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

1030                      [2019]REPORTS
                SUPREME COURT    14 S.C.R. 1030            [2019] 14 S.C.R.


 A        ODISHA FOREST DEVELOPMENT CORPORATION LTD.
                                        v.
                      M/S ANUPAM TRADERS & ANR.
                          (Civil Appeal No.9083 of 2019)
 B                            NOVEMBER 28, 2019
                   [R. BANUMATHI, A.S. BOPANNA AND
                         HRISHIKESH ROY, JJ.]
             Contract:
 C            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
 D
       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       sale was vacated – The Writ Petition was disposed of as withdrawn
 E     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
 F
       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
 G     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
 H     is noticed that the termination of the agreement itself was for
                                       1030
  ODISHA FOREST DEVELOPMENT CORPORATION LTD. v.                          1031
            M/S ANUPAM TRADERS & ANR.

non-deposit of the additional security amount to the extent of           A
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
                                                                         B
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           C
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          D
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]
                                                                         E
      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]                F

       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          G
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
                                                                         H
1032           SUPREME COURT REPORTS                     [2019] 14 S.C.R.


 A     has caused the loss to the appellant and the public exchequer is
       a matter to be determined based on materials and evidence but
       the fact remains that such resultant delay was at the instance of
       the private respondent. As per the terms of the agreement, any
       loss caused was permissible to be recovered from the respondent
       after adjusting the security deposit available. Therefore, even if
 B
       the amount of deposit made pursuant to the order passed by the
       High Court is not considered as an additional security deposit,
       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. As such the deposit
 C     ordered will have to be considered as a conditional deposit to
       protect the interest of the appellant as well. [Para 17]
       [1043-E-H; 1044-A]
             5. It is no doubt true, dehors the writ proceedings initiated
       by the private respondents and in the absence of such deposit,
 D     option in any event was open to the appellant to make the recovery
       through legal proceedings or public demand. Apart from the right
       available to recover the amount by forfeiting the additional
       security deposit, the appellant had also clearly indicated that the
       subsequent sale would be made at the ‘……cost and risk’ of the
       private respondents which would mean that the difference of the
 E     cost between the first and second auction and the resultant loss
       to the appellant if attributable to the private respondents, is
       recoverable from the private respondents. However, it is no doubt
       true that such recovery is to be made after quantifying the same
       by following due process of law. [Para 18] [1044-C-D]
 F           6. Though at this stage the said amount of deposit as ordered
       by the High Court cannot be considered as additional security
       deposit nor the actual determination of the loss suffered, when in
       a circumstance the action of the appellant to re-tender was caused
       to be deferred, through a proceedings initiated at the instance of
 G     the private respondent, the condition to deposit the amount
       should have been considered by the High Court in the background
       of its intent to protect the interest of appellant. In that
       circumstance, when the contention of loss being caused was put
       forth, the amount ought to have been allowed to be retained till
       the procedure as contemplated in law is followed and a decision
 H     is taken though not directly as forfeiture. [Para 19] [1044-F-H]
  ODISHA FOREST DEVELOPMENT CORPORATION LTD. v.                           1033
            M/S ANUPAM TRADERS & ANR.

      7. The appellant in any event would have the right to               A
determine the loss suffered and recover the same in accordance
with law as the process to re-tender, was at the ‘…...cost and
risk’ of the private respondent as stated in the notice of
termination. In that circumstance, when it is prima-facie indicated
that due to the delay caused at the instance of the private
                                                                          B
respondents the value of the Kendu leaves had reduced, thereby
causing loss, in view of legal proceedings initiated by the private
respondents, the Court will have to bear in mind the maxim actus
curiae neminem gravabit, namely, no party should suffer due to
the act of Court. In such event, since the interim order was at
the instance of the respondent, the appellant should be permitted         C
to retain the amount and complete the process by providing
opportunity to the private respondents.[Para 20] [1045-A-C]
      8. In the above circumstance, the direction to refund the
amount unconditionally is not found justified and is accordingly
set aside.[Para 21] [1045-D]                                              D
      M/s. Atma Ram Properties (P) Ltd. v. M/s. Federal Motors
      Pvt. Ltd. (2005) 1 SCC 705 : [2004] 6 Suppl. SCR 843
      – relied on.
                        Case Law Reference
                                                                          E
[2004] 6 Suppl. SCR 843            relied on             Para 16


