JUDGMENT : Janak Raj Kotwal, J.:- 1. Municipal Committee, Katra/respondent No. 3 issued auction noticed No. MC/K/2009-10/1226-37 dated 20.03.2010 inviting offers for the 'Mules & Mazdoor Contract of Municipal Committee, Katra' for the year 2010-11 (01.04.2010 to 31.03.2011). The Auction Notice was accompanied with its term and conditions clause-8 whereof is relevant. It reads: "the successful highest bidder shall have to deposit 40% of the offered amount at the time of provisional acceptance of the offer by the committee immediately but not later than 24 hours from the time of acceptance. Balance contractual amount shall have to be deposited in 5(five) equal installments commencing from 1st May to September, 2010, in shape of post dated cheques along with bank guarantee to be deposited within 24 hours from the time of acceptance of offer to secure timely realization of the consideration amount. In case of default to deposit 40% of bid offered amount within the 24 hours and also fails to fulfill other formalities required as per terms & conditions, the security deposit/earnest money shall be forfeited." One Pritam Dass happened to be the highest bidder whereas petitioner was the second highest, having offered 7.86 crore rupees as contract amount. The highest bidder, however, failed to make the requisite deposit as required under Clause 8 (supra) and respondent No. 1, therefore, vide its communication No. MC/K/2009-10/1330-39 dated 30.03.2010, asked the petitioner to deposit 40% of the auction amount. 2. Petitioner's contention is that he approached respondent No. 1, expressed his readiness to deposit the 40% of the auction amount and made a representation that clause No. 8 of the auction notice was harsh and arbitrary and may be relaxed. Petitioner then filed a suit in the court of learned District Judge, Reasi. This suit seems to have been filed on 03.04.2010 as indicated in the order dated 29.04.2010 passed by the learned District Judge in the application for temporary injunction filed in that suit. In that suit, petitioner inter alia sought declaring of the condition of providing the bank guarantee as arbitrary and illegal and injunction restraining respondents from re-auctioning or re-tendering the contract.
In that suit, petitioner inter alia sought declaring of the condition of providing the bank guarantee as arbitrary and illegal and injunction restraining respondents from re-auctioning or re-tendering the contract. Learned District Judge by his order dated 29.04.2010 (supra) passed in the application for temporary injunction, firstly, directed, respondents to issue the order for allotment of contract to the petitioner/plaintiff and secondly, directed that in case letter of allotment is not issued for non furnishing of bank guarantee, the respondents will pay the amount of CDR to the petitioner within two days and also furnish an undertaking that 'they will compensate the plaintiff for breach of contract and will bind themselves for compensating the losses accruing to the plaintiff as a result of breach of contract if found to have concluded by re-tendering contract, in case the defendants choose to do so, as per the final determination of this suit'. 3. Respondents questioned the order dated 29.04.2010 passed by the learned District Judge in appeal, CIMA No. 312/2010, before this Court and in compliance to the interim direction issued by this Court vide order dated 07.05.2010 respondent No. 3 made allotment of the contract in favour of the petitioner vide No. MC/K/2010/168-77 dated 10.05.2010. 4. As the respondents started taking steps for allotment of fresh contract for the next financial year, that is, 2011-12, petitioner filed CMA No. 271/2011 in CIMA No. 312/2010, which was pending in this Court. A learned Single Judge of this Court vide order passed on 31.03.2011 directed the parties to maintain status quo as on that day till 07.04.2011. Petitioner, thus, continued with executing the contract. However, on the case coming up before this Court on 07.04.2011, the respondents withdrew the appeal and in the result the interim direction issued on 31.03.2011 came to end and petitioner could execute the contract only up to 07.04.2011. The petitioner, thus, executed the contract and collected the revenue for the period commencing from 10.5.2010 to 7.4.2011. 5.
