When Orders Of Govt Authorities Are Arbitrary And Facts Are Not In Dispute, Adjudication In Civil Court Is Not Required- SC

The Supreme Court directed the Directorate of Mining, Industries and Commerce Department, Chandigarh, Punjab (Directorate of Mining) to refund the earnest money deposited by the appellant as the facts on record were crystal clear and did not require a detailed review for the purpose of recovery of amount forfeited.

The Bench of Justice Sanjiv Khanna and Justice M.M. Sundresh observed that “... 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 the orders passed by the government authorities are arbitrary, unfair or unreasonable and where the facts are not in dispute and are easily ascertainable.”

Advocate Anubha Agrawal appeared for the appellant and Advocate Avishkar Singhvi appeared for the respondent.

The issue before the Apex Court was whether the appellant should be asked to file a civil suit or take any other appropriate remedy for recovery of the amount forfeited by the Directorate of Mining.

In this case, the appeal had been preferred against the impugned order of Division Bench of Punjab & Haryana High Court whereby writ petition filed by the appellant to enforce the right to carry on mining operations and, in the alternative, refund the earnest amount paid had been dismissed with liberty to file a suit or take any other appropriate action for recovery of the amounts.

The appellant, pursuant to the E-auction, had submitted the highest bid of Rs.1,85,12,512/- for a mining lease of the Rurewal Mines, District Amritsar, Punjab. The bid was accepted by the respondent- Directorate of Mining. The appellant successfully deposited the amount online by way of RTGS and NEFT, but the amount could not be transferred to the designated bank account of the respondents due to technical glitch.

Thereafter, a demand draft was prepared for the amount left but the same was taken to the office of the Directorate of Mining beyond office hours. The demand draft was retained by the respondents for over three months and was returned. Subsequently a letter was sent to the appellant informing that the earnest amount had been forfeited as per condition no. 24 of the E-auction Notice and the provisional approval granted to the appellant had been cancelled.

The Apex Court was apprised of the fact that after the contract was terminated the respondents had re-auctioned the mining lease, but the highest bid received was only Rs.45,00,000/- per annum.

The Apex Court noted that the fresh auction was not at the risk of the appellant as there was no stipulation regarding the same. “...therefore, (the respondents) are to be blamed for the loss. Had the respondents taken a pragmatic and reasonable view and stand, public exchequer would not have suffered any loss.” said the Court.

Accordingly, the Apex Court allowed the appeal and directed the respondent to refund the earnest money.

Cause Title- M/s Hornbill Consultants v. State of Punjab & Ors.

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