ODISHA FOREST DEVELOPMENT CORPORATION LTD. versus M/S ANUPAM TRADERS & ANR. on 28 November 2019

SUPREME COURT REPORTS

[2019] 14 S.C.R.

AODISHA FOREST DEVELOPMENT CORPORATION LTD.

v.

M/S ANUPAM TRADERS & ANR.

(Civil Appeal No.9083 of 2019)

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NOVEMBER 28, 2019

[R. BANUMATHI, A.S. BOPANNA ANDHRISHIKESH ROY, JJ.]

Contract:

CAgreement for purchase of ‘phal kendu leaf’ – As per theagreement the proposed purchaser, apart from provisional securitydeposit, was required to deposit additional security deposit covering25% of the purchase price of the lot – The proposed purchaser(respondent) failed to deposit the additional security amount –Agreement cancelled – Fresh tender issued – Writ petitionDchallenging cancellation of agreement and issuance of fresh tender – High Court by its interim order stayed the finalisation of sale,subject to the respondent depositing an amount of Rs.20,00,000/-(Rupees Twenty Lakhs) – However, later the stay on finalisation ofsale was vacated – The Writ Petition was disposed of as withdrawnEand the High Court directed refund of Rs. twenty lakhs (depositedpursuant to interim order) – Appeal to Supreme Court – Plea ofappellants that direction to refund the amount of Rs.20,00,000/-(Rupees Twenty Lakhs) was not justified as the deposit was relatableto additional security amount – Held: The deposit ordered by HighCourt cannot be classified as additional deposit in terms of theFcontract, at that stage of the lis – However, even if the depositedamount is not considered as additional security amount in its truespirit, as per terms of the agreement the right of the appellant toproceed in accordance with law to assess the damage suffered andto recover the same from the private respondents, would still remainGintact – The amount deposited ought to have been allowed to beretained till the procedure as contemplated in law to recover thedamages suffered by the appellant was followed.

Partly allowing the appeals, the Court

HELD: 1 In a circumstance of the present nature, when itHis noticed that the termination of the agreement itself was for non-deposit of the additional security amount to the extent of25% of the value, the deposit ordered by the High Court cannotbe classified as additional deposit in terms of the contract, at thatstage. If ultimately the writ petition was taken to its logicalconclusion and the private respondents had succeeded in suchproceedings, only in such event the said amount could have beenconsidered as a belated payment towards additional securitydeposit and in any event, the consideration in that regard wouldbe in terms of the directions that would have been issued by theHigh Court. [Para 15] [1041-G-H; 1042-A-B]

2. Since the writ petition was withdrawn unconditionally,the question is as to whether the respondents were entitled torefund of the amount as a matter of right when all future actionfor disposal of the subject Kendu leaves was at the ……. ‘costand risk’ of the private respondents as per Clause of theagreement relating to termination of the agreement. Hence evenif the said amount is not considered as the additional securityamount in its true spirit, as per the agreement and the right offorfeiture at this stage is not accepted in its technical sense infavour of the appellant, the right of the appellant to recover theloss suffered in terms of the agreement cannot be ignored.[Para 15] [1042-B-C]

3. As the interim prayer and the very writ petition isentertained in the discretionary jurisdiction, in such circumstance,though it is not necessary that a condition is to be imposed inevery case for grant of interim order, if the Court in a given caseimposes the condition, the same is to be treated as being with apurpose and not as an empty formality. [Para 16] [1043-D]

4. In that regard, it is to be noticed that in the instant casein a circumstance where the private respondent had filed the writpetition, even though the High court had permitted the processof re-tender to progress, the finalization thereof had been stayed.If that be the position, the appellant was not in a position toimmediately bring the Kendu leaves for re-auction by receivingthe amount from the subsequent purchaser and the same is likelyto have dissuaded the purchasers to offer the best price due touncertainty looming large. Whether all these and any other factor AB