However, on the case coming up before this Court on 07.04.2011, the respondents withdrew the appeal and in the result the interim direction issued on 31.03.2011 came to end and petitioner could execute the contract only up to 07.04.2011. The petitioner, thus, executed the contract and collected the revenue for the period commencing from 10.5.2010 to 7.4.2011. 5. It is contended by the petitioner that he, having executed the contract 33 days less than the contract period of 365 days of a year, wanted to pursue the suit earlier filed by him before the District Judge, Reasi but, as the respondents in that suit had taken an objection that dispute was arbitrable and civil court has no jurisdiction, he withdrew the suit with liberty to approach the arbitrator as per the terms and conditions of the NIT. 6. Petitioner filed Arbitration Application before the Arbitrator, the Director Urban Local Bodies, Jammu, contending inter alia that the auction amount of 7.86 crore rupees was deposited by him for contract period of 365 days but the contract having been allotted on 10.05.2010 he was not granted extension of 33 days and therefore, claimed Rs. 71,06,276/- proportionate to the contract value of 33 days. The Arbitrator, however, after framing issues and hearing both sides rejected the claim holding that no agreement was executed between the parties so application for arbitration was not maintainable in the absence of proper agreement having an arbitration clause for settlement of dispute between the parties. 7. The admitted position, thus, arising is that the petitioner, though eligible for allotment of the contract for the financial year, 2010-11 (01.04.2010 to 31.03.2011), did not comply with clause 8 of the auction notice and instead questioned the legality of the said clause by filing a suit in the court of District Judge, Reasi. Allotment of contract was, however, made in his favour on 10.05.2010 pursuant to the interim direction issued in this regard by this Court in the appeal filed against the order of temporary injunction passed by the learned District Judge, Reasi. Allotment thus, came to be made forty days after the stipulated beginning of the contract period.
Allotment of contract was, however, made in his favour on 10.05.2010 pursuant to the interim direction issued in this regard by this Court in the appeal filed against the order of temporary injunction passed by the learned District Judge, Reasi. Allotment thus, came to be made forty days after the stipulated beginning of the contract period. Petitioner, however, continued with executing the contract and collecting revenue even after the last date of stipulated period, that is, 31.03.2011, up to 07.04.2011 pursuant to the order dated 31.03.2011 passed by this Court in the appeal (supra), which was pending in this Court. It is in this backdrop that petitioner claims to have worked for 33 days less than the stipulated contract period of 365 days of the financial year, 2010-11 and claims recovery of the auction amount proportionately. 8. An earlier writ petition, being OWP No. 743/2013, filed in this regard by the petitioner was disposed by this Court vide the order dated 03.07.2013 issuing a direction to the respondents to accord consideration to petitioner's claim in accordance with rules occupying the field. Pursuant to and in compliance with that order, respondent No. 3, the Executive Officer, Municipal Committee, Katra, accorded consideration to petitioner's claim and rejected the same vide his order No. MC/K/2013/438-41 dated 12.08.2013 taking the view that 'the same is not maintainable as the petitioner himself was at fault for not fulfilling the terms and conditions of the Auction Notice'. 9. Petitioner has, thus, filed this writ petition seeking writ, order or direction in the nature of certiorari quashing order No. MC/K/2013/438-41 dated 12.08.2013 passed by respondent No. 3 and writ, order or direction in the nature of mandamus directing the respondents to refund an amount of Rs. 71,06,276/- to the petitioner along with 12% interest with effect from 10.04.2010 till its final realization. 10. On the strength of the averments made in the petition, Mr. Ajay Vaid, learned counsel for the petitioner, sought to demonstrate that the stipulated contract period as given in the auction notice dated 20.03.2010 was 365 days of the financial year, 2010-11 from 01.04.2010 to 31.03.2011. Referring to the interim order dated 07.05.2010 passed by this Court in CIMA No. 312/2010, Mr.
Ajay Vaid, learned counsel for the petitioner, sought to demonstrate that the stipulated contract period as given in the auction notice dated 20.03.2010 was 365 days of the financial year, 2010-11 from 01.04.2010 to 31.03.2011. Referring to the interim order dated 07.05.2010 passed by this Court in CIMA No. 312/2010, Mr. Vaid submitted that the direction for allotment of the contract in favour of the petitioner was issued by this court pursuant to a statement made by respondents' counsel that if the petitioner (respondent therein) is ready to furnish bank guarantee of rest of the amount, the contract will be allotted in his favour and by making such a statement and allotment having been made pursuant thereto, respondents waived the conditions provided under Clause-8 (supra) and were bound to allow the petitioner to perform the contract for full period of 365 days. Mr. Vaid, thus, submitted that the petitioner had paid to the respondents full auction amount of 7.8 crore rupees for collecting revenue for 365 days and respondents were under contractual obligation to allow him to perform the contract for the full contract period and having allowed him to work 33 days less than the contract period, respondents have no legal right to retain the proportionate auction amount in respect of the said period. 11. Respondents have opposed the petition. On the strength of the averments made in the objections filed on behalf of respondents, Ms. Seema Shekhar, learned, AAG, and Mr. Adarsh Sharma, advocate, appearing for respondents, submitted that contract could not be allotted in favour of the petitioner with effect from 01.04.2010 because petitioner did not comply with the conditions laid down in clause-8 of the auction notice inasmuch as neither he deposited 40% of the auction amount offered by him within 24 hours nor the post dated cheques and bank guarantee in respect of the balance amount. The petitioner rather filed suit in the court of District Judge, Reasi and later the contract was allotted in his favour pursuant to and in compliance-with the interim direction issued by this court vide order dated 07.05.2010 passed in the appeal filed by respondents against the order of temporary injunction passed by learned District Judge, Reasi in the suit filed by the petitioner. Ms.
