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Issues involved:
1. Whether a person can be penalized for no fault of his due to an equity clause in favor of the State? 2. Can a person be directed to forfeit security amount due to a pending writ petition without being impleaded as a party? Summary: The case involved a dispute regarding the disposal of Tendu leaves for 1995 session. The respondent's tender was initially accepted but later canceled due to complaints and manipulations. The appellant subsequently became the highest bidder. A writ petition by another party led to a stay order on executing the fresh agreement, affecting the appellant who had deposited a security amount. The appellant sought a refund after the writ petition was disposed of, but faced challenges from the authorities. In the writ petition filed by the appellant, the Single Judge held that the contract had frustrated, and the appellant was not obligated to purchase the Tendu leaves. The Division Bench found that the appellant did not breach any conditions and ordered a deduction from the security amount based on equities, which was challenged. The Supreme Court held that the appellant should not be penalized for circumstances beyond his control, citing legal maxims like "actus curiae neminem gravabit" and "lex non cogit ad impossibilia." The Division Bench's decision to deduct a sum from the security amount was overturned, and the appellant was deemed entitled to a full refund of the earnest money deposited. In conclusion, the Court ruled in favor of the appellant, emphasizing the importance of fairness and justice in such matters, and directed the refund of the entire security amount without any deductions.
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