TERMS AND CONDITIONS OF COTTON SEED SALE BY AUCTION

THESE TERMS AND CONDITIONS ARE PRESCRIBED FOR THE SALE OF COTTON SEED BY AUCTION WITH EFFECT FROM 12/11/98.  THE GOVT OF MAH HAVE APPOINTED THE MAH STATE CO-OP COTTON GROWERS MARKETING FEDERATION LTD. AS CHIEF AGENT FOR IMPLEMENTATION OF MONOPOLY COTTON PROCUREMENT SCHEME AND AUTHORISE TO DISPOSE OF COTTON SEED UNDER SECTION 39 OF THE MAHARASHTRA RAW COTTON (PROCUREMENT, PROCESSING & MARKETING)ACT 1971.

THE MAH STATE CO-OP COTTON GROWERS MARKETING FEDERATION LTD., HEREINAFTER REFERRED AS "COTTON FEDERATION" PRESCRIBE the terms and conditions for the purpose of Sale of Cotton Seed as under :-

The parties interested in purchase of cotton seed, duly registered, shall be referred hereinafter as "Buyer"

1)  (A)  ELIGIBILITY  :

Only registered buyers shall be allowed to take part in the sale of cotton seed by public auction.  The Zonal Manager is empowered to grant the registration and to cancel the registration of buyers who do not abide the terms and conditions.  The Zonal Manager is empowered to execute contract/documents regarding cotton seed sale.  The buyer shall become a nominal member of the Federation.

    (B)  PROCEDURE FOR REGISTRATION :

The buyers shall obtain registration certificate by applying to the Zonal Manager in the prescribed application form and paying registration deposit of Rs.1500/- (Rupees One Thousand Five Hundred Only).  Such registration will be valid for only one season and for a particular zone only.  Fresh application form shall be submitted for new registration in next season.  If any buyer desires to take part in cotton seed auction of more than one zone in the state, he should register himself separately in such concerned zone.  The Zonal Manager shall grant certificate of Registration after the deposit is received.  A copy of terms and conditions of cotton seed sale shall be supplied to the buyer alongwith registration certificate.  These terms and conditions of sale of cotton seed shall be binding on such registered buyers.

     (C)  REFUND OF REGISTRATION DEPOSIT  :

The registration deposit shall be refunded to the registered buyer at any time on submission of an application by him alongwtih original receipt of deposit and registration certificate, after making recovery of dues, if any.  The name of the buyer shall be removed from the register of registered buyers, when registration deposit is refunded or when registration is cancelled by Zonal Manager.

2. (A)  PROCEDURE OF AUCTION  :

    All the registered buyers attending an auction, shall be given statement showing the details of cotton seed stock that will be auctioned on that day.  The Zonal Manager shall keep a buyer attendance register and every buyer will sign the register to the effect that he is fully aware of the terms and condition of auction sale as well as of contract and it taking part in the auction after having understood the said terms and conditions.

(B)   CREDENTIALS TO BE DEPOSITED BY REPRESENTATIVE OF FIRMS  :

If the participant in the auction is claiming to be a representative of the firm or a company, he shall deposit his credentials to that effect with the Zonal Manager.  The credentials shall clearly indicate that the participant has the authority to take part in the auction on behalf of the principal and principal shall be liable for all acts or omission on the part of the representative.  The credentials shall be valid for particular season only.  Fresh credentials shall be submitted by the registered buyer for each season.

(C)    INVITING BIDS  :

At the time of auction, the Zonal Manager shall announce the lot with reference to the name of the center, variety-grade, heap No., approximate quantity etc. of cotton seed and open one sample-bag of that particular lots, (Which are received in three sealed bags from Deputy Manager) for inspection by parties.  He shall then request the participants to offer bids.

(D)     CLOSING OF THE BID :

Bid of each participant shall be recorded in the bid sheet (which is duly numbered).  Zonal Manager shall try to obtain maximum bid for each lot.  When he observes that no bid higher than the last received is likely to be made, he shall close the auction for that lot either by stroke of a hammer or by calling three indicating that there will be no further bid for that lot, and the said lot is being sold to the highest bidder-buyer.  The signatures of the highest bidder as well as other participant, who have given the bids, will be taken on the bid sheet as soon as the bid/auction is over for that particular lot.  Once the highest bid accepted by the Zonal Manager and the highest bidder signs the bid sheet, it confirms the acceptance of Sale of that lot to him.

The Zonal Manager shall have full authority to close the bid/auction or to keep a lot unsold without assigning any reason.  It shall not also be binding on the Zonal Manager to confirm the sale at the highest bid, if he has reasons to believe that price received is not reasonable or there is a concerted efforts on the part of the participants to restrain free competition.  Once the lots remains unsold, it will not be put up for sale in the same auction or on the same day in any circumstances.

