P. Ramajayam v. District Collector,Cuddalore District,Cuddalore

IN THE HIGH COURT OF JUDICATURE AT MADRASDATED : 30.10.2009CORAMTHE HONOURABLE MR. JUSTICE T.S. SIVAGNANAMW.P.No.4504 of 2000P. Ramajayam... PetitionerVs.District Collector,Cuddalore District,Cuddalore.... RespondentPrayer: Petition filed under Article 226 of the Constitution ofIndia for the issuance of writ of certiorarified mandamus, callingfor the records pertaining to the order dated 14.09.99 bearing No.Na.Ka.Si/Ka.Si./Ka.&Su 1532/99, issued by the respondent herein andquash the same and consequentially direct the respondent to refund tothe petitioner the sum of Rs.3,31,100/- together with interest at 18%per annum till the date of actual refund.For Petitioner :Mr.Srinath SridevanFor Respondent :Mr.G.Desingu, Special Government PleaderO R D E RThe petitioner has filed the above writ petition challengingthe order passed by the respondent dated 14.09.1999 and consequentlyto direct the respondent to refund a sum of Rs.3,31,100/- togetherwith interest at 18% p.a. The facts of the case are as follows:-" The respondent conducted auction for the right to quarrysand from the Vellar River. The auction was conducted on 16.06.1999.The petitioner participated in the said auction and he was declaredas the highest bidder and his offer of Rs.27,26,300/- was accepted.The petitioner was directed to pay the said amount along with theother charges and the total amount payable was Rs.30,90,300/-. Bythe proceedings of the respondent dated 23.06.1999, the petitionerwas directed to pay 10% of the said amount forthwith and theremaining 90% of amount to be paid in seven days. According to thepetitioner, he had remitted the 10% of the bid amount within the timestipulated and due to certain difficulties faced by him, he could notremit the balance 90% of amount within one week. Therefore thepetitioner submitted a representation to the Assistant Director ofGeology and Mining on 21.06.1999 and the said representation wasforwarded to the respondent on 24.06.1999. Thereafter, thepetitioner also made a representation to the respondent on https://hcservices.ecourts.gov.in/hcservices/

29.06.1999. On consideration of the said representation, theimpugned order came to be passed". 2. In the impugned order, it has been stated that in termsof the condition of auction, which is as per rule 8(5)(vi) and (vii)of the Tamil Nadu Minor Minerals Concession Rules, 1959 hereinafterreferred as the Rules, the successful bidder shall pay 10% of the bidamount immediately and 90% of the bid amount within a week timethereafter and in view of the said position, the petitioner wasinformed that the 10% of amount which was remitted by the petitionerwas liable to be forfeited in accordance with Rule 8(5)(vii) of theRules. Further, the petitioner was informed that there is no powervested with the respondent for extension of time or for refunding the10% of amount. 3. Mr. Srinath Sridevan, learned counsel appearing for thewrit petitioner would contend that under the relevant Rule if the 90%of the bid amount is not paid within the time, the 10% of the amountalready paid immediately after auction shall alone be forfeited.Therefore, the learned counsel would submit that the 10% of the bidamount cannot be forfeited and it is only 10% out of the amountinitially paid by the petitioner, which is liable to be forfeited.Further, it is submitted that the District Collector has no power offorfeiture and such power is vested only with the State Government.Further, it is contented that the forfeiture as penalty, is arbitraryand unreasonable and is violative of Article 14 of the Constitutionof India. The learned counsel by placing reliance on the Judgementof the Honourable Supreme Court reported in 1991 (2) S.C.C.P. 362(Uberoi Mohinder Singh Vs. State of Haryana) would contend that asheld by the Honourable Supreme Court, the petitioner was entitled torefund of the forfeited amount. 4. Mr.G.Desingu, Special Government Pleader, appearing forthe respondent would contend that the petitioner having accepted theauction conditions and having participated in the same, he cannot nowcontend that the amount deposited by him cannot be forfeited. Thelearned counsel would further submit that in terms of Rule 8 (5)(b)(vii) and 8(7) of the Rules, the respondent is empowered to cancel orforfeit the EMD and all amounts paid by the defaulter to theGovernment. Further, after cancellation of an order granting thequarry lease to the defaulter, the District Collector may also grantquarry lease in favour of the next below highest bidder. Therefore,the learned Special Government Pleader would submit that since thepetitioner failed to remit the 90% of the bid amount, the DistrictCollector is entitled to forfeit the amount and further the nextbelow highest bidder one Mr.U.K.Rajendiran was directed to remit thelease amount and security deposit and other charges and he has alsoremitted the same. On these grounds, the learned Special GovernmentPleader submitted that the writ petition deserves to be dismissed. https://hcservices.ecourts.gov.in/hcservices/