Ms. Seema Shekhar, thus, vehemently argued that petitioner himself was responsible for late allotment of contract in his favour due to non-compliance of the condition of auction notice so is not entitled to recovery of proportionate amount. Ms. Shekhar submitted also that contract is allotted for a financial year and not for 365 days. 12. It is seen that when the matter came up before this Court in CIMA No. 312/2010 on 07.05.2010, the submission made by the respondents, counsel (appellants therein) was that the department did not accept the 40% of the amount offered by the petitioner (respondent therein) which was required to be deposited at the time of provisional acceptance for the reason that the petitioner had not complied with clause 8 of the NIT by not furnishing the bank guarantee as he was required to submit post dated cheques for remaining amount along with bank guarantee within 24 hours from the date of acceptance of documents and therefore, contract was not allotted in his favour. Respondents' counsel had further stated that if the petitioner (respondent therein) is ready to furnish the bank guarantee for the rest of the amount, the contract would be allotted in his favour as the intent and purpose of seeking such guarantee is to secure the amount. The contention of the petitioner's counsel on the other hand was that the post dated cheques were delivered and the dispute was only in regard to furnishing of the bank guarantee, which according to petitioner's counsel (respondent therein) was to be furnished after 01.05.2010. This Court, however, was not persuaded to accept petitioner's contention and had observed in the order passed on that day that the bank guarantee was to be furnished along with post dated cheques within 24 hours of the acceptance of the documents. It was in that backdrop and on the basis of above mentioned statement made by respondents' counsel that this Court vide order dated 07.05.2010 had extended time for furnishing bank guarantee up to 28.05.2010 and directed the respondents to accept the cheque issued by petitioner for 40% of the auction amount along with post dated cheques for the remaining amount by 10.05.2010 and issue letter of allotment in favour of the petitioner (respondent therein). 13.
13. Indisputable position, thus, emerging is that, whereas the petitioner had complied with clause-8 of the auction notice to the extent of offering 40% of the auction amount by way of a cheque, he, however, had failed to comply with rest of the conditions by not issuing five post dated cheques and bank guarantee to secure the payment of rest of the auction amount and instead questioned the legality of clause-8 by filing suit in the court of learned District Judge, Reasi. It was for this failure on the part of the petitioner that allotment letter enabling him to start performing under the contract from 01.04.2010 was not issued by respondent No. 3, which, nonetheless, later came to be issued on 10.05.2010 pursuant to and in compliance with order dated 07.05.2010 (supra) passed by this Court. As the contract period had to came to an end with the end of the financial year, that is, on 31.03.2011, the petitioner again approached this Court by way of CMA No. 271/2011 in the above mentioned appeal (CIMA No. 312/2010) and because of the interim direction issued by this Court on 31.03.2011, he continued performing under the contract up to 07.04.2011 when, however, the interim direction ceased to operate due to withdrawal of appeal by the respondents. Fact of the matter, thus, precisely is that as against stipulated contract period of one year from 01.04.2010 to 31.03.2011 the petitioner could perform under the contract and earned revenue from 10.05.2010 to 07.04.2011 and in that petitioner is not wrong in saying that he worked 33 days less than the stipulated contract period of 365 days. He thus sought refund of proportionate auction amount for these 33 days, firstly, by the medium of OWP No. 743/2013 and now by the medium of the petition on hand in which he also questions order dated 12.08.2013 passed by respondent No. 3 in compliance with the order dated 03.07.2013 passed by this Court in OWP No. 743/2013. Respondent No. 3, by impugned order dated 12.08.2013, rejected petitioner's claim holding it as not maintainable solely for the reason that petitioner himself was at fault for not fulfilling the terms and conditions of the Auction Notice. 14.