      CIVIL APPELLATE JURISDICTION: Civil Appeal No. 9083
of 2019
                                                                          F
      From the Judgment and Order dated 30.04.2019 of the High Court
of Orissa at Cuttack in WP(C) No. 18718 of 2017
                                   With
      Civil Appeal Nos. 9084, 9088, 9089, 9091, 9092, 9093, 9094, 9095,
9096, 9097, 9098 and 9099 of 2019                                         G
     S.K. Padhi,Sr.Adv., Shubhranshu Padhi, Rakshit Jain, Ashish
Yadav, Ms. Anindita Pujari, Aditya Kr.Choudhary, Sukanta Dalai,
Gurmeher Vaan Singh, Aman Singh, Vaibhav Prasad Deo, Rajesh Singh
Chauhan, Advs. for the appearing parties.
                                                                          H
1034             SUPREME COURT REPORTS                          [2019] 14 S.C.R.


 A           The Judgment of the Court was delivered by
             A.S. BOPANNA, J.
             1. Leave granted.
              2. The appellants in eleven of these appeals are the Odisha Forest
 B     Development Corporation Ltd. (“OFDC Ltd.” for short) and the State
       of Odisha is the appellant in two other appeals. The appeals filed by the
       State of Odisha relate to the same orders in respect of the same private
       respondents who were the writ petitioners regarding whom the Odisha
       Forest Development Corporation Ltd. has also filed the appeal. Further,
       though separate orders passed by the High Court in different writ petitions
 C     relating to various petitioners are assailed in all these appeals, the issue
       involved is the same. Hence all these appeals were clubbed, heard
       together and are accordingly disposed of by this common judgment. For
       the purpose of narration of facts, the case as in Civil Appeal arising out
       of SLP(C) No.17627/2019, titled Odisha Forest Development Corporation
 D     Ltd. vs. M/s Anupam Traders & Anr. is taken note, which reads as
       hereunder.
              3. The appellant OFDC Ltd. issued an e-tender notification dated
       22.11.2016 inviting offers online from intending purchasers for advance
       sale of phal Kendu leaf (KL) of 2017 crop as per the ‘lots’ indicated in
 E     the notification. The private respondent had responded to the notification
       and made its offer. The bid was opened on 07.12.2016. The private
       respondent being the successful bidder was required to execute an
       agreement and deposit the provisional security deposit of Rs.5,00,000/-
       (Rupees Five Lakh). The private respondent herein executed an
       agreement dated 20.01.2017. In terms of the agreement, on the actual
 F     quantity of leaves collected, the additional security deposit covering 25%
       of the purchase price of the lot was to be deposited before 31.05.2017.
       The private respondent in the instant case was therefore required to
       deposit the differential security amount of Rs.27,14,765/-less, the security
       amount of Rs.5,00,000/- (Rupees Five Lakh) already paid.
 G           4. In view of the requirement to pay the same before 31.05.2017,
       the private respondent addressed a letter dated 02.06.2017 seeking
       extension of time to pay the said security amount. The extension sought
       was declined by the appellant through the communication dated
       06.06.2017. Since the amount required to be deposited was not made,
       the appellant cancelled the agreement dated 20.01.2017 by issuing the
 H
  ODISHA FOREST DEVELOPMENT CORPORATION LTD. v.                              1035
    M/S ANUPAM TRADERS & ANR. [A.S. BOPANNA, J.]

