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5. Advancing his arguments on behalf of the writ petitioner, the learned Senior Counsel would submit that in the instant case, the petitioner is entitled for the writ of certiorarified mandamus to which it is entitled to; that following a tender notice, which was issued by the fifth respondent for the sale of the fertilizer plant machinery as installed in the factory of the second respondent, the bid was made by the petitioner herein; that it is pertinent to point out that in the Tender Schedule, there was no mention that any one of the machineries found in the plant, which were part and parcel of the subject matter, was imported; that while there were notifications of the year 1999 and 2000 subject to which terms and conditions the machineries were imported, they were not also stated in the tender notice; that as per the notifications issued, which would be binding on the second respondent, the imported goods should be used only for the purpose for which it was actually imported by the second respondent; that no question of sale of the same would arise; that only on that condition, there was a concession that was given originally; that if the NLC was to sell the property in public auction, it should have obtained permission; but, it was not done so; that even without doing so, the second respondent through the fifth respondent has made the auction notice, and thus, in the instant case, if those facts were brought to the notice of the petitioner, the petitioner would not have made bid for the same, and he would have avoided purchasing the machinery; that there was concealment of all the necessary facts, which could be termed only as fraud as one defined under the Contract Act; that further, it is a case where all these facts which were within the special knowledge of the second respondent, were completely suppressed; that if to be so, while there was a notification issued, in breach of the terms and conditions of the notification, the property was sold, and thus, it would be quite clear that it was a case where as per the provisions of the Customs Act, the properties could not be sold as there was a notification under the provisions of that Act; that while those provisions prohibited the sale of those goods and the sale of the machinery, such a tender notice was issued, and auction has been conducted, and hence, the entire contract itself is void ab initio; and that once the contract itself is void ab initio, to start with, the second respondent has to necessarily pay back the entire amount of Rs.163 crores which has been paid by way of earnest money which has been subsequently converted as part of consideration and the subsequent payment of Rs.143 crores which has been received.

28. In the case on hand, the machinery has been imported, and there was a ban for sale of the property, and without the clearance from the Central Excise and Customs Department, it has been done. When the sale was made, it was forbidden by law. Under the circumstances, in view of the factual position, and applying Section 23 of the Contract Act, it could be declared that it is a contract void ab initio.

29. The main grievance of the petitioner is that the second respondent has played fraud on the petitioner when the auction notice was issued. It is not in controversy that the machineries were imported pursuant to the notifications of the year 1999 and 2000 referred to above, and only concessional duty was paid on condition that it should be used by the second respondent for its own purpose. When it desired to sell the same, a communication was addressed. Following the same, a reply was also given by the department making a query. All these factual positions could have been only within the special knowledge of the second respondent NLC. But, the second respondent did not make any of the bidders including the petitioner, put on notice. Thus, it would be quite clear that the facts have been thoroughly suppressed. Now, it could be analyzed whether the suppression of these facts would constitute fraud. It would be more apt and appropriate to reproduce Section 17 of the Contract Act which defines fraud, as follows.

17. "Fraud" defined:- "Fraud" means and includes any of the following acts committed by a party to a contract, or with his connivance, or by his agent, with intent to deceive another party thereto or his agent, or to induce him to enter into the contract:

(1) the suggestion, as a fact, of that which is not true, by one who does not believe it to be true;
(2) the active concealment of a fact by one having knowledge or belief of the fact;
(3) a promise made without any intention of performing it;