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Ahas caused the loss to the appellant and the public exchequer isa matter to be determined based on materials and evidence butthe fact remains that such resultant delay was at the instance ofthe private respondent. As per the terms of the agreement, anyloss caused was permissible to be recovered from the respondentafter adjusting the security deposit available. Therefore, even ifBthe amount of deposit made pursuant to the order passed by theHigh Court is not considered as an additional security deposit,the right of the appellant to proceed in accordance with law toassess the damage suffered and to recover the same from theprivate respondents, would still remain intact. As such the depositCordered will have to be considered as a conditional deposit toprotect the interest of the appellant as well. [Para 17][1043-E-H; 1044-A]

5. It is no doubt true, dehors the writ proceedings initiatedby the private respondents and in the absence of such deposit,Doption in any event was open to the appellant to make the recoverythrough legal proceedings or public demand. Apart from the rightavailable to recover the amount by forfeiting the additionalsecurity deposit, the appellant had also clearly indicated that thesubsequent sale would be made at the ‘……cost and risk’ of the private respondents which would mean that the difference of theEcost between the first and second auction and the resultant lossto the appellant if attributable to the private respondents, isrecoverable from the private respondents. However, it is no doubttrue that such recovery is to be made after quantifying the sameby following due process of law. [Para 18] [1044-C-D]F

6. Though at this stage the said amount of deposit as orderedby the High Court cannot be considered as additional securitydeposit nor the actual determination of the loss suffered, when ina circumstance the action of the appellant to re-tender was causedto be deferred, through a proceedings initiated at the instance ofGthe private respondent, the condition to deposit the amountshould have been considered by the High Court in the backgroundof its intent to protect the interest of appellant. In thatcircumstance, when the contention of loss being caused was putforth, the amount ought to have been allowed to be retained tillthe procedure as contemplated in law is followed and a decisionHis taken though not directly as forfeiture. [Para 19] [1044-F-H]

7. The appellant in any event would have the right todetermine the loss suffered and recover the same in accordancewith law as the process to re-tender, was at the ‘…...cost andrisk’ of the private respondent as stated in the notice oftermination. In that circumstance, when it is prima-facie indicatedthat due to the delay caused at the instance of the privaterespondents the value of the Kendu leaves had reduced, therebycausing loss, in view of legal proceedings initiated by the privaterespondents, the Court will have to bear in mind the maxim actuscuriae neminem gravabit, namely, no party should suffer due tothe act of Court. In such event, since the interim order was atthe instance of the respondent, the appellant should be permittedto retain the amount and complete the process by providingopportunity to the private respondents.[Para 20] [1045-A-C]

8. In the above circumstance, the direction to refund theamount unconditionally is not found justified and is accordinglyset aside.[Para 21] [1045-D]

M/s. Atma Ram Properties (P) Ltd. v. M/s. Federal MotorsPvt. Ltd.(2005) 1 SCC 705 : [2004] 6 Suppl. SCR 843– relied on.

Case Law Reference

[2004] 6 Suppl. SCR 843 relied on

Para 16

CIVIL APPELLATE JURISDICTION: Civil Appeal No. 9083of 2019

From the Judgment and Order dated 30.04.2019 of the High Courtof Orissa at Cuttack in WP(C) No. 18718 of 2017

With

Civil Appeal Nos. 9084, 9088, 9089, 9091, 9092, 9093, 9094, 9095,9096, 9097, 9098 and 9099 of 2019

S.K. Padhi,Sr.Adv., Shubhranshu Padhi, Rakshit Jain, AshishYadav, Ms. Anindita Pujari, Aditya Kr.Choudhary, Sukanta Dalai,Gurmeher Vaan Singh, Aman Singh, Vaibhav Prasad Deo, Rajesh SinghChauhan, Advs. for the appearing parties.

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1034SUPREME COURT REPORTS

AThe Judgment of the Court was delivered byA.S. BOPANNA, J.

