Auction highest bidder denied possession entitled to full refund with 6% interest from first refund request

SC allowed the appeal, set aside the HC order and held the writ was maintainable despite factual disputes because the respondents' conduct was arbitrary. The highest bidder, having deposited the auction amount but denied possession for reasons not attributable to it and unable to excavate, is entitled to a refund. The respondents were directed to refund the entire amount with interest at 6% per annum from the date of the first refund request until realisation. The HC's refusal to entertain the petition and relegation to a suit was held unjustified.

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Issues:
1. Entertaining a petition involving disputed questions of fact under Article 226 of the Constitution.
2. Refund of auction amount due to non-possession of sand block.
3. State's obligation as a model litigant in legal proceedings.

Analysis:

Issue 1: Entertaining a petition involving disputed questions of fact under Article 226 of the Constitution
The Supreme Court emphasized that while disputed questions of fact and law may deter the High Court from entertaining a petition under Article 226, it is not a strict rule but a matter of self-restraint. Citing precedent, the court clarified that in certain cases, even if disputed facts arise, a writ petition can be entertained if it does not require extensive evidence. The court highlighted that the High Court's plenary power must be exercised in exceptional circumstances, especially if the state's actions are found to be arbitrary and unreasonable, violating constitutional mandates.

Issue 2: Refund of auction amount due to non-possession of sand block
The case involved the appellant, who was the highest bidder for a sand block but was denied possession despite depositing the full auction amount. Various authorities confirmed that neither possession nor excavation of sand occurred. The court noted the authorities' acknowledgment of the appellant's situation and the processing of a refund, which was later hindered by the loss of the file in transit. The court deemed the denial of refund to be unreasonable and arbitrary, emphasizing the state's obligation to act fairly and justly towards citizens. Consequently, the court directed the respondents to refund the entire amount with interest to the appellant.

Issue 3: State's obligation as a model litigant in legal proceedings
Citing previous judgments, the court reiterated that the state should act as a model litigant, avoiding frivolous and unjust contentions to obstruct justice. The court emphasized the state's duty to meet honest claims, vindicate defenses, and not resort to technicalities to defeat legitimate claims. In this context, the court held that the appellant, having fulfilled his obligations as a bidder, was entitled to a refund due to non-possession of the sand block, emphasizing the state's duty to act fairly and justly towards citizens in legal matters.

In conclusion, the Supreme Court allowed the appeal, set aside the High Court's order, and directed the respondents to refund the entire amount to the appellant with interest, highlighting the state's obligation to act as a model litigant and ensure justice for its citizens.

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