ORDER
K.P. Sivasubramaniam, J.
1. The petitioner seeks for a Writ of Mandamus to direct the respondents 1 to 3 to confirm the sealed tender dated 26.3.1993 made pursuant to their advertisement dated 11.3.1993 published in ‘Daily Thanthi’ dated 11.3.1993 in respect of the property of the 6th respondent.
2. The petitioner contends that the 6th respondent had already borrowed funds from the third respondent during the year 1965 for starting an industry. As a result of his failure to repay the amounts, the third respondent initiated proceedings for recovery as early as 1973. The proceedings culminated in a valid and enforceable decree. The third respondent brought the mortgaged property for sale for recovery of the amount of Rs.11,06,072.61 as on 28.2.1993 and sealed tenders were called for as well as open auction sale also. The last date for submission of the sealed tender was 26.3.1993 and the petitioner submitted a tender for a sum of Rs.30,02,000/-. In the open auction, he offered the highest bid at Rs.28,61,000/-. The sealed tenders were opened on 30.3.1993.
3. The 6th respondent also filed WP No.5641 of 1993 for a Mandamus to the respondents to convene a meeting and to consider the 6th respondent’s representation for implementation of the nursing programmer. By order dated 26.3.1993, this Court after taking note of the fact that the last date for receipt of tenders was fixed on 26.3.1993, held that it was open to the respondents to process tenders but finalisation in accepting any particular tender shall be kept in abeyance until further orders. The petitioner got himself impleaded in the said Writ Petition. Subsequently, the Writ Petition was dismissed as devoid of merits.
4. The petitioner further contends that after the dismissal of the Writ Petition, he visited the office of the respondents 1 to 3 on several occasions and requested them to confirm the sale. As there was no response, he was constrained to issue notice through an advocate demanding confirmation of the auction. However, the petitioner received a reply on 6.4.1995 stating that Rule 126(K) of the Tamil Nadu Co-Operative Societies Rules 1988 is mandatory and in terms of the said provision, he has failed to deposit 15% of the price of the property. According to the petitioner, no such provisions have been alleged in the auction notice nor was the petitioner informed about such condition. The petitioner has stated that he had been diligent in taking follow up action pursuant to his tender auction and he has deposited Rs.10,000/- as early as 26.3.1993 which money was lying with the respondents since then. However, subsequently, the said amount was returned by the third respondent by way of a cheque dated 12.1.1996 with a covering letter. The petitioner further submits that he has borrowed money from third parties and other sources to the extent of the sale consideration and it was kept ready. Therefore, according to the petitioner, he is suffering a huge loss since March 1993. Hence the Writ Petition.
5. In the counter affidavit filed by the second respondent, it is stated that the 6th respondent was granted a sum of Rs.2,00,000/- in the year 1965. The property in question was mortgaged as security. The loan advance was repayable in five annual instalments. AS the 6th respondent failed to honour his commitments, an arbitration case was filed under the provisions of the Tamilnaud Co-operative Societies Act 1961 and a decree was obtained for a sum of Rs.3,11,169.34P on 25.5.1974. When the decree was sought to be enforced, father of the 6th respondent filed an appeal and the case was remanded for retrial. Again there was a decree for a sum of Rs.4,61,777.94P on 30.9.1980. The 6th respondent filed W.P.No.11074 of 1987. This Court directed the second respondent to consider the nursing programmer for reviving the unit. However, the programmer submitted by the 6th respondent was found not feasible and hence was rejected. The 6th respondent again went on appeal against the decree after a long delay and the appeal was also dismissed. In W.P. NO.5990 of 1992, this Court directed the 6th respondent to pay Rs.2,00,000/- on or before 30.6.1992. However, the said directions were not complied with and hence Execution Petition was filed for bringing the property for sale. In terms of the advertisement, eight persons participated in the auction and the offer quoted by the petitioner was the highest. However, in the mean time, the 6th respondent filed again another Writ Petition No.5641 of 1993 and in the connected WMP No.9039 of 1993, this Court held that it was open to the respondents to process the tenders received, but the final decision in accepting any particular tender, shall be kept in abeyance until further notice. The Writ Petition was dismissed on 10.5.1994.
