have deposited the earnest money deposit shall be admitted into the place of auction
Rule 10 provides for refund of such a deposit to the unsuc cessful bidders
Rule 12 lays down that the Sale Officer can refuse to accept the bid under any one of the conditions specified therein
Rule 14 similarly lays down that highest of the bid shall be taken into consideration for acceptance
As per Rule 15 every auction purchaser shall immediately after the announcement or atleast before the close of the day s sale deposit half a month s rental with the Sale Officer
If he does not do so the earnest money deposit made by him under Rule 8 shall be forfeited to the State Government
For the purpose of this case Rule 16 is impor tant and it is in the following terms 612 Deposit of advance The Sale Officer if he accepts provi sionally the bid of an auction purchaser shall issue a notice to the auction purchaser to pay as advance in any case within seven days from the date of the sale an amount equal to three months rental in addition to the earnest money deposit already made under rule 8 but inclusive of the half a month s rental paid at the close of the sale under rule 15 emphasis supplied We will consider the scope of this rule in a detailed manner at a later stage
Rule 17 lays down that the auction pur chaser shall produce a solvency certificate issued by the Tehsildar for the purpose of creating encumbrances and should also execute a mortgage deed and if does not own any properties he should deposit additional amount towards three months  rental or should furnish bank guarantee
Under Rule 18 the Collector should refund the deposits made by the auctionpurchaser in case he refuses to confirm the accept ance of the bid
Rule 20 is another important rule and it is necessary that it should be fully extracted 20
Confirmation of sale by the Collector 1 Every bid provisionally accepted by the Sale Officer shall be subject to confirmation by the Collector and on such confirmation the orders of the Collector shall be final unless it is revised by the Commissioner for special reasons to be re corded in writing
The Commissioner may on appeal or revi sion or suo motu revise any order of the Collector confirm ing a bid provisionally accepted by the Sale Officer after issuing a show cause notice to the person affected and considering his representations if any
Any order of the Collector confirming the sale of a shop in favour of a person may be cancelled by the Commissioner even subse quent to the grant of a licence to him for reasons to be recorded by him and after giving an opportunity to all persons concerned
2 On receipt of the order of confirmation and on receipt of an application in Form No 2 the Excise Officer shall subject to the provisions in rule 17 issue a licence in Form No 3 under Section 17 C2 of the Act
3 If the Collector considers any bid to be inadequate he may refuse to confirm the provisional acceptance of the 613 bid and immediately direct the resale of the shop from the point at which it was last left on such date and at such time and place as may be fixed by him
The conditions of sale shall remain unaltered unless otherwise directed by the Collector
Any order passed by the Collector for resale shall be given adequate publicity and shall also be notified at the Taluk Office
4 Any resale ordered to be made under sub rule 3 shall begin with the bid provisionally accepted by the sale offi cer at the original sale and in the name of the individual who offered it
If at such sale a higher bid is offered and is provisionally accepted by the Sale Officer the bid with which such sale began shall lapse
But if no higher bid is accepted by the Sale
Officer the matter shall be reported to the Collector who may pass orders confirming the bid provisionally accepted at the original sale or may again direct that the sale be continued from the point at which it was left at the original sale and the order of the Collec tor shall be final unless it is revised by the Commissioner on appeal or revision
5 The provision of sub rule 4 shall apply to any sale the re opening of which is directed under that sub rule
6 No bid which has been provisionally accepted by the Sale Officer shall be withdrawn before it lapses under subrule 4 or before orders are passed confirming or refusing to confirm it and if the bidder commits any breach of this condition he shall be liable to make good the difference between his bid and any lower bid which may be finally accepted emphasis supplied Rule 21 lays down that on the failure of any person to make a deposit or to comply with  any requisition or to comply with any formality like executing bond etc
the shop may be resold under the orders of the Collector on a report from the Assistant Commissioner and the same shall be resold under this rule
It shall be at the risk of the defaulting bidder who shall forfeit all gain if any that may secure by the resale in the event of a loss by resale the default ing bidder shall be required to make good the deficiency between the total amount payable for the whole period under the terms of the original sale and by the total 614 amount payable by the successful bidder at the resale and the deposit already made by the defaulting bidder shall be forfeited
As already mentioned it is under this last rule the action is taken against the appellant
At this stage it would be useful to refer to some of the everments in the affidavit and the counter affidavit putting forward the rival
The appellant in his affidavit has stated that his bid was never confirmed and that he has not received any notice and that on the other hand there was a re auction and there was a higher bid in the re auction but the said bidder defaulted
