LAXMIKANT AND ORS. versus SATYAWAN AND ORS.

Citation: [1996] 3 S.C.R. 532 · Decided: 19-03-1996 · Supreme Court of India · Bench: N.P. SINGH · Disposal: Appeal(s) allowed

Cited by 4 judgment(s) · cites 1 · see the full citation network in Lexace

Judgment (excerpt)

A 
LAXMIKANT AND ORS. 
v. 
SATYAWAN AND ORS. 
MARCH 19, 1996 
B 
[N.P. SINGH A:-.ID S.C. SEN, JJ.] 
Nagpur Improvement T11tst Land Disposal Rules, 1955: 
R. 4(3), Proviso under control of Nagpur Improvement T111st-Allot-
C ment of plot on leas,,_cancellation on lease 011 allottee's failure to raise 
const111ction within stipulated pe1io~Plot put to auctimr-Conditions of 
auction contemplating accrual of 1ight to highest bidder subject to confinna-
tion lette1-Ihird round of bid being not held due to stay order by court-Auc-
tion no conzpleted--T1ust passing resolution to reinstate allotntent to 
lessee-Resolution challenged by highest bidder-High Court deciding in 
D favour of highest bidder-Held, High Cowt not justified in quashing the 
resolution passed by T111st-Auction not being completed, and confimiation 
letter not being issued to highest bidder no 1ight acc11ted to him. 
E 
Auction sale : 
Nagpur Improvement T111st-Auction of plot by-Nagpur Improvement 
T111st Land Disposal Rules empowe1i11g Tmst to reserve right to itself to reject 
highest or any bi~onditions of auction contemplating accntal of 1ight on 
highest bidder subject to issuance of confinnation letter to him-17tird round 
of bid, not held due to stay order passed by cowt-Auction not com-
F pleted-No confimiation feller issue~laim of highest bidder upto second 
round of bi~eld not maintainable. 
The appellant was a transferee of the plot in dispute which was 
originally leased out to the transferer by the Nagpur Improvement Trust. 
Since the appellant did not comply with the condition of the lease 
G whereunder the lessee was required to start construction on the said plot 
withiJ) four years from the date of agreement of the lease and to complete 
the construction within three years thereafter, the Trust cancelled the 
allotment; and put the plot to auction, which was challenged by the 
appellant in a writ petition before the High Court. At the auction, the 
H respondent was the highest bidder till the second round of the bid; but 
532 
I \ 
, 
) 
LAXMIKANTv. SATYAWAN[N.P. SINGH,J.] 
533 
before the third round of the bid could he held, an order staying the bid A 
was received and the auction proceedings did not proceed further. 
During the pendency of the writ petition filed by the appellant, the 
Trust took a decision to reinstate the allotments which Jtad been cancelled 
due to non-completion of the construction. The appellant withdrew the writ 
petition and the Trust passed a resolution rejecting the bid of the respon-
B 
dent and reinstating the plot in favour of the appellant. 
The respondent filed a writ petition before the High Court challeng-
ing the rejection of his bid. The High Court though held that because of 
the order of stay the third round of bid could not be held and as such there C 
was no completed contract which could be enforced in court, yet it directed 
the trust to transfer the land to the respondent who was the highest bidder 
at the auction. 
Aggrieved, the appellant filed the appeal. 
Allowing the appeal, this Court 
HELD : 1.1. Since third round of the bid could not be held and the 
public anction had not culminated to its logical end the High Court erred 
in holding that the respondent had acquired a right in respect of the plot 
in dispute. [537-B-C] 
1.2. The acceptance of the highest bid is snbject to the conditions of 
holding the public auction and the right of the highest bidder has to be 
examined in context with the different conditions nnder which such auction 
has been held. In the present case no right had accrued to the respondent 
either on the basis of the statutory provision under Rule 4(3) or under the 
conditions of the sale had been notified before the public auction was held. 
[538-D-E] 
D 
E 
F 
1.3.'From a bare reference to the conditions of auction it is apparent 
and explicit that even if the public auCtion had been completed and the 
respondent was the highest bidder, no right had accrued to him till the G 
confirmation letter, as envisaged by condition No. 3, had been issued to 
him. No such confirmation letter was issued to the respondent. The 
conditions of the auction clearly conceived and contemplated that the 
acceptance of the highest bid by the Board of Trustees was a must and the 
Trust reserved the right to itself to reject the highest or any bid. [538-B] H 
534 
SUPREME COURT REPORTS 
[1996] 3 S.C.R. 
A 
1.4. The High Court, was not justified In quashing the resolution 
dated 27.2.1

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