notice dated 21.08.2017. Since such cancellation would be at the ‘cost       A
and risk’ of the private respondent, the lot was to be put to re-tender.
The appellant accordingly proceeded to issue a fresh e-tender notification
on 22.08.2017 for sale of the same ‘lots’ of the phal Kendu leaves.
       5. At that stage the private respondent aggrieved by extension of
time not being granted, filed the writ petition in W.P.(C) No.11498/2017,    B
the same was withdrawn and a writ petition bearing W.P.(C) No.18718/
2017 was filed wherein the order dated 21.08.2017 passed by the appellant
cancelling the agreement dated 20.01.2017 as also the subsequent Auction
Notice dated 22.08.2017, were assailed. In the said writ petition, interim
order against the subsequent auction through notice dated 22.08.2017
was sought. While considering the same, the High Court while allowing        C
the appellant to proceed with the subsequent tender process, had stayed
the finalization of the sale subject to the private respondent herein
depositing an amount of Rs.20,00,000/- (Rupees Twenty Lakhs only)
within one week with the appellant herein. The said order was passed
on 08.09.2017 wherein it was further directed that the said amount would     D
be kept in a separate deposit by the appellant. The application filed by
the appellant herein seeking vacation of the interim order was considered
and at that stage since the vacation of the stay was not opposed by the
private respondent herein, it was vacated on 28.03.2018 due to which
the subsequent sale was completed on 24.04.2018. The private respondent
herein thereafter sought leave to withdraw the writ petition in W.P.(C)      E
No.18718/2017 thereby giving up the challenge to the cancellation of the
auction process wherein the private respondent had taken part and also
the challenge to the subsequent auction which had been conducted by
the appellant. The High Court while disposing of the writ petition as
withdrawn, despite objection put forth by the appellant herein directed      F
refund of the deposit which was made pursuant to its interim order dated
08.09.2017. The appellant herein is, therefore, aggrieved by the order
dated 30.04.2019 only to the extent whereby the High Court has directed
refund of the amount available with the appellant.
      6. The facts in the connected appeals is to the same effect except     G
the variation in the ‘lot’ number, quantity of Kendu leaves which was
purchased by each of the private respondents therein and the number of
the writ petition filed before the High Court. The names of the different
tenderers in the individual writ petitions that were filed and the quantum
of amount ordered to be deposited by the High Court will be detailed in
                                                                             H
1036             SUPREME COURT REPORTS                          [2019] 14 S.C.R.


 A     later part of this judgment. However, in all the cases the writ petitions
       have been withdrawn and the refund of the deposit ordered is directed
       to be refunded. In that view, the basic contention which is common, on
       consideration would answer all the appeals herein.
             7. In that backdrop we have heard Mr. S.K. Padhi, learned senior
 B     advocate for the appellants – OFDC Ltd, Ms. Anindita Pujari, learned
       advocate for the appellant State of Odisha and Mr. Aditya Kumar
       Choudhary, learned advocate for the private respondents in all the appeals
       and perused the materials on record in the appeals.
               8. As noticed, though the private respondents herein had filed the
 C     writ petition at the stage when the earlier agreement entered into pursuant
       to the tender process in their favour had been cancelled and a subsequent
       auction was notified, keeping in view the fact that all the private
       respondents herein had chosen to withdraw the writ petitions, which
       was permitted by the High Court through the order dated 30.4.2019, the
       consideration of that aspect is not required to be made. The only question
 D     for consideration herein is with regard to the correctness or otherwise
       of direction issued by the High court to the appellant herein to refund the
       amount which was a deposit made by the private respondents with the
       appellant pursuant to the interim order dated 08.09.2017.
               9. The learned senior advocate for the appellant while contending
 E     that the High court was not justified in ordering the refund has taken us
       through the tender notification dated 22.11.2016, as also the purchase
       agreement dated 20.1.2017. In that light, it is pointed out that apart from
       the Earnest Money Deposit (“EMD” for short) to enable a tenderer to
       participate in the tender process, the successful purchaser was required
 F     to initially pay the provisional security deposit of Rs.5,00,000/- (Rupees
       Five Lakhs only) and after final collection of the leaves the differential
       amount to the extent of 25% of the purchase price was to be paid within
       31.05.2017. It is contended that if the said amount was not paid, the
       security amount already paid was to be forfeited and if any further
       recoveries are to be made, the appellant had the liberty to do so.
 G
               10. In that light, it is contended that in the instant facts only the
       initial deposit of Rs.5,00,000/- (Rupees Five Lakhs only) was made, apart
       from the EMD. The default was committed relating to payment of 25%
       of the additional security amount which was to be made within the time
       frame. Since, the extension of time as requested was rejected and the
 H
  ODISHA FOREST DEVELOPMENT CORPORATION LTD. v.                                1037
    M/S ANUPAM TRADERS & ANR. [A.S. BOPANNA, J.]

