IN THE HIGH COURT OF JUDICATURE, ANDHRA PRADESH AT HYDERABAD (Special Original Jurisdiction) MONDAY, THE NINTEENTH DAY OF DECEMBER TWO THOUSAND AND ELEVEN PRESENT THE HON'BLE SRI JUSTICE VILAS V. AFZULPURKAR WRIT PETITION No.30624 of 2011 BETWEEN Anton Engineering, Chennai and another. ... PETITIONERS AND The Regional Manager, M.S.T.C. Limited, Visakhapatnam and three others. ...RESPONDENTS Counsel for the Petitioners: MR. M.A.K. MUKHEED Counsel for the Respondents: MR. PONNAM ASHOK GOUD ASST. SOLICITOR GENERAL MR. T.S. ANAND The Court made the following order: ORDER: A short question that falls for consideration in this writ petition is relating to E-auction where bidding takes place among the pre-bid deposit holders through internet. 2. The brief facts are as follows: (a) The Eastern Naval Command, Andhra Pradesh – second respondent herein, intended to sell a Decommissioned Submarine “Vela” Foxprot built in 1974 Russia, as iron scrap. The said E-auction was held through MSTC Limited – respondents 1, 3 and 4 herein by issuing notification dated 10.11.2011. E-auction notification, inter alia, required each intending participant to deposit pre-bid deposit of Rs.15,00,000/- in favour of CAD (Navy), Eastern Naval Command, payable at Visakhapatnam, to qualify to participate in the E-auction. The aforesaid sale was ‘as is where is’ basis and the auction was to be conducted on 10.11.2011 at 13:00 Hrs and the closing date was on the same day at 15:00 Hrs. The method of auction, which is precisely the controversy in the present case, is regulated by the following clauses in ‘Buyer Specific Terms and Conditions’ of MSTC. Clauses 3.3 and 3.4 are, therefore, appropriate to be extracted hereunder: 3.3. The closing time of an auction shall automatically be executed by 5 minutes for all Coal auctions and by 8 minutes for all other auctions if bid continues (e.g. in case the closing time is 5-30 p.m. of any particular date and if any bidder bids at 5.29 p.m. then the closing time will be automatically extended to 5-37 p.m. in case of auctions other Coal. Similarly, if any bidder again bid at 5-36 p.m. then the closing time will automatically be extended to 5-44 p.m. in case of auctions other than Coal and so on.) 3.4. A bid once given cannot be retracted. 3. It appears that there are only two participating bidders, who participated and when the petitioner raised his bid to Rs.1,61,32,792/- the other participating bidder increased his bid by Rs.1/-. Thereafter, it was for the petitioner to increase the bid further. It is alleged that at this stage the petitioner’s Airtel Internet connection went offline whereby petitioner’s accessibility was disconnected and petitioner could not bid any further, though he intended to raise the bid by Rs.25,00,000/- more taking the bid to a maximum amount of Rs.1.87 crores. On account of disconnection of internet, the petitioner allegedly sent a fax immediately followed by a letter informing the respondents of his highest offer of Rs.1.87 crores. The fax and the letter of the petitioner was acknowledged by the respondents on the next day i.e. 11.11.2011 but petitioner did not receive any response and seeking reopening of the E-auction the present writ petition is filed questioning the inaction of the respondents in not re-auctioning the tender. 4. According to the petitioner, the E-auction was conducted by reverse auction process as per the Indian Strategic Petroleum Reserves Limited and relies upon the following clause in Annexure – I thereof and clause 11 (viii) as under. 1. SCHEDULE FOR REVERSE AUCTION: The Reverse Auction shall be for a duration of two hours as under: Date: To be intimated later Time: To be intimated later … … … 11. OTHER TERMS & CONDITIONS: viii. In extreme case of failure of internet connectivity, (due to unforeseen circumstances other than power failure), communication shall have to be sent by fax immediately. Owner may decide to extend the bidding time, at their discretion, but not as bidder’s right. A copy of the e-mail sent by the petitioner is filed as annexure – P1 followed by a letter of the petitioner as annexure – P2 dated 11.11.2011. 5. When the writ petition was heard, in the first instance, on 21.11.2011, the learned Assistant Solicitor General, who had taken notice for the second respondent, sought time to get instructions and while permitting the petitioner to serve notice on respondents 1, 3 and 4, it was directed that if the tender has not been finalized so far, the same shall not be finalized pending further orders. In the proceedings of this Court dated 21.11.2011, referred to above, I had also pointed out that the shortlisted highest bidder has also to be impleaded by the petitioner. Thereafter, respondents 1, 3 and 4 have filed a counter affidavit, while the learned Assistant Solicitor General produced documents, particularly, the bid history showing the