M/S Hornbill Consultants vs The State Of Punjab

IN THE SUPREME COURT OF INDIA

CIVIL APPELLATE JURISDICTION

CIVIL APPEAL NO. OF 2023 (Arising out of Special Leave Petition (Civil) No. 8755 of 2018)

M/S HORNBILL CONSULTANTS ..... APPELLANT

VERSUS

STATE OF PUNJAB AND OTHERS ..... RESPONDENTS

ORDER

SANJIV KHANNA, J.

Leave granted.

2. The civil writ petition filed by the appellant – M/s. Hornbill

Consultants to enforce the right to carry on mining operations and,

in the alternative, refund the amount paid, has been dismissed vide

the impugned judgment, with liberty to the appellant to file a suit or

take any other appropriate action for recovery of the amounts, in

spite of the fact that the Division Bench of the Punjab and Haryana

Signature Not Verified High Court has recorded as under: Digitally signed by BABITA PANDEY Date: 2023.03.02 14:21:33 IST Reason: “4. ...The provisional acceptance was issued on 05.07.2017 and under the terms and conditions the amounts were to be deposited by 5.00 P.M. on

Civil Appeal @ SLP (C) No. 8755 of 2018 Page 1 of 7 10.07.2017 (the weekend had intervened as a result whereof the stipulated period of two days was extended up to 10.07.2017). The amounts were to be deposited in a designated account of the respondents at the Axis Bank. This was notified by a corrigendum dated 15.06.2017. The details regarding the account were also sent through the provisional acceptance dated 05.07.2017.

Two separate transactions of Rs.28.75 lakhs and Rs.9.60 lakhs were to be executed by way of transfers into the designated bank account of the petitioner from his other account. However, due to server problems in his bank, the transfers could not take place. The transfers could not take place even on 08.07.2017 and 09.07.2017 as the banks were closed on account of 8th July, 2017 being a second Saturday of the month and 09.07.2017 being a Sunday. The last date for deposit was 10.07.2017. On 10.07.2017, the said amounts of Rs.28.75 lakhs and Rs.9.60 lakhs were credited into the petitioner's account at 3.40 P.M. and 4.20 P.M., respectively. The cut off time for RTGS transfers was 3.30 P.M. and for NEFT was 4.30 P.M. Thus, the amounts could not be transferred to the respondents' designated account by 5.00 P.M. on 10.07.2017. The petitioner took permission on the telephone from the office of respondent No.2 for depositing the amounts by a demand draft. Accordingly, a demand draft of Rs.68,46,002/- was obtained by the petitioner in favour of the respondent concerned. The petitioner's bank has confirmed that the difficulty was on its part and not on the petitioner's part. This was recorded by the petitioner's e-mail dated 10.07.2017. The petitioner took the demand draft to respondent No.2 on 10.07.2017 but beyond the office hours. He, therefore, took it again to the respondents on 11.07.2017. The respondents retained the demand draft for three months.”

3. The appellant, pursuant to the E-auction Notice dated 13.06.2017,

had submitted the highest bid of Rs.1,85,12,512/- for a mining lease

of the Rurewal Mines, District Amritsar, Punjab, held on

05.07.2017. This bid was accepted by respondent no.2 –

Civil Appeal @ SLP (C) No. 8755 of 2018 Page 2 of 7 Directorate of Mining, Industries and Commerce Department,

Chandigarh, Punjab1, vide letter dated 06.07.2017, written to

General Manager-cum-Mining Officer, District Industries Centre,

Amritsar, Punjab, with a copy to the appellant for information and

necessary action. The appellant had deposited Rs.31,40,634/- as

earnest money at the time of participating in the auction on

05.07.2017. As per condition nos. 24 and 25 of the E-auction Notice

dated 13.06.2017, the appellant was required to deposit security at

the rate of 25% of the annual contract amount within two days of

the acceptance of the bid, failing which the earnest money was to

be forfeited. There was also a stipulation that the appellant would

be barred from taking part in bids for three years. On account of

bank holidays, the last date of payment, which had to be made by

e-transfer to the bank account of the respondents, was 10.07.2017.

4. We have already reproduced the facts as found by the High Court

in the second paragraph of this order, which clearly show that on

10.07.2017 the appellant was successful in making two online

deposits of Rs. 28.75 lakhs and Rs. 9.60 lakhs by way of Real-Time

Gross Settlement2 and National Electronic Funds Transfer3.

