P. Ramajayam vs District Collector

T.S. Sivagnanam, J.—The petitioner has filed the above writ petition challenging the order passed by the respondent dated 14.09.1999 and

consequently to direct the respondent to refund a sum of Rs. 3,31,100/- together with interest at 18% p.a. The facts of the case are as follows:

The respondent conducted auction for the right to quarry sand from the Vellar River. The auction was conducted on 16.06.1999. The petitioner

participated in the said auction and he was declared as the highest bidder and his offer of Rs. 27,26,300/- was accepted. The petitioner was

directed to pay the said amount along with the other charges and the total amount payable was Rs. 30,90,300/-. By the proceedings of the

respondent dated 23.06.1999, the petitioner was directed to pay 10% of the said amount forthwith and the remaining 90% of amount to be paid in

seven days. According to the petitioner, he had remitted the 10% of the bid amount within the time stipulated and due to certain difficulties faced

by him, he could not remit the balance 90% of amount within one week. Therefore the petitioner submitted a representation to the Assistant

Director of Geology and Mining on 21.06.1999 and the said representation was forwarded to the respondent on 24.06.1999. Thereafter, the

petitioner also made a representation to the respondent on 29.06.1999. On consideration of the said representation, the impugned order came to

be passed.

In the impugned order, it has been stated that in terms of the condition of auction, which is as per Rule 8(5)(vi) and (vii) of the Tamil Nadu

Minor Minerals Concession Rules, 1959 hereinafter referred as the Rules, the successful bidder shall pay 10% of the bid amount immediately and

90% of the bid amount within a week time thereafter and in view of the said position, the petitioner was informed that the 10% of amount which

was remitted by the petitioner was liable to be forfeited in accordance with Rule 8(5)(vii) of the Rules. Further, the petitioner was informed that

there is no power vested with the respondent for extension of time or for refunding the 10% of amount.

Mr. Srinath Sridevan, learned Counsel appearing for the writ 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 amount already paid immediately after auction shall alone be forfeited. Therefore, the learned Counsel

would submit that the 10% of the bid amount cannot be forfeited and it is only 10% out of the amount initially paid by the petitioner, which is liable

to be forfeited. Further, it is submitted that the District Collector has no power of forfeiture and such power is vested only with the State

Government. Further, it is contented that the forfeiture as penalty, is arbitrary and unreasonable and is violative of Article 14 of the Constitution of

India. The learned Counsel by placing reliance on the Judgement of the Honourable Supreme Court reported in Uberoi Mohinder Singh and

Associates Vs. State of Haryana and Others, would contend that as held by the Honourable Supreme Court, the petitioner was entitled to refund

of the forfeited amount.

Mr. G. Desingu, Special Government Pleader, appearing for the respondent would contend that the petitioner having accepted the auction

conditions and having participated in the same, he cannot now contend that the amount deposited by him cannot be forfeited. The learned 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 or forfeit the EMD and all

amounts paid by the defaulter to the Government. Further, after cancellation of an order granting the quarry lease to the defaulter, the District

Collector may also grant quarry lease in favour of the next below highest bidder. Therefore, the learned Special Government Pleader would submit

that since the petitioner failed to remit the 90% of the bid amount, the District Collector is entitled to forfeit the amount and further the next below

highest bidder one Mr. U.K. Rajendiran was directed to remit the lease amount and security deposit and other charges and he has also remitted

the same. On these grounds, the learned Special Government Pleader submitted that the writ petition deserves to be dismissed.

I have considered the submissions made on either side and perused the materials on record.

The petitioner was granted the right to quarry sand in the Vellar river by proceedings of the respondent dated 14.09.1999. In terms of the

order, the petitioner was directed to pay 10% of the bid amount immediately and 90% of the amount within a period of one week thereafter. It is

not in dispute that the petitioner has remitted the 10% of the bid amount namely Rs. 3,06,100/- and the security deposit and other charges. In the

penultimate portion of the order dated 14.09.1999, it has been clearly stated that if the petitioner fails to deposit 90% of balance amount within 7

days, the entire 10% of Rs. 3,06,100/- together with the security deposit and other charges will be forfeited to the Government. The learned

Counsel by relying upon the Rules 8(5)(b)(vii) of the Rules, which has been extracted in Page 3 of the affidavit filed in the support of the writ

petition, would contend that the forfeiture can be only 10% of the amount deposited and not the entire 10% deposited. On perusal of the rules as

printed and published, Rule 8(5)(b)(vii) read as follows.

(vii) The remaining 90 per cent of the tendered amount or bid amount, deducting the earnest money deposit already made, shall be paid within a

week''s time thereafter. If his balance amount is not paid within the above stipulated time, 10 per cent amount already paid immediately after the

auction or tender opening along with the earnest money deposit shall be forfeited to the Government.

On perusal of the said rule, it is clear that what was liable to be forfeited is ""10% amount already paid"" and not ""10% of the amount"". Therefore

the first submission of the learned Counsel for the petitioner does not merit acceptance.

The next contention is that the respondent has got no jurisdiction to order forfeiture. A perusal of the rule as extracted above makes it

abundantly clear that the forfeited amount shall be ""to the"" Government, in terms of Rule 8(5)(b)(vii) of the Rules. The respondent is the competent

authority to call for auction / tender and if satisfied with the bid offered, the respondent could confirm and grant the lease. The rules also empowers

the District Collector to cancel the lease if the applicant fails to produce the challan for remittance of the amount specified in the order granting

lease. Therefore, the respondent is the competent authority for grant of the lease as well as the cancellation and in default, act as contemplated

under Rule 8(5)(b)(vii). The respondent is also empowered to order forfeiture and send such forfeited amount to the government. Therefore, I am

of the view that the respondent is a competent to pass impugned order directing the forfeiture to the Government.

Finally, the learned Counsel by placing reliance upon the judgment of the Honourable Supreme Court reported in Uberoi Mohinder Singh and

Associates Vs. State of Haryana and Others, referred above, would contend that forfeiture is erroneous. In the said case before the Honourable

Supreme Court, the contractor was ready and willing to perform the contract who was not given no objection from Flood Control Department in

order to make it peaceful to execute the contract by excavacting or taking out the sand. Considering the facts and circumstances of that particular

case, the Honourable Supreme Court held that the respondents therein are not entitled to forfeiture or demand further money. The facts of the

present case is entirely different. The petitioner herein has consciously accepted the contract after agreeing to abide by the terms and conditions

contained therein. After having done so, the petitioner has also remitted the initial 10% of the bid amount and only due to the default committed by

the petitioner, the order directing the forfeiture was issued. Therefore, the circumstances in this case are solely attributed to the petitioner and the

petitioner cannot be allowed to wriggle out from the obligations contained in the order granting the right to quarry sand in his favour. It is settled

proposition of law that the person who has participated in an auction / tender is estopped from questioning the condition of the such auction /

tender. Hence for the above reason, I do not find any merit in the writ petition and accordingly same is dismissed. However, there shall be no

orders as to the costs.