Authority: Supreme Court of India
Order Date: 17 September 2026
Case Overview
- Parties: Appellant – M/s Malayagiri Sandalwood Oil Distillery; Respondents – State of Uttar Pradesh and others, including Uttar Pradesh Forest Corporation.
- Background: An auction notice dated 24‑12‑2010 was issued by the Divisional Sale Manager, Uttar Pradesh Forest Corporation, for the sale/disposal of red sanders/sandalwood. The appellant deposited Rs 2,00,000 as earnest money and quoted Rs 360 per kilogram.
- Cancellation: Following the auction, multiple complaints were received alleging that prospective bidders willing to offer Rs 600 per kilogram were prevented from participating by local mafia. Consequently, the competent authority cancelled the auction by order dated 01‑02‑2011.
- High Court Proceedings: The appellant filed a writ petition challenging the cancellation. The High Court dismissed the petition, reserving liberty to the appellant to seek arbitration or institute a civil suit for breach of contract.
- Supreme Court Review: The Supreme Court examined the record and the respondents’ reply, noting the policy decision to cancel the auction due to the mafia‑related complaints. The Court found no ground to interfere with the 01‑02‑2011 cancellation order, especially given the lapse of nearly 16 years since the auction.
Final Outcome
- The appeal is disposed of; the Supreme Court does not interfere with the cancellation order.
- The respondents are directed to refund the entire earnest money of Rs 2,00,000 to the appellant, with interest at 12% per annum, within sixty days from the order date.
- Any pending applications, if any, shall stand disposed of.
Topics: Court Order, Auction Refund, Forestry Dispute