THE HON’BLE SRI JUSTICE K.C. BHANU APPEAL SUIT No.364 OF 1993 JUDGMENT: This Appeal Suit, under Section 96 of the Code of Civil Procedure, 1908, is directed against the Judgment, dated 03.11.1992, in Original Suit No.76 of 1984, on the file of the Subordinate Judge, Rajahmundry, whereunder and whereby, the Suit for recovery of an amount of Rs.10,000/- deposited by the appellant/plaintiff in an auction, was dismissed. 2. For better appreciation of facts, the parties hereinafter are referred to as they are arrayed in the trial Court. 3. The brief facts that are necessary for disposal of the present appeal may be stated as follows: On 29.11.1983, in the auction conducted by defendant No.2, the plaintiff participated and became the highest bidder for 2,262 CUM of Firewood of Labbarthi F C VI by 1983 – 84 strip II bit ‘B’ for Rs.1,18,960/-. As per the general sale conditions, the sale in favour of the highest bidder has to be confirmed by the competent authority within seven days from the date of sale and the confirmation of the same has to be communicated to the highest bidder within one week from the date of the confirmation of the sale. The defendants did not communicate the confirmation of sale within seven days or within reasonable time. The plaintiff waited till 19.12.1983. As the plaintiff did not receive any communication of confirmation of sale in his favour, he sent a letter, dated 19.12.1983, to defendant No.2 to cancel the sale and refund the amount of Rs.10,000/- deposited by him on 29.11.1983. Subsequently, the plaintiff received the order of confirmation of sale on 23.12.1983 from defendant No.2. Thereafter, the plaintiff again addressed a letter, dated 06.01.1984, to the defendants. As the defendants failed to refund the amount of Rs.10,000/- deposited by the plaintiff, he got issued a notice to the defendants to refund the amount of Rs.10,000/- with interest. Defendant No.2 got issued notice to the plaintiff demanding him to pay Rs.44,853/- being the difference of amount on resale of the firewood, which took place on 28.02.1984. The defendants are not entitled to claim the other amount as they committed breach of contract in not confirming the sale within the stipulated time. Hence, the Original Suit. 4. Defendant No.1 filed written statement contending that the suit is bad for mis-joinder of parties and non-joinder of parties, and that defendant No.1 is not concerned with the sale of firewood in this case. 5. Defendant No.2 filed written statement stating that the sale has to be confirmed by the Regional Manager. Some delay was occurred with the Regional Manager in dispatching the orders of confirmation of sale to the plaintiff. The orders of confirmation of sale were dispatched to the plaintiff on 19.12.1983. Having come to know about the same, plaintiff got issued a notice to defendant No.2 cancelling the sale. As per condition No.24 of the sale conditions, it is for the plaintiff to make his own arrangements to receive the orders of confirmation of the sale. As he did not make his own arrangements for the purpose of receiving the orders of confirmation of sale, the confirmation orders were dispatched by registered post on 19.12.1983 to the plaintiff, who received the same on 23.12.1983. As the plaintiff has not deposited the balance of sale consideration, defendant No.2 conducted reauction of the same firewood on some other day, which fetched only Rs.1,26,107/- . Therefore, defendant No.2 sustained loss of Rs.44,853/-. Hence, defendant No.2 made a counter claim for recovery of the same. 6. Based on the above pleadings, the following issues are framed for trial: “1. Whether the plaintiff is entitled to claim refund of the amount deposited by him at the time of auction? 2. Whether the plaintiff committed breach in complying with the sale conditions and thereby the defendant – corporation sustained loss of Rs.44,853/- and the 2nd defendant is entitled to recover the suit amount as counter claim from the plaintiff? 3. To what relief?” 7. During trial, PW.1 was examined and Exs.A1 to A8 were got marked on behalf of the plaintiff, and on behalf of the defendants, DW.1 was examined, but no document was got marked. 8. The trial Court after considering the evidence on record came to the conclusion that it is the plaintiff who has to make arrangements to get the orders of confirmation of sale; that after receipt of notice of confirmation of the sale, the plaintiff got issued a notice with oblique reasons; that in pursuance of the terms and conditions of Ex.A1 – General Sale Notice, the plaintiff is liable to pay the loss caused to the defendants in case of conducting reauction and accordingly, dismissed the suit and partly decreed the counter claim of the defendants duly crediting the amount deposited by the plaintiff. Challenging the same, the present appeal is filed by the plaintiff. 9. Now the points for determination are: a. Whether the defendants are entitled for the counter claim for the loss sustained by them? b. Whether the trial Court is right in adjusting the amount of Rs.10,000/- towards loss caused to the defendants? 10. Learned counsel for the appellant contended that there is a serious lapse on the part of respondent No.2/defendant No.2 in communicating the confirmation of sale within seven days from the date when the appellant/plaintiff became the highest bidder; that having waited for more than twenty days, the appellant addressed a letter to respondent No.2 duly terminating the sale; that the Judgment under challenge is unsustainable inasmuch as there was no proper appreciation of the terms and conditions of Ex.A1 – General Sale Notice; that as the sale is not confirmed within seven days from the date of sale, the appellant is entitled for refund of the money deposited by him and hence, he prays to set aside the impugned judgment and decree in the suit. 11. Learned counsel for the respondents contended that condition No.8 of Ex.A1 is not mandatory; that due to some administrative exigencies, the sale was not confirmed within seven days from the date of sale; that after coming to know about the confirmation of sale proceedings issued by respondent No.2, the appellant got issued the notice; that the department sustained the loss due to lapses on the part of the appellant/plaintiff while conducting reauction; that the trial Court after elaborate consideration of evidence on record rightly allowed the counter claim of the respondents in part and hence, there are no grounds to interfere with the impugned judgment. 