Ground rent
Rajkumar
(Querist) 20 November 2011
This query is : Resolved
Railways sell the scrap iron through auction. The contractor who took it in auction is imposed with a condition to remove the materials within 60 days or else Railways says ground rent will be charged @ Rs.2000/- per day for first 15 days and Rs.5000/- from 16 th day to 31days and thereafter Rs.20,000/- per day. Is it open to the Railways to impose such a condition which in fact amounts to compulsory exaction in the form of tax. The Railways Act does not seem to authorise them to impose such ground rent. While so levying such rent in the form of ground rent is legal?
Devajyoti Barman
(Expert) 20 November 2011
If the bidder accepts such offer by taking part in the auction, he can not later challenge its validity.
Rajkumar
(Querist) 20 November 2011
But the point is does the Railway have power to levy ground rent just because the contractor has agreed. I am of the view that the Railways cannot demand such rent amount unless they have the sanction of law.
Devajyoti Barman
(Expert) 20 November 2011
I do not think this a levying of rent, rather a penal clause to enforce the agreement strictly.
Rajkumar
(Querist) 20 November 2011
Ok. Tnx for ur time and advise
prabhakar singh
(Expert) 20 November 2011
Hey!you do not believe these experts wait for advise of my senior who has final say in these matters.His name is DHINGRA.Sorry Most wise best man by attitude Hon'ble DHINGRA G.
Raj Kumar Makkad
(Expert) 20 November 2011
Once an agreement has been executed with mutual consent, the parties to the agreement cannot raise legal questions later on. Agreement has partly been executed by both parties and one cannot refuse now to follow his part of performance.
M V Gupta
(Expert) 21 November 2011
The conditions are undoubtedly extortionist in nature. It may be possible to challenge them on grounds of undue influence (Sec. 16 of Contract Act)and monopolistic practice. The Railways can be said to be in a dominant position to impose such unconscionable conditions which you as an auction purchaser had no choice but to accept as otherwise you would stand to lose the material. But the issue needs to be examined in deapth. The learned experts may like to dilate on the above points.
Rajkumar
(Querist) 23 November 2011
Mr.Gupta, i also would like to add a point. the term rent being a term which suggests a consensus before fixing, unless the tender condition of Railways prescribes this, a party cannot be said to have agreed as suggested by Mr.Rajkumar makkad and Mr.Devajyoti Barman. In any case, i am of the view even if the contractor naively agrees for such a condition at the time of participating in auction, could the Railways contend that the contractor is bound to the terms however usurious and unconscionable the terms may be. I am of the view that they are entitled to contend. Their status argues against them and they are expected to be fair, reasonable even in imposing any terms of contract. Just because a contractor agrees the Railways cannot act like a Shylock. The contract could only be termed as a 'Dotted line contract' as held by the Supreme court or a contract between a lion and a lamb.
