w w w . L a w y e r S e r v i c e s . i n



Shareif Nasimudeen, Represented by his authorised Power of Attorney S. Saifudheen v/s Principal Secretary, Forest & Wild Life Department, Secretariat, Thiruvananthapuram & Others

    WP(C). No. 31468 of 2015

    Decided On, 03 March 2022

    At, High Court of Kerala

    By, THE HONOURABLE MR. JUSTICE P.V. KUNHIKRISHNAN

    For the Petitioner: P.A. Mohammed Shah, Mary Reshma George, P.M. Mazna Mansoor, Sooraj T. Elenjickal, Advocates. For the Respondents: Government Pleader, Saji Varghese, Advocate, T.P. Sajan, Spl. G.P (Forest).



Judgment Text

1. The petitioner participated in auction at timber sales depot of respondent Nos 4 and 5 during the year 2009-2010. He also participated in the auction at other depots too. Altogether, the petitioner purchased timber worth Rs.6.40 crores from all the depots in Kerala. It is the case of the petitioner that he deposited Rs.3,30,47,337/- as earnest money deposit (EMD), security deposit and as cost of the timber. The petitioner was a non resident Indian, who started furniture business in Kerala after his 30 years hard work at abroad. His intention was to export furnitures. Due to some global financial crisis, the purchasing company of the furnitures at Dubai temporarily blocked their transaction for three months and the petitioner was not able to pay the balance amount to the respondents as per the terms of auction. Hence, the petitioner approached the Divisional Forest Officers concerned for extension of three months time for depositing the balance amount and for removing the timber from the depot. The same was rejected. It is the case of the petitioner that the price quoted in auction by the petitioner was the highest prices ever quoted by any contractor who intended to purchase timber during that time. Even then the petitioner's request to extend the time was not considered by the authorities and according to the petitioner, the forest officials were colluding with the other contractors because the petitioner was a new entrant in this field at that time. Since the petitioner was not able to pay the balance amount, the depots re-auctioned the timber. Except at 4th and 5th timber sale depots, the sale of timber was confirmed in the re auction for less than the price quoted by the petitioner. It is the case of the petitioner that even the price was less than the minimum sale price fixed by the Government. Therefore, the petitioner filed WP(C) No.36661 of 2010 before this Court. Now the above case was disposed of by this Court recently directing the authority to pass final orders regarding the risk and costs and the petitioner was also allowed to submit representations narrating his grievance.

2. On 8.12.2011, the 3rd respondent issued an order in which it is stated that the re-auctions are finalised at Aruvacode depot and Nedumkayam depot at the risk and cost of the petitioner and the amount of risk and cost was fixed by Rs.6,19,931/-. Exts P5 and P7 are the orders passed by the Divisional Forest Officer, Palakkad, dated 8.12.2011. According to the petitioner, an amount of Rs.38,20,000/- is with the respondents as security deposit and the value of timber which was deposited in connection with the auction in Aruvacode depot and Nedumkayam depot. Hence, it is the case of the petitioner that an amount of Rs.32,00,069/- is due to the petitioner even if the risk and cost fixed based on Exts P5 and P7 are adjusted. The petitioner approached the Government for settling the entire dues. But the said request was rejected by the Government as per Ext P9 stating that WP(C) No.36661 of 2010 is pending. It is the case of the petitioner that now WP(C) No.36661 of 2010 is already disposed of and moreover in that case the dispute was different. The writ petition was filed when revenue recovery notice was issued by 6th respondent for an amount of Rs.6,19,931/- as evident by Ext P10. This writ petition is filed with the following prayers:

i) To issue a Writ of Certiorari quashing Ext P10 Revenue recovery demand notice issued by the 6th Respondent.

ii) Issue a writ of the nature of mandamus directing the respondents to disburse an amount of Rs.32,00,069/- (Thirty Two Lakhs and Sixty Nine only) with interest at least from the date of issuance of Exhibit P4 and P6 to the petitioner forthwith.