Therefore there was again another re auction but on that day there were no bidders but ultimately during the final re auction on 2761981 the bid was only Rs3000 by one Doraisamy and that was confirmed
The plea of the appellant has been that his bid was not confirmed by the Collector as required under Rule 20 and repeated re auctions would itself go to show that the bid of the appel lant was not confirmed
In the counteraffidavit filed on behalf of the Government it is admitted that the petitioner was the highest bidder on 2851981 but the Collector or dered resale as already mentioned and one Chellamuthu was the highest bidder offering Rs6575 but he failed to comply with the conditions
It is averred that the said Chellamuthu though was the highest bidder in the said re auction but did not comply with the conditions under Rule 15 inasmuch as he failed to deposit half a month s rental and therefore his bid was not accepted
Therefore subsequent bids were held
It is further averred by the Government that the bid offered by the appellant was confirmed by the Collector as per the proceedings of the Collector dated 28681 but the appellant refused to receive the order of confirmation and therefore he has to make good the resultant loss
Learned counsel for the appellant submits that Chellamu thu was the highest bidder and he should be held to be a defaulter and consequently be liable for the resultant loss
In order to see whether the appellant s liability in any manner continued consequently making him liable for the resultant loss we have to examine Rules 203 and 204 carefully in the context of the facts of this case
As extracted above Rule 203 states that if the Collector considers any bid to be inadequate he may refuse to confirm the provisional acceptance of the bid and immediately direct the resale of the shop from the point it was last left
As per sub Rule 4 any resale ordered to be made under sub rule 3 shall begin with the bid provisionally accepted by the Sale Officer at the original sale and if at such 615 sale a higher bid is offered and is provisionally accepted by the Sale Officer the bid with which such sale began shall lapse
This part of the rule is very significant
If the record shows that the bid offered by Chellamuthu has been provisionally accepted by the Sale Officer the bid with which the sale began ie the bid offered by the appellant lapses but if on the other hand such a bid during the re auction is not  accepted by the Sale Officer then the subsequent steps for further reauction or for confirmation of the original bid ie that of the appellant would take place
In this context it is once again necessary to note that as per the Department bid of Chellamuthu was not even provisionally accepted
As laid down in Rule 16 if the record shows that his bid has been provisionally accept ed by the Sale Officer then as provided under Rule 204 the bid of the appellant gets automatically lapsed
For our own satisfaction we called for the record and perused the file concerning the auction
So far as the bid made by Chellamu thu is concerned we find a document in the record which authentically shows that his bid being highest was provi sionally accepted and announced by the Sale Officer
This document reads as under Second resale of toddyarrack shops in Sankari Taluk
171981 to 3061982 Shop No 49 Place Koneripatti Name and full address of Tender amount the tenderer
Nil Highest tender amount Rs nil by Thiru Highest bid amount Rs6575 by Thiru The highest of these two that is Rs6575 Rupees Six Thou sand five hundred seventy five only by Thiru Sellamuthu so Nachimuthu of Kumaranpalayam Village the highest biddertenderer is provisionally accepted and announced
Sd 19681 Sale officer  Sub CollectorSankari
 616 As per Rule 16 when there is such provisional acceptance then the Sale Officer issues a notice to the highest bidder to pay as advance three months rental
But according to the respondents namely the Department the said Chellamuthu though was the highest bidder did not deposit half a month s rental as required under Rule 15 therefore the question of accepting his bid did not arise even provision ally
Consequently the highest bid of the appellant was subse quently confirmed
Since we find a genuine doubt about the liability of the appellant we went through the rest of the file also
No doubt there is a note here and there to the effect that Chellamuthu did not deposit the 5 days rental on that day
But in view of the document mentioned above it must be deemed that the Chellamuthu s bid was accepted provisionally by the Sale Officer and by virtue of Rule 20 sub rule 4 when once the bid of Chellamuthu was accepted provisionally as the highest bid the bid with which such sale began namely the bid of the appellant got lapsed
We do not want to go into the question whether under Rule 16 the provisional acceptance of the bid by the Sale Officer should necessarily be preceded by the fulfilment of the condition of deposit of half a month s rental by the auc tion purchaser under Rule 15
Perhaps normally it may be correct to say that the Sale Officer under Rule 16 accepts provisionally the bid after there is compliance of Rule 15 but in the instant case we are concerned with the re auction and about the liability of the original highest bidder in the light of Rule 204
The document mentioned above clear ly shows that the Chellamuthu s bid was provisionally ac cepted and therefore Sub Rule 4 of Rule 20 comes into force and consequently the bid of the appellant lapsed
At any rate after a due consideration of the contents of the declaration issued by the Sale Officer accepting the bid of Chellamuthu provisionally a genuine doubt arises about the liability of the appellant
Having given our earnest consid eration we are of the view that the bid by the appellant got lapsed by virtue of the acceptance of the bid by Chella muthu provisionally by the Sale Officer and consequently the appellant cannot be held liable for the resultant loss