amount was not deposited, the appellant was left with no other alternative     A
but to terminate the agreement and forfeit the security deposit. It is the
contention of the learned senior advocate that though the High Court
has not specifically indicated deposit to be made as the additional security
deposit, the extent of deposit ordered in each of the cases makes it clear
that it is relatable to the extent of the additional security amount which
                                                                               B
was to be deposited. In that light, he contends that when the writ petition
was not pressed, the termination of the agreement would remain valid
and in such circumstance since the clause contained in the agreement
permits the forfeiture of the preliminary security deposit, the direction to
refund the same was not justified. On the other hand, the High Court
ought to have allowed retention of the said amount and the liberty to          C
recover additional amount, if any,should have been left open. Hence, he
contends that the direction issued by the High Court to refund the amount
is not justified.
        11. The learned advocate for the respondent would also refer to
the very same clauses as contained in the agreement. He contends that          D
the private respondents herein were before the High Court seeking to
exercise their right by assailing the order of termination so as to complete
the transaction. With reference to the objection statement, the learned
advocate would contend that there were circumstances which indicated
that the price offered by the private respondent was at higher rate when
the panchayat had fixed a lower price for the Kendu leaf. It is his            E
contention that, in any event, the forfeiture can only be to the extent of
the amount that had already been deposited, namely, the EMD and the
initial deposit regarding which the private respondents have not made a
grievance. On referring to the tender conditions as also the clauses
contained in the agreement, he contends that as per Clause 9 (iv) even if      F
the additional security is not deposited or if any loss is suffered, the
provision made therein is to recover the amount by way of initiating legal
proceedings or through the Orissa Public Demand Recovery Act which
option has been left open to the appellant by the High Court and as such
the appellant cannot make out any grievance. It is his contention that the
very fact that the High Court while granting the interim order, though         G
had directed deposit of the amount had further directed the appellant to
keep it in a separate fixed deposit, will indicate that the said amount had
no reference whatsoever to the additional security deposit but it was
only to establish the bonafide of the private respondent who was the
                                                                               H
1038             SUPREME COURT REPORTS                             [2019] 14 S.C.R.


 A     writ petitioner. Hence, in that circumstance when the High Court has
       directed refund the order does not call for interference.
              12. In the light of the above, what is required to be noticed at the
       outset is the provision relating to the security deposit contained in Clause
       9 of the tender notification on which reliance was placed by both sides,
 B     which reads as hereunder:
              “Security Deposit
               (i) The successful purchaser shall have to pay provisional
                    Security Deposit @ Rs.5.00 lakhs (Rupees Five Lakh) per
                    lot(s) within 21 [Twenty-one] days of issue of ratification
 C                  order. If the provisional security deposit is not paid at
                    Corporate Office within 21 days from the date of issue of
                    ratification order, the sale of the lot(s) will be cancelled and
                    the EMD/part S.D. will be forfeited to OFDC. However in
                    exceptional circumstances, the period of 21 days may be
                    extended for a further period of 7 (seven) days by the
 D                  Director (C)/Managing Director of OFDC Ltd. by
                    depositing of non-refundable fees of Rs.2000/- (Rupees two
                    thousand only) by the purchaser.
               (ii) After final collection of leaves, the purchaser has to pay the
                    differential amount up to the extent of 25% of Purchase price
 E                  of the lot towards final Security deposit within 31.5.2017, failing
                    which it will be considered as violation of purchaser’s
                    agreement and the provisional security deposit will be
                    forfeited.
               (iii) The Security Deposit can be adjusted either wholly or in part,
                    as the case may be, by the Director (C)/Managing Director,
 F
                    OFDC Ltd. towards any amount recoverable from the
                    purchaser, including the purchase price under provisions of
                    the Acts, Rules & Notification of Govt., Purchaser’s
                    agreement and the terms and conditions of the sale notice
                    and all such deductions shall have to be made good by the
 G                  purchaser by depositing an equal amount within 15 days of
                    issue of the notice to that effect.
               (iv) If the dues to be recovered from the purchaser exceed the
                    amount of security deposit, the amount in excess shall unless
                    made good to the Corporation within 15 days from the date
                    of issue of the notice to that effect, be recoverable by way of
 H
  ODISHA FOREST DEVELOPMENT CORPORATION LTD. v.                                 1039
    M/S ANUPAM TRADERS & ANR. [A.S. BOPANNA, J.]

