JUDGMENT
B.P. Saraf, J.
1. The petitioners in this writ petition are aggrieved by the forfeiture of earnest money deposit amounting to Rs. 2,25,000/- on their failure to take delivery of the goods purchased by them in a public auction conducted on behalf of respondent No. 1.
2. The facts of the case, briefly stated, are as follows : The petitioner No. 1 (hereinafter “the petitioner”) is a registered partnership firm. The 1st respondent, Board of Trustees of the Port of Bombay, (“respondent” hereinafter) invited offers for the sale of certain goods as set out in their tender cum sales notice No. 9/90-91 dated 19-2-1990. The notice was in respect of various lots. The petitioner gave his offer for purchase of 7 drums of cables described as Lot No. BB/2917 TCS at Sr. No. 64. The conditions of tender/acution sale and instructions to the tenderer/bidder were set out in the tender-cum-sale notice. Special conditions applicable to any particular lot were specified against the description of that lot. The offer of the petitioners in respect of the goods set out in lot No. 64 being the highest, they were declared “the highest bidder” for the purchase of the said lot and as per the conditions of auction sale, they were required to deposit 10% of the bid money. The petitioners thereupon deposited a sum of Rs. 2,25,000/- as Earnest Money Deposit as per the conditions of tender/sale. As the sale was subject to approval of the Board of Trustees, the balance amount of the sale price was to be paid within five days of the date of confirmation. The confirmation of sale was communicated to the petitioners by the respondent No. 1 on 15-3-1990. By letter dated 15-3-1990, the petitioners were asked to collect the delivery order and effect delivery on payment of balance purchase price. In reply, the petitioners by letter dated 16th March, 1990 wrote to respondent No. 1 that as the sale had not been confirmed by it within two weeks from the date of auction and as the time had elapsed they had withdrawn their offer by letter dated 6-3-1990 and in that view of the matter the question of collecting the delivery order and executing the same did not arise. By the said letter, the petitioners also claimed refund of the earnest money deposit of Rs. 2,25,000/-. In reply thereto, the respondent No. 1 wrote to the petitioners, that the lot was sold to them subject to the approval of the Trustees of the Port of Bombay. As the Board had accorded its sanction to the same, the petitioners were required to collect the goods immediately. It was also mentioned that in the event of the failure of the petitioners to effect delivery of the lot in question on payment of the balance purchase price, the earnest money deposit paid by them would stand forfeited as per condition No. 22 of tender-cum-sale notice. Despite the above letter, the petitioners did not take delivery on payment of the balance purchase price. The respondents, therefore, forfeited the amount of earnest money deposit. The petitioners went on writing letters to respondent No. 1 reiterating their claim for refund and ultimately filed the present writ petition seeking a mandamus to the respondent No. 1 to refund the amount to them.
3. The submission of the learned Counsel for the petitioners is that the auction sale being subject to the confirmation of the Board of Trustees, it was open to them to withdraw their offer any time they liked because till confirmation, the transaction did not crystalise into a completed sale. Counsel further submits that respondent No. 1 was required to confirm the sale within 15 days from the date of sale. That having not been done, it was not open to them to confirm the same later. The learned Counsel for the respondents, on the other hand, submits that both the submissions of the petitioners are wholly erroneous and untenable in law. According to the learned Counsel, under the terms of the tender cum sale notice a bidder is required to deposit earnest money and to wait till the confirmation of the sale in cases where sale is subject to confirmation. If the sale is not confirmed, the earnest money is refunded automatically. Till the decision is taken in regard to confirmation, it is not open to the purchaser in an auction sale to withdraw its offer as otherwise the very purpose of earnest money deposit will be frustrated. The learned Counsel further submits that in the instant case, neither in the terms and conditions of sale there is any stipulation of 15 days within which confirmation is to be communicated nor any such indication had been given at any time by the respondents to the petitioners. The contentions of the petitioners, according to the learned Counsel, on the face of it, are not tenable and this petition is liable to be dismissed outright. I have carefully considered the rival submissions. I have also perused the auction sale notice dated 19-2-1990 and various terms and conditions set out therein. Clause 22 of the “Conditions of Tender/Auction Sale and Instructions to Tenderer/Bidder” provides :
“Earnest Money will be forfeited to the Trustees of the Port of Bombay, if a tenderer/purchaser withdraws his offer before the intimation of acceptance of the offer. No offer can be withdrawn once accepted. Earnest Money will also be forfeited if a successful tenderer commites any breach of conditions of the Tender/Sale.”