1. Leave granted.

2. The appellants in eleven of these appeals are the Odisha ForestBDevelopment Corporation Ltd. (“OFDC Ltd.” for short) and the Stateof Odisha is the appellant in two other appeals. The appeals filed by theState of Odisha relate to the same orders in respect of the same privaterespondents who were the writ petitioners regarding whom the OdishaForest Development Corporation Ltd. has also filed the appeal. Further,though separate orders passed by the High Court in different writ petitionsCrelating to various petitioners are assailed in all these appeals, the issueinvolved is the same. Hence all these appeals were clubbed, heardtogether and are accordingly disposed of by this common judgment. Forthe purpose of narration of facts, the case as in Civil Appeal arising outof SLP(C) No.17627/2019, titled Odisha Forest Development CorporationDLtd. vs. M/s Anupam Traders & Anr. is taken note, which reads ashereunder.

3. The appellant OFDC Ltd. issued an e-tender notification dated22.11.2016 inviting offers online from intending purchasers for advancesale of phal Kendu leaf (KL) of 2017 crop as per the ‘lots’ indicated inEthe notification. The private respondent had responded to the notificationand made its offer. The bid was opened on 07.12.2016. The privaterespondent being the successful bidder was required to execute anagreement and deposit the provisional security deposit of Rs.5,00,000/-(Rupees Five Lakh). The private respondent herein executed anagreement dated 20.01.2017. In terms of the agreement, on the actualFquantity of leaves collected, the additional security deposit covering 25%of the purchase price of the lot was to be deposited before 31.05.2017.The private respondent in the instant case was therefore required todeposit the differential security amount of Rs.27,14,765/-less, the securityamount of Rs.5,00,000/- (Rupees Five Lakh) already paid.G4. In view of the requirement to pay the same before 31.05.2017,

G4. In view of the requirement to pay the same before 31.05.2017,the private respondent addressed a letter dated 02.06.2017 seekingextension of time to pay the said security amount. The extension soughtwas declined by the appellant through the communication dated06.06.2017. Since the amount required to be deposited was not made,the appellant cancelled the agreement dated 20.01.2017 by issuing theH

notice dated 21.08.2017. Since such cancellation would be at the ‘costand risk’ of the private respondent, the lot was to be put to re-tender.The appellant accordingly proceeded to issue a fresh e-tender notificationon 22.08.2017 for sale of the same ‘lots’ of the phal Kendu leaves.

5. At that stage the private respondent aggrieved by extension oftime not being granted, filed the writ petition in W.P.(C) No.11498/2017,the same was withdrawn and a writ petition bearing W.P.(C) No.18718/2017 was filed wherein the order dated 21.08.2017 passed by the appellantcancelling the agreement dated 20.01.2017 as also the subsequent AuctionNotice dated 22.08.2017, were assailed. In the said writ petition, interimorder against the subsequent auction through notice dated 22.08.2017was sought. While considering the same, the High Court while allowingthe appellant to proceed with the subsequent tender process, had stayedthe finalization of the sale subject to the private respondent hereindepositing an amount of Rs.20,00,000/- (Rupees Twenty Lakhs only)within one week with the appellant herein. The said order was passedon 08.09.2017 wherein it was further directed that the said amount wouldbe kept in a separate deposit by the appellant. The application filed bythe appellant herein seeking vacation of the interim order was consideredand at that stage since the vacation of the stay was not opposed by theprivate respondent herein, it was vacated on 28.03.2018 due to whichthe subsequent sale was completed on 24.04.2018. The private respondentherein thereafter sought leave to withdraw the writ petition in W.P.(C)No.18718/2017 thereby giving up the challenge to the cancellation of theauction process wherein the private respondent had taken part and alsothe challenge to the subsequent auction which had been conducted bythe appellant. The High Court while disposing of the writ petition aswithdrawn, despite objection put forth by the appellant herein directedrefund of the deposit which was made pursuant to its interim order dated08.09.2017. The appellant herein is, therefore, aggrieved by the orderdated 30.04.2019 only to the extent whereby the High Court has directedrefund of the amount available with the appellant.

