AI Drafter 
TaxTMI 
TaxTMI 
TaxTMI 
2019 (7) TMI 1959
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.... of HEMM for OB removal including Access Trench & diversion of nallah at Jagannathpur OCM, Bhatgaon Area has been cancelled and earnest money deposit amounting to Rs. 50,00,000/- has been forfeited and eventually the petitioner herein has been debarred from participating in future bids for a period of 24 months and fresh tender for said work has been floated at the risk and cost of the petitioner herein. 2. The Central Government under the provisions of the Coal Bearing Areas (Acquisition and Development) Act, 1957 (hereinafter called as 'the Act of 1957") after issuance of notification under Sections 8 to 11 of the Act of 1957 acquired 662.151 hectares of land at village Jagannathpur, Tahsil Pratappur, District Surguja for open cast project of SECL at Bhatgaon area by notifications dated 4th August, 2010 and 3rd March, 2011 and thereby the subject land stands vested with the Central Government and thereafter with respondent-SECL under Sections 10 and 11 of the Act of 1957, but the company have no power to transfer the said land without prior approval of the Central Government. The Additional Collector, Surajpur by its order dated 17.4.2018 directed that name of the responde....
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....ed and the petitioner company has been debarred from participating in future bids, which has been questioned in this writ petition stating inter-alia that statutory clearance for the said work was not obtained by the respondent-SECL right in time and possession was not with the SECL, therefore, work could not be undertaken by it and despite repeated requests, the respondent-SECL did not pay any heed to the request made by the petitioner except making verbal assurances, which led the petitioner to make a request to the respondent-SECL for refund of its earnest money deposit which they failed to refund and which compelled the petitioner to file this writ petition challenging their illegal and arbitrary action of forfeiting huge amount of Rs. 50,00,000/-, which is unsustainable and bad in law, as such, the impugned order is liable to be set aside and appropriate writ be issued directing the respondent-SECL to refund Rs. 50,00,000/-, which has been deposited by the petitioner as earnest money by quashing the impugned communication dated 26.2.2019 (Annexure P/1). 3. Return has been filed by the respondent-SECL stating inter-alia that the petitioner has remedy of invoking arbitration ....
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....nd were not available with the respondent-SECL and despite being informed to the respondents-authorities, they did not pay any heed to the request made by the petitioner except making verbal assurances and when the petitioner filed writ petition seeking refund of earnest money deposit, the respondent-SECL issued show-cause notice and cancelled the Letter of Intent (LOI) issued in favour of the petitioner and forfeited its earnest money deposit, which is violative of the petitioner's fundamental right guaranteed under Articles 14 and 19 (1) (g) of the Constitution of India. Therefore, the impugned order dated 26.2.2019 (Annexure P/1) passed by respondent No.3 deserves to be set aside and appropriate writ be issued directing the respondents to refund an amount of Rs. 50,00,000/-. 5. Mr.Vivek Chopda, learned counsel appearing on behalf of the respondents/SECL, would submit that the dispute relating to cancellation of contract and forfeiture of earnest money is arbitrable dispute and it can be resolved by way of clause 13 of conditions of contract, which provides settlement of dispute and clause 13A of conditions of contract provides settlement of dispute through Arbitration. He....
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....oney, showcause notice for cancellation of contract in question was issued and thereafter, Letter of Intent was cancelled and his earnest money deposit was forfeited, as such, the respondent-SECL has acted most arbitrarily, particularly, forfeiting the earnest money amounting to Rs. 50,00,000/-, which is ex-facie arbitrary. In view of above, we are entertaining the writ petition to the extent of examining and finding out as to whether forfeiture of earnest money to the tune of Rs. 50,00,000/- is legal and proper or it suffers from vice of arbitrariness leaving rest of dispute with regard to cancellation of contract, blacklisting and fresh tender for the said work and risk and cost to be raised by the petitioner by way of arbitration as provided in clause 13A of the conditions of contract, as such, the writ petition is entertained only to that extent indicated hereinabove leaving rest of the dispute to be adjudicated by way of arbitration, if any, to be invoked by the petitioner or avail any other remedy available to him under the law. 10. The next preliminary objection is that since the Letter of Intent has been cancelled and consequently, earnest money deposit has been forfeite....
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.... as a matter of rule. (c) A writ petition involving a consequential relief of monetary claim is also maintainable. 28. However, while entertaining an objection as to the maintainability of a writ petition under Article 226 of the Constitution of India, the court should bear in mind the fact that the power to issue prerogative writs under Article 226 of the Constitution is plenary in nature and is not limited by any other provisions of the Constitution. The High Court having regard to the facts of the case, has a discretion to entertain or not to entertain a writ petition. The Court has imposed upon itself certain restrictions in the exercise of this power [See: Whirlpool Corporation vs. Registrar of Trade Marks, Mumbai & Ors. (supra)]. And this plenary right of the High Court to issue a prerogative writ will not normally be exercised by the Court to the exclusion of other available remedies unless such action of the State or its instrumentality is arbitrary and unreasonable so as to violate the constitutional mandate of Article 14 or for other valid and legitimate reasons, for which the Court thinks it necessary to exercise the said jurisdiction." 12. The above....
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....tioner on 2.5.2018, but there is nothing on record to show that before issuance of Letter of Intent, possession of subject land was delivered to the SECL by the competent authority under the Act of 1957. 15. It is the case of the petitioner that on 11.6.2018, 19.6.2018 and 20.6.2018 the petitioner demanded possession of subject land to commence the work as even in inspection carried out by the team of CMPDI, hindrance was caused by the villagers and inspection of work could not be completed. The respondents in para-8 of their return have also admitted that though the subject land on which work was to be executed was under their possession, but there was some obstruction by villagers agitation due to which there was little delay in handing over the site, but the fact remains that no document has been brought on record by the respondent-SECL that after vesting of land under Section 11 of the Act of 1957, possession of subject land was handed over to SECL before issuance of Letter of Intent and SECL, in turn, has placed the petitioner in possession to initiate the work awarded to him by Letter of Intent dated 2.5.2018. 16. The Supreme Court in the matter of Banda Development Aut....
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....on of land is expected within a period of two months, but while filing return, though the respondents have specifically claimed 95% of land to be in their possession, but no document has been brought on record placing them in possession of subject land which they claimed to have given to the petitioner for execution of work in question. The land has been acquired under the Act of 1957 and the manner of taking possession of huge land is also indicated by Their Lordships of the Supreme Court in Banda Development Authority (supra) by preparing panchnama, which the respondents ought to have in their possession, but they did not produce the same before this Court to support their plea that they were placed in possession of subject land on which work of subject tender was required to be executed by the petitioner, which is apparent from the fact that despite several requests made by the petitioner noticed hereinabove, the respondents did not even give positive response except directing the petitioner to contact personally and gave oral assurances and promise and also for the reasons that the respondents themselves have mentioned in para-8 of their return that subject land was under their....