LexCHIEF CONSERVATOR OF FOREST & ORS. versus VIRENDRA KUMAR & ORS.
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[2024] 7 S.C.R. 2427 : 2024 INSC 514 Chief Conservator of Forest & Ors. v. Virendra Kumar & Ors. (Civil Appeal No. 7414 of 2024) 10 July 2024 [Vikram Nath* and Satish Chandra Sharma, JJ.] Issue for Consideration Validity of forfeiture by forest department of the security deposit made by successful auction bidder due to failure to comply with work mandate, considered. Headnotes† Auction – Conditions of sale – Forfeiture of security deposit – Respondent emerged as successful bidder in auction conducted by forest department, Gorakhpur (U.P.) in 1998 for certain forest produce – Parties executed an Agreement in terms of relevant Conditions of Sale – However despite being informed about last date to deposit the bid amount and complete the work, followed by two subsequent reminder letters/notices, Respondent failed to comply with the said mandate – Resulting in forfeiture of Respondent’s security deposit and re-auctioning – Forfeiture challenged in High court on the ground that department’s approval was not given within stipulated time, and hence Respondent applied for withdrawing its bid – In its support, Respondent relied on Condition of Sale Manual applicable in 1980-81 overwritten as “1997-98” since auction took place in 1998 and argued that concerned provision mandated communicating approval/ disapproval within 40 days from auction – High Court allowed the writ petition – Decision challenged in this SLP: Held: 1. High Court erred while relying on Manual applicable in 1980-81 because the year in this manual was overwritten as “1997-98” without bearing any signature – A fact noted by High Court but not given due weightage. [Para 14] 2. Court accepted Appellant’s argument that no manual was published after 1987-88 and hence it will prevail over previous * Author 2428 [2024] 7 S.C.R. Digital Supreme Court Reports edition of 1980-81 that Respondent sought to reply on – As 1987-88 edition did not contain provision regarding above-noted 40 days’ time period, and required the successful bidder to enquire about the status of acceptance of contract if no formal communication is received by him within 35 days, and provided for deemed approval in absence for formal approval within stipulated time-period of 35 days, the Respondent could not escape the consequences of withdrawing from auction. [Para 15-16] 3. On facts, Respondent did not comply with the initial letter and subsequent reminders which reflected its non-diligent and lackadaisical approach that couldn’t be overlooked and thus the forfeiture of security deposit of Respondents was valid. [Para 17-18] List of Acts Conditions of Sale Manuals. List of Keywords Forest Department; Auction; Security amount; Forfeiture; Lackadaisical approach; Re-auction. Case Arising From CIVIL APPELLATE JURISDICTION: Civil Appeal No. 7414 of 2024 From the Judgment and Order dated 11.01.2011 of the High Court of Judicature at Allahabad in WC NO. 55072 of 2000 Appearances for Parties Ms. Garima Prashad, Sr. A.A.G., Sudeep Kumar, Ms. Manisha, Advs. for the Appellants. Amit Sharma, R.C. Kohli, Advs. for the Respondents. Judgment / Order of the Supreme Court Judgment Vikram Nath, J. 1. Leave granted. 2. This appeal by special leave is against the judgment and order dated 11.01.2011 passed by the High Court of Judicature at Allahabad in Writ Petition (C) No. 55072 of 2000. The said Writ Petition in the [2024] 7 S.C.R. 2429 Chief Conservator of Forest & Ors. v. Virendra Kumar & Ors. High Court was filed by the Respondents herein challenging the notice dated 17.01.2000 passed by the Divisional Forest Officer, Gorakhpur forfeiting the security amount of the Respondents. For the sake of convenience, we will refer to the parties as per their instant status before this Court. 3. Brief facts of the matter are that the Forest Department had issued a public notice dated 05.03.1998 inviting registered contractors for participation in a sale auction. In pursuance of the said notice, sale auction was completed on 27.03.1998 as per prescribed procedure and the Respondents offered the highest bids in respect of the various lots. On being declared as the successful bidders, an agreement was executed between the Appellant and the Respondent on the same date with respect to the lot No. 195 (38-H Nasirabad, Bankee Range). On the following day itself, a proposal was sent to the Conservator of Forests and Regional Director, Eastern Circle, Gorakhpur, U.P.
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