(Per : HONOURABLE MR.JUSTICE P.B.MAJMUDAR) 1. This appeal is directed against the order of the learned Single Judge dated 22.01.2003 rendered in Company Application No. 248/02 in Company Petition No.85 of 1998. The appellant had taken part in the bidding for purchasing the property of the Company M/s. Navjyot Mills Company Limited, which is in liquidation. The Official Liquidator had given public advertisement inviting the bidding for selling the properties of the respondent No.1-company. The bid of the present appellant being the highest, the offer given by the appellant was accordingly, accepted by the Sale Committee. The advertisement was given for sell of certain land, which included both agricultural and non-agricultural land. The appellant, thereafter, took out various proceedings for taking over the possession of the property in question. The appellant had earlier filed one application being Company Application No.57 of 1999, with a prayer that the bidding of the appellant may be accepted and the sale in their favour be confirmed. Company Application No.249 of 1999 was also preferred by the present appellant for the alternative relief regarding refund of the Earnest Money Deposit, totaling to a sum of Rs.50,00,000/-(Rupees Fifty Lacs) along with interest. The learned Single Judge of this Court, by his order dated 24.08.1999, decided the said application. The learned Single Judge, in Para-4 of the said order, observed that on the basis of the advertisement, under the order of this Court, meeting of the Sale Committee was held at the office of the Official Liquidator on 29.05.1998, and during the said meeting, the terms and conditions of the sale and other arrangements were worked out and were finalized. Accordingly, necessary advertisement came to be given. Inspection of the assets was taken by the intending purchasers on 13.07.1998. The appellant was the only offerer and his offer was accepted by the Sale Committee. The learned Single Judge, accordingly, confirmed the sell in favour of the appellant. Since, the sell in favour of the appellant was confirmed by the learned Single Judge, the subsequent application being Company Application No.249 of 1999 was held to be infructuous, which was for returning of Earnest
adjusted towards the price to be paid by the bidder. It is also observed that the interest earned on the said amount of Rs.50,00,000/- is also to be adjusted towards the sell price. The learned Single Judge also observed that the bidder i.e. the present appellant should now keep his own security arrangements on the premises, meaning thereby possession was also handed over to the appellant, which is not disputed. The sale in favour of the appellant having been confirmed by the learned Company Judge, the appellant, thereafter, tried to convert the said land from Agriculture to Non-Agriculture and from industrial purpose to residential purpose, since the appellant wanted to sell the said property to various persons after making construction over the same. It is required to be noted that, even though, the offer of the appellant was accepted long back and even sale was confirmed in its favour, the appellant had never taken any objection that there was no mention in the advertisement that the part of the land was in industrial zone and on that ground earnest money deposited by it be refunded. Instead he went on making applications for converting the land from agriculture to non-agriculture and from industrial purpose to residential purpose. As a matter of fact, the learned Company Judge also observed that the amount deposited by the appellant towards earnest money be adjusted towards the final price of the land. The possession was also handed over to the appellant. It seems that thereafter, the appellant could not succeed in getting the land converted from either agriculture to non- agriculture nor from industrial to residential. The appellant also made various representations to the concerned Municipality for getting the said land converted into non-agriculture from agriculture or from industrial to residential. In fact, the Municipality also passed a resolution to that effect. However, the State Government did not accept the same. The appellant, thereafter, preferred another application being Company Application No.49 of 2002. In the said application it was prayed that Official Liquidator be directed to accept the further amount of Rs.1,00,00,000/-, as a part of the consideration towards the purchase of the land in question and as such the entire amount was not paid to the Official Liquidator towards the sell. It was also prayed that the Official Liquidator be directed to handover the pro-rata part of the land and the appellant be allowed to develop the area of which the possession is given as prayed for and shown in map. It was also prayed that the Official Liquidator be also directed to sign and put his seal on the development plan placed by the present applicant before Kadi Municipality for seeking permission to build upon the land and to take steps to see that the plan is approved by the Municipality, and thereafter, the appellant be allowed to carry out construction on the said land, in accordance with the approved plan. Thereafter, the appellant be permitted to dispose of the plots. It was also prayed that if any buyer wants housing loan, then, such buyers be issued 'No Objection Certificate' so as to enable them to avail housing loan. It is required to be noted that the last application was made by the appellant after three years of his offer was accepted by the Official Liquidator. The learned Single Judge disposed of the said application by passing the following order:
“4. It is apparent that when the sale was finalized the Court sanctioned the same on the terms and conditions which were fixed by the Sale Committee. As per Condition No.8, the highest bidder from the date of intimation of acceptance of the bid was required to pay 25% of the purchase consideration within one week and this was excluding earnest money deposit with the tender. The condition of the land in question was also known to the applicant and at this length of time the applicant cannot be heard to say that because the land was falling within the Industrial Zone the applicant must be permitted to vary the terms and conditions on which the deal was finalized. The law is well settled that the terms and conditions on the basis of which a tender is floated cannot be varied by the authority as the same would otherwise result in arbitrariness which is not warranted in law.”