iii) Grant such other reliefs which this Hon'ble Court may deem fit grant in the facts and circumstances of the Court.[SIC]

3. Heard the counsel for the petitioner and Special Government Pleader for Forest.

4. The counsel for the petitioner reiterated his contention in the writ petition. The counsel submitted that as per Exts P5 and P7, the 3rd respondent already fixed the liability of the petitioner in accordance to clause 7(a) of Ext R3(a). Thereafter, there is no provision in Ext R3(a) to forfeit the balance amount which is deposited by the petitioner as per Exts P6 and P8. The counsel takes me through the different clauses in Ext R3(a) and submitted that there is no authority to the respondents to forfeit the amount deposited by the petitioner and it is to be refunded to the petitioner. The counsel submitted that even if the petitioner has got grievance against Exts P5 and P7, the petitioner is not challenging the same and the balance amount after deducting the amount as per Exts P5 and P7 may be refunded is the submission. On the other hand, the Special Government Pleader (Forest) Sri.T.P.Sajan submitted that as per condition No.5(e) and 7(a), the petitioner is not entitled the amount. The Government Pleader takes me through the counter affidavit filed by the 3rd respondent on 2.11.2015 and also the statement dated 22.11.2021 filed by the 3rd respondent as directed by this Court.

5. This Court considered the contentions raised by the petitioner and the respondents. For deciding the point raised by the petitioner in this case, clause 5(a) & (b) and also 7(a) of Ext R3(a) is relevant. It would be better to extract the same.





6. As per clause 5(a), the successful bidder has to deposit the amount offered by him in full if the value of the timber is below 20,000/-. If it is above Rs.20,000/-, the successful bidder has to deposit 35% of the bid amount. If the 35% bid amount is above Rs.1,00,000/-, the successful bidder is bound to deposit Rs.1,00,000/- on the date of the sale and the balance amount of 35% after deducting Rs.1,00,000/- within seven days from the date of sale. Admittedly, the petitioner deposited 35% of the bid amount in this case. In Aruvacode depot, the sale was conducted on 31.8.2009 and the petitioner deposited R.1,00,000/-(Rs.20,000/- as EMD and Rs.80,000/- towards 35% of the sale value) in the auction day itself as per sale condition No.5(a). Similarly 35% bid amount was deposited by the petitioner strictly in accordance to clause 5(a) as far as the auction which was conducted at Nedumkayam depot. It is also an admitted fact that the petitioner has not deposited the balance amount. If the successful bidder deposited 35% of the amount and if he is not able to deposit the balance amount as per condition No.7(a) of Ext R3(a), the officer concerned has to asses the damages caused to the department and the successful bidder who did not pay the balance amount is bound to pay the same. As per condition No.7(a), Exts P5 and P7 orders were passed by the 3rd respondent assessing the amount to be paid by the petitioner. Even though the petitioner challenged Exts P5 and P7, it is conceded now that he is ready to pay the amount covered by Exts P5 and P7 and the amount covered by Exts P5 and P7 can be deducted from the 35% amount deposited by the petitioner on the date of auction. The submission of the petitioner is that the balance amount after deducting Exts P5 and P7 may be refunded.