One sealed sample-bag out of three which are received from Deputy Manager will be handed over to successful bidder and one sealed bag will be retained by Zonal Manager with him till the delivery of the lot.  The outer cover of sample-bags will clearly indicate the name of Center, variety-grade, heap No., date of auction approximate quantity etc.

3. (A) ADVANCE PAYMENT BY HIGHEST BIDDER :

The highest bidder who has confirmed the sale by signing the bid-sheet and whose bid has been accepted by Zonal Manager, has to make an advance payment of Rs.50/- (Rupees Fifty Only) per qtl. of cotton seed sold to him.  The contract will be signed by him or his representative.  On behalf a Cotton Growers' Federation, Zonal Manager/Deputy Manager or his authorised officer has to sign the contract.  The copy of contract will govern the terms and conditions of Cotton Seed Sale.  The advance payment shall be made in the zone office/Sub Zone Office before 4.00 p.m. within two working days (i.e. within 48 hours) from the date of auction.  Zonal Manager/Dy.Manager may accept the advance payment late by five days with penalty of 0.08 paise per Rs.100/- per day.  In case, the last day of payment is declared as holiday, the advance payment shall be accepted on immediate next working day without penalty.  The Zonal Manger/Dy. Manager will accept the payment by D.D. on Nationalised Bank or Co-operative Bank or Scheduled Bank, payable at Bombay. If the buyer fails to deposit the advance payment of previous auction he may not be allowed to participate in the coming auction.

(B) CONSEQUENCES OF FAILURE TO PAY ADVANCE PRICE & RECOVERY OF LOSSES IF ANY  :

If the highest bidder whose bid has been accepted by the Zonal Manager, fails to make an advance payment and sign the contract within the limit as in 3 (A) above, the registration of such bidder shall, automatically stand cancelled forthwith and his name shall be removed from register of registered buyers.  The amount of registration deposit shall stand forfeited to the Federation.  The lot in question shall then be reauctioned.  If Federation sustains any loss (including penalty and other charges) in resale of such lot/lots, the same shall be recoverable from the defaulter buyer referred above, (besides the registration deposit forfeited)as arrears of Land Revenue under the provisions of Sub-Section (1) and Section 40 of the Maharashtra Raw Cotton (Procurement, Processing and Marketing)Act, 1971.

(C)  When the bidder makes advance payment @ Rs.50/- per quintal and signs the contract, such advance shall be adjusted proportionately against the Sales proceeds recoverable from him.

4. (A) PERIOD FOR MAKING FULL PAYMENT  :

The pruchaser shall make full payment for the cotton seed pruchased by him (after adjusting, proportionately, the advance payment already made by him) within a period of Eight calendar days from the next day of auction (i.e excluding auction day).

(B) EXTENSION IN PAYMENT PERIOD  :

In case, the buyer fails to effect full payment as in 4 (A) buyer may be allowed to effect full payment within the period of 9 to 15 days subject to a penalty of 10 paise per Rs.100/- per day and from 16 to 20 days subject to penalty of 11 paise per Rs.100/- per day.  The penalty shall be calculated on the basis of the balance price payable by the buyer after giving him credit for the advance payment already made by him.

(C) CONSEQUENCE OF FAILURE TO MAKE FULL PAYMENT AND TAKEDELIVERY  :

If the buyer having made the advance payment, fails to effect full payment within 20 days from the next day of auction as in 4(b) and if he wants extension for making payment and delivery, he should submit his request in writing to Zonal Manager for extension for payment and delivery.  Zonal Manager may consider his request looking to his previous performance as regard making payment/taking delivery and grant extension for not more than 5 days.  The penalty for the extended period should be 12 paise per Rs.100/- per day.
If the purchaser fails to pay balance amount and lift the cotton seed before the time limit as stated in 4(b) and 4(c), the registration deposit and advance payment of Rs.50/- per quintal paid by him shall stand forfeited to the Federation for non- compliance of contract and registration of such defaulting buyer shall stand automatically cancelled.  The lot/lots inquestion shall be then reauctioned immediately and if Federation sustains any loss, including penalty and other charges, the amount of such losses shall be recoverable from the defaulting buyer (besides the amount of advance payment and registration deposit which are already forfeited) as an arrears of land revenue under the provisions of sub-section (1) and section 40 of the Maharashtra Raw Cotton (Procurement, Processing & Marketing)Act, 1971.  If Federation makes any profit in such resale, no part thereof nor the amount of registration deposit nor advance payment made by the party, shall be refunded to the defaulting party.

5) (A) SETTLEMENT OF DISPUTE :

The Federation will not be responsible for deterioration in quality on account of rains or for any other reasons, after a period of 8 calendar days from the date of auction.  In case of cotton seed which is covered by tarpaulins or put in godown or shed, the Federation may, after the expiry of the said period of 8 days, remove the tarpaulins or take the seed out of the godown or shed in case of exigency.

