2019 Supreme(SC) 1303

SUPREME COURT OF INDIA
R. BANUMATHI, A.S. BOPANNA, HRISHIKESH ROY, JJ.
Odisha Forest Development Corporation Ltd. – Appellants
Versus
M/s Anupam Traders & Anr – Respondents
Civil Appeal No. 9083, 9084, 9088, 9089, 9091, 9092, 9093, 9094, 9095, 9096, 9097, 9098, 9099 of 2019 (Arising out of SLP (Civil) No.17627, 18726, 18575, 18846, 18664, 18876, 18916, 18939, 18890, 18800, 18945, 24167, 24166 of 2019)
Decided On : 28-11-2019

IMPORTANT POINTS
(1) Quantum of net loss suffered by appellant cannot be adjudicated in a writ proceeding.
(2) Though it is not necessary that a condition is to be imposed in every case for grant of interim order, if Court in a given case imposes condition, same is to be treated as being with a purpose and not as an empty formality.

Headnote:

(A) Government Contract – e-tender – Advance sale of Phal Kendu leaves – Refusal to extend time to deposit differential security amount – Cancellation of agreement and re-tender – Direction to refund security deposit – When it is noticed that termination of agreement itself was for non-deposit of additional security amount to the extent of 25% of value, deposit ordered by High Court cannot be classified as additional deposit in terms of contract, at that stage – If ultimately writ petition was taken to its logical conclusion and private respondents had succeeded in such proceedings, only in such event said amount could have been considered as a belated payment towards additional security deposit – Even if said amount is not considered as additional security amount in its true spirit as per agreement and right of forfeiture at this stage is not accepted in its technical sense in favour of appellant, right of appellant to recover loss suffered in terms of agreement cannot be ignored – Even if amount of deposit made pursuant to order passed by High Court is not considered as an additional security deposit, right of appellant to proceed in accordance with law to assess damage suffered and to recover same from the private respondents, would still remain intact – As such, deposit ordered will have to be considered as a conditional deposit to protect interest of appellant as well – Difference of cost between first and second auction and resultant loss to appellant if attributable to private respondents, is recoverable from private respondents – However, such recovery is to be made after quantifying the same by following due process of law – Quantum of net loss suffered by appellant cannot be adjudicated in a writ proceeding – Matter being contractual and also requiring factual determination, same can only be done in an appropriate proceeding – Direction to refund amount unconditionally set aside – Appellant shall issue appropriate notice(s) to private respondents indicating details about the manner in which they computed loss after conducting second auction at ‘cost and risk’ of private respondent – On receiving response to the same, detailed consideration be made and a speaking order be passed in that regard. (Paras 15, 17, 18, 20, 21 and 22)

(B) Constitution of India – Article 226 – Writ petition – Though it is not necessary that a condition is to be imposed in every case for grant of interim order, if Court in a given case imposes condition, same is to be treated as being with a purpose and not as an empty formality. (Para 16)

Facts of the case:

Appellants in eleven of these appeals are Odisha Forest Development Corporation Ltd. (OFDC Ltd.) and the State of Odisha is the appellant in two other appeals. The appeals filed by the State of Odisha relate to the same orders in respect of the same private respondents who were the writ petitioners regarding whom the Odisha Forest Development Corporation Ltd. has also filed the appeal. In terms of the agreement, on the actual quantity 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 to deposit the differential security amount of Rs.27,14,765/less, security amount of Rs.5,00,000/- already paid. Only question for consideration herein is with regard to the correctness or otherwise of direction issued by the High court to appellant herein to refund amount which was a deposit made by the private respondents with appellant pursuant to interim order dated 08.09.2017.

Findings of Court:

As per speaking order passed by the appellant, if it is found that the loss suffered is within amount available in deposit, appropriate adjustment should be made and balance if any, be refunded. On the other hand, if loss caused is found to be more than the amount in deposit, amount available shall be adjusted and appellant would have liberty of initiating action for recovery of the additional amount, if any, in accordance with law. Such procedure shall be completed within the outer limit of two months from the date on which a copy of this order is available. Until such time, amount available in fixed deposit as ordered by High Court shall be retained in the same position and shall not be appropriated for the benefit of appellant.

Result : Appeals allowed in part.