However, the amount could not be transferred to the designated

1 For short, ‘Directorate of Mining’.

2 For short, ‘RTGS’.

3 For Short, ‘NEFT’.

Civil Appeal @ SLP (C) No. 8755 of 2018 Page 3 of 7 bank account of the respondents on account of a technical glitch in

the bank servers. The appellant has placed on record the letter

written by HDFC Bank Ltd. dated 11.07.2017 stating that further

RTGS transaction for transfer of Rs. 68,46,002/- in favour of the

respondents could not be made before the closure of

banking/RTGS hours. The appellant had then spoken on telephone

to the office of respondent no.2 – Directorate of Mining, and had

got a demand draft of Rs. 68,46,002/- prepared on 10.07.2017

itself. This fact is undisputed and unchallenged. A photocopy of the

demand draft has been placed on record and is also proved from

the debit entries made in the bank account of the appellant. This

demand draft was taken to the office of respondent no.2 –

Directorate of Mining on 10.07.2017, but beyond office hours.

However, it was given to the office of respondent no.2 – Directorate

of Mining on 11.07.2017. The demand draft was retained by the

respondents for over three months before it was returned. A

speaking order dated 03.10.2017 was issued by respondent no.2 –

Directorate of Mining stating that the appellant had defaulted in

payment of its first instalment. Subsequently, a letter dated

10.10.2017 was sent by respondent no.2 – Directorate of Mining to

the appellant informing that the earnest amount of Rs. 31,40,634/-

had been forfeited as per condition no. 24 of the E-auction Notice

Civil Appeal @ SLP (C) No. 8755 of 2018 Page 4 of 7 dated 13.06.2017 and the provisional approval granted to the

appellant had been cancelled.

5. The impugned judgment records that upon termination of the

contract, the respondents had re-auctioned the mining lease but the

highest bid received was only Rs.45,00,000/- per annum. We may

note here that the fresh auction was not at the risk of the appellant,

there being no stipulation in this regard in the tender. The appellant

had filed a writ seeking issue of certiorari to quash the speaking

order dated 03.10.2017 and the letter dated 10.10.2017 cancelling

the provisional acceptance granted in favour of the appellant and

forfeiting the earnest money. Mandamus was also sought seeking

direction to the respondents to grant approval of mining of Rurewal

Mines, District Amritsar, Punjab, as per the bid given by the

appellant on 05.07.2017. The respondents had opposed the said

prayers and, therefore, 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.

6. The last aspect which needs to be decided is whether the appellant

should be asked to file a civil suit or take any other appropriate

remedy for recovery of the amount forfeited.

Civil Appeal @ SLP (C) No. 8755 of 2018 Page 5 of 7

7. In the present case, the writ petition filed on or around 23.10.2017

was dismissed by the Division Bench of the High Court on

16.02.2018. Thereafter, the appellant had filed the present special

leave petition in which notice was issued on 16.04.2018. The matter

has remained pending in the writ court and this Court for

approximately the last six years.

8. It is, no doubt, correct that in contractual matters, the High Courts

do not like to exercise extraordinary jurisdiction under Article 226 of

the Constitution of India, even though this power is plenary in nature

and not limited by any provision of the Constitution of India; as

normally, 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.4 We

are, in view of the lapse of time, inclined to allow the appeal in order

to prevent any further rounds of litigation between the parties when

the facts on record are crystal clear and do not require a detailed

4 This is a matter of prudence and the courts, while exercising writ jurisdiction, normally do not entertain

a dispute which would require adjudication of contesting questions and conflicting claims of parties which require determination of correct facts for due application of law. However, in the realm of legal theory and jurisprudence, a writ court exercising power under Article 226 of the Constitution of India can, if required, take oral evidence.

Civil Appeal @ SLP (C) No. 8755 of 2018 Page 6 of 7 review. The aspect of arbitrary and erratic conduct on the part of

the respondents has been addressed and elucidated earlier.

9. Keeping in view the aforesaid principles, and in the facts of the

present case, we allow the present appeal, set aside the impugned

judgment, and direct the respondents to refund Rs. 31,40,634/-, the

earnest money deposited by the appellant. This payment should be

made within a period of eight weeks from the date a copy of this

order is received by respondent no.2 – Directorate of Mining. In

case the refund/payment is made within the said period, no interest

would be payable by the respondents to the appellant. However, in

case the payment is made beyond the stipulated period, the

respondents would be liable to pay interest at the rate of 8% per

annum to the appellant from the date of this order till the date of

payment. There shall be no order as to costs.

......................................J. (SANJIV KHANNA)

......................................J. (M.M. SUNDRESH) NEW DELHI;

MARCH 02, 2023.

Civil Appeal @ SLP (C) No. 8755 of 2018 Page 7 of 7