RAJASTHAN HIGH COURT

                      Alok Enterprises

                      Vs.

                      Rajasthan Financial Corporation

S.B. Civil Writ Petition No. 2887 of 1993
           (Gyan Sudha Misra, J.)

                      31.01.2003

                      JUDGMENT

Gyan Sudha Misra, J.

1. The petitioner herein - M/s. Alok Enterprises claims to be the auction purchaser of
an Industrial unit by the name of M/s. Vincum Engineering Enterprises (P) Ltd.
situated at Jaipur, from the respondent No. 1 Rajasthan Financial Corporation ('R.F.C.'
for short) and has therefore sought a direction to the respondent No. 1 to issue
acceptance letter of the tender, execute the necessary documents and hand over the
possession of the aforesaid unit to the petitioner without any further delay.

2. Hence the question which requires determination in this writ petition is whether the
auction sale can be held to be complete in favor of the petitioner so as to direct the
respondents to execute the sale-deed and hand over possession of the industry in favor
of the petitioner, although the terms and conditions of the offer and acceptance in
regard to the sale had still been at the stage of negotiation which had not reached a
final stage.

3. The petitioner has sought the desired relief on the premise that a tender was issued
by the respondent No. 4 Deputy General Manager of the R.F.C. for the sale of various
units which were taken over by the R.F.C. u/Section 29 of the State Financial
Corporations Act, 1951. The tenders for the sale of land, building plant and
machineries of M/s. Vincum Engineering Enterprises (P) Ltd. were called by the
respondent-R.F.C. on 24.11.90 and the conditions of sale were enumerated in the said
tender notice which had been published in the local newspaper-Rajasthan Patrika on
22.11.90.
4. The petitioner submitted his offer in a sealed cover along with a cheque. of Rs.
42,500/- drawn in favor of the R.F.C. along with an offer of Rs. 8,50,000/- for the
Land and building, plant and machineries of the industrial units. The petitioner,
however, put in a condition in its offer that the liability of Rajasthan State Industrial
and Investment Corporation (RIICO for short) or any other will not be paid by the
petitioner except the liability of Public Health & Engineering Department (PHED for
short) and Rajasthan State Electricity Board (RSEB for short). It, however, agreed to
pay the balance amount of 75% of the sale price in five years time in quarterly
installments including the interest as applicable. The other offers from various
industrial units were also received by the RFC. The petitioner thereafter, received a
letter dated 30.11.90 from the Deputy General Manager (R), RFC, Jaipur calling the
petitioner in the office on 5.12.1990 for further negotiation, which was postponed to
7.12.1990. On this date the petitioner revised his offer and increased the amount of his
offer to Rs. 10.50 lacs excluding all the liabilities except the liabilities of RSEB and
PHED. The petitioner's case is that this offer of the petitioner was the highest of all the
parties due to which the Deputy General Manager, RFC informed him in the meeting
that it was highest; hence it was accepted and a formal information would be sent in
this regard within a few days. The petitioner has complained that thereafter he did not
receive the letter of acceptance from the respondents due to which he represented to
the RFC without any result. He also claims to have made personal visits for issuance
of acceptance letter and for handing over possession but the petitioner was told that
the liabilities from the various Departments and Corporations are being collected and
after these information's are received, the petitioner will be sent a formal letter of
acceptance, which he never received. It has been stated by him that he was always
assured by the RFC personnel that letter of acceptance would be sent to him shortly
but the commitment was never honored. The petitioner has complained that the RFC
thereafter colluded with the debtor Vincum Engineering Enterprises (P) Ltd. and
therefore the letter of acceptance was never issued in his favor although his bid is the
highest. It is further stated by him that when more than two and a half years elapsed
and he did not receive the letter of acceptance nor possession of the industrial unit, he
gave a notice for demand of justice to the respondents on 12.1.93 which did not
receive any response and hence he was compelled to file this writ petition challenging
the arbitrary action of the respondents in not issuing the letter of acceptance, not
executing the necessary documents in pursuance thereof and thereafter not handing
over the vacant possession of the industrial unit.