6. The respondent further contends that as a result of the lapse of time, it was decided by the first respondent to re-auction the property owing to the enhancement in value. The Collector of Salem, by letter dated 10.2.1995 informed that the market value of the property was Rs.1,23,21,900/-. Further, the mandatory provisions under Rule 126 (k) requiring the auction purchaser to deposit 15% was not complied with by the petitioner. The sale which should have been confirmed within 30 days was not confirmed mainly because the price offered by the petitioner was very low. Thereafter, the petitioner made claim for damages and the said claim was suitably replied by the second respondent on 6.4.1995. One of the reasons for not accepting the petitioner’s bid was the price offered by him was very low and it was within the discretion of the respondents not to confirm the same.
7. Mr. G. Masilamani, learned Senior Counsel for the petitioner contends that both the reasons given for not accepting the tender were not sustainable. Neither as per the tender conditions nor by any communication, the tendered, who was the successful bidder, was required to deposit 15% of the bid amount. It is not the case of the respondents that the petitioner had been directed to deposit the said amount. That being so, reference to a statutory provision beyond the actual tender advertisement/documents will be unfair. The contention that the property was worth more than the amount quoted by the petitioner cannot also be sustained as the petitioner was never informed about the same when he was declared as the highest bidder. The said reason was stated only at a very belated stage. The petitioner was not at all responsible for the delay in any manner and the subsequent escalation of the market price due to passage of time cannot be stated as a reason for denying the lawful claim of the petitioner as on the date of auction. Learned senior counsel also took me through the tender conditions and contended that the facts disclose that there was an enforceable right and legitimate expectation in favour of the petitioner. The respondent being an appropriate authority cannot act in an arbitrary manner. In fact, the liability of the 6th respondent to the bank was only about 11 lakhs while the property was bid by the petitioner for a sum of Rs.30,02,000/-. Therefore, there was no justification for not accepting the petitioner’s bid nor to contend that the property was worth more than the highest bid. Reference was also made to the counter affidavit of the bank filed in the earlier Writ Petition in W.P. No.5641 of 1993 and it is stated that the bank had pleaded only for confirmation of the sale and there was no mention of the value of the property being more than the bid amount. As regards non-deposit of 15%, assuming that the petitioner was under a duty to deposit the said amount, it can be construed only at the most as an irregularity which could be rectified by the petitioner being directed to comply with the said requirement even with a reasonable interest on the 15% of the bid amount.
8. Mr. R. Krishnasamy, learned Senior Counsel for the bank contends that the bank is a public institution which is being denied the fruits of the decree by the delaying tactics adopted by the debtor by resorting to one proceeding after another and that even now, an appeal has been filed questioning the decree itself and with the result, the bank may not be able to receive the money due from the debtor even after disposal of this Writ Petition. Learned senior counsel further refers to the tender conditions which make it abundantly clear that the auction shall be conducted in terms of the conditions of the Tamil Nadu Co-Operative Societies Rules 1988 (hereinafter described by the “Rules”) and especially Rule No.115 which deals with the proceedure relating to the execution for delivery of the immovable property received for breach of the conditions. Learned counsel refers to Rule 126 in particular. Under Rule 126 (g)(ii), it is stated that the sale shall be by public auction to the highest bidder. Rule 126(g)(k) requires that a sum of money equal to 15% of the price of the immovable property shall be deposited by the purchaser and in default of such deposit, the property shall be re-auctioned and the EMD shall be forfeited after defraying the expenses of the resale. Therefore, the petitioner cannot plead ignorance of the said condition. The learned counsel further contends that the petitioner was fully aware of the position that the sale in his favour cannot be confirmed. There was no explanation as to why the petitioner did not take immediate steps after the last date for submission of the sealed tender viz., 26.3.1993. Even though the Writ Petition which was filed earlier by the 6th respondent was dismissed on 10.5.1994, even from the said date, the petitioner had acted very belatedly and that it was only on 9.3.1995 for the first time, the petitioner issued a legal notice to the third respondent demanding confirmation of the sale. The learned counsel also stated that the property was situated in a very central locality of the Salem Town and as the price offered by the petitioner was found to be unreasonably low and the Collector by his communication dated 10.2.1995 also stated that the market value of the property was Rs.1,23,21,900/-, the respondents have rightly taken the decision not to confirm the sale in favour of the petitioner.