7. The question to be decided is that, whether the respondents can forfeit the 35% bid amount deposited, when the bidder was not able to pay the balance amount offered within time. When this writ petition was heard in part on an earlier date, this Court directed the Special Government Pleader (Forest) to find out whether there is any condition in Ext R3(a) or whether there is any other rule to forfeit the deposited amount (35%), if the bidder failed to pay the balance amount. Accordingly, a statement is filed by the 3rd respondent on 22.11.2021. It is conceded that, Ext R3(a) is the conditions applicable in timber sale. It is also conceded in paragraph 9 of the above statement that clause 7(c) of Ext R3(a) is meant for the case of bidders, who had remitted the balance sale value and taxes within the stipulated time but did not remit the ground rent and has not removed the logs within the time as mentioned in clause 7(b) of the sale condition. It is also conceded in paragraph 9 of the statement that the said clause is not applicable to the petitioner since the petitioner has not remitted full amount of timber as per auction. The Special Government Pleader relied clause 5 of Ext R3(a). Clause 5 (a) stipulate about the payment of amount on the date of auction. There is no dispute to respondents that the petitioner has not paid 35% of the bid amount. If 35% of the bid amount is not paid, as per clause 5(b), the tender will be automatically cancelled and the EMD and the amount deposited will be forfeited. Therefore, clause 5(b) says about a situation where 35% of the bid amount is not paid. In this case that situation will not arise and therefore, clause 5 (b) also is not applicable. Clause 5(c) and (d) says about the time limit for payment of the balance amount. Admittedly, the petitioner has not paid the balance amount. Clause 5(e) says about the situation after the payment of the amount as per Clause 5(c) and about the rent to be payable if the logs are not removed. From the above discussion, it is clear that clause 5(a) to (e) of Ext R3(a) is not applicable in a situation where the persons deposited 35% of the bid amount. The Special Government Pleader conceded that clause 5 and clause 7 of Ext R3(a) are the only provision which deals about the forfeiture of amount. But the Special Government Pleader submitted that since there is default on the part of the petitioner in paying the balance amount, the respondents are at liberty to forfeit the amount. It is an admitted fact that in the re-auction, the timber was sold on a higher rate compared to the offer made by the petitioner. That is why in Exts P5 and P7, no compensation is levied in that regard. Moreover, the Government Pleader was specifically directed to get instruction to find out whether there is any proceedings or order passed by the respondents to forfeit the amount deposited by the petitioner towards 35%. The Government pleader after getting instructions submitted that there is no proceedings forfeiting the amount except Exts P5 and P7 orders. In paragraph 6 of the counter affidavit, it is clearly stated that in Nedumkayam depot 34 out of 38 logs re-auctioned fetch better price than the price quoted by the petitioner. The specific contention in the counter affidavit is that, as per clause 5(b) of Ext R3(a), if any successful bidder fails to remit all the dues within the allowed time from the date of receipt of the confirmation letter, all his bid will be cancelled and all remittance made so far including part value paid will be forfeited without any notice. Those logs will be reauctioned at the risk and cost of the bidder and it is also stated that the amount paid by the petitioner as part value remains forfeited and cannot be returned. This court already considered clause 5(b) of Ext R3(a). That is a situation where a party was not able to pay 35% bid amount. Here is a case where the petitioner deposited 35% of the bid amount in accordance with Ext R3(a) and therefore that contention cannot be accepted. In the counter it is also stated that as per clause 8(a) of Ext R3(a), the amount can be recovered. But clause 8(a) also has no application because it only authorises revenue recovery proceedings in a situation where the amount due to the Government is not received and there is default on the part of the tenderer. Here is a case where the petitioner deposited 35% and he was not able to pay the balance

Please Login To View The Full Judgment!

amount and thereafter reauction was conducted in which admittedly better price than the rate quoted by the petitioner received by the respondents. Therefore, clause 8(a) also has no application. Therefore, according to me, the retention of the amount deposited by the petitioner towards 35% of the bid amount is without any authority. After deducting the amount covered by Exts P5 and P7, the balance amount is to be disbursed to the petitioner. 8. Ext P10 is a revenue recovery based on Exts P5 and P7. Admittedly, there is huge amount in deposit with the respondents from the side of the petitioner. The amount covered by Ext P10 can be adjusted from the 35 % deposit made by the petitioner and the balance can be refunded. Therefore, this writ petition is allowed in the following manner. 1. Ext P10 revenue recovery proceedings are quashed. 2. Respondent Nos.1 to 5 are directed to refund the 35% of bid amount deposited by the petitioner as per Clause 5(a) of Ext R3(a), after deducting the amount covered by Exts P5 and P7. 3. The above exercise is to be completed and the amount due to the petitioner is to be disbursed as expeditiously as possible at any rate within three months from the date of receipt of a copy of this judgment.
O R