The following special conditions are applicable to the sale of the lot in question :
“Conditions :
(1) The lot will be sold subject to confirmation of Board of Trustees.
(2) On the spot the bidder should deposit 10% of the total amount on E.M.D. and the balance sale price should be lodged within 5 days of date of confirmation of the sale.
(3) Addl. Free period can be considered by the sale committee at the time of sale.”
There is no dispute at the bar about the above conditions and the fact that the offer of the petitioners in the instant case is subject to these conditions. Condition No. 22 of the general conditions says in clear terms that no offer can be withdrawn once accepted. It also provides that earnest money will also be forfeited if a purchaser withdraws his offer before the intimation of acceptance of the offer. This condition clearly goes to show that in cases where the offer needs confirmation, once the offer is made and earnest money deposited, it is not open to the purchaser to withdraw the offer pending confirmation. Evidently, this condition is intended to put a check on frivolous bids and offers and also to ensure the clearance of goods by the purchaser on payment of balance price within the stipulated period of five days. This is clear from General Condition No. 7 which provides :
“The successful tenderers/purchasers will have to pay the balance price within five working days of confirmation of sale failing which the tender will be treated as CANCELLED and the earnest money will be liable to be forfeited.”
The offer made by the petitioners being subject to the above stipulations, it is difficult to accept the contention of the petitioners that they were free to withdraw their offer any time before confirmation.
4. On a careful consideration of the facts of the instant case, it is evident that for one reason or the other, the petitioners were not interested in taking delivery of the goods on payment of balance money. Forfeiture of earnest money deposit in that event was the automatic consequence. To get out of it, they took the plea that as the sale was not confirmed within 15 days, they had no obligation to keep their offer subsisting thereafter. Hence they withdrew the same. The relevant conditions of sale have already been set out above. I do not find any stipulation therein in regard to the period within which the sale has to be confirmed. There is nothing to show that the confirmation was to be done within 15 days from the date of sale. Moreover, the confirmation was communicated to the petitioners within a reasonable time. There was no unreasonable delay in doing so. The auction sale was effected on 19th February, 1990 and the confirmation was communicated to the petitioners on 15th March, 1990 i.e. within a period of one month which by no stretch of imagination can be said to be unreasonable. Besides, in the absence of any period of limitation in the conditions of sale, no specific period of limitation can be prescribed for the purpose of confirmation by this Court. Evidently, the petitioners wanted to back out of their offer. They did nothing to take delivery of the goods after confirmation and, in fact, wanted to do what they were specifically forbidden to do under condition 22 of the Tender Notice. They purported to withdraw their offer before the intimation of confirmation of sale to them. This action of the petitioners, in fact, is clearly contrary to the conditions of sale. In such a situation, respondent No. 1 was justified in asking the petitioners to take delivery of the goods and telling them that in the event of their failure, the earnest money deposit would be forfeited. The petitioners failed to take delivery despite clear intimation to that effect. Forfeiture of the earnest money deposit by the respondent No. 1 in such a situation was the only natural legal consequence. I do not find any reason, not to speak of cogent reason, to interfere with the same.
5. In that view of the matter, I do not find any merit in this petition and the same is, therefore, dismissed.
6. In view of the above decision, I do not think it necessary to go into the contention of the respondents that this petition should be dismissed at the threshold as the dispute raised by the petitioners is a pure contractual dispute and there is nothing extraordinary to justify interference by this Court under Article 226/227 of the Constitution. It is true that except in cases where there is patent arbitrariness or gross violation of Article 14 of the Constitution, in matters pertaining to contractual disputes the High Court is slow to entertain writ applications. Civil courts are the proper forum for such disputes. In any event, in view of the decision rendered above, it is not necessary to deal with this aspect of the matter in this case.
7. In the result, this writ petition is dismissed. No order as to costs.