2. The appellant, at that point of time, never prayed for refund of Ernest Money Deposit, which was paid long back in 1999. The aforesaid order was never challenged by it by way of an appeal. However, subsequently, it preferred another application being Company Application No.248 of 2002, with a prayer that Ernest Money Deposit should be paid back to the appellant. The learned Single Judge observed in the said order that as per the terms and conditions, if the amount of purchase consideration was not paid within the stipulated time, the entire Ernest Money Deposit would be forfeited. It is not in dispute that the appellant could not pay the balance amount within the prescribed time limit, and therefore, the earnest money deposited by the appellant was forfeited by the Official Liquidator. In fact, the appellant went on making applications for giving more time to deposit the remaining amount, but, he could not deposit the same. The learned Single Judge by the impugned order rejected the application of the appellant being Company Application No.248 of 2002. In the impugned order, the learned Single Judge has held in Para-7 and 8 as under:
“7. As stated herein above, the request of the applicant for extension of time or for variation of the terms and conditions, on which the land was to be sold to the applicant, had been turned down by this court by an order dated 1.5.2002 in Company Application No.49 of 2002. Thus, it would not be open to this court to make any variation in the terms and conditions on which the land in question was to be sold. As per the terms and conditions, the amount of EMD was to be forfeited if the balance amount of consideration was not paid to the Official Liquidator by the buyer of the property within a period of 3 months from the date on which the sale was confirmed or within such extended period as ordered by this court. It is not in dispute that the entire amount of consideration has not been paid even during the extensions granted by this court.
8. Looking to the above-referred undisputed fact, it would not be proper for this court to direct the Official Liquidator to refund the amount of EMD to the applicant, as the said amount stands forfeited as per the terms and conditions on which the land in question was to be sold.”
3. Against the aforesaid order of the learned Single Judge, the appellant has preferred the present appeal. As per the factual aspects narrated above, it is not in dispute that the bid of the appellant being the highest one was accepted. In fact, only one bid was received and the same was accepted by the Sale Committee and the learned Company Judge approved the said transaction. The appellant, thereafter, requested for some time to pay the remaining amount. Even after three years of acceptance of the bid of the appellant, he had taken out various proceedings for certain directions, as discussed herein above and at no point of time he showed desire to get back his Earnest Money Deposit. It is argued that the land was in industrial zone, but, since the same was not mentioned in the advertisement, the appellant was misguided, and therefore, earnest money should be refunded. The learned Single Judge has considered this aspect and has dismissed the application for refund of Ernest Money Deposit, and therefore, the said argument of the appellant amounts to nothing, but, an after thought on the part of the appellant, as he could not get the land converted into residential zone. It is an admitted fact that the appellant attempted to convert the land into residential zone from agricultural/industrial zone by taking out various proceedings before the concerned authorities and when he could not succeed in getting the said land converted into residential zone, he tried to get back earnest money deposited by him. At this stage, from the additional affidavit filed by the appellant in this appeal, the following portion from para-6 is required to be considered:
“6. ... It was also proposed that that whatever amount is collected will be in the custody of the Official Liquidator and out of that 35% of the amount shall be adjusted against the consideration of the auction sale and 65% would be towards the costs of construction which could be utilized by the appellant in putting up the further construction. It is further submitted that in this connection in the application itself there are certain letters, which were written by different parties and societies, have been placed on the record of the case from which it is very clear that several persons and societies supported the scheme and welcomed the project and therefore, with the help of the local people itself it was possible for the appellant to put a scheme to realize money and to go on making the payment to the official liquidator and to see that the entire consideration is paid in a short time. Over and above that the appellant had made an arrangement with other Bankers to pay the amount. However, the appellant did not succeed and therefore, the present appellant lost a huge amount of Rs. 50 lacs which were deposited at the time of filing up the tender.”
4. Therefore, it is clear that the appellant after having participated in the bid and being successful therein, tried to convert the land in question from agriculture to non-agriculture and from industrial to residential zone and when he could not succeed, he instituted the present proceedings, as an afterthought. If the aforesaid aspect was not mentioned in the public advertisement, the appellant should have, at the threshold, applied for refund of Earnest Money Deposit, instead he went on applying to the authorities for converting the land from industrial to residential zone. Even otherwise, in view of the fact that the earlier application seeking similar relief was rejected by the learned Single Judge, subsequent application on the very same ground is rightly rejected by the learned Single Judge, and therefore, this appeal is not maintainable.
5. At this stage, learned Counsel for the appellant placed reliance on a decision of the Supreme Court in the case of “HARYANA FINANCIAL CORPORATION AND ANR. VS. RAJESH GUPTA”, reported in (2010) 1 SCC 655. In the said case, the Supreme Court held that when there is a fundamental or essential mistake in the property and when such mistake comes to the notice of buyer and he refuses to perform further contract, in such a case the forfeiture or withholding of earnest money by the seller is not justified. In the facts of the said case, the High Court found that the original petitioner was not at all at fault, as the Haryana State Financial Corporation failed to provide proper passage for utilizing the property in question. In the above back-ground, it was held that the amount of security deposit was not required to be forfeited. In the said case, the proceedings were taken out under the State Finance Act. Considering the factual aspect of the said case, the property which was purchased by the auction purchaser, which was absolutely unfit for use for want of passage, the supreme Court ordered the refund of the Ernest Money Deposit along with proportionate interest.
6. So far as the factual aspect of the present case is concerned, as we have already discussed earlier, the appellant with open eyes purchased the property and not only that he applied for extension of time, several times, for payment of remaining amount. Besides, even when, it came to his knowledge that the land was situated in industrial zone, it went on making applications for converting the land from agricultural / industrial to non-agricultural / residential land and having failed in his attempts, as an afterthought, he took out the present proceedings for getting refund of Earnest Money Deposit, that too after a period of three years after his offer was accepted and his earlier application claiming the similar relief was rejected by the learned Single Judge. We are, therefore, of the view that the learned Single Judge was justified in passing the impugned order.
7. In the result, we find no substance in the present appeal and the same is DISMISSED. No order as to costs.
(P.B. MAJMUDAR, J.) (C.L. SONI, J.) Umesh/