progressive bidding among the participants commencing from 13:32:36 Hrs with the last bid time recorded as 19:53:48 Hrs. 6. Counter affidavit filed by respondents 1, 3 and 4 denies that the said auction was conducted by methodology of reverse auction, as contended by the petitioner and state that the auction was, in fact, forward auction. Reliance is also placed upon clause 1.3 of ‘Buyer Specific Terms and Conditions’ of MSTC, which refers to applicability of Force Majeure and thereby, the respondents contend that they are not liable for any failure or delay in performance due to any reason and state that the auction was closed at 08.00 PM on 10.11.2011 whereas the E-mail sent by the petitioner was received on 10.11.2011 at 10.40 PM. Respondents, therefore, state that they are not responsible for break down of any machinery or internet service of petitioner and though treating the petitioner’s fax and the letter as bid offered after closure of auction, it is stated that the same cannot be taken into consideration. The counter affidavit further states that the vessel, which is auctioned, is lying in the port and is sinking day-by-day causing problems for navigation of the other naval vessels in the channels. It is, therefore, contended that there is urgency in finalizing the auction so as to remove the vessel as early as possible from the channel. 7. I have heard Mr. M.A.K. Mukheed, learned counsel for the petitioner; the learned Assistant Solicitor General for second respondent and Mr. T.S. Anand, learned counsel for respondents 1, 3 and 4 and on 15.12.2011 and 16.12.2011. 8. Looking at the clauses, extracted above, of the terms and conditions of reverse auction relied upon by the petitioner, it is evident that in case of disruption of internet connectivity the communication has to be sent by the bidder by fax immediately whereupon the extension of bid time would be at the discretion of the owner. The terms and conditions of reverse auction, which are relied upon by the petitioner, as above, are, however, disputed by the respondents. Even assuming that the said clauses are applicable to the present E-auction, it is not in dispute and Ex.P1 itself shows that the e-mail sent by the petitioner was received by fourth respondent on 10.11.2011 at 10.40 PM whereas the auction was closed at 08.00 PM. Thus, even if it is assumed that the aforesaid clause relating to reverse auction is applied, petitioner has not sent the fax immediately, as contemplated by the clause extracted above, apart from the fact that even if the fax of the petitioner was received on time immediately after disconnection of internet connectivity the discretion of the owner to extend time still remains with the owner. On facts, therefore, it cannot be said that the petitioner has acted immediately by sending his offer by fax, on losing connectivity. 9. The bid history shows that right from 15:21:46 onwards both the bidders went on increasing their offer only by Rs.1/- and progressively brought to the last offer of the petitioner at Rs.1,61,32,791/-, which was bid at 19:53:33 Hrs whereas the other bidder increased the said bid by Rs.1/- by 19:53:48 Hrs. It is, therefore, not as if the petitioner has bid the intended amount anyway nearer to the bid amount during the bids posted and it is only in the e-mail sent – Ex.P1 that the offer of approximately Rs.1.87 crores is made by the petitioner. As stated above, the said offer being after the closure of E-auction at 8 PM, respondents were not obliged to accept the same. It cannot, therefore, be said that the petitioner is entitled to a Mandamus compelling the respondents to conduct re-auction when the petitioner has not complied with even the clause relating to reverse auction relied upon by him. 10. During the hearing of this matter and on noticing that the petitioner intends to give an offer almost Rs.25,00,000/- more than what is received by the respondents, I had put a specific query to the learned counsel on either side as to whether the terms and conditions of auction permit negotiations and on verification all the learned counsel had confirmed that there is no such clause for holding negotiations amongst the highest bidders. Even then, in the interest of Eastern Naval Command – second respondent, I was of the opinion that there is no reason why the second respondent should loose Rs.25,00,000/- more which the petitioner is offering. However, a direction in that respect cannot be issued, as the other highest bidder is not impleaded in this writ petition in spite of specifically pointing out the said deficiency and giving direction to implead on the date of hearing. Hence, no relief whatsoever can be granted to the petitioner. The writ petition is, therefore, dismissed. However, in the circumstances, there shall be no order as to costs. _____________________ VILAS V. AFZULPURKAR, J December 19, 2011 DSK