6. The facts in the connected appeals is to the same effect exceptthe variation in the ‘lot’ number, quantity of Kendu leaves which waspurchased by each of the private respondents therein and the number ofthe writ petition filed before the High Court. The names of the differenttenderers in the individual writ petitions that were filed and the quantumof amount ordered to be deposited by the High Court will be detailed in A

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Alater part of this judgment. However, in all the cases the writ petitionshave been withdrawn and the refund of the deposit ordered is directedto be refunded. In that view, the basic contention which is common, onconsideration would answer all the appeals herein.

7. In that backdrop we have heard Mr. S.K. Padhi, learned seniorBadvocate for the appellants – OFDC Ltd, Ms. Anindita Pujari, learnedadvocate for the appellant State of Odisha and Mr. Aditya KumarChoudhary, learned advocate for the private respondents in all the appealsand perused the materials on record in the appeals.

8. As noticed, though the private respondents herein had filed theCwrit petition at the stage when the earlier agreement entered into pursuantto the tender process in their favour had been cancelled and a subsequentauction was notified, keeping in view the fact that all the privaterespondents herein had chosen to withdraw the writ petitions, whichwas permitted by the High Court through the order dated 30.4.2019, theconsideration of that aspect is not required to be made. The only questionDfor consideration herein is with regard to the correctness or otherwiseof direction issued by the High court to the appellant herein to refund theamount which was a deposit made by the private respondents with theappellant pursuant to the interim order dated 08.09.2017.

9. The learned senior advocate for the appellant while contendingEthat the High court was not justified in ordering the refund has taken usthrough the tender notification dated 22.11.2016, as also the purchaseagreement dated 20.1.2017. In that light, it is pointed out that apart fromthe Earnest Money Deposit (“EMD” for short) to enable a tenderer toparticipate in the tender process, the successful purchaser was requiredFto initially pay the provisional security deposit of Rs.5,00,000/- (RupeesFive Lakhs only) and after final collection of the leaves the differentialamount to the extent of 25% of the purchase price was to be paid within31.05.2017. It is contended that if the said amount was not paid, thesecurity amount already paid was to be forfeited and if any furtherrecoveries are to be made, the appellant had the liberty to do so.G

10. In that light, it is contended that in the instant facts only theinitial deposit of Rs.5,00,000/- (Rupees Five Lakhs only) was made, apartfrom the EMD. The default was committed relating to payment of 25%of the additional security amount which was to be made within the timeframe. Since, the extension of time as requested was rejected and theH

amount was not deposited, the appellant was left with no other alternativebut to terminate the agreement and forfeit the security deposit. It is thecontention of the learned senior advocate that though the High Courthas not specifically indicated deposit to be made as the additional securitydeposit, the extent of deposit ordered in each of the cases makes it clearthat it is relatable to the extent of the additional security amount whichwas to be deposited. In that light, he contends that when the writ petitionwas not pressed, the termination of the agreement would remain validand in such circumstance since the clause contained in the agreementpermits the forfeiture of the preliminary security deposit, the direction torefund the same was not justified. On the other hand, the High Courtought to have allowed retention of the said amount and the liberty torecover additional amount, if any,should have been left open. Hence, hecontends that the direction issued by the High Court to refund the amountis not justified.