Respondent No. 3, by impugned order dated 12.08.2013, rejected petitioner's claim holding it as not maintainable solely for the reason that petitioner himself was at fault for not fulfilling the terms and conditions of the Auction Notice. 14. Point sought to be demonstrated on behalf of the respondents is that petitioner by not issuing post dated cheques and bank guarantee to secure the payment of remaining 60% of the total auction amount was responsible for non-issue of allotment letter and allotment of contract in his favour up to 10.05.2011 and therefore is not entitled to claim recovery of proportionate auction amount. 15. It admits of no doubt that petitioner himself was responsible for delay in allotment of contract in his favour-resulting into his inability to collect the revenue for initial period of 39 days, that is, from 01.04.2010 to 09.05.2010. Respondents cannot be said to have committed any wrong, illegality or breach of contract in not issuing allotment letter and allotting the contract to the petitioner from 01.04.2010 up to 09.05.2010. It was with the intervention and under the interim directions of this Court on 07.05.2010 (supra) that the respondent No. 3 allotted the contract in favour of the petitioner on 10.05.2010 and he performed under the same up to 7.4.2011. This, however, is one aspect of the matter and the other aspects, which are important nevertheless, are that stipulated period of the contract was twelve months, the auction amount offered and paid by the petitioner was for the said period of twelve months and the petitioner could not collect the revenue for 32 days out of the said twelve months. 16. Question, thus, arising is whether petitioner is justified in claiming refund of the auction amount proportionately in respect of the above mentioned 32 days or respondents are justified in refusing the refund? It is to be noticed that such a situation is not covered under the auction notice and admittedly no agreement was executed between the parties after allotment of the contract in favour of the petitioner, which had been the reason for dismissal of arbitration application filed by the petitioner. The question, therefore, is to be accorded consideration and determined on the principle of equity and good conscience. 17.
The question, therefore, is to be accorded consideration and determined on the principle of equity and good conscience. 17. As pointed out above, petitioner paid auction amount of 7.86 crores rupees in respect of entire twelve months of the financial year 2010-2011 but did not perform under the contract and earn revenue for initial thirty nine days, that is, 1.4.2010 to 09.5.2010. He, however, was allowed to perform for seven more days after the end of the financial year under the interim direction issued by this court on 31.03.2011. Petitioner, thus, did not earn revenue for a total period of thirty two days. It is also important to note that it is not the respondents' case that the respondent/Municipal Committee did not collect any revenue for the initial period of thirty nine days or suffered any financial loss on that count. On the other hand, it is stated in the objections that collection of revenue was taken up departmentally with effect from 01.04.2010. It is, thus, admitted that for initial thirty nine days, that is, from 01.04.2010 to 09.05.2010, the contract work had been performed and revenue collected by the respondent/Committee departmentally. Once the committee did not suffer any financial loss due to delay in allotment of contract caused by petitioner's failure to fulfill the conditions of allotment there would be no justification in permitting the committee to retain the revenue collected by them during initial thirty two days except the expenditure incurred in the collection. 18. Ours is a social welfare State where the Government has to play key role in protecting and promoting economic interests and social wellbeing of its citizens. Government or its instrumentalities including the civic bodies are not entitled to or justified in earning undue benefit/profit from the citizens. There would be rather no justification in permitting the State or its instrumentalities to earn undue profit detrimental to economic interest of an individual. Respondent No. 3 by rejecting the claim of the petitioner has taken an administrative decision conferring double benefit on it. On the one hand the Municipal Committee earned revenue in the shape of auction amount paid by the petitioner and on the other hand earned revenue for the said period of 32 days directly. Petitioner on the other hand has suffered loss by not earning revenue for thirty two days out of the stipulated contract period.
On the one hand the Municipal Committee earned revenue in the shape of auction amount paid by the petitioner and on the other hand earned revenue for the said period of 32 days directly. Petitioner on the other hand has suffered loss by not earning revenue for thirty two days out of the stipulated contract period. Respondents are not justified in earning double financial benefit either for the reason that fault lied with the petitioner or by making an attempt to draw a distinction between a period of one financial year and 365 days. 19. Courts in exercise of powers of judicial review generally do not interfere with the administrative decisions of the State or its instrumentalities but a decision which is unjust and arbitrary calls for judicial review. I do not find any justness in the view taken by respondent No. 3 in the impugned order simply for the reason that the fault was on the part of the petitioner. Question is not of fault alone but of monetary loss, if any, having been suffered by the respondents, which, however, is not. 20. Viewed thus, this writ petition has merit and is allowed. By issue of writ of certiorari order No. MC/K/2013/438-41 dated 12.08.2013 passed by respondent No. 3 is quashed and by issue of writ of mandamus, respondents are directed to pay an amount equivalent to the net revenue collected by them during first thirty two days of contract period commencing from 01.04.2010 after deducting from the total revenue the expenses incurred in the said collection such as salary of the staff engaged for or involved in making the collection and allied expenses. After making deductions towards the said expenses, respondents shall be entitled to make 10% further deduction from the net revenue for the reason that the Municipal Committee was compelled to perform the task of collecting revenue, which, but for a failure on his part, should have been performed by the petitioner. Exercise in this regard be taken up and completed and payment made to the petitioner within eight weeks hereafter. 21. Disposed of along with connected CMP.