5. I have considered the submissions made on either sideand perused the materials on record.6. The petitioner was granted the right to quarry sand inthe Vellar river by proceedings of the respondent dated 14.09.1999.In terms of the order, the petitioner was directed to pay 10% of thebid amount immediately and 90% of the amount within a period of oneweek thereafter. It is not in dispute that the petitioner hasremitted the 10% of the bid amount namely Rs.3,06,100/- and thesecurity deposit and other charges. In the penultimate portion ofthe order dated 14.09.1999, it has been clearly stated that if thepetitioner fails to deposit 90% of balance amount within 7 days, theentire 10% of Rs.3,06,100/- together with the security deposit andother charges will be forfeited to the Government. The learnedcounsel by relying upon the Rules 8(5)(b)(vii) of the Rules, whichhas been extracted in Page 3 of the affidavit filed in the support ofthe writ petition, would contend that the forfeiture can be only 10%of the amount deposited and not the entire 10% deposited. On perusalof the rules as printed and published, Rule 8(5)(b)(vii) read asfollows."(vii) The remaining 90 per cent of the tenderedamount or bid amount, deducting the earnest money depositalready made, shall be paid within a week's timethereafter. If his balance amount is not paid within theabove stipulated time, 10 per cent amount already paidimmediately after the auction or tender opening along withthe earnest money deposit shall be forfeited to theGovernment" (emphasis supplied).7. On perusal of the said rule, it is clear that what wasliable to be forfeited is "10% amount already paid" and not "10% ofthe amount". Therefore the first submission of the learned counselfor the petitioner does not merit acceptance. 8. The next contention is that the respondent has got nojurisdiction to order forfeiture. A perusal of the rule as extractedabove makes it abundantly clear that the forfeited amount shall be"to the" Government, in terms of Rule 8(5)(b)(vii) of the Rules. Therespondent is the competent authority to call for auction / tenderand if satisfied with the bid offered, the respondent could confirmand grant the lease. The rules also empowers the District Collectorto cancel the lease if the applicant fails to produce the challan forremittance of the amount specified in the order granting lease.Therefore, the respondent is the competent authority for grant of thelease as well as the cancellation and in default, act as contemplatedunder Rule 8(5)(b)(vii). The respondent is also empowered to orderforfeiture and send such forfeited amount to the government.Therefore, I am of the view that the respondent is a competent topass impugned order directing the forfeiture to the Government. https://hcservices.ecourts.gov.in/hcservices/

9. Finally, the learned counsel by placing reliance uponthe judgment of the Honourable Supreme Court reported in 1991 (2)S.C.C.P. 362 (Uberoi Mohinder Singh Vs. State of Haryana) referredabove, would contend that forfeiture is erroneous. In the said casebefore the Honourable Supreme Court, the contractor was ready andwilling to perform the contract who was not given no objection fromFlood Control Department in order to make it peaceful to execute thecontract by excavacting or taking out the sand. Considering thefacts and circumstances of that particular case, the HonourableSupreme Court held that the respondents therein are not entitled toforfeiture or demand further money. The facts of the present case isentirely different. The petitioner herein has consciously acceptedthe contract after agreeing to abide by the terms and conditionscontained therein. After having done so, the petitioner has alsoremitted the initial 10% of the bid amount and only due to thedefault committed by the petitioner, the order directing theforfeiture was issued. Therefore, the circumstances in this case aresolely attributed to the petitioner and the petitioner cannot beallowed to wriggle out from the obligations contained in the ordergranting the right to quarry sand in his favour. It is settledproposition of law that the person who has participated in an auction/ tender is estopped from questioning the condition of the suchauction / tender. Hence for the above reason, I do not find anymerit in the writ petition and accordingly same is dismissed.However, there shall be no orders as to the costs.ogy Sd/Asst.Registrar/true copy/Sub Asst.RegistrarToThe District Collector,Cuddalore District,Cuddalore.1CC to Government Pleader (SR.56077)Pre-deliver order in W.P.No.4504 of 2000GV (CO)SS (06.11.2009)