K. Kannan, J.
1. The petition contains a challenge to the auction of the 2nd respondent in putting up certain properties to auction on 03.04.2008 which, according to the petitioner, was in contravention of an advertisement that had been issued earlier announcing the sale of the property (on lease hold basis) some of which were Shop-cum-Offices (SCOs) and some were industrial plots at Village Baramalipur, Doraha, near Ludhiana. The contention of the petitioner is that the prices that had been offered for a SCO measuring 19' x 88' contained two stipulations : (i) a price of Rs. 6,000/- per square yard on down payment; and (ii) Rs. 6,200/- on installment for two months only. The petitioner's contention was that he had paid a demand draft representing 10% of the total cost of the SCO as per condition No. (i) and he had by such an act, accepted the offer which had come through the advertisement and a completed contract had taken place. Relying on Clause 4 of the advertisement, the petitioner's contention was that an auction could have been held by the 2nd respondent, if only there were more applicants than the number of shops and in this particular case, since the number of applicants and the number of shops were the same, a resort to an auction process was untenable.
2. The contention in response by the 2nd respondent was that the advertisement itself was merely an invitation to offer and did not contain an offer for sale of the property by a particular price for the petitioner to contend that on his tender of 10% of the amount, a contract has concluded for sale of the property in his favour. It was the further contention that as regards SCOs, there were 21 applicants. The payment of 10% sent through a cheque by one of the applicants bounced and yet another applicant had withdrawn subsequent to the last date. Clause 4 in the advertisement did not create any binding obligation on the respondent to offer the property only at the rate which was specified even without going through the auction. According to the learned Counsel for the respondent, if the property were to be seen as belonging to a public body, the best method of securing the competitive price is only to put the property for auction and the resort to the auction process, therefore, cannot be a subject of challenge. It is an admitted fact that the auction did take place and the respondents 3 to 7 have bid at the auction for 5 shops but the confirmation of the auction have been stayed by this Court. It is a matter of fact brought through the contentions of the private bidders that ultimately the property got to be sold in their favour for prices in the range of Rs. 9,600 per square yard to Rs. 11,600 per square yard constituting an increase by about 150% of the original stated price in the advertisement.
3. The whole issue would depend on what the advertisement meant: whether it was an offer for sale of the property at a particular price or it was an invitation to offer to purchase and with a right reserved to the 2nd respondent to either accept the price which was offered by a prospective buyer and if it did not, whether it could chose to go for an action through auction process. The advertisement reads as if the 2nd respondent was announcing the sale (on lease hold basis) of premium shop-cum-office/industrial plots with Clauses 1 to 4 in the advertisement reading as follows:
1. The applicant shall have to deposit 10% of the total cost of the S.C.O. or Industrial plot along with the application. And balance amount would be deposited within 60 days from the allotment. Post dated cheque of the above will have to deposited immediate after the allotment i.e. same bay.
2. S.C.O. offered for: All types of textile machinery & accessories relating to apparels, textile raw materials & accessories supplier for hosiery/apparels, for work-shop, for printing & stationery items, cafeteria, daily needs, buying houses, various service like bank, insurance, communication, courier & travel agencies, construction material, for any other services which may be required for catering (100 garment units) 30 thousand work force, business generating 300 core in the Apparel Park.
3. Applications to be deposited at Punjab Apparel Park Ltd. registered office Punjab Trade Center building Opp. Manju Cinema, Adj. S.B.I. Miller Ganj, Ludhiana. Cehque/D.D./P.O. should be drawn in favour of 'Punjab Apparel Park Ltd.' payable at Ludhiana.
4. However if the No. of Applicants are more than the number of shops or industrial plot then the open auction will be held. The date & venue, terms and conditions will be intimated later on.
4. The petitioner has responded to this advertisement through a letter dated 04.09.2007 and the expressions in his letter again has a bearing to understand as to how he treated the advertisement as to whether the advertisement was to be construed as an invitation to offer or an offer by sale of the property for a particular price. The petitioner has stated in the following words:.I am interested in buying on SCO in your Punjab Apparel Park and enclosing herewith a Cheque No. 694693 dated 4.9.07 for Rs. 1,20,000/- (Rs. One Lac & Twenty Thousand only) of HDFC Bank, Ludhiana being the 10% of the total cost for the allotment of a Shop-cum-Office.
5. The response of the petitioner comprises of two parts: (i) an interest expressed for buying the property and showing his earnest by enclosing the cheque amounting to 10% of the total cost; and (ii) an assurance by the petitioner to abiding by the rules and regulations of the allotment of the SCO. Subsequent to the letter if the respondent had specifically allotted a SCO and informed the petitioner of the same that would again be relevant, for, it would set the starting point for payment of the balance of the amount which under Clause 1 stipulates to be paid within a period of 60 days from the date of the allotment. Admittedly, the 2nd respondent did not make any allotment nor was there any occasion for the petitioner to make the payment of the balance of the amount within 60 days which would have arisen only from the date of such allotment. Instead, after nearly 7 months, the 2nd respondent had again caused an advertisement to be issued on 03.04.2008 putting up all the SCOs for auction with a reserve price of Rs. 6,000/- per square yard. In the meanwhile, it appears that the 2nd respondent had sent a letter of communication to the 1st respondent on 10.09.2007, that was, immediately after the first advertisement when applications had been received from the willing parties. The letter registers the fact that there had been poor response in respect of industrial plots and as regards SCOs, they had received 19 applications against 19 shop-cum-offices. The letter also records the fact that the 2nd respondent had found itself in a vicious cycle that if they do not allot the SCOs, they would not have the funds to undertake the development and repay the loan and, therefore, there was need to proceed on the full allotment. On 26.02.2008, a meeting of the Board of Directors appears to have been held and one of the items for consideration was to put up the SCOs for auction to get the maximum price for SCOs. The agenda in the meeting dated 26.02.2008 refers to a reiteration of the decision taken by the Board in its meeting held earlier on 30th March, 2007. The minutes of the meeting held on 30th March, 2007 has also been put on record which refers to a decision to put up the SCOs in auction with the reserve price of Rs. 1500 per square yard. It is not on record for the Court to discern as to how between the date when a meeting was held on 30th March, 2007 deciding to put up the SCOs for auction, a later decision came about to insert an advertisement for sale at a particular price and provide for a stipulation that if the applicants were more than the plots available, then only the property would be put for auction.