              initiating legal proceedings or through Orissa Public Demand      A
              Recovery Act 1962 (Orissa Act-I of 1963).”
      13. Similarly, the agreement entered into between the parties, apart
from containing a similar clause for security deposit as at Clause No.11,
also contains Clause 13 relating to the termination of the agreement.
The said clause reads as under: -                                               B
      “13. Termination of Purchaser’s Agreement
       (i)     If the purchaser fails to pay the first instalment before the
               due date of 2nd instalment or 2nd instalment before due date
               of the 3rd instalment or third instalment within 15 days after
               its due date or any other amount due or to comply with any       C
               of the provisions of the agreement, the Director (C)/
               Managing Director of OFDC Ltd. may at his discretion and
               without prejudice to any other right and remedies that may
               be available to him, terminate this agreement after giving 15
               days notice and an opportunity of hearing to the purchaser       D
               and blacklist the purchaser for a period up to 3 years.
       (ii) The order of termination of the agreement shall be delivered
             in person to the purchaser or sent by Registered/Speed Post.
             The termination shall be effective from the date of order
             terminating the agreement.
                                                                                E
       (iii) On termination of the agreement the Corporation shall be
             entitled to:
             a. Forfeit the provisional as well as final security deposit in
             full.
             b. Forfeit the undelivered stocks of Kenduleaves in storage in     F
             favour of the Corporation for which payment has been made.
             c. Cancel the customer registration with OFDC along with
             forfeiture of registration fees.
             d. (i) Sell the Kenduleaves in the godown for which amount         G
             due has not been paid and undelivered stock of Kenduleaves
             in storage which has been forfeited in favour of the
             Corporation under condition 13 (iii) (b) and recover the loss.
             The same shall also be recoverable by encashment of the Bank
             guarantee, if any such guarantee has been furnished by the
                                                                                H
1040             SUPREME COURT REPORTS                           [2019] 14 S.C.R.


 A               purchaser under clause-7, as also from sale of such leaves
                 which has been forfeited in favour of the Corporation under
                 condition 13(iii)(b). Provided if the lot is not resold in the first
                 sale after issue of order of termination of agreement, loss will
                 be recovered from the purchaser treating the value of the lot
                 as zero. However, if the lot is sold in subsequent sale, the
 B
                 amount of sale price recovered as such shall be adjustable
                 against balance amount of loss or be refunded to the purchaser
                 as the case may be. However no interest will be payable to
                 the purchaser on such amount. In the event of cancellation of
                 purchaser’s agreement the loss to be recovered from 1 st
 C               purchaser will be computed as follows: -
                 Total expected receipts including all taxes in concerned sale
                 (+) expenditure on storage, supervision etc. up to disposal (-)
                 receipts including taxes from subsequent sale.
                 (ii) Recover any amount of loss still remaining due through
 D               Legal proceedings.
                 (iii) Retain the full amount, if on such resale, higher amount is
                 received than is due in respect of the lot and the purchaser
                 shall have not right or claim there to.

 E                  e. Recover all cost and expenses incurred for recovering
                 loss.
                   f. Recover all penalties imposed and compensation assessed
                 not yet paid.”
              In addition to the same, it is noticed that in the communication
 F     dated 02.08.2017 (Annexure P/8) while issuing the notice calling upon
       to pay the additional security deposit, the appellant has indicated that if
       the same is not paid the provisional security deposit will be forfeited and
       the ‘lot’ will be sold in the ensuing sale. That apart, in the order dated
       21.08.2017 whereby the agreement was terminated, it was intimated
       that the provisional security is forfeited and that the stock contained in
 G
       ‘lot’ No. 42 would be resold at the ‘cost and risk’ of the private respondent
       herein.
             14. In the above background, a perusal of the interim order dated
       08.09.2017 passed in writ petition would indicate that the High Court on
       considering the facts and circumstances of the case has directed that
 H
  ODISHA FOREST DEVELOPMENT CORPORATION LTD. v.                              1041
    M/S ANUPAM TRADERS & ANR. [A.S. BOPANNA, J.]

the private respondents herein deposit the amount as indicated in the        A
order, which is shown against their respective names here below in tabular
format for easy reference: -

  S.o.     SLP (C)      ame of the          Amt. deposited as per
            o.          Firm                 Interim Orders (In Rs.)
                                                                             B
       1.   17627        ANUPAM                        20,00,000
                         TRADERS
       2.   18726        NABILA                        15,00,000
                         ENTERPRISE
       3.   18575        RAFIK FURNITURE               50,00,000             C
                         MART
       4.   18846        SAIYED                        20,00,000
                         SULTAN
       5.   18664        VIJAY                         20,00,000
                         ENTERPRISE
       6.   18876        JAI BABA                      10,00,000             D
                         BHOLANATH
                         ENTERPRISE
       7.   18916        T. PRASAD                     50,00,000
                         RAO
       8.   18939        ANANYA                        35,00,000
                         ENTERPRISE                                          E
       9.   18890        YASEEN                        35,00,000
                         KHAN
      10.   18800        KARIM                         5,00,000
                         KHAN
      11.   18945        SHEIKH                        15,00,000             F
                         ZAKIR

       The High Court does not specifically indicate that the amount is
relatable to the additional security that was required to be deposited by
the writ petitioners.
                                                                             G
       15. In a circumstance of the present nature, when it is noticed
that the termination of the agreement itself was for 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
                                                                             H
1042             SUPREME COURT REPORTS                          [2019] 14 S.C.R.


