SRI SANTOSH KUMAR AGARWALLA Vs. STATE OF ORISSA

JUDGEMENT

(1.) SANTOSH Kumar Asar-walla who is the petitioner in both the cases is a Forest contractor at Angul deal-ins in Genduli gum which is a minor forest produce. For the year 1970-71 (wrongly mentioned as 1969-70 in the petition), the sale of genduli sum of Angul Forest Division was notified by the Divisional Forest Officer, aneul (O. P. No. 3) to be held by public auction on the 20th and 21st October, 1970. The notification was published in the Orissa Gazette dated 18-9-1970. and the auction was on 20-10-1970. The petitioner's bid for Rs. 2,100/-was the highest bid and the sale was knocked down in his favour. The petitioner deposited the security money of Rs. 210/ -. The fact of the petitioner be-ins the highest bidder was duly communicated to the Conservator of Forests (O. P. No. 2) who in turn communicated to the State Government (O. P. No. 1) for finalisation of the agreement. The State Government instead of finalising the sale in favour of the petitioner passed the impugned order Annexure-7 dated 2-12-1970 granting in favour of Dayal and Co. (O. P. No. 4), the lease of Genduli sum of Angul Division (excluding therefrom the Talcher area) for three vears on payment of rovalty which was directed to be fixed at 25 per cent over and above the highest bid received during the year. Aggrieved by this decision, the petitioner filed O. J. C. No. 1191 of 1970 for the issue of a writ of mandamus directing opposite parties 1 to 3 not to settle the coupe with opposite party No. 4 and to ratify the bid in favour of the petitioner. Pending disposal of the writ application, the petitioner prayed for and obtained an order staving the settlement of the coupe with the opposite party No. 4 and the working of the coupe by him. As the petitioner was the higher bidder in respect of the disputed coupe for the year 1970-71 and the writ application could not be disposed of during that period, a memo was filed on behalf of the State on 6-11972 that the relief as prayed for by the petitioner was no more available to him and that the writ application had become infructuous. It is thereafter that on 3-31972 the petitioner filed, O. J. C. 165 of 1972 praying for the issue of a writ of mandamus quashing the settlement of lease dated 2-12-70 made in favour of opposite party No. 4 in Annexure-6 ("which corresponds to Annexure-7 of O. J. C. 1191/70 ). As common questions of fact and law are involved in both the writ applications, they have been heard together.

(2.) THE stand taken by the petitioner in both the writ applications is that the sale of genduli gum having been advertised to be made by the process of auction and an auction having been held in accordance therewith the petitioner who was the highest bidder at the auction was entitled to obtain the lease and that the subsequent action of Government in resorting to the method of negotiation with opposite party No. 4 and settling the lease in the latter's favour for a period of three years without giving an opportunity to the petitioner to enter into negotiation is bad and mala fide and that the action of the Government (O. P. No. 11 is also hit by Articles 14 and 19 (1) (f) and (g) of the Constitution. It is also complained that in settling the lease, the principles of natural justice were violated inasmuch as no notice was given to the petitioner regarding the intended cancellation of the settlement in his favour, although by such cancellation, the petitioner's rights were going to be affected. The legality of action of the government is also challenged on the ground that under Rule 152 (4) of the orissa Forest Department Code the only competent authority to accept the bid is the Conservator of Forests and Government have absolutely no power to give any contrary directions in the matter. In a case of this nature, where finances of the state are involved, it was incumbent and mandatory on the Forest Department of government to consult the Finance Department before any action was taken and as no such consultation had been made in the instant case, the order of government in Annexure-7 is liable to be quashed.

(3.) IN the counter affidavit filed on behalf of opposite parties 1 to 3 it is admitted that the petitioner was the highest bidder for Genduli gum for Angul Forest division in the public auction held at Angul on 20-10-1970 and that the bid was provisionally accepted by the Divisional Forest Officer subiect to confirmation by competent authority. But meanwhile, on 28-8-1970. opposite party No. 4 had submitted a petition fannexure-A to the counter) to the Minister, Forests stating inter alia that he had established a factory for processing Genduli gum at jharsuguda, that the industry was suffering for want of raw materials and in the circumstances requesting Government to settle the lease of Genduli gum of Angul division in his favour by means of negotiations. Opposite party No. 4 was advised to get his application processed through the Industries Department which was duly done by him. The Industries Department recommended to the Forest Department the case of opposite Party No. 4 for sympathetic consideration. Pending final consideration of the application of opposite party No. 4. Govt. did not ratify the sale held by auction in which the petitioner was the highest bidder. In due course, the application of opposite party No. 4 was considered and the impugned order dated 2-12-1970 (Annexure-7) was passed by Government granting the lease of Genduli gum of Angul division (Excluding Talcher area) to opposite Party No. 4 on payment of royalty at an amount which is 25 per cent over and above the highest bid offered by the petitioner at the public auction-In passing the impugned order, Government acted bona fide and in the best interests of the Revenues of the State. The allegation of mala fides made in the petition was denied. It was further averred that the bid offered by the petitioner at the auction sale which was subject to ratification having not been ratified, the petitioner had not acquired any right which he could enforce in application under Article 226, As the forest produce in question belongs to the State it is open to the latter to settle the same for higher revenue and there is no violation either of Article 14 or of article 19 of the Constitution. In the circumstances of the case, no consultation with the Finance Department was necessary before settling the lease in favour of opposite party No. 4. It was therefore, contended that the petitioner had no right either to obtain the lease for the year 1970-71 or for an order quashing settlement of the lease granted in favour of opposite party No. 4. The application is premature and is not maintainable.