11. The learned advocate for the respondent would also refer tothe very same clauses as contained in the agreement. He contends thatthe private respondents herein were before the High Court seeking toexercise their right by assailing the order of termination so as to completethe transaction. With reference to the objection statement, the learnedadvocate would contend that there were circumstances which indicatedthat the price offered by the private respondent was at higher rate whenthe panchayat had fixed a lower price for the Kendu leaf. It is hiscontention that, in any event, the forfeiture can only be to the extent ofthe amount that had already been deposited, namely, the EMD and theinitial deposit regarding which the private respondents have not made agrievance. On referring to the tender conditions as also the clausescontained in the agreement, he contends that as per Clause 9 (iv) even ifthe additional security is not deposited or if any loss is suffered, theprovision made therein is to recover the amount by way of initiating legalproceedings or through the Orissa Public Demand Recovery Act whichoption has been left open to the appellant by the High Court and as suchthe appellant cannot make out any grievance. It is his contention that thevery fact that the High Court while granting the interim order, thoughhad directed deposit of the amount had further directed the appellant tokeep it in a separate fixed deposit, will indicate that the said amount hadno reference whatsoever to the additional security deposit but it wasonly to establish the bonafide of the private respondent who was the A

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Awrit petitioner. Hence, in that circumstance when the High Court hasdirected refund the order does not call for interference.

12. In the light of the above, what is required to be noticed at theoutset is the provision relating to the security deposit contained in Clause9 of the tender notification on which reliance was placed by both sides,Bwhich reads as hereunder:

“Security Deposit

(i) The successful purchaser shall have to pay provisionalSecurity Deposit @ Rs.5.00 lakhs (Rupees Five Lakh) perlot(s) within 21 [Twenty-one] days of issue of ratificationCorder. If the provisional security deposit is not paid atCorporate Office within 21 days from the date of issue ofratification order, the sale of the lot(s) will be cancelled andthe EMD/part S.D. will be forfeited to OFDC. However inexceptional circumstances, the period of 21 days may beextended for a further period of 7 (seven) days by theDDirector (C)/Managing Director of OFDC Ltd. bydepositing of non-refundable fees of Rs.2000/- (Rupees twothousand only) by the purchaser.

(ii) After final collection of leaves, the purchaser has to pay thedifferential amount up to the extent of 25% of Purchase priceEof the lot towards final Security deposit within 31.5.2017, failingwhich it will be considered as violation of purchaser’sagreement and the provisional security deposit will beforfeited.

(iii) The Security Deposit can be adjusted either wholly or in part,as the case may be, by the Director (C)/Managing Director,FOFDC Ltd. towards any amount recoverable from thepurchaser, including the purchase price under provisions ofthe Acts, Rules & Notification of Govt., Purchaser’sagreement and the terms and conditions of the sale noticeand all such deductions shall have to be made good by theGpurchaser by depositing an equal amount within 15 days ofissue of the notice to that effect.

(iv) If the dues to be recovered from the purchaser exceed theamount of security deposit, the amount in excess shall unlessmade good to the Corporation within 15 days from the dateof issue of the notice to that effect, be recoverable by way ofH

initiating legal proceedings or through Orissa Public DemandRecovery Act 1962 (Orissa Act-I of 1963).”

13. Similarly, the agreement entered into between the parties, apartfrom containing a similar clause for security deposit as at Clause No.11,also contains Clause 13 relating to the termination of the agreement.The said clause reads as under: - “13. Termination of Purchaser’s Agreement

(i) If the purchaser fails to pay the first instalment before thedue date of 2[nd] instalment or 2[nd] instalment before due dateof the 3[rd] instalment or third instalment within 15 days afterits due date or any other amount due or to comply with anyof the provisions of the agreement, the Director (C)/Managing Director of OFDC Ltd. may at his discretion andwithout prejudice to any other right and remedies that maybe available to him, terminate this agreement after giving 15days notice and an opportunity of hearing to the purchaserand blacklist the purchaser for a period up to 3 years.

(ii) The order of termination of the agreement shall be deliveredin person to the purchaser or sent by Registered/Speed Post.The termination shall be effective from the date of orderterminating the agreement.

