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Para 10.8 - Auction Disposal | KartavyaDesk

Goods Manual

Original Rule Text

10.8. Disposal through Auction 1. A ministry or Department may undertake an auction of goods to be disposed of either directly or through approved auctioneers; 2. The basic principles to be followed here are like those applicable for disposal through the advertised tender to ensure transparency, competition, fairness, and elimination of discretion. The auction plan, including details of the goods to be auctioned and their location, applicable terms and conditions of the sale, and so on, should be given wide publicity in the same manner as is done in the case of the advertised tender; 3. For entering and participating in the Auction, an EMD shall be taken from all bidders in the form of a bank draft/pay order drawn on any of the commercial banks in favour of the officer concerned, as mentioned in the Auction Catalogue. While starting the auction process, the condition and location of the goods to be auctioned, applicable terms and conditions of sale, and so on (as already indicated earlier while giving wide publicity to it) should be announced again for the benefit of the assembled bidders; 4. During the auction process, acceptance or rejection of a bid should be announced immediately on the stroke of the hammer. If a bid is accepted, SD (not less than 25 (twentyfive) per cent of the bid value) should immediately be taken on the spot from the successful bidder either in cash or in the form of deposit-at-call-receipt, drawn in favour of the FA of the disposing organisation. The goods should be handed over to the successful bidder only after receiving the balance payment as in the case of sale through tenders; 5. The CA shall decide the composition of the auction team. The team should preferably include an officer of the internal finance wing of the Department and a representative of security staff.

What This Means

Para 10.8 of the Manual for Procurement of Goods, 2017, outlines the process for disposing of government goods through auction. Think of it like a public sale where items the government no longer needs are sold to the highest bidder. This rule ensures that the auction process is fair, transparent, and competitive, just like when the government buys things through tenders. It applies to all Ministries and Departments that need to get rid of old or surplus goods. It affects everyone involved, from the government employees organizing the auction to the individuals and businesses participating in the bidding process.

This explanation was generated with AI assistance for educational purposes. Always refer to the official gazette notification for authoritative text.

Key Points

  • •Disposal of goods can be done directly by the Ministry/Department or through approved auctioneers.
  • •The auction process must be transparent, competitive, and fair, similar to advertised tenders.
  • •Earnest Money Deposit (EMD) is required from all bidders before participating in the auction.
  • •Successful bidders must immediately pay a Security Deposit (SD) of at least 25% of the bid value.
  • •An auction team, including a finance officer and security representative, should be formed.

Practical Example

The Ministry of Textiles has a large quantity of outdated weaving machinery they need to dispose of. Following Para 10.8, they decide to hold a public auction. They widely advertise the auction details, including the list of machinery, their condition, and the terms and conditions of the sale, on their website and in leading newspapers. They require an EMD of ₹10,000 per bidder. During the auction, Mr. Sharma places the highest bid of ₹5,00,000 for a particular machine. The auctioneer immediately accepts the bid and Mr. Sharma is required to pay a Security Deposit of ₹1,25,000 (25% of ₹5,00,000) on the spot. The machinery will be handed over to Mr. Sharma only after he pays the remaining ₹3,75,000.

This explanation was generated with AI assistance for educational purposes. Always refer to the official gazette notification for authoritative text.

Frequently Asked Questions

What is EMD and why is it required for auctions?▼
EMD stands for Earnest Money Deposit. It's a refundable deposit required from all bidders to ensure serious participation and prevent frivolous bidding.
What is the minimum Security Deposit (SD) required after a successful bid?▼
The Security Deposit (SD) should not be less than 25% of the bid value and must be paid immediately after the bid is accepted.
Who decides the composition of the auction team?▼
The Competent Authority (CA) decides the composition of the auction team, which should preferably include an officer from the internal finance wing and a security representative.
Can the Security Deposit be paid in any form?▼
The Security Deposit should be paid either in cash or in the form of a deposit-at-call-receipt, drawn in favour of the FA (Financial Advisor) of the disposing organization.
How is transparency ensured during the auction process?▼
Transparency is ensured by widely publicizing the auction details, announcing the acceptance or rejection of bids immediately, and having a diverse auction team.

This explanation was generated with AI assistance for educational purposes. Always refer to the official gazette notification for authoritative text.

Test Your Knowledge

Question 1 of 3

According to Para 10.8 of the Manual for Procurement of Goods, 2017, which of the following is NOT a required principle for disposal of goods through auction?

Related Rules

Para 9.4Manual for Procurement of Goods, 2024 - Para 9.4 - Chapter 9Para 9.5.5Manual for Procurement of Goods, 2024 - Para 9.5.5 - Chapter 9Para 1.8.2Manual for Procurement of Goods, 2024 - Para 1.8.2 - Chapter 1Para 2.2.2Manual for Procurement of Goods, 2024 - Para 2.2.2 - Chapter 2Para 2.2Manual for Procurement of Goods, 2024 - Para 2.2 - Chapter 2

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