Non-Diligent & Lackadaisical Approach By Contractors: Supreme Court Upholds Forfeiture Of Security Deposit By Forest Department
The Supreme Court upheld the forfeiture of security money deposited by successful bidders with forest department after it noted that their approach was non diligent and lackadaisical in completing the work.
The Court was hearing an appeal by special leave against the judgment of the High Court where the Respondents challenged the notice passed by the Divisional Forest Office forfeiting the security amount of the Respondents.
The bench of Justice Vikram Nath and Justice Satish Chandra Sharma observed, “It is the fact that in spite of repeated notices by the Appellants calling upon the Respondents to complete the work within a stipulated period, the Respondents failed to come forward and do the needful. Respondents came forward by filing a Writ Petition, only after the communication dated 17.01.2000 forfeiting the security amount. It reflects on the non-diligent and lackadaisical approach adopted by the Respondents which cannot be overlooked by this Court.”
Brief Facts-
The Forest Department issued a public notice inviting registered contractors for a sale auction. The Respondents, as successful bidders, entered into an agreement with the Appellant. Approval for the auction was granted, and the Respondents were subsequently asked to deposit the bid amount and complete the work. Despite reminders, the Respondents failed to comply, leading to the forfeiture of their security deposit and re-auctioning of the lot. The Respondents filed a Writ Petition, arguing that delayed approval invalidated their obligation. The High Court sided with the Respondents, citing the Conditions of Sale, and ordered a refund of the forfeited amount against which the appellant came before the Supreme Court.
The Court noted that in the absence of signatures according to any sanction to overwriting in manuals of conditions of sale, the High Court has seriously erred by making a finding that the Manual for Years 1980-81 will supersede the Manual for Years 1987-88.
The Court further noted that the Manual of 1987-88 has brought in amendments that imposed the responsibility on the contractor to enquire about the acceptance of the contract if no information is received within 35 days and also grants a deemed approval in cases where the approval is not received within the stipulated period.
The Court held that the security amount deposited by the Respondents rightly deserves to be forfeited by the Appellants.
Accordingly, the Court set aside the impugned order and allowed the appeal.
Cause Title: Chief Conservator Of Forest & Ors. v. Virendra Kumar & Ors. (Neutral Citation: 2024 INSC 514)
