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CMA Intermediate · Business Laws and Ethics · Sale of Goods Act, 1930

At an auction of machinery, the seller, Kapoor Industries, expressly reserved the right to bid and notified that the sale was subject to a reserved price. Which of the following is permissible under Section 64 of the Sale of Goods Act, 1930?

The seller or any one person on its behalf may bid, and the sale may be subject to the reserved price. Section 64(3) permits only one person on the seller's behalf where the right is expressly reserved, and pretended bidding still makes the sale voidable under Section 64(6).

  1. AKapoor Industries bids itself, and also appoints two further persons to bid on its behalf
  2. BKapoor Industries appoints any number of persons to bid, since the right to bid is reserved
  3. CKapoor Industries or any one person on its behalf may bid, and the sale is subject to the reserved priceCorrect
  4. DKapoor Industries employs persons to make pretended bids to raise the price, as the right is reserved

Explanation

Section 64(3) allows, where the right to bid is expressly reserved, the seller or any one person on his behalf to bid. Section 64(5) allows the sale to be notified as subject to a reserved price. Option A and B allow more than one person. Pretended bidding under Section 64(6) makes the sale voidable at the buyer's option, even if the right to bid is reserved.

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