M/S Century Steels vs Southern Railway
2025 Latest Caselaw 714 Mad

Madras High Court

M/S Century Steels vs Southern Railway on 2 July, 2025

Author: N.Anand Venkatesh

Bench: N.Anand Venkatesh

                                                                                                      W.P.No.5295 of 2023

                                  IN THE HIGH COURT OF JUDICATURE AT MADRAS

                                                     DATED: 02.07.2025

                                                             CORAM :

                                  THE HON'BLE MR. JUSTICE N.ANAND VENKATESH

                                                     W.P.No.5295 of 2023

                     M/s Century Steels
                     rep.by its Sole Proprietor
                      Rashed Abdul Hafiz
                     130/4, Manali Express Road
                     Ernavoor, Chennai
                     Tamil Nadu 600 057                                       ..         Petitioner

                                                                   v.

                     Southern Railway
                     rep.by its Deputy CMM
                     General Stores Depot
                     Perambur
                     Chennai 600 023                                          ..         Respondent

                            Petition filed under Article 226 of the Constitution of India, praying
                     for issuance of a Writ of Mandamus, directing the respondent to refund the
                     Earnest Money Deposit of Rs.20,40,062/- (Rupees Twenty Lakh Forty
                     Thousand Sixty Two Only) paid by the petitioner along with an interest at
                     the rate of 36 percent per annum within a time frame stipulated by this
                     Hon'ble Court.

                                    For Petitioner         ::       Mrs.Narmada Sampath

                                    For Respondent         ::       No appearance

                     ____________
                     Page 1 of 6




https://www.mhc.tn.gov.in/judis                ( Uploaded on: 04/07/2025 03:21:50 pm )
                                                                                             W.P.No.5295 of 2023

                                                                  ORDER

This writ petition has been filed for issuance of a writ of mandamus

directing the respondent to refund the Earnest Money Deposit of a sum of

Rs.20,40,062/- paid by the petitioner along with interest within the time

frame fixed by this Court.

2. Heard the learned counsel for petitioner and carefully perused the

materials available on record. There is no appearance on behalf of the

respondent.

3. The case of the petitioner is that they participated in the e-auction

that was conducted by the respondent on 13.01.2023. The petitioner also

remitted the EMD of a sum of Rs.20,40,062/-. The petitioner, instead of

mentioning the bid amount as Rs.4,08,123/-, mentioned it as Rs.40,80,123/-.

Hence the petitioner was declared as the highest bidder in the auction.

____________

https://www.mhc.tn.gov.in/judis ( Uploaded on: 04/07/2025 03:21:50 pm )

4. The petitioner, after realising the mistake, made a representation to

the respondent. The respondent informed the petitioner that the decision

taken by the petitioner to withdraw from the bid will result in the forfeiture

of the entire EMD amount. It is under these circumstances, the present writ

petition came to be filed before this Court.

5. In the considered view of this Court, there was a genuine mistake

on the part of the petitioner in mentioning the bid amount as Rs.40,80,123/-,

instead of Rs.4,08,123/-. The same is evident from the fact that the second

highest bidder had quoted a value of Rs.4,07,500/-. Therefore, for this

mistake committed by the petitioner, the entire EMD should not be

forfeited.

6. This Court places reliance upon the judgment of the Apex Court in

ABCI Infrastructures P Ltd v. Union of India and others, 2025 SCC OnLine

SC 327. The Apex Court considered a very similar case and held that the

entire EMD cannot be forfeited and permitted forfeiture of six per cent out

of the total EMD that was deposited by the bidder in that case. The same

____________

https://www.mhc.tn.gov.in/judis ( Uploaded on: 04/07/2025 03:21:50 pm )

reasoning can be adopted in the present case also.

7. In the light of the above discussion, there shall be a direction to the

respondent to deduct six per cent out of the total EMD of Rs.20,40,062/-

and pay the balance amount to the petitioner, within a period of four weeks

from the date of receipt of a copy of this order. If there is any delay in

settling this amount, it will carry an interest of six per cent per annum from

the date on which the EMD was remitted till the date of actual payment of

the amount.

8. In the result, this writ petition is allowed with the above direction.

No costs.

                     Index : yes/no                                                           02.07.2025
                     Neutral citation : yes/no

                     ss




                     ____________





https://www.mhc.tn.gov.in/judis                     ( Uploaded on: 04/07/2025 03:21:50 pm )




                     To


                     1. The Deputy CMM
                        Southern Railway
                        General Stores Depot
                        Perambur
                        Chennai 600 023




                     ____________





https://www.mhc.tn.gov.in/judis            ( Uploaded on: 04/07/2025 03:21:50 pm )


                                                                       N.ANAND VENKATESH,J.



                                                                                                   ss









                                                                                        02.07.2025




                     ____________





https://www.mhc.tn.gov.in/judis     ( Uploaded on: 04/07/2025 03:21:50 pm )