HON’BLE SRI JUSTICE R. SUBHASH REDDY WRIT PETITION No.29419 of 2009 Dated: 02-03-2010 Between: A. Yadagiri. … Petitioner And The State of A.P., rep. by the Commissioner, Department of Endowments & others. … Respondents HON’BLE SRI JUSTICE R. SUBHASH REDDY WRIT PETITION No.29419 of 2009 ORDER: In this writ petition, the petitioner, a businessman dealing in products made of human hair, seeks directions by way of Mandamus, declaring the action of the 2nd respondent-temple in rejecting the bid offered by him, pursuant to the public auction conducted on 30th of December 2009, in the premises of the 2nd respondent- temple, as illegal and arbitrary. He has also questioned the acceptance of the bid of the 3rd respondent herein. 2. The 2nd respondent-temple is registered under Section 6 (b) of the A.P. Charitable and Hindu Religious Institutions and Endowments Act, 19897. The Manager of the said temple issued auction notice for sale of human hair, collected in the temple premises, for the period from 30th December 2009 to 29th December 2010. Auction notice, dated 20th December 2009, along with terms and conditions, is notified by way of pamphlets. As per condition No.4 notified in the auction notice, in order to participate in the auction, the intending bidders were to deposit an amount of Rs.50,000/-. As per condition No.6, the highest bidder shall deposit the entire bid amount on the same day and shall obtain receipt to that effect. The condition further reads to the effect that in the event of failing to deposit the amount on the same day, the deposit of the bidder will be forfeited to the temple. 3. In the auction conducted on 30th December 2009, the petitioner, respondent No.3 and some others have participated, and the petitioner has emerged as highest bidder, by offering Rs.6,62,000/-, whereas, the 3rd respondent has offered Rs.6,61,000/-. It is the case of the petitioner that though he was the highest bidder, inspite of his request and readiness to deposit the balance amount of Rs.6,12,000/-, the same was not accepted by the Manager of the 2nd respondent-temple, only due to political pressures, as the petitioner is a non-local. It is alleged by the petitioner that there was a pressure on the Manager of the 2nd respondent-temple, to accept the bid of the 3rd respondent, who is a local and resident of the same village. It is stated in the affidavit filed in support of the petition that when he offered to pay the balance amount, he was told by the Manager of the temple that the bid amount would be accepted at Vayalpad, as such, he went there and waited up to 4.45 p.m. and tried to tender the money, but the Manager refused to accept the same. It is pleaded that having avoided to receive the bid amount from him, the 2nd respondent has accepted the bid of the 3rd respondent. It is also the case of the petitioner that the bid of the 3rd respondent is illegally accepted, contrary to the conditions notified for sale. 4. Counter affidavit and additional counter affidavits are filed by the 2nd respondent. In the counter affidavit, while generally denying the various allegations made by the petitioner, the 2nd respondent denied the allegation that he avoided to receive the bid amount from the petitioner. It is stated that though the petitioner was the highest bidder having offered Rs.6,62,000/-, but he failed to deposit the same as per the tender conditions on the date of auction, though he waited up to 7 p.m. It is stated that at that stage, he has called the 2nd highest bidder i.e. the 3rd respondent herein, whose bid was for Rs.6,61,000/- i.e. Rs.1,000/- less than the petitioner’s bid. It is stated that the 3rd respondent has deposited cash of Rs.90,000/- vide receipt No.802, dated 30.12.2009, Rs.3,00,000/- vide receipt No.803, dated 30.12.2009, and a cheque, dated 30.12.2009, for Rs.2,71,000/- vide receipt No.804, dated 30.12.2009. Precisely, it is the case of the 2nd respondent as stated in the counter that, as the petitioner failed to deposit the bid amount on the date of auction, and as the 3rd respondent, being the 2nd highest bidder, has deposited the bid amount as mentioned above, the bid of the 3rd respondent is accepted. 5. In the additional counter affidavit filed by the 2nd respondent, it is stated that the cheque bearing No.168802, dated 30.12.2009, issued by the 3rd respondent herein for Rs.2,71,000/-, was deposited in the Indian Bank, Vayalpad branch in to the S.B. account of the temple on 31.12.2009, but, the said bank has returned the cheque to the 2nd respondent with an endorsement, “Account is closed”. Further, it is stated that after return of the cheque, in view of the interim order passed by this Court in the other writ petition i.e. W.P.No.28930 of 2009, filed by the Bhajantris of the temple, to the effect that the auction shall not be finalized, the 3rd respondent could not deposit Rs.2,71,000/-. It is stated that the said interim order was vacated only on 02.02.2010, and thereafter, the 3rd respondent has deposited the amount of Rs.2,71,000/- on 6th of February 2010. 