Allowed

Neo Southern Metal Mart Premises v. M/s. Mstc Ltd.

Telangana HC19 Sept 2013WP/26780/2013

Case brief

AI extract

What is this about?

The court allowed a writ petition seeking a direction to lift the balance salvaged scrap goods under Lot No.1. Ruling that the 'as is where is' condition created an indefeasible right, the court directed authorities not to restrict lifting based on weight discrepancies and exempted the petitioner from ground rent if lifted within two weeks.

What did the court decide?

Directed that respondents shall not impose ground rent if material is lifted within two weeks of permission; dismissed respondent's attempt to restrict lifting based on weight.

Neo Southern Metal Mart Premises Vs M/s… — Contract and Commercial Disputes | Telangana HC (2013)

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THE HON’BLE SRI JUSTICE C.V.NAGARJUNA REDDY WRIT PETITION No.26780 of 2013

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Date: 19.09.2013

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Between: Neo Southern Metal Mart, Hyderabad .. Petitioner and M/s. MSTC Ltd., Visakhapatnam and another

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.. Respondents

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Counsel for the Petitioner: Sri D.Prakash Reddy, senior counsel for Sri Wajid Ali Kamil Counsel for respondent No.1: -- Counsel for respondent No.2: Sri A. Samir Kumar Reddy, Additional Standing Counsel for Central Government

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ORDER:

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This writ petition is filed for a mandamus to direct the respondents to forthwith allow the petitioner to lift the balance/remaining goods of Lot No.1 sold to it in pursuance of e- auction No.MSTC/VZG Air Force Academy (IAF)/3/Near Annaram Village/12-13/7738(55984) dated 30.11.2012.

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On behalf of respondent No.2, respondent No.1 has called for bids from the prospective bidders for auction of certain goods which are in the nature of salvaged scrap. In response to the said auction notice, the petitioner submitted its bid, which was accepted by respondent No.1 and issued sale order No.MSTC/VZG/12-13/1288 dated 15.12.2012. On the same day, respondent No.1 has issued delivery order in respect of Lot No.1. It is the pleaded case of the petitioner that when it started lifting the material from Lot No.1, the security incharge of respondent No.2 started imposing severe restrictions such as insisting on unladen weight of the trucks etc., and that the petitioner had lifted certain material from Lot No.1 on 07.01.2013. When it attempted to lift the balance material from Lot No.1 on 15.01.2013, the staff of respondent No.2, in particular, the Wing Commander - Sri N.V.Prasad did not permit the petitioner to lift the balance salvage scrap material of - (i) ferrous metal, (ii) non-ferrous metal and (iii) aluminum metal of Lot No.1.

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The petitioner, thereafter, addressed letter dated 18.01.2013 to respondent No.1 stating about the intervention of respondent No.2 and asking to convince respondent No.2 to permit it to lift the balance material from Lot No.1. Respondent No.1 addressed letter dated 21.01.2013 to respondent No.2 to consider the petitioner’s grievance and do the needful. In response to the said letter, respondent No.2 has addressed letter dated 23.01.2013 to respondent No.1 marking a copy of the same to the petitioner, wherein it has given the list of items in Lot No.1 by classifying the material under two categories, namely,

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‘collected’ and “not collected” and indicated that they were not prepared to permit the petitioner to lift the balance material. The petitioner, then, got legal notice dated 07.02.2013 served on respondent Nos.1 and 2 by taking the stand that as per Condition No.7.1 of the general terms and conditions of e-auction, the entire lot was sold to the petitioner on ‘as is where is’ basis and that, therefore, there should not be any objection to respondent No.1 to instruct respondent No.2 to permit the petitioner to lift the entire material under Lot No.1. In reply to the said legal notice, respondent No.2 has got issued a reply notice dated 07.05.2013, wherein it has inter alia stated that the representative of the petitioner visited the office of respondent No.2 and requested for permission to lift the items mentioned in Lot No.1 and that it was made clear to him that the items in the Lot would be issued as per the prescribed and announced weight only and not the whole quantity available. The action of respondent No.2 in not permitting the petitioner to lift the entire material comprised in Lot No.1 is questioned in this writ petition.

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Sri D.Prakash Reddy, learned senior counsel appearing for the petitioner, has drawn the attention of this Court to Condition No.7 of the general terms and conditions of e-auction and submitted that the stand taken by respondent No.2 as reflected in the reply legal notice is patently contrary to the said condition. He has submitted that the goods were sold on ‘as is where is’ basis and that the whole of lot/lots shall be taken from the site of accumulation with all faults and errors in description and that the quantities, qualities, sizes, measurement, and weights etc.,. mentioned in the auction notice are approximate.

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Since the claim of the petitioner is solely based on condition No.7, in particular condition No.7.1, of the general terms and conditions of e-auction, it is necessary to consider the same. This condition reads as under:

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7. CONDITION OF GOODS

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7.1 The goods are sold as and where they lie, on as is where is basis, the whole of the lot/lots shall be taken from the site of accumulation with all faults and errors in description. Otherwise the quantities, qualities, size or sizes, measurement, numbers and weights as stated in the auction floor and or in any delivery documents are only approximate and no guarantee or guarantees shall be implied. The goods are sold on the specific assumption that whether the bidders have inspected the lots or not the principle of Caveat-emptor will apply. No complaint will be entertained after sale.

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From a reading of the above reproduced condition, it is clear that the goods were sold on ‘as is where is’ basis and the quantities, measurements, weights etc., mentioned in the auction notice are only approximate.

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Sri A.Samir Kumar Reddy, learned Additional Standing Counsel appearing for respondent No.2, who did not dispute the purport of condition No.7.1, however, stated that the said condition was incorporated by mistake. I am afraid, such a stand cannot be countenanced by this Court. Having committed themselves to sell the entire salvage scrap in lots and clearly held out that the quantities, measurements etc., mentioned in the tender notice are only approximate, it lies ill in the mouth of respondent No.1 to ignore the specific condition of the tender notice and act contrary thereto. Respondent No.2, being a state organization, is expected to act in a fair and non-arbitrary manner. Having agreed to sell the entire Lot No.1 to the petitioner on ‘as is where is’ basis, fairness requires that respondent No.2 stands on its commitment. If it felt that such a condition ought not to have been incorporated in the tender notice, it can only take corrective steps for future auctions. With the acceptance of the petitioner’s tender and payment of the bid amount, an indefeasible right came to be vested in the petitioner, which cannot be

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taken away by respondent No.2 on the purported ground of mistake in framing the tender conditions.

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For the aforementioned reasons, the Writ Petition is allowed as prayed for. The respondents shall not impose any liability of ground rent on the petitioner for the delayed lifting of the material under Lot No.1 if it lifts the material within two weeks from the date of permission granted by respondent No.1 for lifting the balance quantity of Lot No.1.

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As a sequel to allowing the writ petition, W.P.M.P.No.33134 of 2013 filed by the petitioner for interim relief shall stand disposed of as infructuous.

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_____________________ C.V.NAGARJUNA REDDY, J

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19^th September, 2013 GHN

Neo Southern Metal Mart Premises v. M/s. Mstc Ltd.

Case brief

What is this about?

What did the court decide?

Neo Southern Metal Mart Premises v. M/s. Mstc Ltd.

Case brief

What is this about?

What did the court decide?

What the court decided

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