Case Note & Summary
The petitioner, M/s. Wasim Khan Material Suppliers, participated in a public auction on 16.01.2015 for the right to excavate sand from Godegaon Sand Ghat. The petitioner was the highest bidder at Rs.1,10,23,125/- and was allotted the contract on 30.01.2015, valid until 30.09.2015, permitting excavation of 31,800 brass of sand. Initially, the petitioner used JCB and poclain machines with permission, but midway through the contract, the State prohibited the use of mechanical means. The petitioner challenged this prohibition in Writ Petition No.3924/2015, and the Division Bench of the Bombay High Court, by judgment dated 14.07.2015, quashed the prohibition, holding it unsustainable in law. However, due to the time lost during the litigation and the prohibition, the petitioner could not excavate the full quantity of sand. The petitioner then sought a refund for the unexcavated sand from the respondents. The Principal Secretary and Special Executive Officer (Revenue) rejected the refund claim by order dated 11.03.2016. Aggrieved, the petitioner filed the present writ petition. The Court noted that the State had prevented the petitioner from using mechanical excavation, which was later held illegal. The Court observed that the State cannot retain the money for sand that was not excavated, as it would amount to unjust enrichment. The Court directed the respondents to refund the proportionate amount for the unexcavated sand to the petitioner within four weeks. The writ petition was allowed, and rule was made absolute.
Headnote
A) Contract Law - Public Auction - Refund for Unexcavated Sand - Unjust Enrichment - The petitioner, a successful bidder in a public auction for sand excavation, was prevented by the State from using JCB and poclain machines midway through the contract. The High Court in a previous writ petition quashed the prohibition. However, due to the delay, the petitioner could not excavate the full quantity of sand. The petitioner sought refund for the unexcavated sand. The Court held that the State cannot retain the money for sand that was not excavated, as it would amount to unjust enrichment. The State is liable to refund the proportionate amount for the unexcavated sand. (Paras 2-8) B) Administrative Law - Natural Justice - Refund Claim - The petitioner's claim for refund was rejected by the Principal Secretary without considering the earlier High Court order that quashed the prohibition on mechanical excavation. The Court held that the rejection was arbitrary and unsustainable. The State must refund the amount for unexcavated sand, as the petitioner was prevented from excavating due to the State's own action. (Paras 5-8)
Issue of Consideration
Whether the petitioner is entitled to a refund of the amount paid for unexcavated sand when the State prevented excavation through mechanical means and the contract period expired.
Final Decision
The writ petition is allowed. The impugned order dated 11.03.2016 is quashed and set aside. The respondents are directed to refund the proportionate amount for the unexcavated sand to the petitioner within four weeks. Rule is made absolute.
Law Points
- Refund for unexcavated sand
- unjust enrichment
- public auction contract
- right to refund for non-performance
- natural justice