6. A reply affidavit is also filed by the petitioner herein, reiterating his stand that though he was ready to deposit the bid amount, the Manager of the 2nd respondent- temple has avoided to receive the same. In the reply, it is further stated that even the 2nd highest bidder did not pay the balance bid amount on the date of auction, and inspite of the same, such bid was illegally accepted. 7. Heard learned counsel for petitioner Sri Seshadri Naidu and Sri V.T.M. Prasad, learned Standing Counsel appearing for the 2nd respondent-temple. Inspite of service of personal notice on respondent No.3 by the counsel for petitioner, there is no appearance on his behalf, to oppose the petition. 8. In this writ petition, it is contended by Sri Seshadri Naidu, learned counsel for petitioner, that the petitioner is a resident of Secunderabad, and is a businessman dealing in human hair and though he has participated in the auction by depositing the earnest money deposit of Rs.50,000/- and offered the highest bid of Rs.6,62,000/-, the 2nd respondent has arbitrarily and illegally avoided to receive the bid amount offered by the petitioner. It is submitted that he has also lodged a complaint to that effect, before the Police, on the same day, and only due to local political pressures, the Manager of the 2nd respondent-temple has favoured the local candidate i.e. the 3rd respondent herein and avoided to accept the bid of the petitioner. It is further submitted that as per the tender conditions, the highest bidder was to deposit the entire bid amount on the same day. It is submitted that in any event, accepting the bid of the 3rd respondent by accepting the cheque for Rs.2,71,000/-, is not in accordance with the tender conditions. It is submitted that issuance of cheque will not amount to depositing the amount on the date of auction, and it is submitted that even from the counter affidavits filed by the respondents, the cheque issued by the 3rd respondent was returned with an endorsement, “Account is closed”. It is submitted that in view of return of cheque issued by the 3rd respondent for Rs.2,71,000/-, it cannot be said that the 3rd respondent has complied with the tender conditions, so as to award the contract in his favour. 9. On the other hand, it is submitted by Sri V.T.M. Prasad, learned counsel appearing for the 2nd respondent-temple, that though the petitioner was the highest bidder, he failed to deposit the bid amount on the date of auction, and the Manager of the 2nd respondent- temple, having waited up to 7 p.m. on 30.12.2009, invited the 2nd highest bidder i.e. respondent No.3 herein, who was ready to comply with the tender conditions. It is submitted that as much as the 3rd respondent has deposited Rs.3,90,000/- in cash, in addition to the earnest money deposit of Rs.50,000/-, and issued a cheque for Rs.2,71,000/-, his bid was accepted. It is further submitted that in the absence of any material to show that the petitioner was ready to offer the bid amount on the date of auction as per the tender conditions, he cannot now seek for any directions for acceptance of his bid. It is further submitted that in view of the interim orders passed in the connected writ petition in W.P.No.28930 of 2009, the 3rd respondent has deposited the amount on 06.02.2010, as such, the bid of the 3rd respondent is valid, and there are no grounds to interfere with the same, at this stage. 10. The 2nd respondent is a registered temple and the Manager of the said temple has issued notice for public auction, for sale of human hair to be collected in the premises of the temple for the period from 30.12.2009 to 29.12.2010. From a perusal of the auction notice and the conditions notified therein, it is clear that Condition No.6 prescribes that the highest bidder has to deposit the bid amount on the date of auction itself. Though it is the case of the petitioner that he was ready and willing to deposit the bid amount on the same day, but, the Manager of the 2nd respondent-temple has avoided to receive the same, there is no material to accept his contention. Though it is pleaded by the learned counsel for petitioner that there was a complaint given before the Police, but a copy of such complaint are not placed on record and it is submitted by the learned counsel that such a complaint is given in a nearby Police Station at about 11 p.m. on 30th December 2009. Basing on such complaint, which is lodged at about 11 p.m. on 30.12.2009, in the absence of any further material to show that he was ready to deposit the bid amount, it is not possible for this Court to issue any directions to accept the bid of the petitioner. But at the same time, in this writ petition, the petitioner has also questioned the acceptance of the bid of the 3rd respondent herein. From the counter affidavit filed by the 2nd respondent-temple, it is clear that in addition to the earnest money deposit of Rs.50,000/-, the 3rd respondent has paid an amount of Rs.3,90,000/- in cash and issued a cheque for an amount of Rs.2,71,000/- and obtained receipts to that effect. From a perusal of the counter affidavit, it is also clear that the cheque, which is issued by the 3rd respondent, was deposited