2013 (5) TMI 601 - HC - Indian Laws

Sale of secured assets by bank - contradiction to the conditional bid submitted by the plaintiff and accepted by the defendant Bank - Held that - The offers/bids were invited in sealed cover. It can thus safely be assumed that the offer dated 20th January, 2010 of the plaintiff comprising aforesaid of a single sheet was contained in a sealed envelope. The said sealed envelopes were to be opened only on 27th January, 2010 at 3.00 PM. The defendant Bank itself till the stage of opening of the sealed envelope submitted by the plaintiff had no occasion to know that the offer of the plaintiff was a conditional one and was well entitled to presume that the offer contained in the sealed envelope was in accordance with the Sale Notice. Had the plaintiff been desirous of making a conditional offer, the plaintiff ought to have besides the sealed envelope containing its bid and EMD, given an open letter to the defendant Bank setting out its condition and only in which eventuality, the defendant Bank prior to the opening of the sealed offers/bids could have had notice of the bid/offer of the plaintiff being not confirming to the terms of the Sale Notice and would have had the opportunity to reject the same. At the outset, the contention of the plaintiff that the bid stood accepted on the fall of hammer is again contrary to the sale condition supra, of the highest bid being subject to approval of the Authorized Officer of the defendant Bank. The bid was thus not to be accepted on the fall of hammer but only on approval of the Authorized Officer of the defendant Bank. Since the plaintiff as per the Sale Notice was required to be present at the time of opening of the bids, for inter se bidding if any required and has admitted such presence inasmuch as the amount of Rs.13,50,000/- was paid on the same day, it follows that the minutes aforesaid were drawn in the presence of the plaintiff. The admission, during admission/denial of documents by the plaintiff, of the said minutes is also indicative thereof. Thus, the argument of the plaintiff of the defendant Bank having accepted his conditional offer cannot be believed. Not only so, the letter dated 27th January, 2010 also was not issued thereafter but before the plaintiff left the office of the defendant Bank. The said letter is in fact the approval of the bid of the plaintiff by the Authorized Officer of the defendant Bank. The said acceptance again, save for varying the date of payment of the balance sale consideration, reiterates the other conditions of the Sale Notice. The plaintiff is shown to have personally accepted the said letter on 27th January, 2010 itself. The plaintiff appears to have changed his mind subsequently. It is significant that the first communication from the plaintiff after 27th January, 2010 is of 19th February, 2010. The plaintiff therein as well as in the plaint has falsely represented that the letter dated 27th January, 2010 was received by him thereafter . As aforesaid, the said letter was personally received by the plaintiff on 27th January, 2010 itself and signed in acceptance of the terms therein. The right of the defendant Bank to forfeit is otherwise not under challenge and neither any pleading has been made by the plaintiff in that regard nor any issue claimed. There is thus no merit in the suit the same is dismissed.

Summary

Issues Involved:
1. Entitlement of the plaintiff to recover Rs.22,50,000/- from the defendant.
2. Entitlement of the plaintiff to any interest, and if so, at what rate, period, and amount.
3. Relief.

Issue-wise Detailed Analysis:

1. Entitlement of the plaintiff to recover Rs.22,50,000/- from the defendant:
The plaintiff instituted the suit for recovery of Rs.22,50,000/- with interest, claiming that the defendant Bank had published a Sale Notice with terms stating that statutory and other dues on the secured asset would be borne by the buyer. The plaintiff submitted a conditional bid of Rs.90 lakhs, limiting liability to the bid amount and excluding dues to other authorities. The defendant Bank accepted the bid, and the plaintiff deposited Rs.13,50,000/- to make up 25% of the bid amount. However, the defendant Bank reiterated the original terms, leading the plaintiff to seek a refund, which was denied by the Bank. The defendant Bank contested, stating that the plaintiff accepted all terms, including bearing statutory dues, and that the conditional bid was never accepted. The Court found that the Sale Notice was an invitation to offer, and the offer made by the plaintiff was conditional and inconsistent with the Sale Notice terms. The Court noted that the plaintiff's bid was opened on 27th January 2010, and the letter confirming the sale and terms was issued the same day. The plaintiff's subsequent actions, including accepting the letter and not withdrawing the bid, indicated acceptance of the terms. The Court concluded that the plaintiff's conditional bid was not accepted, and the defendant Bank was entitled to forfeit the deposit as per the Sale Notice terms. Therefore, the plaintiff was not entitled to recover Rs.22,50,000/-.

2. Entitlement of the plaintiff to any interest, and if so, at what rate, period, and amount:
Since the Court determined that the plaintiff was not entitled to recover the principal amount of Rs.22,50,000/-, the question of entitlement to interest did not arise. The Court did not find any basis for awarding interest to the plaintiff.

3. Relief:
The Court dismissed the suit, concluding that there was no merit in the plaintiff's claims. The Court also decided not to award any costs, considering the expeditious disposal of the suit. The decree sheet was ordered to be drawn up accordingly.

Conclusion:
The Court dismissed the plaintiff's suit for recovery of Rs.22,50,000/-, holding that the conditional bid was not accepted, and the defendant Bank was entitled to forfeit the deposit. The plaintiff was not entitled to any interest, and no costs were awarded.