(B) In case buyer wishes to raise the dispute in respect of quality, he shall apply in prescribed form to the Zonal Manager within 8 calendar days from the date of auction.  While lodging the dispute, the buyer shall remit dispute fee Rs.3/- (Three Only) per quintal (apart from other credit balance if any) separately in the Zonal Office and obtain receipt.  Unless the dispute fee is paid and dispute is lodged within 8 days as above, the dispute shall not be entertained by the Zonal Manager.  The Zonal Manager will settle the dispute within 8 days from the date of receipt of application.

(C) In case the dispute is settled in favour of party, the amount of dispute fee shall be adjusted/refunded.  If the dispute is settled against the buyer, dispute fee paid by him, will stand forfeited to the Federation.  In case, the dispute is settled against the buyer, the penalty will be charged for this period also as usual. In case, the dispute is not settled by Zonal Manager within the period of 8 days,buyer shall not be liable for penalty for the period beyond 8 days.

(D) For settlement of dispute, the Zonal Manager shall nominate a dispute settlement committee consisting the following members :-

1. Zonal Manager or Deputy Manager (Seed), Dy.Manager (Sales) or Sales Officer or any other authorised Officer.
   

2. Senior/Junior Grader (other than Factory Incharge).
   

3. Representative of the Party.
   

4. Representative of G/P Factory.

On the basis of the report of this committee, Zonal Manager, shall give final decision and the same is binding on both parties.

6. WEIGHMENT/DELIVERY OF COTTON SEED.

Delivery of cotton seed in all cases shall be given after receiving full payment including penalty, late lifting charges and sales tax etc.  Weighment will be done in packing of 40 kgs.  45 kgs. 50 kgs. or 60 kgs. of each bag, according to size of seed.  There will not be weighment and delivery of cotton seed after sunset.

7. (A) LATE LIFTING CHARGES :

The buyer of cotton seed will have to lift the cotton seed immediately after he makes full payment for the cotton seed if he fails to do so, he will have to pay late lifting charges as given in the following table before he is allowed to lift the cotton seed.

(B)  The buyer who has effected full payment (with penalty if any) before 25 days from the date of auction, Federation may carry such seed for 15 days from the date of full payment, subject to late lifting charges @ 6 paise per quintal per day from the epiry of free delivery period till the date of actual delivery.

(C) The buyer who effects full payment before 25 days, but fails to lift cotton seed within 15 days as per 7(b) above, the Federation shall be entitled to reauction the said cotton seed, However, before reauctioning, the Federation shall issue a'Registered Notice' to the concerned buyer calling upon him to show-case within 10 calendar days from the date of notice as to why cotton seed may not be reauctioned.  The Federation may reauction such unlifted cotton seed after the expiry of notice period, if the reasons shown by party are not satisfactory and agreeable to the Zonal Manager. If Federation sustains any loss including penalty, late lifting and other charges, in such resale the amount of such losses shall be recoverable from the amount already received from the buyer.  The amount of advance payment and registration deposit will stand automatically forfeited to the Federation.
In case, Federation makes profit in such resale, no part thereof will be refunded to the party.  In addition, an amount of registration deposit, advance payment and late lifting charges payable if any will stand forfeited to the Federation.

8. VARIATION IN QUANTITY OF COTTON SEED :

The quantity indicated at the time of auction is an approximate.  There may be variation in actual quantity in the heap.  For this purpose, following procedure to be observed.

(a) Where the actual weight of cotton seed in the heap is less than 2% of the quantity mentioned in the contract (sold in auction), the actual quantity of the cotton seed in the heap shall be delivered to the buyer against the said contract and contract for the remaining quantity shall be treated as cancelled at par.

(b) Where the actual weight of cotton seed in heap is less than contracted quantity, and if the difference is more than 2% the short fall may be made good by delivering cottonseed from another heap of same station belonging to the same variety and grade at the contracted price if such cottonseed is available otherwise contract shall be performed to the extent of actual weight of cottonseed in  that heap only and it shall be deemed to have been cancelled to the extent of the remaining quantity.

Entire contract will not be cancelled for the reason of short delivery.

(c) Where the quantity in the heap is more by 2% than the contracted quantity, the delivery shall be effected from the contracted quantity plus 2%.

MODE OF PAYMENT

All payments with respect to these contracts shall be made by a Demand Draft on a Nationalised or Co-operative or Scheduled Bank payable at Bombay.  The cheques will be accepted where the special permission is granted with the collection charges, which are as under for the time being in force :

10. The Zonal Manager may temporarily suspend or cancel the registration of any buyer if it is observed that he misbehave makes any improper comments or remarks, cause any nuisance or disturbs the proceeding of cotton seed auction.

11. Any dispute arises out of such auction sale, shall be subject to the jurisdiction of Co-operative court or Local competent Court at the head quarter of the Zonal Manager.

General Manager.