LAW FOR ALL

APEX COURT - public auction - suit for refund of deposited amount as four additional conditions are incorporated after auction - entitled for refund with interest - In the first place, the appellant ensured compliance of the term because he deposited 1/4th amount of Rs. 10,45,000/- on the same day, i.e.,11.01.1996 by cheque. Secondly, the respondents also accepted 23 the cheque from the appellant because deposit of money by cheque was one of the modes of payment. Had it not been so, the respondents would not have accepted the cheque from the appellant. Thirdly, the stop payment was done when the appellant received the acceptance letter containing four additional conditions to which he was not agreeable. He had, therefore, every right to wriggle out of the auction proceedings and stop further payment towards the transaction. Such action on the part of the appellant (bidder) did not amount to a breach of clause 4 so as to give right to the State to forfeit the security deposit.= we are of the considered opinion, that the appellant did not commit any breach of the term(s) and condition(s) of the notice inviting bids and on the other hand, it was the respondents who committed breaches. In 24 these circumstances, the State had no right to forfeit the security amount and instead it should have been returned when demanded by the appellant.- after cancellation of the auction proceedings in question, the plot in question was re-auctioned by the State and the same fetched Rs.134.00 lakhs as against appellant’s bid amount of Rs.53,50,000/-. Learned counsel for the respondents did not dispute this fact. In such circumstances, we find that the respondent did not suffer any monetary loss in the transaction and on the other hand earned more money as against what they would have got from the appellant. It is for this additional reason also, we are of the view that the action on the part of the respondents(State) in 25 forfeiting the security deposit of the appellant was wholly unjustified. = state should act as Honest Person do not dependant on technicalities “…..we have often had occasion to say that when the State deals with a citizen it should not ordinarily reply on technicalities, and if the State is satisfied that the case of the citizen is a just one, even though legal defences may be open to it, it must act, as has been said by eminent Judges, as an honest person.” = We are, therefore, of the considered opinion that both the Courts below were not justified in their respective reasoning and the conclusion in dismissing the appellant's suit. The appellant's suit should have been decreed against the respondents. -The appeal thus succeeds and is allowed with cost throughout. Impugned judgment and decree of the High Court and the Trial Court are set aside and the appellant’s (plaintiff) suit is decreed against the 27 respondents (defendants). It is declared that letter dated 24.02.1996 of the respondents forfeiting the security deposit of the appellant is illegal and bad in law. A money decree for refund of Rs.3 lakhs is accordingly passed in favour of the appellant(plaintiff) and against the respondents (defendants) along with interest payable on Rs.3 lakhs at the rate of 9% p.a. from 01.02.1996 till realization.