The appeal is accordingly allowed
TNA Appeal allowed


Summary:
The All India State Bank Officers  Federation filed a Writ Petition in this Court on the 24th April 1989 seeking to impugn a new promotion policy initiated by the State Bank of India
The petition was supported by an affidavit of the President of the Federation affirming the contents of the petition to be true to his personal knowledge and submit ting in paragraph 9mm of the petition that the petitioners were approaching this Court in great haste as the Bank was moving with great speed to implement its new promotion policy and was likely to constitute a Departmental Promotion Committee and declare the results
In para 4 it was submit ted that the petitioners had not filed any other similar petition either in this Court or any other High Court
When the writ petition came up for admission before a Bench of this Court on April 26 1989 counsel for the State Bank of India was present and accepted notice on behalf of the Bank
The Writ Petition was contested by the Bank which sub mitted in its counter affidavit that the statement in para 4 of the petition in support of the writ petition was false and pointed out that the Federation through its Deputy General Secretary had filed a Writ Petition in the High Court of Andhra Pradesh along with an application seeking stay of the promotion policy and that the High Court admit ted the Writ Petition on April 13 1989 but rejected the application for interim stay and further pointed out that another petition had been filed by the State Bank of India Officers  Association Karnataka in the Karnataka High Court
A second objection as regards the maintainability of the 494 petition was raised in para 3 that since the promotions had already been made they could not be disturbed and that no steps were taken to implead those officers who would be directly affected as a result of the prayer made in the writ petition
To the aforesaid objections raised by the Bank the petitioner filed a rejoinder supported by an affidavit of the President of the Federation submitting that the depo nent did not have any knowledge of the writ petition filed in the High Court of Andhra Pradesh and that as soon as it came to his knowledge it was withdrawn
and that the peti tioners did not know the names of all the 58 candidates who had been promoted favoured
When the Writ Petition was taken up for further hearing on April 5 1990 counsel for the Bank objected to the maintainability of the writ petition on the grounds of suppression of material facts and abuse of the process of court
The Court directed the petitioner to file a better affidavit and the petitioner Federation filed a better affidavit explaining the correct position and tendering an unqualified apology for the mis statements in the earlier affidavit but still reiterated that they came to know of the writ petition in the Andhra Pradesh High Court only on April 23 1989 and that at the time of the preliminary hearing it was brought to the notice of the Court by the Respondent s counsel
The respondent pointed out that the statements made in the rejoinder filed by the petitioners that they were not aware of the names of the promoted officers till November 1989 was a total falsehood because i the writ petition filed in the Karnataka High Court made all of them parties to the writ petition and ii the names of the promoted officers were listed in the fortnightly bulletin of the State Bank Officers  Association dated 1st May 1989 carry ing a message of congratulations to all of them
Disposing of the preliminary objections and adjourning the writ petition for further hearing on merits the Court HELD 1
Apart from mis statements in the affidavits filed before this Court the petitioner federation has clear ly resorted to tactics which can only be described as abuse of the process of court
The simultaneous filing of writ petitions in various High Courts on the same issue though purportedly on behalf of different associations of the Officers of the Bank is a practice which has to be discour aged
500H 501A 495 2
An attempt was made to obtain a stay in the Andhra Pradesh High Court and when that attempt failed the writ petition here was filed
In this the petitioners were able to obtain only an order that any promotions made during the pendency of the petition would be subject to the decision in the writ petition
But having obtained this order on April 26 1989 it is curious and inexplicable that an affiliated association should have made an application on April 27 1989 in the Karnataka High Court praying for a stay of the promotions
These are only tactics that will be indulged in by a chronic and compulsive litigant and not by a Federation like the petitioner
501C D 3
One expects that officers fight their battles fairly and squarely and not stoop low to gain what can only be temporary victories by keeping away material facts from the court
501E 4
It is common knowledge that of late statements are being made in petitions and affidavits recklessly without proper verifications not to speak of dishonest and deliber ate misstatements
Strong and emphatic disapproval of the conduct of the petitioners in this case is recorded in the hope that this will be a lesson to the present petitioners as well as to other litigants and that atleast in future people will act more truthfully and with a greater sense of responsibility
501F G 5
The Court does not wish to penalise the various officers who may suffer as a consequences of the new policy which they wish to challenge and decline them an opportuni ty to put forward their grievances before the Court for the mis statements or wrong steps taken by the officers of the Federation in their over anxiety to get quick interim re lief
502B C