(iii) On termination of the agreement the Corporation shall beentitled to:

a. Forfeit the provisional as well as final security deposit infull.

b. Forfeit the undelivered stocks of Kenduleaves in storage infavour of the Corporation for which payment has been made.

c. Cancel the customer registration with OFDC along withforfeiture of registration fees.

d. (i) Sell the Kenduleaves in the godown for which amountdue has not been paid and undelivered stock of Kenduleavesin storage which has been forfeited in favour of theCorporation under condition 13 (iii) (b) and recover the loss.The same shall also be recoverable by encashment of the Bankguarantee, if any such guarantee has been furnished by the A

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Apurchaser under clause-7, as also from sale of such leaveswhich has been forfeited in favour of the Corporation undercondition 13(iii)(b). Provided if the lot is not resold in the firstsale after issue of order of termination of agreement, loss willbe recovered from the purchaser treating the value of the lotas zero. However, if the lot is sold in subsequent sale, theBamount of sale price recovered as such shall be adjustableagainst balance amount of loss or be refunded to the purchaseras the case may be. However no interest will be payable tothe purchaser on such amount. In the event of cancellation ofpurchaser’s agreement the loss to be recovered from 1[st]Cpurchaser will be computed as follows: - A

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Total expected receipts including all taxes in concerned sale(+) expenditure on storage, supervision etc. up to disposal (-)receipts including taxes from subsequent sale.

(ii) Recover any amount of loss still remaining due throughDLegal proceedings.

(iii) Retain the full amount, if on such resale, higher amount isreceived than is due in respect of the lot and the purchasershall have not right or claim there to.

e. Recover all cost and expenses incurred for recoveringloss.

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f. Recover all penalties imposed and compensation assessednot yet paid.”

In addition to the same, it is noticed that in the communicationFdated 02.08.2017 (Annexure P/8) while issuing the notice calling uponto pay the additional security deposit, the appellant has indicated that ifthe same is not paid the provisional security deposit will be forfeited andthe ‘lot’ will be sold in the ensuing sale. That apart, in the order dated21.08.2017 whereby the agreement was terminated, it was intimatedthat the provisional security is forfeited and that the stock contained inG‘lot’ No. 42 would be resold at the ‘cost and risk’ of the private respondentherein.

14. In the above background, a perusal of the interim order dated08.09.2017 passed in writ petition would indicate that the High Court onconsidering the facts and circumstances of the case has directed thatH

ODISHA FOREST DEVELOPMENT CORPORATION LTD. v.M/S ANUPAM TRADERS & ANR. [A.S. BOPANNA, J.]

the private respondents herein deposit the amount as indicated in theorder, which is shown against their respective names here below in tabularformat for easy reference: - The High Court does not specifically indicate that the amount isrelatable to the additional security that was required to be deposited bythe writ petitioners.

15. In a circumstance of the present nature, when it is noticedthat the termination of the agreement itself was for non-deposit of theadditional security amount to the extent of 25% of the value, the depositordered by the High Court cannot be classified as additional deposit interms of the contract, at that stage. If ultimately the writ petition was A

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Ataken to its logical conclusion and the private respondents had succeededin such proceedings, only in such event the said amount could have beenconsidered as a belated payment towards additional security deposit andin any event, the consideration in that regard would be in terms of thedirections that would have been issued by the High Court. Though thatbe the position and presently since the writ petition was withdrawnBunconditionally, the question is as to whether the respondents were entitledto refund of the amount as a matter of right when all future action fordisposal of the subject Kendu leaves was at the ……. ‘cost and risk’ ofthe private respondents as per Clause 13 of the agreement which isextracted supra. Hence even if the said amount is not considered as theCadditional security amount in its true spirit as per the agreement and theright of forfeiture at this stage is not accepted in its technical sense infavour of the appellant, the right of the appellant to recover the losssuffered in terms of the agreement cannot be ignored.

