MOHAMMAD GAZI Vs. STATE OF MADHYA PRADESH

JUDGEMENT

(1.) Leave granted.

(2.) Whether a person can be penalised for no fault of his merely by resorting to equity clause in favour of the respondent-State particularly when such person is found to have not been benefitted or the State deprived of the benefits on account of the stay order issued by the Court is the question of law to be decided in this appeal. Another related question requiring determination is as to whether on account of the pendency of the writ petition filed by another party without impleading the affected person as a party in which the stay order granted by the Court, such person can be directed to forfeit a part of the security amount deposited by him particularly when the Court itself found that even the equities were equally balanced between the State and such person.

(3.) The facts of the case giving rise to the determination of the questions of law formulated hereinabove are that a tender notice inviting tenders for disposal of Tendu leaves for 1995 session was issued by the respondent-State on 20th November, 1995. Respondent No. 4 offered his tender in respect of different lots including Lot No. 597 and was declared the highest bidder for the said lot on 20th December, 1995. On account of some complaints made by other bidders and on account of alleged manipulations on the part of the official-respondents the highest bid of the respondent No. 4 was not accepted and his tender cancelled by order dated 27th January, 1996. Fresh notice for tenders for the aforesaid lot were issued on 20th May, 1996 in which the appellant herein was declared the highest bidder. In the meantime, the respondent No. 4 filed writ petition No. 2147/96 in the High Court challenging the order of cancellation of tender dated 27th January, 1996 and re-tender notice dated 23rd May, 1996. He also prayed for interim relief to the extent that pursuant to the fresh tender notice dated 20th May, 1996 the official respondents be restrained from executing any fresh agreement. The High Court vide order dated 18-6-1996 issued an interim direction restraining the official-respondents from taking any step pursuant to the fresh tender notice. It is pertinent to note that the appellant herein was not impleaded as a party-respondent in the aforesaid writ petition. He received a letter from official-respondents 1 to 3 calling upon him to execute purchase agreement as per Clause 7(2) of the tender notice with the Conservater of Forests after depositing the balance security as shown in the letter dated 1-9-1996. Consequently, the appellant deposited a sum of Rs. 2,68,217.72 as security amount. The appellant also filed an application for intervention in the writ petition filed by respondent No. 4 which was rejected on 1-4-1997. The writ petition filed by the respondent No. 4 was disposed of by a learned single Judge of the High Court by quashing order dated 27-1-1996 to the extent by which the earnest money deposited by respondent No. 4 had been directed to be forfeited and a direction was issued to refund the earnest money to respondent No. 4. After disposal of the aforesaid writ petition the appellant requested the respondents 2 and 3 to refund his security amount of Rs. 2,68,217.72 vide his leter dated 24-4-1997. He pleaded that since Tendu leaves, which was a perishable item, had already perished and rotten with the result that its value had become useless by lapse of time. He also prayed for 18% interest on the security amount which was alleged to have illegally been detained by official-respondents for no fault of the appellant. It is contended by the appellant that after his letter dated 24-4-1997 the respondent No. 2 sent an ante dated letter dated 10-4-1997 directing the appellant to execute the agreement by 10-5-1997 and deposit the remaining tender price in four instalments as detailed therein. Apprehending that the authorities might proceed to forfeit his earnest money and blacklist him, the appellant was constrained to file Writ Petition No. 1934/97 in the High Court praying for quashing of order dated 1-4-1997 and refund of earnest money along with an amount of Rs. 10 lakhs claimed as damages. He further prayed that he should not be compelled to enter into an agreement in pursuance to letter dated 19-6-1996. The writ petition was allowed by a learned single Judge of the High Court on 10-12-1997 with a direction to the respondents 1 to 3 to refund the security amount to the appellant forthwith. Not satisfied with the order of the learned single Judge, the respondents 1 to 3 filed a Letters Patent Appeal before the Division Bench of the High Court which was partly allowed vide the order impugned in this appeal.