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SUPREME COURT OF INDIA
SANJIV KHANNA, M.M. SUNDRESH, JJ.
M/s Hornbill Consultants – Appellant
Versus
State Of Punjab And Others - Respondents
Civil Appeal No. of 2023 (Arising out of Special Leave Petition (Civil) No. 8755 of 2018)
Decided on : 02-03-2023
Constitution of India – Article 226 – Government contract – Scope of judicial review – Cancellation of provisional acceptance of mining lease granted in favour of appellant and forfeiture of earnest money – In contractual matters, High Courts do not like to exercise extraordinary jurisdiction under Article 226 of Constitution of India, even though this power is plenary in nature and not limited by any provision of Constitution of India – Normally, when disputed questions of fact arise, adjudication in a civil court is more appropriate, just and fair – Nevertheless, this is not an absolute rule; more so in cases when orders passed by government authorities are arbitrary, unfair or unreasonable and where facts are not in dispute and are easily ascertainable – In view of lapse of time, in order to prevent any further rounds of litigation between parties when facts on record are crystal clear and do not require a detailed review, appeal allowed – Impugned judgment set aside and respondents directed to refund earnest money deposited by appellant. (Paras 8 and 9)
Facts of the case:
Civil writ petition filed by the appellant – M/s. Hornbill Consultants to enforce the right to carry on mining operations and, in the alternative, refund the amount paid, has been dismissed vide the impugned judgment, with liberty to the appellant to file a suit or take any other appropriate action for recovery of the amounts,
Findings of Court:
Payment should be made within a period of eight weeks from the date a copy of this order is received by respondent no.2 – Directorate of Mining. In case the refund/payment is made within the said period, no interest would be payable by the respondents to the appellant. However, in case the payment is made beyond the stipulated period, the respondents would be liable to pay interest at the rate of 8% per annum to the appellant from the date of this order till the date of payment.
Result : Appeal allowed.
ORDER :
SANJIV KHANNA, J.
Leave granted.
2. The civil writ petition filed by the appellant – M/s. Hornbill Consultants to enforce the right to carry on mining operations and, in the alternative, refund the amount paid, has been dismissed vide the impugned judgment, with liberty to the appellant to file a suit or take any other appropriate action for recovery of the amounts, in spite of the fact that the Division Bench of the Punjab and Haryana High Court has recorded as under:
“4. ...The provisional acceptance was issued on 05.07.2017 and under the terms and conditions the amounts were to be deposited by 5.00 P.M. on 10.07.2017 (the weekend had intervened as a result whereof the stipulated period of two days was extended up to 10.07.2017). The amounts were to be deposited in a designated account of the respondents at the Axis Bank. This was notified by a corrigendum dated 15.06.2017. The details regarding the account were also sent through the provisional acceptance dated 05.07.2017.
Two separate transactions of Rs.28.75 lakhs and Rs.9.60 lakhs were to be executed by way of transfers into the designated bank account of the petitioner from his other account. However, due to server problems in his bank, the transfers could not take place. The transfers could not take place even on 08.07.2017 and 09.07.2017 as the banks were closed on account of 8th July, 2017 being a second Saturday of the month and 09.07.2017 being a Sunday. The last date for deposit was 10.07.2017. On 10.07.2017, the said amounts of Rs.28.75 lakhs and Rs.9.60 lakhs were credited into the petitioner's account at 3.40 P.M. and 4.20 P.M., respectively. The cut off time for RTGS transfers was 3.30 P.M. and for NEFT was 4.30 P.M. Thus, the amounts could not be transferred to the respondents' designated account by 5.00 P.M. on 10.07.2017. The petitioner took permission on the telephone from the office of respondent No.2 for depositing the amounts by a demand draft. Accordingly, a demand draft of Rs.68,46,002/- was obtained by the petitioner in favour of the respondent concerned. The petitioner's bank has confirmed that the difficulty was on its part and not on the petitioner's part. This was recorded by the petitioner's e-mail dated 10.07.2017. The petitioner took the demand draft to respondent No.2 on 10.07.2017 but beyond the office hours. He, therefore, took it again to the respondents on 11.07.2017. The respondents retained the demand draft for three months.”
3. The appellant, pursuant to the E-auction Notice dated 13.06.2017, had submitted the highest bid of Rs.1,85,12,512/- for a mining lease of the Rurewal Mines, District Amritsar, Punjab, held on 05.07.2017. This bid was accepted by respondent no.2 – Directorate of Mining, Industries and Commerce Department, Chandigarh, Punjab1[For short, ‘Directorate of Mining’], vide letter dated 06.07.2017, written to General Manager-cum-Mining Officer, District Industries Centre, Amritsar, Punjab, with a copy to the appellant for information and necessary action. The appellant had deposited Rs.31,40,634/- as earnest money at the time of participating in the auction on 05.07.2017. As per condition nos. 24 and 25 of the E-auction Notice dated 13.06.2017, the appellant was required to deposit security at the rate of 25% of the annual contract amount within two days of the acceptance of the bid, failing which the earnest money was to be forfeited. There was also a stipulation that the appellant would be barred from taking part in bids for three years. On account of bank holidays, the last date of payment, which had to be made by e-transfer to the bank account of the respondents, was 10.07.2017.
4. We have already reproduced the facts as found by the High Court in the second paragraph of this order, which clearly show that on 10.07.2017 the appellant was successful in making two online deposits of Rs. 28.75 lakhs and Rs. 9.60 lakhs by way of Real-Time Gross Settlement2[For short, ‘RTGS’.] and National Electronic Funds Transfer3[F
Government contract – Scope of judicial review – Normally, when disputed questions of fact arise, adjudication in a civil court is more appropriate, just and fair – Nevertheless, this is not an absol....
Presence of an arbitration clause would oust jurisdiction under Article 226.
Authorities under Article 12 must ensure decisions reflect fairness and rationality, especially regarding individual circumstances such as health issues affecting compliance.
Forfeiture of earnest money in mining lease applications is only permissible when there is evidence of false documentation; procedural requirements lacking a penal clause are considered directory.
Borrower must be informed about date of auction of secured asset.
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