16. In the above backdrop, before we proceed any further, theDintent of such conditional interim orders passed by the Courts will haveto be gathered. In order to aid the same it will be apposite to take noteof the observations contained in the decision of this Court in the case ofM/s. Atma Ram Properties (P) Ltd. vs. M/s. Federal Motors Pvt.Ltd. (2005) 1 SCC 705 which is as hereunder, E“The power to grant stay is discretionary and flows from thejurisdiction conferred on an appellate Court which is equitable innature. To secure an order of stay merely by preferring an appealis not the statutory right conferred on the appellant. So also, anappellate Court is not ordained to grant an order of stay merelybecause an appeal has been preferred and an application for anForder of stay has been made. Therefore, an applicant for order ofstay must do equity for seeking equity. Depending on the factsand circumstances of a given case an appellate Court, while passingan order of stay, may put the parties on such terms the enforcementwhereof would satisfy the demand for justice of the party foundGsuccessful at the end of the appeal. In South Eastern CoalfieldsLtd. Vs. State of M.P. & Ors., (2003) 8 SCC 648, this Courtwhile dealing with interim orders granted in favour of any party tolitigation for the purpose of extending protection to it, effectiveduring the pendency of the proceedings, has held that such interimorders, passed at an interim stage, stand reversed in the event ofH

ODISHA FOREST DEVELOPMENT CORPORATION LTD. v.M/S ANUPAM TRADERS & ANR. [A.S. BOPANNA, J.]

the final decision going against the party successful in securinginterim orders in its favour; and the successful party at the endwould be justified in demanding compensation and being placed inthe same situation in which it would have been if the interim orderwould not have been passed against it. The successful party candemand (a) the delivery to it of benefit earned by the oppositeparty under the interim order of the High Court, or (b) compensationfor what it has lost, and to grant such relief is the inherent jurisdictionof the Court. In our opinion, while granting an order of stay underOrder 41 Rule 5 of the CPC, the appellate court does havejurisdiction to put the party seeking stay order on such terms aswould reasonably compensate the party successful at the end ofthe appeal in so far as those proceedings are concerned.”

Though the said observation was made in the context of interimorder being considered under Order 41 Rule 5 CPC, it would be moreappropriate in a writ proceedings in as much as, not only the interimprayer but the very writ petition will be entertained in the discretionaryjurisdiction unlike the statutory appeal under Section 96 read with Order41 of CPC. In such circumstance, though it is not necessary that acondition is to be imposed in every case for grant of interim order, if theCourt in a given case imposes the condition, the same is to be treated asbeing with a purpose and not as an empty formality.

17. In that regard, it is to be noticed that in the instant case in acircumstance where the private respondent had filed the writ petition,even though the High court had permitted the process of re-tender toprogress, the finalization thereof had been stayed. If that be the position,the appellant herein was not in a position to immediately bring the Kenduleaves for re-auction by receiving the amount from the subsequentpurchaser and the same is likely to have dissuaded purchasers to offerthe best price due to uncertainty looming large. Whether all these andany other factor has caused the loss to the appellant and the publicexchequer is a matter to be determined based on materials and evidencebut the fact remains that such resultant delay was at the instance of theprivate respondent. As noticed from the terms of the agreement, anyloss caused was permissible to be recovered from the respondent afteradjusting the security deposit available. Therefore, even if the amount ofdeposit made pursuant to the order passed by the High Court is notconsidered as an additional security deposit, the right of the appellant to A

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Aproceed in accordance with law to assess the damage suffered and torecover the same from the private respondents, would still remain intact.As such the deposit ordered will have to be considered as a conditionaldeposit to protect the interest of the appellant as well.

