Law:

Section:

This suit has been filed by the plaintiff for declaration and recovery of Rs.2,00,000 from the defendants. The facts briefly are that the defendants organized an auction on 27-10-1985 for the sale of 600 bags of betel-nuts weighing about 33000 kg. The plaintiff was one of the participants in the said auction where its bid of Rs.7,90,000 was the highest and was accepted. As such in accordance with the terms of the auction the plaintiff deposited on the same day a sum of Rs.2,00,000 being approximately 25% of its bid. The plaintiff has alleged that before the start of the auction samples of the betel-nuts which were in good condition and fit for human consumption were shown to the prospective bidders with the assurance that the contents of the said 600 bags were similar to the samples and it was on this understanding that the plaintiff made the bid. However, after the deposit of Rs.2,00,000 when plaintiff's representative checked the 600 bags it was found that the betel-nuts in these bags did not tally with the sample, were in bad condition and not fit for human consumption. The plaintiff took samples of the betel-nuts from the bags and got these tested in a laboratory which confirmed that these were not fit for human consumption. The plaintiff informed the defendants of the situation and finally requested for the return of the deposit of Rs.2,00,000. On failure of the defendants to refund the amount the present suit was riled.

The defendants in their written statement have denied about any sample having been shown to the bidders or any assurance given. It is stated that the bidders were provided full opportunity to inspect the goods and they participated in the auction after they were satisfied. It is claimed that the auction was simply on "as is where is" basis. It is admitted that the plaintiff's bid for Rs.7,90,000 was the highest and was accepted and that the plaintiff deposited the sum of Rs.2,00,000 soon after the auction. According to the defendants the plaintiff under the rules, had to pay the balance of the bid money within four days of the acceptance of its bid, failing which the deposit was liable to forfeiture and therefore the plaintiff was not entitled to the reliefs claimed. The defendants further alleged that as from 10-11-1985  the custom duty on betel-nuts was reduced from 25% to 10% and it was thereafter that the plaintiff, who was a regular importer of these nuts, raised the dispute about the quality of the auctioned goods. It is claimed that betel-nuts were not only used for human consumption but also for industrial purposes.