NILGIRI CONTRACTORS SOCIETY Vs. STATE OF ORISSA

JUDGEMENT

(1.) The averments in the writ application may be stated in short. The petitioner is a forest contractor in respect of lot No. 291 of the Baripada Forest Division. There was a public auction on 28-8-73. The upset price was fixed at Rs. 73,000. The petitioner with five others participated in the public auction. The petitioner was the highest bidder for an amount of Rs. 80,500. The sale was finally knocked at that amount. After the acceptance of the highest bid of the petitioner he was directed by the Divisional Forest Officer (opposite party No. 3) to sign the bid-sheet. The D.F.O. also signed the bid-sheet in token of his acceptance of the bid. Immediately after the bid-sheet was signed the petitioner deposited Rs. 8,050 which was 10 per cent of the bid amount. The security deposit was in the form of Government Promissory Notes and National Defence Certificates. The agreement was signed by the petitioner and the D.F.O. The period of lease was nine working months starting from October, 1973 and the petitioner was all along waiting for the direction of the Divisional Forest Officer to work out the coupe. The petitioner made an investment of more than Rs. 11,000 to be ready for working out the coupe the moment the order was received. He ultimately gathered that in respect of the impugned lot the Government entered into a negotiation with the Orissa Forest Corporation and granted the same in its favour. He accordingly prayed for issue of a writ of mandamus directing the Government to lease out the impugned lot in his favour after cancelling the lease in favour of the Orissa Forest Corporation and to issue a writ of certiorari to quash the order of the State Government in that respect. Facts are not very much in dispute in the counter filed by the opposite parties. It is, however, asserted that there was no acceptance of the highest bid given by the petitioner which was merely an offer. The competent authority to accept the offer is the Chief Conservator of Forests. Reliance for the purpose was placed on Clause 1 of the General Condition of Sale under which the lot was put to auction. It may be extracted:

(2.) Mr. Palit contended that as the highest bid given by the petitioner was accepted by the D.F.O. it was no longer open to the Government not to accept the offer and to settle the coupe on the Corporation. The contention is not well founded. Clause 1 of the General Condition of Sale clearly shows that the bid was conditionally accepted by the D.F.O. subject to the approval of the competent authority who was the Chief Conservator of Forests. Until such approval had been obtained and a formal agreement executed on behalf of the Government the sale shall not be binding on the Government. On the other hand, no bidder is eligible to rescind the contract between the date of bidding and the date of approval of the competent authority. Admittedly, no approval had been given by the Chief Conservator of Forests and no formal agreement was executed. Consequently no rights have been created in favour of the petitioner on the basis of the highest bid given by him which was provisionally accepted by the D.F.O. The highest bid at the auction not having culminated into a binding contract between the parties the petitioner has no enforceable right to challenge the settlement made in favour of the Corporation. It is quite open to the Government not to accept the highest bid and settle the coupe on the Corporation in any manner it chose.

(3.) Reliance was placed by Mr. Palit on a Division Bench decision in (1970) 1 Andh WR 342 (S. Raman Goud v. The Govt. of Andhra Pradesh). The facts of that case are very similar to the facts of the present case. The facts of that case may be noticed in short. The appellant therein was the highest bidder for a particular coupe which had been notified for auction sale. In accordance with the conditions for auction sale he deposited one-third of the amount soon after the auction. Condition No. 9 of General Sale Conditions required that the sale had to be confirmed by the Conservator of Forests as the bid amount was above Rupees 20,000. The confirmation is usually done within 30 days after the sale. No such confirmation was, however, made. On enquiry the appellant came to know that the Bamboo Co-operative Society had applied before the Minister for Forests for that particular coupe even before the auctions were held, but after the notification for auction sale. The Government order was issued in favour of the Co-operative Society in furtherance of the policy encouraging Co-operative Societies in proper utilisation of forest wealth of the State. A writ application was filed by the appellant in the case for quashing the settlement in favour of the Co-operative Society. The writ application was dismissed by the learned Single Judge on the view that no legal right vested in the appellant to insist upon the confirmation of the auction sale. The Division Bench, in appeal, however issued a writ to the Government for consideration of the question of acceptance of the auction sale on the theory that the Government having led the appellant and other citizens to believe that the conditions of sale would be observed in holding the auction, and also in making the bidders to act to their prejudice by making deposits, cannot be permitted to give a go-by to the conditions of sale. Their Lordships held that the Court had the necessary power in proper cases, to compel observance of the rules issued by the departmental authorities. In support of the aforesaid conclusion the Division Bench placed reliance on AIR 1968 SC 718 (Union of India v. Anglo Afghan Agencies). With respect, we must say that the Division Bench decision of the Andhra Pradesh High Court is contrary to law and cannot be supported by the dictum in AIR 1968 SC 718. Our view requires a close examination of the principles determined in the aforesaid Supreme Court decision.