12. The factual matrix is not in dispute. The appellant/plaintiff became the highest bidder when he participated in the auction conducted on 29.11.1983 in respect of sale of 2,262 CUM firewood of Labbarthi F C VI by 1983-84 strip II bit ‘B’ for Rs.1,80,960/-. When the appellant became the highest bidder, he deposited an amount of Rs.10,000/- on the same day towards part of bid amount. Ex.A1 is the General Sale Notice. As the sale was not confirmed within the time stipulated i.e., within seven days from the date of auction, the appellant repudiated the contract, which necessitated the respondents to conduct reauction for the self-same firewood. On a subsequent date, on reauction, it fetched only Rs.1,26,107/-. Therefore, according to the respondents they sustained loss of Rs.44,853/-, because of not honouring the terms and conditions of Ex.A1 by the appellant. 13. Condition No.8 of the sale conditions in Ex.A1 reads as follows: “The sale is subject to confirmation by the Divisional Regional Manager, A.P. Forest Development Corporation Limited as the case may be. The officer conducting the sale reserves the right to confirm or reject any bid including the highest bid without assigning any reasons therefor. His decision in this respect shall be final. Mere knocking down of the sale cannot be deemed as acceptance of the bid unless it is confirmed by the competent authority. Normally confirmation orders will be dispatched within (7) seven days from the date of sale. If the sale is not confirmed, the amount paid by the highest bidder shall be refunded as early as possible.” The above condition makes it clear that ordinarily the confirmation of sale orders will be dispatched within seven days from the date of sale. 14. There cannot be any dispute that if a person wants to withdraw his offer he can do it, but that can be done before the confirmation of the sale. Ex.A2 is said to have been sent by the appellant to respondent No.2 withdrawing the offer, which is dated 19.12.1983. By that time, the confirmation order was passed by the competent authority under Ex.A4, which was received by the appellant. So, once the confirmation order has been received by the appellant, he has no option but to honour the terms and conditions of the sale. No doubt, there was some delay in sending the confirmation order to the appellant, but that delay has been explained by DW.1, Senior Accountant of defendant No.1 – Corporation, who categorically stated that the confirmation has to be done by the Regional Manager; that as the Regional Manager was on camp, the auction in favour of the appellant was not confirmed within seven days of sale; that immediately after the conduct of sale, the Divisional Manager has sent the record to the Regional Manager on 30.11.1983, who confirmed the sale on 15.12.1983; and that the Divisional Manager received the confirmation along with the file on 16.12.1983. Therefore, from the evidence of DW.1 it is clear that there is no deliberate violation of terms and conditions of the sale conditions in Ex.A1. 15. Condition No.15 of Ex.A1 reads that respondent No.2/defendant No.2 is entitled to recover the loss that occasioned due to the default committed by the appellant and due to the reauction of the same lot. Similarly, there is another condition, which would go to show that it is the duty of the appellant to enquire about the passing of order of confirmation of sale either by issuing a letter or by making some efforts, as per the conditions in Ex.A1. The appellant did not go to the office of respondents to know about the confirmation of the sale. Therefore, condition No.8 cannot be said to be a mandatory one. In the normal circumstances, if the Regional Manager was not on camp, the confirmation would have been communicated within seven days from the date of sale. In view of the fact that the Regional Manager was on camp the confirmation proceedings have not been issued to the appellant within the above time. That is the reason why there was some delay in confirming the sale. 16. It is not in dispute that the respondents violated condition No.8 of Ex.A1. If the appellant did not want to proceed further, the appellant can as well issue a notice to withdraw his offer of bid in purchasing the firewood. But, that should be done before the date of confirmation of sale. When the sale was confirmed on 15.12.1983 and the same has been received by the appellant on 23.12.1983, the appellant is bound to pay the remaining sale proceeds. After passing of the order of confirmation of sale, the appellant appears to have been issued Ex.A2, dated 19.12.1983, repudiating the same. Therefore, the trial Court upon consideration of evidence on record rightly held that because of the action of the appellant the respondents sustained loss to a tune of Rs.33,853/- due to reauction of the self-same firewood. In view of the fact that one of the conditions of Ex.A1 is violated, the appellant is liable to pay the loss caused to the respondents - department as a result of reauction of the self-same firewood. Therefore, the respondents are entitled for recovery of the loss occurred to the department in view of the fact that the appellant deliberately withdrawn from the sale. Therefore, the impugned order needs no interference by this Court. Appeal is devoid of merit and is liable to be dismissed. 17. Accordingly, the Appeal Suit is dismissed. There shall be no order as to costs. _______________ K.C. BHANU, J October 21, 2010 MD IN THE HIGH COURT OF JUDICATURE, ANDHRA PRADESH AT HYDERABAD THURSDAY, THE TWENTY FIRST DAY OF OCTOBER TWO THOUSAND AND TEN PRESENT THE HON'BLE SRI JUSTICE K.C. BHANU APPEAL SUIT No.364 OF 1993 Between: Yekkala Koteswara Rao .....APPELLANT AND The Andhra Pradesh Forest Development Corporation Limited and another ....RESPONDENTS The Court made the following: THE HON’BLE SRI JUSTICE K.C. BHANU APPEAL SUIT No.364 OF 1993 October 21, 2010