Trespasser versus tenant

Written by Indu Bhan | Indu Bhan | Updated: May 8 2013, 09:15am hrs
Highest bidder has no vested right

Setting aside the judgment of the Allahabad High Court in the case of UP Avas Evam Vikas Parishad & Ors vs Om Prakash Sharma, the Supreme Court ruled that a bidder has no vested right to get a property in an auction despite his bid being the highest and he depositing 20% of the bid amount along with earnest money. Citing the legal principle that the bidder in a tender process has no other right except the right to equality and fair treatment in the evaluation of competitive bids, the apex court said that the state has the right to reject the highest bid and even prefer a tender other than the highest bidder, if there exist good and sufficient reasons such as the highest bid not representing the market price.

Ruling in favour of the UP Avas Evam, a statutory body created for development of colonies, residential plots, commercial plots and complexes in the state, it stated that there was no concluded contract since the bid was not accepted and the auction proceedings can always be cancelled by the competent authority. The top court further said that the communication of acceptance of the highest bid is necessary for concluding the contract.

In this case, Om Prakash offered the highest bid and deposited 20% of the bid amount and earnest money for a plot in Bareilly in 1977. However, the Assistant Housing Commissioner informed the buyer that his bid was rejected and the money was refunded by way of demand draft. The buyer filed a suit seeking allotment of plot, which was allowed by the trial court in 1993. But the district judge set aside the judgment of the trial court in 2000. On appeal, the HC in May 2010 directed the board to consider the bidders representation for allotment of the plot. This was challenged by the UP Avas Evam in the apex court.

SC calls HPCL a trespasser

Quashing the Allahabad High Court that ruled contrary to its order in the case of Ram Bharosey Lal Gupta (D) by Lrs vs M/S Hindustan Petroleum Corp Ltd, the Supreme Court said that the PSU acted unfairly and unreasonably, calling it a trespasser of a property as it did not vacate premises and paid just R5,000 against the market rent value of R30,000. In this case, one Mansa Ram, the father of the appellants, leased out a property situated on Agra Kanpur Road to M/s Caltex India Ltd in 1960 for 20 years on a monthly rent of R50. After the Caltex Act was enacted and the private company was nationalised in 1977, HPCL became the automatic successor of the original lessee. Since HPCL did not vacate the premises in 1983, the landlord filed a eviction suit. While the trial court in 1987 held that the landlord was not entitled to terminate the tenancy as the 1977 Special Act prevailed over the Transfer of Property Act, the 1st Additional District Judge in 1988 ruled in favour of the owners. The HC set aside the judgment of the first appellate court in 2007.

Senior counsel Nagendra Rai, appearing for the owners, argued that the conduct of the Corporation in continuing with the lease for a third term of 20 years from 2000 to 2020 in the absence of any notice for renewal was illegal, arbitrary and unreasonable. The HC failed to take into consideration that the PSU took the shield of the special Act and it cannot be permitted to enjoy any lease property in perpetuity. The top court said that holding over of property by the government organisation after the termination of lease is that of a trespasser not a tenant.

Bajaj to pay reduced compensation

In a batch of cases led by Bajaj Auto Ltd vs Rajendra Kumar Jagannath Kathar, the Supreme Court has asked the two-wheeler manufacturer to make compensatory payment to its temporary workers who alleged unfair labour practices under the Maharashtra Recognition of Trade Union and Prevention of Unfair Labour Practices Act 1971. The workers alleged that though they were engaged in 1990, yet in every year they were offered employment for seven months and their services used to be terminated after the expiry of the period. It was also alleged that because of this unfair practice, none of them could complete 240 days in employment in any corresponding year to make them eligible to earn the status and privilege of permanent employees under the Model Standing Orders in the Industrial Employment (Standing Orders) Act.

The company refuted the allegations, stating that its 4,250 permanent employees were sufficient to meet the requirement of normal production but whenever there was a temporary rise, with unions consent, it used to engage employees for the duration, which was restricted to few months.

Both the Industrial Court and the Bombay High Court ruled in favour of the employees. The Industrial Court directed Bajaj to pay lump sum amount calculated at 85 days salary inclusive of all allowances for the number of years each complainant had actually worked irrespective of the days a complainant may have put in a year. Finally, the apex court modified industrial courts order and reduced the payment.