 A     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. Though that
       be the position and presently since the writ petition was withdrawn
 B
       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 13 of the agreement which is
       extracted supra. Hence even if the said amount is not considered as the
 C     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.
              16. In the above backdrop, before we proceed any further, the
 D     intent of such conditional interim orders passed by the Courts will have
       to be gathered. In order to aid the same it will be apposite to take note
       of the observations contained in the decision of this Court in the case of
       M/s. Atma Ram Properties (P) Ltd. vs. M/s. Federal Motors Pvt.
       Ltd. (2005) 1 SCC 705 which is as hereunder,
 E           “The power to grant stay is discretionary and flows from the
             jurisdiction conferred on an appellate Court which is equitable in
             nature. To secure an order of stay merely by preferring an appeal
             is not the statutory right conferred on the appellant. So also, an
             appellate Court is not ordained to grant an order of stay merely
             because an appeal has been preferred and an application for an
 F           order of stay has been made. Therefore, an applicant for order of
             stay must do equity for seeking equity. Depending on the facts
             and circumstances of a given case an appellate Court, while passing
             an order of stay, may put the parties on such terms the enforcement
             whereof would satisfy the demand for justice of the party found
 G           successful at the end of the appeal. In South Eastern Coalfields
             Ltd. Vs. State of M.P. & Ors., (2003) 8 SCC 648, this Court
             while dealing with interim orders granted in favour of any party to
             litigation for the purpose of extending protection to it, effective
             during the pendency of the proceedings, has held that such interim
             orders, passed at an interim stage, stand reversed in the event of
 H
  ODISHA FOREST DEVELOPMENT CORPORATION LTD. v.                                     1043
    M/S ANUPAM TRADERS & ANR. [A.S. BOPANNA, J.]

      the final decision going against the party successful in securing             A
      interim orders in its favour; and the successful party at the end
      would be justified in demanding compensation and being placed in
      the same situation in which it would have been if the interim order
      would not have been passed against it. The successful party can
      demand (a) the delivery to it of benefit earned by the opposite
                                                                                    B
      party under the interim order of the High Court, or (b) compensation
      for what it has lost, and to grant such relief is the inherent jurisdiction
      of the Court. In our opinion, while granting an order of stay under
      Order 41 Rule 5 of the CPC, the appellate court does have
      jurisdiction to put the party seeking stay order on such terms as
      would reasonably compensate the party successful at the end of                C
      the appeal in so far as those proceedings are concerned.”
       Though the said observation was made in the context of interim
order being considered under Order 41 Rule 5 CPC, it would be more
appropriate in a writ proceedings in as much as, not only the interim
prayer but the very writ petition will be entertained in the discretionary          D
jurisdiction unlike the statutory appeal under Section 96 read with Order
41 of CPC. 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.
                                                                                    E
       17. 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 herein was not in a position to immediately bring the Kendu
leaves for re-auction by receiving the amount from the subsequent                   F
purchaser and the same is likely to have dissuaded purchasers to offer
the best price due to uncertainty looming large. Whether all these and
any other factor has caused the loss to the appellant and the public
exchequer is a matter to be determined based on materials and evidence
but the fact remains that such resultant delay was at the instance of the           G
private respondent. As noticed from the terms of the agreement, any
loss caused was permissible to be recovered from the respondent after
adjusting the security deposit available. Therefore, even if the amount of
deposit made pursuant to the order passed by the High Court is not
considered as an additional security deposit, the right of the appellant to
                                                                                    H
1044             SUPREME COURT REPORTS                           [2019] 14 S.C.R.


