JAI BHAWANI TIMBER Vs. STATE OF MADHYA PRADESH

JUDGEMENT

(1.) The petitioners are all traders in timber. They were the highest successful bidders at the public auction held on 25-6-91 of lots of timber detailed in the impugned notice (Annexure-A). The auction conditions are contained in the auction notice (Annexure-A). The petitioners had made initial deposits of earnest money of 10% of reserve price as per auction condition No. 1. They signed the bid-sheet as successful bidders in terms of auction condition No. 9 and had deposited 25% of the bid amount, as required by condition No. 2(a)(i).

(2.) The contention of the petitioners is that the sales of various timber lots, for which they had offered the highest bid, were complete. Hence the respondents who are the authorities in the Forest Department of the State of M.P., had no right to cancel the auction sales vide impugned communication dated 25-7-91 (Annexure-C) of the respondent - D.F.O. directing refund of the prices paid by them and for taking steps to reauction the timber lots.

(3.) The respondents supported their actions stating that the D.F.O. respondent No. 2, who was conducting the auction sale, had later on discovered that the petitioners had formed a "ring". The "ring" may be explained as a sort of combination or mutual understanding between the bidders to refrain from bidding against each other. Thus, according to the respondents, since there were no bid offered on competitive basis, the D.F.O. reported the matter vide its letter dated 4-7-91 (Annexure R-1) to the Conservator of Forests. The Conservator of Forests on his part reported the matter vide letter dated 4-7-91 (Annexure R-3) to the Chief Conservator of Forests, who took a decision on 16-7-91 to cancel the entire auction sale of teak lots. This resulted in issuance of the impugned communication dated 25-7-91 (Annexure C) by the D.F.O. intimating annulment of all auction sales of teak lots and refund of prices already paid to the petitioners.