5. The writ petition has been contested by the principal respondent No. 1 RFC as also
the impleaded respondent No. 6-M/s. Vincum Engineering Enterprises (P) Ltd. which
failed to pay its debt to the RFC. In fact the debtor industry M/s. Vincum Engineering
Enterprises (P) Ltd. had also filed a suit for rendition of accounts, injunction and
declaration before the ADJ No. 7 at Jaipur City, Jaipur but the suit was dismissed on
16.9.1996 against which first appeal is pending before this High Court and hence it
has been prayed by their counsel that this should be heard along with the first appeal.
However, I do not see any justification for this prayer as that is the dispute between
the debtor industry and the RFC. In so far as this writ petition is concerned, the
question is whether the auction sale in between the petitioner and respondent RFC can
be held to be complete so as to issue necessary direction for issuing the letter of
acceptance of the auction sale and execution of necessary documents as also the
delivery of possession. The stand of the RFC in this regard is that the tender notice
published in the Rajasthan Patrika on 22.11.1990 clearly notified therein that the
respondent-RFC reserves the right to accept or reject the auction sale in consequence
of the tender notice. It is their further plea that there was no occasion or any chance for
the petitioner by which he could have acquired the right to get acceptance letter
regarding his bid for the industrial unit M/s. Vincum Engineering Enterprises (P) Ltd
since the petitioner had made a conditional offer by refusing to accept the liabilities of
some of the Departments like the RIICO and ors. which was not in accordance with
the terms of the tender notice due to which the final decision could not be taken
regarding the offer made by the petitioner and hence the petitioner had no right to infer
that the tender offer made by the petitioner was complete. Mere deposit of 5% amount
towards the bid amounting to Rs. 42,500/- which was tendered by the petitioner, in a
sealed cover cannot create a right in favor of the petitioner to conclude that his offer
was accepted specially when it had made a conditional offer which was not in
accordance with the terms of the tender notice. It has been stated that during the
course of negotiation it had been clarified to the petitioner that the liabilities of the
industrial units under sale were being determined and that final decision would be
conveyed to it in course of time clearly conveying him that it was liable to be rejected.
It was also stated that if the petitioner industry had accepted the liabilities in terms of
the tender notice as a whole, perhaps the complexion of the case would have been
entirely different. The same not being the position, the petitioner had wrongly formed
an opinion that his offer was accepted to conclude that the auction sale was complete
so as to infer that the consequence of offer in pursuance thereof was its legal right.
The arguments which have been advanced by the counsel for the parties are on the
aforesaid lines and hence do not require to be repeated.
6. From a perusal of the case and the counter case of the contesting parties, it is
apparent that the petitioner's offer although was the highest and he was also called for
negotiation by the RFC, the same ultimately never culminated into final acceptance as
the petitioner's offer was conditional and it did not accept the terms and conditions of
the tender notice in its entirety; on the contrary despite being the highest bidder it laid
down its own terms and conditions which was within the competence, power and at
the option of the respondent-RFC to accept or reject it. It will, therefore, have to be
inferred that no private contract had at all been created between the respondent and the
petitioner since the petitioner had merely made an offer and that too a conditional one
in response to the tender notice of the respondent-RFC and the terms and conditions
laid down by the petitioner had not been fully accepted by the RFC since no letter of
acceptance of his offer had been issued. One can understand that if a letter of
acceptance of the offer had been issued by the respondent RFC, a right would have
been created in favor of the petitioner so as to seek a writ of mandamus to the
respondent RFC for executing necessary documents of sale and also claim for
possession of the industrial unit but if the conditional offer of the petitioner itself had
not been accepted then merely on the basis of oral assurance the letter of acceptance
cannot be claimed and it was nothing than a wishful thinking on the part of the
petitioner to infer that his offer had been accepted. It hardly needs to be emphasized
that unless an offer is accepted, a contractual right in favor of anyone who has made
the offer do not arise and hence the respondents cannot be held under a constitutional
obligation to issue the acceptance letter although the conditions offered by the
petitioner were not acceptable to them. Hence direction to execute the necessary
documents of sale and deliver the industrial unit to the petitioner cannot arise. In so far
as the rendition of the amount of Rs. 42,500/- is concerned, the petitioner had never
asked for its refund at any stage and the same being a condition precedent to the
submission of an offer in response to the tender notice dated 22.11.1990, no refund
could have been made as long as the offer was under consideration.

7. It is thus obvious that the auction sale in pursuance of the tender notice cannot be
held to be complete in favor of the petitioner so as to issue any direction to the
respondents to issue letter of acceptance. This answer being in the negative, the
question of executing necessary documents and delivery of possession do not arise.
The claim of the petitioner thus does not have any legal force and consequently, the
writ petition is fit to be dismissed which is hereby dismissed. However, there shall be
no order as to costs.
Petition dismissed.