 A     proceed in accordance with law to assess the damage suffered and to
       recover the same from the private respondents, would still remain intact.
       As such the deposit ordered will have to be considered as a conditional
       deposit to protect the interest of the appellant as well.
              18. In such event, the issue for consideration is as to whether in
 B     view of the clause contained in 9(iv) of the tender notification the appellant
       should be driven to initiate the legal proceedings or for public demand
       recovery after refunding the amount which is deposited, as contended
       by the learned Advocate for the private respondents despite taking note
       of the intent of such deposit. It is no doubt true, dehors the writ
       proceedings initiated by the private respondents and in the absence of
 C     such deposit, option in any event was open to the appellant to make the
       recovery through such proceedings. It is noticed that apart from the
       right available to recover the amount by forfeiting the additional security
       deposit, the appellant had also clearly indicated that the subsequent sale
       would be made at the ‘……cost and risk’ of the private respondents
 D     herein which would mean that the difference of the cost between the
       first and second auction and the resultant loss to the appellant if
       attributable to the private respondents, is recoverable from the private
       respondents. However, it is no doubt true that such recovery is to be
       made after quantifying the same by following due process of law.
 E            19. Presently, though the learned senior advocate for the appellant
       had furnished a chart showing the original price as against the resale
       price, thereby projecting the net loss suffered by the appellant, the
       correctness of the same cannot be adjudicated in a proceeding of the
       present nature arising out of a writ proceeding. The matter being
       contractual and also requiring factual determination, the same can only
 F     be done in an appropriate proceeding. Therefore, though at this stage
       the said amount of deposit as ordered by the High Court cannot be
       considered as additional security deposit nor the actual determination of
       the loss suffered, when in a circumstance the action of the appellant to
       re-tender was caused to be deferred, through a proceedings initiated at
 G     the instance of the private respondent, the condition to deposit the amount
       should have been considered by the High Court in the background of its
       intent to protect the interest of appellant. In that circumstance, when the
       contention of loss being caused was put forth the amount ought to have
       been allowed to be retained till the procedure as contemplated in law is
       followed and a decision is taken though not directly as forfeiture.
 H
  ODISHA FOREST DEVELOPMENT CORPORATION LTD. v.                                   1045
    M/S ANUPAM TRADERS & ANR. [A.S. BOPANNA, J.]

        20. As noticed above, the appellant in any event would have the           A
right to determine the loss suffered and recover the same in accordance
with law as the process to re-tender, was at the ‘…...cost and risk’ of
the private respondent as stated in the notice of termination. In that
circumstance, when it is prima-facie indicated that due to the delay caused
at the instance of the private respondents the value of the Kendu leaves
                                                                                  B
had reduced, thereby causing loss, in view of legal proceedings initiated
by the private respondents, the Court will have to bear in mind the maxim
actus curiae neminem gravabit, namely, no party should suffer due to
the act of Court. In such event, since the interim order was at the instance
of the respondent the appellant should in our opinion be permitted to
retain the amount and complete the process by providing opportunity to            C
the private respondents.
        21. In the above circumstance, the direction to refund the amount
unconditionally is not found justified and is accordingly set aside. The
appellant shall issue appropriate notice(s) to the private respondents
indicating details about the manner in which they computed the loss               D
after conducting the second auction at the ‘cost and risk’ of the private
respondent. On receiving response to the same, a detailed consideration
be made and a speaking order be passed in that regard. The respondents
are at liberty to challenge the speaking order to be passed by the appellant
and the process being pursuant to a contractual matter the private
respondent if aggrieved are entitled to avail their legal remedy before           E
the appropriate forum, in accordance with law and the entitlement of the
amount will be decided therein. As per the speaking order passed by the
appellant, if it is found that the loss suffered is within the amount available
in deposit, appropriate adjustment should be made and the balance if
any, be refunded. On the other hand, if the loss caused is found to be            F
more than the amount in deposit, the amount available shall be adjusted
and the appellant would have the liberty of initiating action for the recovery
of the additional amount, if any, in accordance with law. Such procedure
shall be completed within the outer limit of two months from the date on
which a copy of this order is available. Until such time, the amount
available in fixed deposit as ordered by the High Court shall be retained         G
in the same position and shall not be appropriated for the benefit of the
appellant. The adjustment of the amount by the appellant if made after
passing the speaking order, the same shall be without prejudice to the
contention of both parties and the same shall be subject to the outcome
                                                                                  H
1046             SUPREME COURT REPORTS                       [2019] 14 S.C.R.


 A     of the proceedings in the matters where the respondents may challenge
       the speaking order in accordance with law.
              22. Accordingly, all the appeals are allowed in part with no order
       as to costs. Pending applications, if any, shall stand disposed of.

 B
       Kalpana K. Tripathy                                   Appeals partly allowed.




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