6. The written statement makes reference to the fact that there had been indeed more applicants than the number of plots namely of 22 applicants, who had sent cheques, but two of the cheques had been returned by the Bank as unpaid and there were only 20 eligible applicants and out of whom one applicant had withdrawn subsequent to the last date. It must be borne in mind that the petitioner seeks for a public law remedy against the action of the respondents on the premise that the 2nd respondent is an instrumentality of the State and that the 2nd respondent is joint venture with the Punjab Small Industries and Export Corporation Limited. Any action of public body and particularly a Company which is registered under Companies Act shall have to carry out its mandate through its resolution of the Board. If it were to be contended that the advertisement itself constituted an offer for sale then such an offer itself ought to conform to what was decided by the Board. I have already pointed out that the Board had originally resolved for selling the property through an auction process. If, contrary to the resolution, a decision had been taken to put up an advertisement for the sale of the property at a particular price that would itself be suspect. It would still become possible for the Company to state that being a public body, it was bound to secure what was in the best interest and, therefore, having regard to the fact that the offers for industrial plots had not been adequate and there being a need to pay the loan in interest to the 1st respondent, it had to secure the best price at least for SCOs. By its action to proceed for auction in the property, the decision could not to be seen to be bad. I do not also see from the terms of the advertisement that by a payment of 10% of the amount, a concluded contract could come about. I have already extracted all the terms of the advertisement and it definitely contemplated situations where if the applicants were more than the number of shops, an open auction would be held. It cannot be denied that there were indeed more applicants than the number of plots. If there had been no contingency contemplated in the manner provided under Clause 4, it should have been possible for the petitioner to contend that the advertisement itself contained an offer and by a response by the petitioner with the payment of 10% of the sale price a full-fledged contract had come into force. On the other hand, by the operation of a Clause 4 in the advertisement, it could only be inferred that the parties had contemplated a subsequent confirmation and that is how the party has also understood which is seen from the fact that the petitioner had only expressed 'his interest in buying the property' and he had not closed the offer by saying that he had paid the 10% of the amount and that was to be taken as concluding a contract. The contract again could not have been concluded even without reference to a definite identification of the property which was to be allotted to him. The advertisement itself specifies no more than the availability of 19 number of SCOs and it cannot be said that the petitioner was sending a portion of the price on a concluded contract even without knowing a particular item which was going to be allotted to him. A conclusion of a contract itself could not have been made without reference to identification of the particular property which was to be allotted to him. It is not denied that at no point of time, any particular SCO was allotted to the petitioner for the petitioner to contend that the payment was a payment for a particular piece of SCO. Certainty of the subject matter of property is an essential ingredient of sale relating to immovable property (see, Vimlesh Kumar Kulshrestha v. Sambhaji Rao : (2008) 5 SCC 58). In this case a portion of the price alleged to have been paid by the petitioner could not be identified as having been paid to any particular item of property.
7. The learned Counsel refers to the provisions of Section 4 and 5 of the Contract Act to contend that if an acceptance is made to a contract, the contract will become complete unless the offer is withdrawn before the acceptance was communicated. In this case, according to him, the payment of 10% of the amount amounted to acceptance and a subsequent decision by the 2nd respondent to put it for auction amounted to resiling from an offer which could not be made after the acceptance was concluded. The above contentions will have relevance only in a case where the payment of 10% itself must be understood as acceptance of an offer to sell the property. I have already held that even without identifying a particular item of property, as having been allotted to him, the question of an acceptance of an offer culminating in conclusion of a contract could not be made. Further the advertisement that provided for a contingency with a right reserved to the 2nd respondent to put it for auction is an expression of merely an invitation to offer and not an offer itself. The petitioner, who was responding with the willingness to buy the property was in fact conveying an offer to purchase and did not accept to buy at the price which was mentioned therein. They are not mere quibbling of semantics; they are fairly grounded on expressions of intentions through their conduct. The conduct is through visible acts and the intentions are borne through documents.
8. Even otherwise, a decision for sale of a property by auction, if there involves public interest, is the most appropriate mode of action. A decision to put up the property for auction not merely affirms the decision taken by the Board but also advances the best interest of a public Company. The petitioner cannot, therefore, assail the auction on that ground also. The 2nd respondent shall carry forward the actions initiated pursuant to the auction to their logical end in confirming the auctions held in favour of the private individuals. If the amount has been paid by the petitioner and has been encashed by the 2nd respondent, the same shall be returned with interest at 18% per annum, if not already paid, the same being a commercial transaction involving immovable property to raise resources for the 2nd respondent and incidentally also to develop the property.
9. The writ petition is disposed of on the above terms. There shall be however no directions as to costs.