1979 (12) TMI 165 - HC - Indian Laws

Summary

Issues Involved:
1. Validity of bids without initial deposit
2. Non-compliance with condition No. 11 (25% deposit)
3. Validity of contract under Article 299 of the Constitution
4. Recovery under Section 82 of the Forest Act, 1927

Issue-wise Detailed Analysis:

1. Validity of bids without initial deposit:
The petitioner contended that the bids were invalid as he did not deposit the required 10% earnest money. The court referred to the terms and conditions of the auction (Annexure-A) and noted that the Divisional Forest Officer waived the 10% deposit condition at the petitioner's request. This waiver was within the officer's administrative authority. The court concluded that the bids did not suffer any invalidity due to the absence of the 10% deposit.

2. Non-compliance with condition No. 11 (25% deposit):
The petitioner argued that the bids were invalid as he did not deposit 25% of the price offered. The court interpreted condition No. 11, stating that the term "successful bidder" applies to a bidder whose bid has been accepted. Thus, the 25% deposit is not a condition precedent for the validity of a bid but a requirement post-acceptance. The court found this argument devoid of substance.

3. Validity of contract under Article 299 of the Constitution:
The petitioner argued that there was no valid contract as required by Article 299 of the Constitution. The court examined the bid-sheet signed by the petitioner and the Divisional Forest Officer and found it did not meet the requirements of Article 299 (1). The court cited precedents (K.P. Choudhary v. State of M.P., AIR 1967 SC 203; State M.P. v. Ratanlal, 1967 MPLJ 104 (SC) 106) and concluded that the bid list did not constitute a valid contract as it was not expressed to be made in the name of the Governor nor executed by an authorized person.

4. Recovery under Section 82 of the Forest Act, 1927:
The court considered whether the deficiency could be recovered under Section 82 of the Forest Act, 1927, as substituted by Madhya Pradesh Act No. 9 of 1965. Section 82 allows recovery of money payable to the State Government under the terms of a notice relating to the sale of forest produce by auction. The court found that the petitioner's liability for the deficiency was covered by condition No. 13 of the sale notice (Annexure-A). The court interpreted Section 82 as creating a statutory liability, enforceable even without a contract as envisaged under Article 299. This interpretation was supported by the Supreme Court's decision in A. Damodaran v. State of Kerala, AIR 1976 SC 1533, which held that statutory liabilities could be enforced under statutory provisions irrespective of the existence of a formal contract.

Conclusion:
The court dismissed the petition, holding that the recovery proceedings were valid under Section 82 of the Forest Act, 1927. There was no order as to costs, and the security amount was to be refunded to the petitioner.