Decided on February 28,1982

Prem Steel Sales Appellant


- (1.) AT a public auction held on 24th of August, 1982, by the Railways, the petitioner has allegedly purchased 25 condemned Tank Wagons and three under frame tank wagons for a total sum of rupees three lakhs and 77 thousand. He has even paid the amount of the price. One of the condition , of the auction was that the bidder shall remove the material from the site with his own labour and at his own expenses within a period of 9O days from the date of auction including the day of auction. The petitioners grievance is that despite the payment of price, the Railways are not permitting him to remove the purchased goods from the site.
(2.) THE question arises whether a writ would lie to enforce the obligation under -taken by the Railways. On facts stated above, the obligation is in the nature of a contractual obligation, the terms and conditions where of are those mentioned in the those mentioned in the auction notice. The obligation arising from such a contract would be enforceable if the auction was held in the exercise of the statutory powers. There is no material on the file to show that the auction was held in exercise of the statutory powers. Learned counsel, however, invited my attention to the opening words of the auction notice (Annexure "A") to the petition. The prefatory portion of the notice says as under: The proviso of para 2412 -S in the opening sentence i. e. Railways Administration may, however, conduct its auction itself is being invoked due to no auctioneer for the present."
(3.) THE proviso of this paragraph or the source thereof has no where been indicated in the petition or in the Annexure itself. In the circumstances on the basis of these opening words, it cannot be assumed that the auction was held in exercise of the statutory powers, and, if that be so, the obligation arising there from cannot be enforceable by way of writ. Counsel for the petitioner, however, contended that the obligation resembled a promise and that in pursuance of this promise the petitioner had made investments and so doing acted to his prejudice and as such the obligation was enforceable by way of a writ. In this learned counsel mixes up an obligation arising out of promissory estoppel and an obligation arising out of a contract. The obligation arising out of a promise on which a person acts to his prejudice constitutes an unilateral promise and does not fall within the category of reciprocal or bilateral promise, arising out of a contract. In the present case, the parties are governed by the conditions of the aucrion which form the conditions of contract between them and constitute the basis for reciprocal promise made by them, No such promise can be termed as a promise creating an obligation in the nature of a promissory estoppel which may be enforceable by may of a writ. The argument to the contrary of the learned counsel for the petitioner cannot, therefore, be allowed to prevail.;

Click here to view full judgement.
Copyright © Regent Computronics Pvt.Ltd.