Judgment Summary: Legal Dispute between State of Odisha and Odisha Forest Development Corporation Ltd.

Delve into the details of a significant legal case involving the State of Odisha and Odisha Forest Development Corporation Ltd. as the main parties. Explore the Supreme Court’s verdict and the intricate legal arguments presented during the proceedings. Gain insights into the complexities of the case and the implications of the final judgment.


  • Appellant issued an e-tender notification on 22.08.2017 for sale of phal Kendu leaves after cancellation of the previous agreement.
  • Interim order against subsequent auction through notice dated 22.08.2017 was sought in a writ petition.
  • High Court directed refund of the amount available with the appellant, which aggrieved the appellant.
  • All appeals were clubbed, heard together, and disposed of by a common judgment.
  • Appellant cancelled the agreement dated 20.01.2017 due to non-deposit of required amount.
  • State of Odisha and Odisha Forest Development Corporation Ltd. filed appeals related to the same private respondents and orders.
  • Private respondent sought to withdraw the writ petition, giving up the challenge to the cancellation of the auction process.
  • Differential security amount was to be deposited by the private respondent after withdrawing the writ petition.
  • Extension of time requested by the private respondent was declined by the appellant.
  • Various writ petitions were filed and then withdrawn, leading to the refund of the deposit.
  • The High Court allowed the appellant to proceed with the subsequent tender process.
  • Finalization of the sale was stayed by the High Court, contingent on the private respondent depositing Rs.20,00,000 within a week with the appellant.
  • The High Court disposed of the writ petition as withdrawn, despite the appellant’s objection.
  • The High Court directed the refund of the deposit made based on its interim order dated 08.09.2017.

Also Read: Solapur Municipal Corporation vs. Majarewadi Gram Panchayat Employees


  • Private respondents filed writ petition when their earlier agreement was cancelled and a subsequent auction was notified.
  • All private respondents withdrew their writ petitions as permitted by the High Court.
  • High Court’s direction to refund the deposit made by private respondents was challenged.
  • As per the agreement, the successful purchaser had to pay a provisional security deposit and additional amount by a certain deadline.
  • Failure to pay the additional security amount led to termination of the agreement and forfeiture of the security deposit.
  • The High Court’s order did not specify the type of deposit, but the amount ordered to be refunded was likely related to the additional security deposit.
  • Appellant argues that since the writ petition was withdrawn, the termination of agreement and forfeiture of security deposit were valid.
  • Appellant suggests that the High Court should have allowed retention of the security deposit and left open the possibility of recovering any additional amount owed by the private respondents.
  • The respondent’s contention is that the forfeiture can only be to the extent of the amount already deposited, which includes the EMD and initial deposit.
  • Referring to tender conditions and clauses in the agreement, it is argued that legal proceedings or Orissa Public Demand Recovery Act can be used for recovery.
  • The respondent argues that they were seeking to exercise their right by challenging the termination order to complete the transaction.
  • The advocate contends that the price offered by the respondent was higher than the rate fixed by the panchayat for Kendu leaf.

Also Read: Vaishali Wadhwani and Mamta Mishra vs. MPPSC: Upholding Justice and Integrity in Recruitment Processes


  • The amount ordered by the High Court to be deposited cannot be considered as additional security deposit at this stage, but was intended to protect the appellant’s interest.
  • The appellant retains the right to assess the damage suffered and recover it from the private respondents despite the deposit not being directly forfeited.
  • The High Court’s directive to keep the amount in a separate fixed deposit indicated establishing the bonafide of the private respondent and not additional security deposit.
  • The appellant indicated that any resultant loss from subsequent sales would be recoverable from the private respondents, emphasizing the recoverability of losses.
  • The refund consideration to the private respondents would only be applicable if the writ petition had succeeded, implying the amount deposited was not for security but as a belated payment if required.
  • The tender notification and agreement clauses highlight the provisions for security deposit and termination conditions in case of non-payment.
  • The proceedings and recovery of losses would require further legal actions due to the contractual nature of the issue.
  • The deposit ordered by the High Court should be viewed as conditional to protect the appellant’s interest, as supported by the interim orders and conditions imposed by the Court.
  • The delay caused by the private respondents led to resultant losses, and the High Court’s order for refund in that context does not warrant interference.
  • The termination of the agreement due to the non-deposit of the additional security amount indicates that the High Court’s deposit order was not for additional security at that stage.
  • Recovery of losses, as mentioned in the agreement, can be made after due quantification and following the legal process.
  • The circumstances of the writ petition and the stay on the re-tender process by the High Court do not specifically link the deposited amount to the additional security required from the writ petitioners.
  • The interim order was at the instance of the respondent.
  • The appellant should be allowed to retain the amount and complete the process by providing an opportunity to the private respondents.
  • The appellant has the right to determine the loss suffered and recover the same in accordance with the law.
  • The delay caused by the private respondents led to a reduction in the value of Kendu leaves and resulting loss.
  • The maxim actus curiae neminem gravabit applies, ensuring that no party should suffer due to the act of the Court.

Also Read: Jagdishchandra v. Joint Charity Commissioner & Ors.


  • All appeals allowed in part with no order as to costs.
  • Direction to refund amount unconditionally set aside.
  • Appellant to issue notice to private respondents regarding loss computation after second auction at cost and risk of private respondent.
  • Detailed consideration and speaking order to be passed based on responses received.
  • Private respondents can challenge speaking order before appropriate forum.
  • If loss is within deposit amount, adjustment to be made and balance refunded.
  • If loss exceeds deposit amount, adjustment made and appellant can initiate action for recovery of additional amount.
  • Procedure to be completed within two months.
  • Amount in fixed deposit to be retained until procedure completion.
  • Adjustment by appellant to be without prejudice to both parties and subject to outcome of legal proceedings.


Case Number: C.A. No.-009083-009083 / 2019

Click here to read/download original judgement

Leave a Reply

Your email address will not be published. Required fields are marked *