NAYAN SHAH Vs. STATE OF GUJARAT

JUDGEMENT

(1.) INVOKING jurisdiction of this Court under Article 226 read with Articles 14, 16 and 19 (1) (g) of the Constitution of India, the petitioners of all these three petitions have inter alia prayed that this Court may issue appropriate writ, order or direction, if need be, a writ of mandamus directing the respondents to refund the amount of Earnest Money Deposit (hereinafter referred to as 'the EMD') deposited by the petitioners to the tune of Rs. 5 lakhs in each case. In two petitions filed in the year 2006, the State of Gujarat is shown as party respondent no. 1, and the respondent-State is served through the Ministry of Industrial Affairs of State of Gujarat, Sachivalaya, Gandhinagar. In the third petition filed in the year 2007 i. e. Special Civil Application No. 10162 of 2007, the respondent-Gujarat Industrial Investment Corporation Ltd. (hereinafter referred to as 'the respondent-Corporation') is the only party respondent. The parties are served.

(2.) I have heard Shri Vinay Pandya, learned Assistant Government Pleader, appearing on behalf of the respondent-State in two petitions and Shri R. D. Dave, learned counsel appearing for the respondent-GIIC.

(3.) IT is the say of each of the petitioners that the respondent-Corporation decided to forfeit the amount of Rs. 5 lakhs being EMD which was deposited by each petitioner with the respondent-Corporation in pursuance of the auction advertisement issued by the respondent-Corporation for the sale of assets of its borrower unit M/s. Hello Industries Ltd. . The grievance of each petitioner is that the order of forfeiture of EMD by the respondent-Corporation is arbitrary, illegal and unreasonable, and the same is not otherwise sustainable in the eye of law being unfair, and therefore, the action of forfeiting the amount of EMD may be held bad and unconstitutional. It is also the say of each petitioner that the decision of forfeiture of amount of EMD was taken without offering the opportunity of being heard to the petitioners, especially when none of the petitioners was the highest or the first bidder of the auction held. The petitioners have given various reasons to buttress their say. The first say is that the forfeiture has been affected despite the respondent-Corporation itself had accepted the offer of the highest bidder i. e. one M/s. Choksi Associates. The day on which the bid of M/s. Choksi Associates was accepted and the said bidder was given an opportunity to pay up the agreed amount in the stipulated period, the petitioners had become entitled for refund of the amount of EMD. Most of the facts placed by all the petitioners are similar in all the three petitions, but because of some difference looking to the facts, it would be beneficial to state the say of each petitioner firstly in brief as under :