Madhya Pradesh High Court
M/S Mahavir Infracon vs The State Of Madhya Pradesh on 1 April, 2025
NEUTRAL CITATION NO. 2025:MPHC-JBP:15768
1 WA-3193-2024
IN THE HIGH COURT OF MADHYA PRADESH
AT JABALPUR
BEFORE
HON'BLE SHRI JUSTICE SURESH KUMAR KAIT,
CHIEF JUSTICE
&
HON'BLE SHRI JUSTICE VIVEK JAIN
ON THE 1 st OF APRIL, 2025
WRIT APPEAL No. 3193 of 2024
M/S MAHAVIR INFRACON
Versus
THE STATE OF MADHYA PRADESH AND OTHERS
Appearance:
Shri Nitya Nand Mishra - Advocate for the appellant.
Shri Ritwik Parashar - Government Advocate for respondent/State.
ORDER
Per: Hon'ble Shri Justice Suresh Kumar Kait, Chief Justice
Being aggrieved by the order dated 11.12.2024 passed by the learned
Single Judge in dismissing the Writ Petition No.38248/2024 by giving
liberty to pursue alternate remedy, the writ petitioner is in appeal.
2. Learned counsel for the appellant submits that the respondent has
forfeited the earnest money without giving any show cause notice to the
appellant and thus, there is a gross violation of the principles of natural
justice. In support of his contention, learned counsel has placed heavy
reliance upon the judgment passed by a Division Bench of Gwalior Bench of
this Court in the case of S.R.S. Infra Project Pvt. Ltd. Gwalior Vs. Gwalior
Development Authority, Gwalior and another, (2010) 2 MP LJ 142 , wherein
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with reference to paras 16, 17, 18 and 19 the Court has held as under:
16. The Supreme Court has very emphatically deprecated violation
of principle of natural justice in such matter while observing in a
Judgment reported as (2008) 7 SCC 38, Jagmohan Singh v. State
of Punjab that the forfeiture of Earnest Money Deposit without
issuance of a Show Cause Notice and without there being any
justification should not be ordered.
17. It would not be out of place to mention here that the Gwalior
Development Authority has not ordered for forfeiture of the
Earnest Money Deposit by treating the same to be a Security
Deposit, even when the Earnest Money Deposit sometimes is
withheld or converted into the Security Deposit after issuance of
the Work Order and since that stage has not reached in the present
case, it could not be said or accepted by applying all canons of
imagination that the Earnest Money Deposit was forfeited as
Security Deposit. The Supreme Court in a case, reported as (2007)
1 SCC 228, Saurabh Prakash v. DLF Universal Ltd. has clarified
the distinction between the Earnest Money Deposit and the
Security Deposit and as such it could not be said that by changing
the terminology of Earnest Money Deposit or Security Deposit,
the Gwalior Development Authority was having any jurisdiction
or justification for forfeiting the Earnest Money Deposit of the
Writ petitioner Company.
18. Therefore, we find that the Order of forfeiture of the Earnest
Money Deposit by the Gwalior Development Authority is per-se
illegal, without jurisdiction and contrary to the terms of the NIT
and more particularly it is in violation of Clause 3.1 of the
conditions, prescribed in the detailed NIT.
19. Consequently, the Resolution passed by the Board of Directors
of Gwalior Development Authority (Tender Committee) on Date
8-10-2009 in relation to the Tender Notice Dated 30-7-2009 and
the Order of forfeiture of the Earnest Money Deposit of the
petitioner-Company is hereby quashed and the Gwalior
Development Authority is directed to return the entire amount of
Earnest Money Deposit to the petitioner-Company because the
forfeiture has been ordered contrary to the Terms, prescribed by
the Gwalior Development Authority itself and also by violating
the stages of opening of the tender envelops, while screening the
eligibility of a tenderer. Therefore, in the peculiar facts and
circumstances of the case, we also direct that the Gwalior
Development Authority shall pay Interest at the rate of 6 percent
per annum on the entire amount of Earnest Money Deposit to the
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3 WA-3193-2024
petitioner-Company from Date 8-10-2009 and onwards till the
Date of its actual disbursement to the petitioner-Company.
3. On the other hand, learned Government Advocate appearing for the
respondents-State has argued in support of the impugned order.
4. Heard learned counsel for the parties and perused the record.
5. There is nothing on record to show that prior to forfeiture of the earnest
money deposited by the petitioner any show cause notice was issued to the
petitioner. It is also not the case of the respondents that the amount deposited
by the petitioner towards earnest money was ever converted into the security
deposit at the time of issuance of work order and same has been forfeited.
This aspect of the matter has not been gone into by the learned Single Judge
while passing the impugned order and dismissing the writ petition on the
ground of availability of alternate remedy. It is settled law that availability of
remedy is self imposed restriction which usually does not apply where there
is violation of principle of natural justice or if the order is without
jurisdiction. In the present case, there is violation of principle of natural
justice inasmuch as no show cause notice was issued prior to the order of
forfeiture and same is held to be invalid in case of S.R.S. Infra Project Pvt.
Ltd. (supra) wherein reliance has been placed on the judgment of Hon'ble
Supreme Court in case of Jagmohan Singh V. State of Punjab (2008) 7 SCC
6. In view of the aforesaid, the present appeal is allowed. The impugned
order dated 11.12.2024 passed by the learned Single Judge in WP
No.38248/2024, is set aside. The impugned order (Annexure P/4 in writ
NEUTRAL CITATION NO. 2025:MPHC-JBP:15768
4 WA-3193-2024
petition) passed by the respondents/authority on 16.11.2024, is also set aside
granting liberty to the respondents/authority to pass fresh order observing
principle of natural justice, if so desired, in accordance with law. If the
respondents/authority pass any order adverse to the petitioner, it is needless
to mention that the appellant would always have the liberty to assail the same
in accordance with the law.
With the aforesaid, writ appeal is disposed of.
(SURESH KUMAR KAIT) (VIVEK JAIN)
CHIEF JUSTICE JUDGE
Praveen
