1 IN THE HIGH COURT OF JUDICATURE AT BOMBAY BENCH AT AURANGABAD. SECOND APPEAL NO.593 OF 2004. Gupta Steel Industries through its partner : Bansidhar G.Agrawal and another ... Appellant. Versus The Rahuri Sahakari Sakhar Karkhana Ltd.,Ahmednagar. ... Respondent. ... Mr.A.B.Gatne, advocate for the appellant. Mr.Rahul Karpe, advocate for the Respondent. ... CORAM : S.V.GANGAPURWALA,J. Date : 14.10.2010. PER COURT 1. This is plaintiff's Second Appeal. The plaintiff had instituted suit for recovery of Rs. 25,000/- (Rupees twenty five thousand) plus 2 interest. Rs.25,000/- (Rupees twenty five thousand) was deposited by the plaintiff. The same was forfeited by the present Respondent. The trial Court dismissed the suit. The plaintiff preferred appeal. The appellate Court also dismissed the appeal. The plaintiff has assailed the said judgment in the present Second Appeal. 2. Mr.Gatne, learned counsel for the appellant strenuously contended that the amount that was deposited was pursuant to a private negotiation or a private contract and not pursuant to any auction proceedings. There was no written contract entitling the defendant to forfeit the amount. Mr.Gatne, learned counsel relying on Section 74 of the Contract Act, submitted that unless and until there is a term in the contract authorising a party to forfeit the amount either by way of penalty or otherwise, the defendant does not get any authority to forfeit the same. According to the learned counsel, the Courts below have given a perverse findings regarding the presence of the 3 representative of the appellant/plaintiff in the auction proceedings. On the above count states that the substantial question of law is involved in this Appeal. 3. To buttress his submissions that the findings are not in conformity and the legal position as it stands has not been discussed, the learned counsel has taken me through the judgments delivered by both the Courts below. 4. The moot question is whether the amount of Rs.25,000/- (Rupees twenty five thousand) was deposited by the plaintiff pursuant to the private negotiation or was pursuant to the auction proceedings. The Courts have relied on the various correspondence, the terms of the auction and the proceedings of auction on record. It has been observed that the terms and conditions of the auction sale were produced at Exh.64. As per the terms and conditions of the said auction sale 1/4th price will have to be paid as advance and the remaining amount was to be deposited before taking delivery and if the 4 delivery was not taken within the stipulated period, then 1/4th price would stand forfeited. The defendants have also produced on record Exh. 63 and Exh.65 which are the public notices in regard to public auction and Exh.66 i.e. notes of the auction. The Court has relied on Exh.68 i.e. the letter issued by the Managing Director of the Respondent stating that in the public auction the bid of the appellant was accepted and they were to deposit Rs.25,000/- (Rupees twenty five thousand) before taking delivery. Thereafter, the letters were issued by the defendant directing the appellant to take the delivery or else the amount will be forfeited. The Courts have appreciated this aspect. There is no written contract on record. The public notice of auction was an invitation to the offer. The letter Exh.68 written by the Managing Director of the Defendant is manifest that it was pursuant to auction, the amount of Rs.25,000/- (Rupees twenty five thousand) was deposited. The offer was made by the plaintiff pursuant to the invitation to offer, the same having been accepted would give rise to the contract. In light of the same, it 5 would not be necessary for a separate written contract entitling the defendant to forfeit the amount. 5. Both the Courts on appreciation of evidence have come to the conclusion that the said amount was deposited pursuant to an auction and that the terms of auction specified the clause of forfeiture. In such circumstances, no error can be attributed in the judgment. The Second Appeal being sans substantial question of law is dismissed. However, there shall be no order as to costs. (S.V.GANGAPURWALA,J.) asp/office/sa59304 6