9. I have considered the submissions of both sides.
10. As regards one of the two reasons viz., failure to deposit 15% of the bid amount, it is true that the tender conditions refer to the procedure envisaged under the Rules. At the same time, it is also true that there is no specific mention of the said requirement in the tender advertisement or among the number of conditions mentioned in the tender. If the compliance of the said requirement is a must and the non-compliance of which should result in the cancellation of the bid itself, one would expect that such a condition being incorporated in the tender conditions themselves or at least immediately after the bid was over there should have been a direction to the highest bidder to deposit the 15% amount. Reliance on the principle that ignorance of law is no execuse cannot be extended to tender auctions which are floated on specific conditions stipulated in the tender schedule itself. Need to deposit 15% is not an issue of law but a condition of contract which should be specifically stipulated in the conditions. The rules governing the sale by tender may be incorporated in the Act or the Rules but practically speaking a lay person cannot be expected to be looking into the statutory provisions beyond the tender schedule which by itself contain number of dos and donts and even an educated person cannot possibly visualise more conditions which should be ascertained by going through the Act and Rules. There is no justification as to why the said condition of deposit of 15% should not have been included along with the other conditions which find a place in the tender schedule itself. It is not also the case of the respondents having called upon the petitioner at any time to comply with the said requirement.
11. I am, therefore, not inclined to accept the contention of both the respondents regarding the alleged petitioner’s failure to deposit 15% of the bid amount.
12. However, on the issue relating to the value of the property, I am inclined to hold that the facts disclose that the market price of the property was higher than the bid price of the petitioner. The respondent relies on the communication from the Collector dated 10.2.1995 informing the respondents that the actual market value of the property was Rs.1,23,21,900/-. Therefore, the respondent had no other alternative except to reject the offer.
13. Having regard to the rival contentions regarding the actual market price as on the date of auction, I had directed the respondents to file a valuation memo. The respondents have filed the valuation report by M/s. Jai Engineers, who are approved valuers. A perusal of the said report discloses that in terms of the guideline value in 1993, the value of the property (87 cents) was Rs.55,70,800/-. However, the market value was much more than the guideline value viz., Rs.94,74,250/-. There is also a building within the property measuring about 1,650 sq.ft. of ground floor and 1,200 sq.ft. of the first floor. The building was separately valued at Rs.6,24,600/-. Therefore, according to the valuer, the property was worth Rs.61,95,000/- as per the guideline value and Rs.1,00,98,000/- as per the market value during 1993.
14. A perusal of the report further discloses that the property is situated in a very busy and vantage location at Salem Town, which is a Municipal Corporation. The classification of the land is “high class” and is surrounded by bungalows, hospitals etc.,. There is heavy traffic and the site is located in a thickly populated area.
15. Having regard to the aforesaid facts, in contrast with the market value assessed at Rs.1,00,98,000/- and guideline value at Rs.61,95,000/- on the one hand, and the bid amount of the petitioner at Rs.30,02,000/-, it is certainly far below the actual price which the property should have secured. In all these matters, public interest has to ultimately prevail. Merely because the petitioner was the highest bidder, there is no duty on the acutioner to confirm the sale when the auctioneer is of the opinion that the price offered is too low compared to the actual market value. The bidder cannot be allowed to unjustly enrich himself. The effort of any public institution requiring to sell a property in auction has to abide by larger public interest. The respondents/public authorities cannot be compelled to part with the property unmindful of the real value/worth of the property. It is true the petitioner contends that there was an initial deposit of Rs.10,000/- which was very much available with the respondents. If that be so, the petitioner will be entitled to be reimbursed with the said amount of Rs.10,000/- along with interest at the rate of 12% p.a.,. That should be enough to make good the loss alleged to have been suffered by the petitioner.
16. In the result, the Writ Petition is dismissed subject to the following condition:
The amount if any paid by the petitioner shall be returned along with interest at the rate of 12% per annum from the date when the amount has been deposited with the respondents.
However, there will be no order as to costs.