ODISHA FOREST DEVELOPMENT CORPORATION LTD. versus M/S ANUPAM TRADERS & ANR.

Citation: [2019] 14 S.C.R. 1030 · Decided: 28-11-2019 · Supreme Court of India · Bench: R. BANUMATHI · Disposal: Case Partly allowed

Judgment (excerpt)

A
B
C
D
E
F
G
H
1030
SUPREME COURT REPORTS
[2019] 14 S.C.R.
ODISHA FOREST DEVELOPMENT CORPORATION LTD.
v.
M/S ANUPAM TRADERS & ANR.
(Civil Appeal No.9083 of 2019)
NOVEMBER 28, 2019
[R. BANUMATHI, A.S. BOPANNA AND
HRISHIKESH ROY, JJ.]
Contract:
Agreement for purchase of ‘phal kendu leaf’ – As per the
agreement the proposed purchaser, apart from provisional security
deposit, was required to deposit additional security deposit covering
25% of the purchase price of the lot – The proposed purchaser
(respondent) failed to deposit the additional security amount –
Agreement cancelled – Fresh tender issued – Writ petition
challenging cancellation of agreement and issuance of fresh tender
– High Court by its interim order stayed the finalisation of sale,
subject to the respondent depositing an amount of Rs.20,00,000/-
(Rupees Twenty Lakhs) – However, later the stay on finalisation of
sale was vacated – The Writ Petition was disposed of as withdrawn
and the High Court directed refund of Rs. twenty lakhs (deposited
pursuant to interim order) –  Appeal to Supreme Court – Plea of
appellants that direction to refund the amount of Rs.20,00,000/-
(Rupees Twenty Lakhs)  was not justified as the deposit was relatable
to additional security amount – Held: The deposit ordered by High
Court cannot be classified as additional deposit in terms of the
contract, at that stage of the lis – However, even if the deposited
amount is not considered as additional security amount in its true
spirit, as per terms of the agreement the right of the appellant to
proceed in accordance with law to assess the damage suffered and
to recover the same from the private respondents, would still remain
intact – The amount deposited ought to have been allowed to be
retained till the procedure as contemplated in law to recover the
damages suffered by the appellant was followed.
Partly allowing the appeals, the Court
HELD: 1 In a circumstance of the present nature, when it
is noticed that the termination of the agreement itself was for
 [2019] 14 S.C.R. 1030
    1030
A
B
C
D
E
F
G
H
1031
non-deposit of the additional security amount to the extent of
25% of the value, the deposit ordered by the High Court cannot
be classified as additional deposit in terms of the contract, at that
stage. If ultimately the writ petition was taken to its logical
conclusion and the private respondents had succeeded in such
proceedings, only in such event the said amount could have been
considered as a belated payment towards additional security
deposit and in any event, the consideration in that regard would
be in terms of the directions that would have been issued by the
High Court. [Para 15] [1041-G-H; 1042-A-B]
2. Since the writ petition was withdrawn unconditionally,
the question is as to whether the respondents were entitled to
refund of the amount as a matter of right when all future action
for disposal of the subject Kendu leaves was at the ……. ‘cost
and risk’ of the private respondents as per Clause of the
agreement relating to termination of the agreement. Hence even
if the said amount is not considered as the additional security
amount in its true spirit, as per the agreement and the right of
forfeiture at this stage is not accepted in its technical sense in
favour of the appellant, the right of the appellant to recover the
loss suffered in terms of the agreement cannot be ignored.
[Para 15] [1042-B-C]
3.As the interim prayer and the very writ petition is
entertained in the discretionary jurisdiction, in such circumstance,
though it is not necessary that a condition is to be imposed in
every case for grant of interim order, if the Court in a given case
imposes the condition, the same is to be treated as being with a
purpose and not as an empty formality. [Para 16] [1043-D]
4. In that regard, it is to be noticed that in the instant case
in a circumstance where the private respondent had filed the writ
petition, even though the High court had permitted the process
of re-tender to progress, the finalization thereof had been stayed.
If that be the position, the appellant was not in a position to
immediately bring the Kendu leaves for re-auction by receiving
the amount from the subsequent purchaser and the same is likely
to have dissuaded the purchasers to offer the best price due to
uncertainty looming large.  Whether all these and any other factor
ODISHA FOREST DEVELOPMENT CORPORATION LTD. v.
M/S ANUPAM TRADERS & ANR.
A
B
C
D
E
F
G
H
1032
SUPREME COURT REPORTS
[2019] 14 S.C.R.
h

Excerpt shown. Read the full judgment & AI analysis in Lexace.