in the S.B. Account of the 2nd respondent-temple on 31st of December 2009, but the same was returned to the Manager of the temple on 02.01.2010, with an endorsement that the Account was closed. Although it is pleaded by the learned Standing Counsel Sri V.T.M. Prasad, appearing for the 2nd respondent-temple that in view of the interim orders passed in W.P.No.28930 of 2009, the bid amount is not accepted from the 3rd respondent, but the interim order was only to the effect that the auction shall not be finalized. Further, even according to the 2nd respondent, without reference to the said interim order, they have deposited the cheque issued by the 3rd respondent in the bank, on 31.12.2009 itself, but the same was returned on 02.01.2010, with an endorsement that the Account was closed. In that view of the matter, the only question, which is required to be considered is, whether the issuance of cheque for an amount of Rs.2,71,000/- on 30th of December 2009 will amount to payment by the highest bidder on the same day i.e. on 30th December 2009, as per the tender conditions. 11. In this connection, the learned counsel for petitioner has relied upon a judgment of the Hon’ble Supreme Court in the case of Rao Mahmood Ahmad Khan v. Ranbir Singh[1], where, a cheque was presented towards 25% of the bid amount. The Supreme Court, while interpreting Rule 285-D of the U.P.Zamindari Abolition and Land Reforms Rules, 1952, has held that deposit of amount by cheque, which could not possibly be encashed on the same day, renders the sale nullity. 12. Further, reference is also made to the judgment in the case of Pankaj Mehra v. State of Maharashtra[2], wherein, the Hon’ble Supreme Court, by referring to the definition of ‘Cheque’ under the Negotiable Instruments Act, has held as follows: “A ‘cheque’ is a bill of exchange drawn on a specified banker and not expressed to be payable otherwise than on demand” A ‘bill of exchange’ is “an instrument in writing containing an unconditional order, signed by the maker, directing a certain person to pay a certain sum of money only to, or to the order of a certain person or to the bearer of the instrument”. The cheque, therefore, can be an order on the banker to pay the amount to the holder thereof and no disposition of property would take place until the payment is made by the banker pursuant thereto. At the most, drawing of a cheque can be considered as a step towards disposition of property, but that is insufficient to amount to disposition of property.” 13. The aforesaid judgments relied upon by the learned counsel for petitioner, fully supports the case of the petitioner to the extent of accepting the bid of respondent No.3 herein. First of all, a perusal of the auction conditions shows that the highest bidder was to deposit the bid amount on the same day. Failing to deposit the amount either by way of cash or demand draft, the cheque, which is issued by the respondent No.3 could not have been taken into consideration in view of the notified tender conditions. The very acceptance of the cheque itself is per se illegal, and thus, the respondents have acted illegally in accepting the bid of the 3rd respondent, which runs contrary to the tender conditions. Further, the cheque, which is deposited in the bank on the next date of issuance i.e. 31.12.2009, is also dishonored and the same was returned with an endorsement that the Account was closed. In that view of the matter, the 3rd respondent has failed to comply with the auction conditions, by not depositing the bid amount on the date of auction. Though the 3rd respondent is served with notice, he did not appear before this Court. It is well settled that in distribution of public larges, no bid can be accepted contrary to the notified conditions. In the present case, accepting the bid of respondent No.3 is clearly in gross violation of condition No.6 of the auction conditions. However, it is stated by the learned Standing Counsel Sri V.T.M. Prasad, that pursuant to the grant of bid in favour of respondent No.3, he was not permitted to shift any hair from the temple premises. Further, in this case, in the absence of any material to show that the petitioner was ready to deposit the bid amount on the date of auction, no directions can be issued to accept the bid of the petitioner. 14. For the aforesaid reasons, this writ petition is allowed only to the extent of quashing the action of the 2nd respondent in accepting the bid of respondent No.3, with a further direction to the 1st and 2nd respondents, to notify the auction afresh, and take steps accordingly. The Deputy Commissioner, Kurnool, shall issue instructions to the authorities concerned, for conducting the auction in fair and transparent manner. It is needless to observe that the petitioner and the 3rd respondent are entitled for refund of the amounts deposited by them. 15. The writ petition is allowed to the extent indicated above. No order as to costs. ______________________ R. SUBHASH REDDY, J 2nd March 2010 Note: Copy to the Deputy Commissioner of Endowments, Kurnool. (b/o) ajr [1] 1995 Supp (4) SCC 275 [2] (2000) 2 SCC 756