Rule for the disposal of Government property through public auction

IN these rules the words ‘Competent authority’ mean the ‘authority empowered by Government’ in any rule or order to sanction the sale or disposal of stores or other Government property subject to restrictions imposed in that rule or order and other relevant rules, etc.

2. Whenever it appears that the articles borne on stock or tools and plant including motor vehicles are either in excess of the requirement of the department or have become unserviceable and unfit for further use, the matter should immediately be reported to the competent authority who should arrange for inspection of the articles and decide if they should be auctioned.

3. A report of the surplus stores for disposal should be prepared in Form ‘A’ appended hereto. This report should be signed by the reporting authority after satisfying that all surplus stores have been correctly included in the surplus report.

4. If the articles proposed to be auctioned are serviceable or likely to become so after reasonable repairs and are being auctioned due to being surplus, a list of such articles should first be circulated to other offices of the parent department and also to offices of other departments likely to require the surplus articles to ascertain if they can be utilised by any of them. The condition, book value and the depreciated value of each articles in the case of commercial departments should also be indicated in the list. The articles should be auctioned only if they are not required by other offices.

5. Before auction wide publicity by beat of drums, advertisement, etc. should be given to the articles to be auctioned, the price to determined by the competent authority and the date, time and place of auction. The auction should be conducted in the presence of a gazetted officer who will see that a proper record is maintained of all the bids.

6. The officers conducting the auction will not be bound to accept the highest or any bid. Reasons should, however, be recorded if it is not proposed to decide the auction in favour of the highest bidder. Persons of doubtful means and intentions may not be allowed by the officer conducting the auction to bid at the auction.

7. The acceptance by the officer conducting the auction of any bid will be subject to confirmation by the competent authority and in certain cases also by Government which will be announced at the time of auction.

8. Every person bidding will be held to his bid whether it be the highest or not, and it will be distinctly understood that any remission of the amount of the bid will under no circumstances be considered.

9. No person shall be allowed to bid at the auction on behalf of another person unless he holds a written authority from such other person who is present at the auction and authorises or ratifies the bid made on his behalf.

10. The goods shall be sold as and where they lie. The whole of the lot or lots shall be taken from the site of accumulation. Quantities, sizes, numbers weights and measurements, etc., as announced at the auction may be approximate and no warrantee or guarantee shall be implied, and no complaint will be entertained. The stores will be sold on the assumption that the bidders have inspected the lot or lots and know what they are buying.

11. When it is proposed to auction any particular item or items of stores by weight or number and not on lot basis, an announcement to that effect shall be made before the store is put to auction. The bids in such cases shall be for each number or unit or weight. The price to be charged shall be calculated on the actual weight or numbers delivered.

12. In the event of the officer conducting the auction being of opinion that bidders are forming a ring and fair price are not being realised for the vehicle/stores offered in the auction, he may stop the auction.

13. The officer conducting the auction will reserve the right of withdrawing from the auction any stores advertised or kept in the premises without assigning any reason.

14. Twenty-five per cent of the amount of the bid will have to be deposited in cash as earnest money on the third fall of hammer (i.e. closing of the bid for the vehicle/stores). No cheque, Bank drafts or Hundi, will be accepted. The officer conducting the auction may, however, without assigning any reasons, demand as earnest money a higher percentage up to the full amount of the bid.

15. In the default of the payment of the earnest money, the bid shall forthwith be cancelled and the stores/vehicle offered to the next highest bidder or re-auctioned. The Government will reserve the right to take such action against the bidder who failed to deposit the earnest money as may be authorised by law.

16. The attention of the intending bidder will be invited to Section 185, I.P.C., according to which whoever shall bid for any vehicle/stores with no intention to perform the obligation under which he lays himself by such bid, shall be liable for prosecution.

17. After the competent authority or Government, as the case may be, has approved the accepted bid, the balance will have to be deposited in the Treasury of the town where auction is held within seven days of the receipt of the registered notice.

18. If a successful bidder fails to pay the balance of the amount within the time specified above, the auction in his favour will be cancelled and the earnest money deposited by him on the third fall of the hammer will be forfeited to Government and the vehicle/store will be offered to the next highest bidder provided his bid plus 25 per cent realised from the highest bidder as earnest money does not fall short of the bid offered by the highest bidder. If this condition is not satisfied the article should be re-auctioned as and when the competent authority thinks best without any notice to the bidder. The Government will reserve the right to take such action against the bidder who fails to pay the balance as may be authorised by law.

19. Pending approval of the competent authority, the successful bidder may make suitable arrangement to keep a watch on the vehicle/stores etc., shown in his favour, which will have to be kept in the premises where the auction has been held at the risk and responsibility of the successful bidder.

20. The delivery of the material auctioned will be made after full and final payment has been made by the bidder in whose favour the bid is auctioned and the permission for removal given by the competent authority.

21. The material will be removed in the presence of competent authority or any other gazetted officer authorised by him.

22. The vehicle/stores fully and finally paid for must be completely removed by buyer within seven days from the date of final payment. Where this is not done, the competent authority may recover in addition to any loss that may be suffered a charge on account of storage space at one per cent per diem on the sale price of the said vehicle or lot or lots or portion thereof till the date of removal or re-sale.

23. If the competent authority or Government as the case may be, does not approve of the accepted bid, the amount deposited by the successful bidder will be returned to him and the auction in his favour will be considered as null and void.

24. The successful bidders will have to pay the terminal tax on the vehicle/stores for which their offer/offers have been approved and accepted, to the Municipal authorities before taking delivery of vehicle/stores, if required, and any other tax that may be found due under law.

25. In the case of auction of motor vehicles, the registration certificate will be given to the successful bidder if it is valid. If the same could not be renewed by the department for some reasons the bidder will have to get it renewed at his own cost and no claim on this account will be entertained in the case of auction of vehicles.

26. In case of any dispute touching or arising out in respect of the terms and conditions hereinbefore contained or any action taken or proposed to be taken in pursuance thereof, the same shall be referred to the arbitration of a person nominated by the Secretary to Government/Head of the Department concerned whose decision thereon shall be final and binding on the parties.

27. In case of any litigation, the jurisdiction for filing a suit will be the place where the auction is held.

28. A sale account should be prepared in the Form ‘B’ appended hereto. The sale account should be signed by the officer who supervised the auction after comparing the entries made in the sale account with the report of surplus stores. If the articles are released in the presence of an officer other than one who supervised the auction, the entries in column 9 of the sale account should be attested by the dated signature of such officer.

29. A copy of each order declaring stores as unserviceable, absolete, or surplus should be endorsed by the competent authority to the Audit Officer.

30. Acceptance of the terms and conditions contained in these rules should be obtained in writing from all the bidders, before they are allowed to bid at the auction.


[(See rule 3)]

Report of surplus stores for disposal

Item no.

Particulars of stores

Quantity /Weight

Book value/original bunch wise price

Condition and year of purchase

Mode of disposal sale, public auction or otherwise


Signature, designation and date











[(See rule 28)]

Sales Account

Item no.

Particulars of stores


Name and full address of purchaser

Highest bid accepted

Highest bid rejected

Earnest money realised on the spot

Date on which the complete amount is realised and credited into Treasury

Whether the articles were actually handed over on the spot. If not the actual date of handing over of articles with quantity

Auctioners Commission and acknowledgment for its payment

Signature, designation and date