Issues

18. In such event, the issue for consideration is as to whether inBview of the clause contained in 9(iv) of the tender notification the appellantshould be driven to initiate the legal proceedings or for public demandrecovery after refunding the amount which is deposited, as contendedby the learned Advocate for the private respondents despite taking noteof the intent of such deposit. It is no doubt true, dehors the writproceedings initiated by the private respondents and in the absence ofCsuch deposit, option in any event was open to the appellant to make therecovery through such proceedings. It is noticed that apart from theright available to recover the amount by forfeiting the additional securitydeposit, the appellant had also clearly indicated that the subsequent salewould be made at the ‘……cost and risk’ of the private respondentsDherein which would mean that the difference of the cost between thefirst and second auction and the resultant loss to the appellant ifattributable to the private respondents, is recoverable from the privaterespondents. However, it is no doubt true that such recovery is to bemade after quantifying the same by following due process of law.

E19. Presently, though the learned senior advocate for the appellanthad furnished a chart showing the original price as against the resaleprice, thereby projecting the net loss suffered by the appellant, thecorrectness of the same cannot be adjudicated in a proceeding of thepresent nature arising out of a writ proceeding. The matter beingcontractual and also requiring factual determination, the same can onlyFbe done in an appropriate proceeding. Therefore, though at this stagethe said amount of deposit as ordered by the High Court cannot beconsidered as additional security deposit nor the actual determination ofthe loss suffered, when in a circumstance the action of the appellant tore-tender was caused to be deferred, through a proceedings initiated atGthe instance of the private respondent, the condition to deposit the amountshould have been considered by the High Court in the background of itsintent to protect the interest of appellant. In that circumstance, when thecontention of loss being caused was put forth the amount ought to havebeen allowed to be retained till the procedure as contemplated in law isfollowed and a decision is taken though not directly as forfeiture.H

20. As noticed above, the appellant in any event would have theright to determine the loss suffered and recover the same in accordancewith law as the process to re-tender, was at the ‘…...cost and risk’ ofthe private respondent as stated in the notice of termination. In thatcircumstance, when it is prima-facie indicated that due to the delay causedat the instance of the private respondents the value of the Kendu leaveshad reduced, thereby causing loss, in view of legal proceedings initiatedby the private respondents, the Court will have to bear in mind the maximactus curiae neminem gravabit, namely, no party should suffer due tothe act of Court. In such event, since the interim order was at the instanceof the respondent the appellant should in our opinion be permitted toretain the amount and complete the process by providing opportunity tothe private respondents.

21. In the above circumstance, the direction to refund the amountunconditionally is not found justified and is accordingly set aside. Theappellant shall issue appropriate notice(s) to the private respondentsindicating details about the manner in which they computed the lossafter conducting the second auction at the ‘cost and risk’ of the privaterespondent. On receiving response to the same, a detailed considerationbe made and a speaking order be passed in that regard. The respondentsare at liberty to challenge the speaking order to be passed by the appellantand the process being pursuant to a contractual matter the privaterespondent if aggrieved are entitled to avail their legal remedy beforethe appropriate forum, in accordance with law and the entitlement of theamount will be decided therein. As per the speaking order passed by theappellant, if it is found that the loss suffered is within the amount availablein deposit, appropriate adjustment should be made and the balance ifany, be refunded. On the other hand, if the loss caused is found to bemore than the amount in deposit, the amount available shall be adjustedand the appellant would have the liberty of initiating action for the recoveryof the additional amount, if any, in accordance with law. Such procedureshall be completed within the outer limit of two months from the date onwhich a copy of this order is available. Until such time, the amountavailable in fixed deposit as ordered by the High Court shall be retainedin the same position and shall not be appropriated for the benefit of theappellant. The adjustment of the amount by the appellant if made afterpassing the speaking order, the same shall be without prejudice to thecontention of both parties and the same shall be subject to the outcome A

B

C

D

E

F

G

H

Aof the proceedings in the matters where the respondents may challengethe speaking order in accordance with law.

22. Accordingly, all the appeals are allowed in part with no orderas to costs. Pending applications, if any, shall stand disposed of.

B

Kalpana K. Tripathy

Appeals partly allowed.

C

D

E

F

G

H