DAYANAND G Vs. CHIEF CONSERVATOR OF FORESTS

JUDGEMENT

(1.) The petitioner challenges in this Writ Petition the action of the Respondent- Forest Officials in invoking the Bank guarantees dt. 9-1-1990 bearing Nos. 24/90 and 31/90 issued by the Indian Overseas Bank, Hanamkonda, Warangal District for Rs. 4,74,474/-. The petitioner seeks direction to return the said Bank guarantees. Pursuant to the acceptance of the Tender submitted by the petitioner, he was awarded the contract for the purchase of Abnus leaves collected in Unit No. 67 of Narsampet Forest Range, Warangal South Division. The tender rate was Rs. 43.45 ps. per Kg. and the estimated sale quantity was 1,09,200 Kgs. By virtue of the contract, the petitioner was entitled to purchase the collected, cured, bagged and stored Abnus leaves. The sale is governed by the A.P.Minor Forest Produce (Regulation of Trade) Act, 1971 read with the A.P.Minor Forest Produce (Regulation of Trade in Abnus Leaves) Rules. The Andhra Pradesh Forest Development Corporation (2nd respondent) was appointed as the agent to the Government for collection and disposal of Abnus leaves.

(2.) As per the conditions of Tender Notice, the purchaser, before execution of the Agreement is required to deposit a sum equal to 10% of the sale amount arrived at by multiplying the accepted tendered rate of the notified quantity. Another 10% was required to be paid as Security Deposit on or before 31-3-1990. For this, the period was extended upto 15-5-1990 by the Forest Department. It appears that the season for the collection of Abnus leaves ended by May/June, 1990. Accordingly, the petitioner furnished Bank guarantees for Rs.4,74,474/- representing 10% of the Security Deposit at the time of entering into the Agreement on 19-2-1990. It is not in dispute that the Forest Development Corporation could collect only 74,390 kgs. by May, 1990 and further quantity could not be collected for the reasons beyond the control of the Corporation. The 3rd respondent issued Notice dated 15-3-1990 to the petitioner to remit the 2nd instalment of security deposit amount of Rs. 4,74,474/- in the form of Bank guarantee or Demand Draft on or before 31-3-1990. As already stated, time for paying the security deposit was extended upto 15-5-1990. The 2nd instalment of the security deposit was not arranged by the petitioner even by the extended date. The contract was cancelled on 20-5-1990 for the failure to pay the balance of security deposit in terms of the conditions of the Tender Notice. Whereas the petitioner contends that the factum of the termination of the contract was intimated to him only on 8-8-1990, the learned Government Pleader contends that it might have been intimated to the petitioner even earlier. However, we need not go into the question. But, we may notice the fact that on 8-8-1990, the petitioner was informed by the Divisional Forest Officer, Warangal (3rd respondent) that on account of failure to furnish the 2nd instalment of 10% security deposit amount, the agreement was terminated on 20-5-1990 and it was decided to put up 'unit material' for re-sale on 18-8-90. The re-sale took place on 18-8-1990. In the meanwhile, one significant thing had taken place. The petitioner represented to the Chief Conservator of Forests (here in after referred as to 'C.C.F.') on 13-8-1990 offering to pay balance of security deposit of Rs. 1,71,971/- instead of Rs. 4,74,474/- in view of the appreciable reduction in the quantum of Abnus leaves collected by the end of the season. It appears that similar representations were made by various other purchasers. The C.C.F by a telegraphic communication dated 16-8-1990 addressed the Divisional Forest Officers of Warangal and Khammam districts communicated his decision to "adjust the amount paid towards 10% security deposit on the notified contract" and directed the subordinate officials to collect the difference security deposit amount on the basis of the actual collected quantity. It was further directed that cancellation of the contracts pertaining to the units concerned shall be revoked subject to payment of balance of security deposit at 10% on the actual collected quantity. It appears that the telegram was received on 17-8-1990. However, on 18-8-1990, re-sale had taken place as per the schedule and Abnus leaves were sold to a third party. Thereafter, the petitioner made a further representation to the C.C.F., but there was no response. While so, the 3rd respondent tried to invoke the bank guarantees by sending intimation to the 4th respondent-Bank. At that stage, the present Writ Petition was filed on 5-7-1991.

(3.) We are not concerned with the question whether the 3rd respondent is justified in cancelling the contract on the ground of non-fulfilment of the condition in the Agreement and Tender Notice as regards the payment of 2nd instalment of 10% security deposit in as much as the legality or otherwise of the cancellation has not been challenged before us.