1991 AIR SCW 874 ::(1991) 5 CorLA 285 ::(1991) 2 CivLJ 348 ::(1992) CivilCourtC 34 ::1991 (3) SCC 79 ::(1991) 2 CurCC 97 ::(1991) 2 Mad LJ 21 ::(1991) 2 Mad LW 15 ::(1991) 2 LJR 811 ::(1992) 2 SCJ 4 ::(1991) 1 SCR 885 (SC) ::(1991) 1 BankLJ 30 ::(1991) 1 JT 685 (SC)

Supreme Court Of India

Hon'ble Judge(s): N. M. Kasliwal, K. Ramaswamy , JJ

(A) Contract Act (9 of 1872) , S.23— Void contract - Words "object of an agreement" - Means purpose and design of the agreement - Section is concerned only with object or consideration of agreement - Reasons or motive which prompted it are not relevant. Words and Phrases - Object of an agreement. (Para 2) (B) Contract Act (9 of 1872) , S.23— Void contract - Contract opposed to public policy - Agreement between all competing bidders at auction sale to form ring and peg down prices - Opposed to public policy - However an agreement between some bidders to jointly purchase property at auction sale is not opposed to public policy. An agreement between A and B to purchase property at an auction sale jointly and not to bid against each other at the auction is perfectly lawful, though the object may be to avoid competition between the two. But if there is an agreement between all the competing bidders at the auction sale, be it of the Court sale or revenue sale, or sale by the Government of its property or privilege to form a ring and peg down the price and to purchase the property at knock out price, the purpose or design of the agreement is to defraud the third party, namely, the debtor or Govt. whose property is sold out at the Court aucti....