2009 (3) TMI 905 - HC - Customs

Sale by bid - Held that - It is only upon the full amount being paid that a delivery order will be issued to the bidder to receive the goods. Clearly understanding these terms and conditions, the appellants responded to the letter of the respondents dated 26-9-08 with the observations that they are in receipt of the acceptance letter dated 26-9-08 regarding confirmation of the above-mentioned lot of Wheel Sets. This letter is followed by the letter of Sankar Chatterjee dated 3-10-08 and another letter dated 6-10-08 in which it is again reiterated that the appellants are successful bidder for the above lot. The sale has been confirmed. Thereafter, it is stated that the deliveries be made to the appellants after payment duly recording the pieces and the weight delivered. Having made such a request the appellants have sought to challenge the action of the respondents on the ground that there has been no confirmation of the auction. We are thus of the considered opinion that there is sufficient material on the record to justify the conclusion reached by the Learned Single Judge. Appeal dismissed.

Summary

Issues:
1. Interpretation of General Conditions of Sale regarding confirmation of auction bid.
2. Validity of the auction process and payment terms.
3. Dismissal of writ petition challenging the auction confirmation.
4. Request for invoking arbitration provisions.

Issue 1: Interpretation of General Conditions of Sale regarding confirmation of auction bid:
The case involved a dispute regarding the confirmation of an auction bid for the sale of wheel sets. The appellants claimed their bid was the highest and deposited the earnest money as per the terms. However, the respondents allegedly failed to confirm the auction as required under the General Conditions of Sale. The appellants sought to withdraw their bid due to the lack of confirmation. The court analyzed the relevant clauses of the General Conditions of Sale, particularly Clauses 13, 14, and 17(f), which outlined the process of bid confirmation and payment timelines. The court noted the correspondence between the parties, where the respondents acknowledged the bid acceptance and required payment within specified timeframes. The court concluded that the appellants' bid confirmation was evident from the letters exchanged, and the dismissal of the writ petition challenging the confirmation was upheld.

Issue 2: Validity of the auction process and payment terms:
The auction process involved an e-auction for the sale of wheel sets, conducted by customs authorities. Bidders had to register with customs to participate, and the auction was based on an as-is-where-is basis. Successful bidders were required to pay earnest money and the full bid amount within specified timelines. The court examined the auction terms and payment conditions, emphasizing that delivery of goods would only occur upon full payment of the bid amount. The court highlighted the importance of understanding the terms and conditions of the auction, noting that the appellants acknowledged bid confirmation in their responses to the respondents' letters. The court found no error in the auction process or payment terms and dismissed the appeal.

Issue 3: Dismissal of writ petition challenging the auction confirmation:
The writ petition filed by the appellants challenging the auction confirmation was dismissed by the Learned Single Judge. The appellants contended that the dismissal was based on an erroneous interpretation of the General Conditions of Sale and correspondence between the parties. However, the High Court upheld the dismissal, stating that there was sufficient evidence to support the conclusion reached by the Learned Single Judge. The court emphasized that the appellants were attempting to evade a completed contract by challenging the confirmation after market prices fell. The appeal was consequently dismissed, and the request for invoking arbitration provisions was denied.

Issue 4: Request for invoking arbitration provisions:
During the proceedings, the appellants requested permission to invoke arbitration provisions. However, the court rejected the request, stating that the contract between the parties was concluded, and the appellants were attempting to avoid their obligations. The court held that the request for arbitration could not be accepted at that stage. Ultimately, the court dismissed the appeal and ordered no costs, maintaining the decision of the Learned Single Judge regarding the concluded contract and the appellants' attempt to retract from it.